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IF(DE RAL ELIECTION CO,%AMJISSION *A$,4ICTO%, DC 2043 THIS IS T{ I61Ih F?, tJR # ATE FILJfD ~1iL~I1L CA'ERA NO. 7- CAiI V4AVk~ a ~ (,an' J. LaPailleic: + :, 49 Mlerchandise Mart, Oi". , Chicago. Illinois 60654 " inle.n lliotSeptember 19. 1996 2O 7 ' Federal Ilection ( 'mimisston / ' 999 F:Strcct. \ \\ j(A-,,,lq"y,_i lhis letter is a complaint against the .-l Sal' i for I. 5 Senate Committee "comlmitteeL. Albert)J.ali r"Sal' i" and undisclosed contributors. Sai\ i funneled Si! 2 million into his o'+n campaign treasury, but tried to hide this bv tailing to disclose o,.er St6O0.0<00 in loans Fhe committee and the candidate 'iolated the provisions of the Federal Election Campaign Act of 1974 and Federal Election Commission regulations by failing to timel' disclose $oc".234 in loans b'+ the candidate to the committee. Mkore importantl. based on Salx i's financial disclosures and other statements, it does not appear that Sal' i had sufficient personal resources to loan the committee $1.2 million. Even under a scenario ,+,here Sal, i liquidated all of his personal assets. Salvi cannot account for bet",cen S28 .0_00 and $544.000 of funds lent to the campaign. The failure to disclose the source of these funds is a serious FEC violation. Furthermore. x,,ithout a full disclosure on Salvi's part. one cannot sa '+ith any+degree of certainty that the mone,, ,,as legall., contributed to the committee. l-he likel3 receipt of illegal and undisclosed mone,, s b,, a candidate tot the Itnited States Senate deserves immediate nx esticration h,, the Federal Itlection C.ommiassion A\lbert J .Sal'mi "Saix V" i-,a candidate tbr the office of I.'nited States Senator tbr the State oftllinois at the election to, he held on \ox ember 5. l9O6. O)n Jul,' 21. 1Q95, Sal' i Iormed the "'-l sal!' ort senate Co mmittee ""lt, address is 800O F. Northv, est ttiizhxxa\. Suite 22i K.I'alatmne, lllmn,,> e,i + , \t the titme thle cotmittee x'a> trined. tt,trea-uarer vxa> I orrie Mlark Nex, some "\exsome"b Subsequenti~ . JillmI t'icker iIhacker" became treasurer. f-hacker re.,mgned as treasurer on June I . l ), the c.urrent trca>urer is D)ana (irigoroff O0 O0 ! porn tbrrmatin and belief, certain contributors to the committee have been tindisc toed lheref ,re, complainant isunable to, provide the names and addresses of 1he primar\ electionl fr nt ,minat i,n,, ,a,adidates of rnuil r political parties in he Stte of lllinli, occurred on Mlarch 19. 1Qm4, ai iv as nminated to he the GOP canld d.ate 1I'o S% %eit e ,tthi elect ion l)ulrine the primaro elction campalign..'<,. had ptublicl., statied on numerous ,,cca~tin, that he Would finance his campaign trrugh personal assets~ Exhibit i. \ccording to amended reprts, filed \' ith the f-ederai |Election C'ommission r"FLC~. %alx loaned his campaign in exces of$SI12 milli,,n for the primar\ election cycle. \ccording to documents filed ' ith the I-C,. Sal', i lent his campaign the following amou nts. * 7 Dle o~cf lean. .-\mount [)ate loan first reported. .!t,2 .1 Q')6 4 Jan 2-s. 1Q'e t $22f-t. I "2 , \ 1i2. 1o 6itafter prtnar, .Ian .)L I~t \larch ti. 109% "-'- leb 1. 1O~% \!Iarc h 4. 1Qo 4 S Feb 23 . 1,or 'r 2. 1'406 iafier primar Feb 2>. loo \ 1r2. l O6$afler primar\ $1 g3.'" 4$$ \r'r 12. IQL6 lafter primarx \lar 15. 1Q06, \pr 12. 10Q46 after primar )~t the eight loans listed abo\ e. fi', e loanm totaling 56,0.234 ,",ere not reported until after the \Iarch I1'4. 1 '- T,, election 1-t-C regulations require that loans to a conmmittee the reported in the rep,,rt c', erirw the perio+d in ,',hich the committee received the loan 11 (. I R ," 1,4-; ;di atl.l ca, ,the regulationsrequire that theiloan be rep,,trted p:- ,, to the ee- ti,,n l he rcgulati. n, require that a rcp,, ri "-led t\\,cl\ e da\ prior to a pnimarn decLi!,tutu. t ls.ng all rceit . and di,.bur~en~crt, .i.s itt the t\ ,erntieth da\ before the ,rin.ar.,x . .. ( I R 4 5,,Iha a nd t 12lrthis case, a rep,,rt \ as required to be ;i!J h,\ \ I .rh r,. I'', .. \ or~ n,. all rcecipt-.r'd d'.-h'urscnment,, through t-ebruarn 2'4. 1ot' sal;",\ ',, \lar,:' t,. 'i(*', rep,,rt jt,c-. :, .,',clude the tttllo\,,, l,. oans: I )~i~I1t~i: *\loLx.nt '.2 l,ai-L \ ~r 12. 