There has been quite a bit of discussion here on IPR of the Libertarian Party’s Audit Committee Report from 2012. Resolution appears to have occurred last weekend at the quarterly meeting of the Libertarian National Committee . There were several issues, two of them involving then Executive Director Carla Howell. Discussions will continue, however, at least here on this forum. Here is a series of questions prepared by George Phillies.
There are a half-dozen other articles about this audit if the reader will put “Audit” in the search box.
Leading Questions for LP National Party Members to Consider
For those of you who have not followed all the discussions, I have some
interesting questions you might wish to put to your LNC member or
Regional Representative relative to how they are conducting their business.
At what point does the policy manual become the LNC’s binding
representation to national party members by the LNC as to how the LNC
will discharge its fiduciary responsibilities to our members?
What is the point of having a policy manual if major policies are ignored?
How many written contracts with vendors does the LNC have on file? How
many of those exceed the thresholds in the Policy Manual? How many
contracts were approved in accord with LNC rules? How many large
contracts were not written, approved by the chair, and/or vetted by
counsel, as the LNC has required, a requirement recorded in the Policy
How often does the LNC issue large no-bid contracts for petitioning? How
often are these accompanied with commission-based fundraising deals at
rates such as 20 or 40%? How were commissions set?
Do the party’s current FEC filings correctly, completely, and exactly
reflect to whom we gave money?
The LNC Policy Manual 2.03.5 requires “The Chair or Treasurer shall be
required to approve (and evidence by signing or initialing) all expenses
and expense account reimbursements more than $200 made to the Executive
Director or other officers prior to payment.” Which of them signed off
on the transactions that perturbed the LNC and occupied the full Audit
Committee report, including the parts you have not all seen yet? Were
What are the faults in the filings? When did the Treasurer find them?
Did the Treasurer find them?
What is the Treasurer, as the Party officer with legal liability, doing
futureward, without any reference to the situation in the past, to
confirm that the information passing from the LNC office to our FEC
consultant is complete and correct?
Why did the LNC approve the use of no-bid contracts for petitioning efforts?
Why did the LNC approve the use of commission-type contracts for fund
Did anyone claim in defense of the handshake no-bid deal with Mr Cloud
that this approach was LNC standard operating procedure? Who claimed
that? Who agreed with the claim?
Who on the LNC was concerned that the agreements with Mr Cloud were
based on the recommendation of a good friend of his (not that I oppose
Are there memoranda of conversation between Ms Howell and Mr Neale
verifying that the individual contracts with Mr Cloud had been approved
by the Chair?
Did the LNC in fact find written evidence other than from the Executive
Director that Mr Neale had approved each or any of the individual contracts?
Did the LNC in fact find written evidence from anyone that Mr Neale had
approved each or any of the individual contracts?
There is a traditional freshman error in evaluating experimental data,
namely the freshmen believe that if you do the experiment twice and get
two different answers you are entitled to believe that the second one is
right. The freshmen are wrong. With the latest issue we have four
different invoices. Which one does the LNC believe? Why?
Given the record, will the LNC advance in the future to full compliance
audits of its financial transactions? Why not?
How many of the difficulties that may be revealed by answers to the
above might have been avoided if, for example, past LNCs has spent more
time on its financial responsibilities and less time on parliamentary
haggling? How many of these difficulties would be avoided if the LNC
emulated LPNC and replaced Roberts’ with Francis and Francis
(requires Bylaws change).
How many of these difficulties would have been avoided if the LNC
required that it also receive financial reports in a form that matches
its FEC reports, so it can tell on what it actually spent its money?
Might it have been more nearly obvious, e.g., that any of the
expenditures reported to the FEC for some amount were actually for a
different amount, or that other expenditures were not obviously apparent
in the FEC reports?
Mindful that we have severe legal limits on how we may spend our money,
did you ever read through FEC Guide for Treasurers of Party Committees,
to identify key issues? Did you confirm that the Treasurer and Chair
have done so? If you have not done so, how will you know what questions
to ask? If the Chair and Treasurer have not done so, how will they
notice whether or not the monthly check record and the monthly FEC
reports are concordant?
If you have not done so yourself, how are you going to identify any
recommendation(s) you may have been given for illegal campaign
In the future, are you going to appoint an audit group that does careful
work again, or are you going to look for sweethearts?
George Phillies is a long-term Libertarian activist and is a frequent contributor here to IPR. He is a professor of physics at Worcester Polytechnic Institute in Massachusetts. Also, he is the editor and publisher of the monthly periodical Liberty For America .