Smith Campaign Used Bizarre Reporting Style

When I started this blog, I did so with the solid and moral promise that the truth would always be reported. No post would ever be purposely misleading, and if I found there was something that changed a report, that would be presented for all to see. It's a code I live by. It's one that I demand of Adrian Smith as I, and all who read this, work to hold him accountable.

I got a call today from Teresa Wickens at the North Platte Telegraph. She had started looking at the FEC Filings and had noticed that the amounts that Neal Smith was paid would then match the amounts paid out to in salaries. She gave me just that information so I could do my own researching. She said an article is running in her paper tomorrow and gave me the heads up. She did this, I believe, because I had originally approached her on this issue. I don't know what the contents of that article will be as she has to do her job as a journalist, but this gave me enough to start looking into the matter on my own.

I pulled up all the FEC quarterly expenditures for the Smith campaign and went over them with a fine tooth comb. What I saw caused me to then call the FEC and I got a further understanding of what I was seeing. I realized that Smith's campaign used a very confusing, misleading accounting process in their reporting, but one that is allowed. This most likely confused Open Secrets as well, as they didn't catch it either when they reported the disbursements for Smith's congressional campaign.

As an example, I direct you to the YEAR END 2006 REPORT that was filed. Scroll down until you see Neal Smith's first listing for "Payroll Processing". The amount is $2398.55. Right below his name you will see 3 of the staff listed as receiving a salary. On the far left-hand side under the payout amounts, you see the word MEMO. According to the FEC rep I spoke to, this means that the disbursements were paid from the last listing right above them. In this case, it was the payment to Neal Smith. Those salaries, when added, match Neal Smith's amount.

What this means is that the campaign used an usual practice of paying Neal Smith, and in turn, he paid the salaries, and those salaries have to also be documented in the filings.

As I said, I went through all the filings. This is what I found:

- Neal Smith received 4 payments for "Debt Repayment" totaling $22,055.54. In turn, the same amounts then went to staffers as "Salary Bonus Repayments".

Dan Huber, $13,233.30 on 7/6/2006
James Dukesherer, $2,756.95 on 12/14/2006
Dan Huber, $3,859.73 on 12/14/2006
Cory Siegfriend, $2,205.56 on 12/14/2006

- Neal Smith received 34 payments for "Payroll Processing" totalling $116,389.38. Of that, all but $2,977.40 went directly to staffers for salaries.

- The $2,977.40 can be found paid to Neal Smith for "Payroll" in the OCTOBER 2005 QUARTERLY REPORT. There are no pay outs to anyone as salaries and no other disbursements that are Memo'd. Either this is an accounting error, or Mr. Smith received that money.

There are some other things that I found out, though, while going blind looking at these forms the last few hours. Smith is listed as contributing to his campaign, but in all actuality, the amounts shown as his donations matched several of the In-Kind disbursements. This included the "In-Kind Mileage" claims. At first I thought those specifically were for money spent on fuel, but then I saw there were separate fuel reimbursements. I was wondering if he used the federal rate per mile traveled in his car and reported that as an in-kind contribution for his campaign? I think the rate last year was around $.41 per mile. This is all, of course, speculation, but it seems like these could be disingenuous "donations" that were claimed if that is what it is. He would have essentially claimed wear and tear on his car. Bottom line is that he paid for some of his own travel and it was attributed to his campaign as in-kind contributions.

But Smith's "donations" didn't cover most of the In-kind disbursements shown for him. For example, when I pulled them all together I found 13 listings for "In-Kind: Trailer Use" amounting to $200 each. (That was for that silly little trailer he pulled around everywhere he went.) I then found 13 "Debt Repayment" distributions to Smith, each also $200. All the other "In-kind" disbursements matched the rest of Smith's "Debt Repayment" disbursements. In other words, these were not in-kind donations by Smith, but rather they were reimbursements for expenses incurred on the campaign trail.

I looked at the Jeff Fortenberry, Lee Terry and Scott Kleeb filings as well. None of them used these strange accounting practices. Theirs were straight forward and pretty easy to read. The only other campaign to show a direct payment through the hands of an immediate relative was Fortenberry. Approximately $1400 went to Celeste Fortenberry, but almost all was for travel reimbursement.

Why Smith had his staffs payroll money go through his father's hands is beyond me. Everyone else just paid directly from the campaign. Lee Terry and Scott Kleeb both had accounting staff working for them that handled the books. Fortenberry may have also, but he also paid out just over $14,000 to various accounting firms for their bookkeeping services. Smith's treasurer was listed as Tyler Marshall.

So, in summary, I don't think there is much to Neal Smith distributions at this point. Of course, I'm no expert, and others who have experience at campaign accounting may find something that is of concern. If so, I encourage those individuals to contact me. In the mean time, I'm glad the questions came out, and that an answer was found. This time, Smith appears to be vindicated (although those in-kind distributions have me intrigued).

The sad thing is that this incident is just one incident of vindication. So far, Adrian Smith has not proven himself to be an honest, trustworthy representative working in the best interest of his constituents. He has shown repeatedly he works in his own best interest.....to do what will insure he will "be in the House for a good long time.....and stay there until retirement.”

I actually hope Adrian Smith and his staff, who seem pretty focused and worried about my blog (oh yes, I see the daily hits and hear from insiders), will finally stop their focus on their own self interests, and start focusing on what is REALLY right for Nebraska.....not what is preplanned in a GOP-sanctioned talking-points memo that puts party before the people.