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Higgins' 2016 campaign fined for bookkeeping errors

WASHINGTON – Rep. Brian Higgins' congressional campaign committee paid a $3,100 federal fine last month because of bookkeeping errors made during his 2016 re-election effort.

The Federal Election Commission agreed to that civil penalty after it discovered that Higgins' 2016 campaign misallocated some donations in ways that violate election law. The FEC also found that the Higgins campaign misstated how much money it had on hand in 2015 and 2016.

Thanks to the misallocated contributions, "the committee received contributions in excess of the limit totaling $41,424," the FEC said in the settlement it negotiated with the Higgins campaign, which the commission approved in a 4-0 vote last month.

For Higgins, a Buffalo Democrat, the FEC fine stands as a rare blot on a scandal-free 31-year political record.

While Higgins is not known to be media-shy over the course of those three decades, he left it to his relatively new campaign treasurer, Holly Giarraputo, to explain how his campaign finance violations happened.

“The Higgins for Congress campaign acknowledges the unintentional paperwork errors reported in the Federal Election Commission audit," Giarraputo said on Monday. "The campaign provided the FEC with documentation on donations that complied with federal law but lacked clarity in designating funds for primary or general election use. All discrepancies and designations have been rectified to the FEC's satisfaction."

Under federal election law, individuals can give congressional candidates $2,700 for a primary election and another $2,700 for the general election campaign.

But according to the audit the FEC completed in September, the Higgins campaign didn't do a good job of making clear when contributions were directed to the primary or when they were meant to be spent on the fall general election.

In addition, the Higgins campaign did not make it clear that some joint campaign contributions were actually that – thereby making it seem like one individual was making a $5,400 contribution when it was really split between two people.

The FEC labels such errors as excessive contributions – and when it added up all the Higgins campaign errors, it found that he had $41,424 in excessive contributions during the 2016 election cycle.

Campaigns are supposed to notice such errors when contributions come in, and are supposed to reach out to individual donors to resolve any problems. But the Higgins campaign didn't do that until after the FEC noticed the errors last year – two years after those donors made their donations.

"The committee provided evidence that resolved, albeit untimely, all of the excessive contributions," the FEC said in its settlement with the Higgins campaign.

In addition to finding all those misallocated contributions, the FEC discovered that the Higgins campaign overstated its beginning and ending cash balances for the 2015 and 2016 calendar years. The Higgins campaign started the 2015 calendar year by saying it had $36,151 more money than it actually had, and it finished that year by saying it had $38,560 more than it actually had.

That meant its first 2016 report was off by $38,560, too. And the Higgins campaign's final 2016 report overstated its cash on hand by $36,242.

The FEC said it discovered those errors by comparing the campaign's filings with its bank records.

The commission approved the $3,100 fine on March 14, and the Higgins campaign sent the agency a $3,100 check on March 20.

A source close to the Higgins campaign said it had always been a largely a grassroots affair, with volunteers in many cases reviewing contributions as they arrived. In 2017, though, the campaign realized it needed a treasurer with a strong background in federal campaign finance reporting and compliance to deal with increasingly complex federal campaign finance regulations.

As a result, the campaign hired Giarraputo to replace local attorney Gary Kanaley, who had served as Higgins' campaign treasurer since 2005. Giarraputo quickly made some changes.

"We have updated internal campaign protocols to ensure similar errors do not occur in the future,” Giarraputo said.

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