1996. ,'n intended report ', Il 'i i t ".' '-.t',. or" amnden.td report Ic> it)t, -'; -H ' - 2 1, 'u,. ,, maended report ti,~t(, •OO • According to FE-C regulations, contributions (including loans) over $1,O000 received after the twentieth dax (but he tore 48 hours) before the election must be • disclosed within 48 hours of receipt by the campaign. Salvi did not report the following loans within 48 hours, as required by lan : Mar. 8. 19t96 $18 .7V"', O Apr. 12. 1996. on amended report 0 M ar. I . 1t))% $55.%'() 4 A.pr 12. 1Q96. on amended report I 'pon Intormation and belief, the loans wxere reported only because of nex ,spapr articles on the financing of"Salxl'\ campaign first appearing on March 25. 1Q96. Exhibit 2. I/l'le, contrihution.s The fundamental principle of the Federal Election Campaign Act of 1974 is that contributions from individuals are limited to $1,000 . The only exception to this 0 - fundamental principle is use of personal funds. Buckl'i V lTaleo. 424 U'.S. 1 1976). Candidates for the I 'nited States Senate may make unlimited expenditures from personal funds. 11 (.F.R., 110.10(a).I *- "'Personal funds" are strictly defined by FEC regulations. Personal funds are 0 either assets to which, under applicable state la',,, the candidate had a legal or equitable right at the time he became a candidate. 11 C.F.R. 11 O0l(b)( 1): or salary and other earned income from bona fide employment: xarious investment income: lotter,. proceeds: and gifts of a personal nature wvhich had been customarily received prior to the candidacy. 11IC.F.R. § 110.lIO(bH 2). A candidate may use a portion of assets jointly owned with his 0 ~ or her spouse as personal assets, but only the candidate's share of the assets as disclosed by the instruments of o' nership or. it' not disclosed, one half of the value of the assets. 11 L.FR. 1lO)b(3). o)n or about September 1. I ,5.Salxit iled a Personal Finance Disclosure Report 0 r"PFDR"' x'ith the Secretary of the Senate. Exhibit 3. l-he PFDR. w'hich was signed by Sali under penaltyv of peiur., listed no significant assets, such as a checking account. sayings account or stock. The PFI)R. v,hich covers the periodt January 199)4 to September 1995. discloses S5u5.32') in income from Albert J. Salhi & Associatres. a la ~ practice which, on intormation and be.lief, is a partnership consisting of Albert J1Sal'i • and Kathleen Keller (Sal\ il. ,and $33.4')5 from leczislative salary. Exhibit 4. Salx ililed an amended PFI)R cztctr ne,,xspaper articles appeared questioning the source ot his primary campaign financine. Exhibit 5. The amended PFI)R show'ed, as of September 1. 1995. between $t5.jtn2 and 5165.(004)) in checking and savingrs accounts and 0 between $351!.00t3 and S765.O() in mutual funds. lhe PFDR did not disclose specificall\ the os' nership oftthe assets. x ith the e\ception of S 1 .I)())-$ 15.00(() in a mutual fund oxsned bK Kathy Salx i. tto\\e\ er. %li has indicated that his assects are oxxned jointly Exhibit 6. A\ccording to Fi.Ct regulations, half of these assets qualify' as personal funds. 11 (" |:R. l! I(ll~b)3L A..s of September 1.199$5 Sal~i had bet' ,een $_08.00,..50 and S465.000) legall. available tr campaign expenditures. The PFI)R filed tbr the entire calendar 'ear ]I9Q5 lists the same assets Exhibit 7. Vhe total amount loane~d to thle campaign after September i15. I oQ)5. ,as $797.6 -Q .il\ i explained that the remainder of the funds used to tinance his campaign w ere the re-il, ,,f the settleinent of t'o or three large personal injlur' la\ suits by his law partnership I' xhihit 8. Subsequcnti. .."al' i', counsel told the li|t" that the money was from the settlement of onl, one lawsuit, the ( hrttuan.,,n case. Exhibits 9 and 10. ( ,urt records sho\,, the fee from this settlement ,,,as SI1.083.333.33. and ,,,as earned b\ A\llhr1 J. Sal'i & Associates. Salvi's la partnership. Exhibit 11I. Real estate records show that Sal' i paid a $203.000 mortgage on Salvi's residence on Februar' 14. 109. Exhibit 12. 1 pon information and belief: the mortgage had a present 'alue of approximatel. SI78.O,0.' In addition. Salvi \ 'as also paid $247.971 in taxes o \ed tot 1Q95 on April 15. 1996. Exhibit 13: and he " as required to make an estimated quarterly tax payvment for the settlement on A\pril 15. 1996O. U'pon information and belief Sal'i has no other significant source of income for the first quarter of 1996.: Even assuming Sal~ i ",as entitled to the entire SI1.083.333.33 legal fee earned by the partnership, his disclosures do not add up Nah'i a.,,,'t, .iax.