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Contrary to what U.S. Rep. Lincoln Diaz-Balart’s campaign told the Federal Election Commission, his campaign did not refund nearly $30,000 in illegal contributions early this year to some 45 individuals and corporations. In January the FEC told the Miami-based congressman’s campaign to return the contributions, which were either illegal corporate contributions or exceeded the $1,000 per election limit for individuals. In February, Diaz-Balart’s campaign told the FEC that it had refunded the money. The campaign even provided FEC auditors with photocopies of checks as evidence of refunded payments. But campaign reports filed Dec. 7 by Diaz-Balart’s campaign — and posted on the FEC’s Web site last Friday — show those February refund checks were “voided” on Nov. 13, nine months after the campaign says they were issued. What’s more, the campaign last month wrote substitute checks and mailed the checks to essentially the same contributors. The new checks were issued about a week after the Daily Business Review reported that an FEC audit found Diaz-Balart’s campaign had accepted thousands of dollars in excessive and prohibited contributions in 1997 and 1998. The story included the claim by Diaz-Balart’s campaign that those contributions had been returned in February. Jose A. Riesco, who is Diaz-Balart’s new campaign manager, says the campaign has since learned that the checks were never cashed because they were all lost in the mail and never delivered. “They were never negotiated,” Riesco says of the checks. “They got lost, and were never cashed. So we just voided them all out and new ones were issued.” Riesco, a Coral Gables, Fla. accountant, said campaign officials told him that each of those 45 checks was lost while in the mail to the designated recipients. The checks ultimately were returned, unopened, to the campaign by the U.S. Postal Service, he said. “They came back because they were poorly addressed, things like that,” said Riesco. He said the checks are today in the possession of the campaign. As for the second batch of checks, he says, “They’re coming back negotiated now.” Among those getting refunds is North Miami developer Stanley Tate, founder and chairman of Florida’s Prepaid College Program, who said he deposited his $1,000 refund check the week after Thanksgiving Day. Tate said the check reflected that the money was refunded because it exceeded federal contribution limits. Tate said the check that he received in November was the first and only refund check he got from the Diaz-Balart campaign this year. Others who also should be receiving refund checks include several members of the Milton family, a wealthy clan of Miami-Dade developers whose patriarch is Jose Milton, an architect and builder. In all, Milton family members and corporations were refunded $6,500 in illegal contributions. Federal law forbids companies from giving to political campaigns. Riesco, hired last month, said he didn’t know why Diaz-Balart’s campaign told the FEC earlier this year that the illegal contributions had been refunded when they were not. He also did not know why the campaign had provided the FEC with copies of uncashed refund checks that suggested the refunds were made. He referred those questions to the campaign’s head, Ana Carbonell, who is the Republican congressman’s campaign manager and district director. Carbonell, who in previous interviews said she’d handled the campaign’s finances for several years under the congressman’s direction, did not respond to four phone messages left at her office and on her cell phone. And detailed phone messages left with Jaqueline Stevens, press secretary for Diaz-Balart in Washington, were not returned. Trevor Potter, a Washington attorney and former FEC commissioner recently retained by Diaz-Balart to deal with the government’s auditors, said the campaign reported that the money wasn’t actually refunded as soon as it learned the checks hadn’t been cashed. “As soon as they discovered this, which they discovered in November, they took steps on their FEC report to correct the public record,” said Potter. “If the committee’s reports were perfect, we wouldn’t be having this conversation.” Potter said he knew nothing about the non-negotiated checks first presented to the FEC auditors to document the refunds. FEC auditors had requested copies of the front and back of negotiated refund checks as evidence of the refunds. According to the final audit report issued in March, the campaign responded with copies of 45 checks totaling $29,330 that “it had issued to refund [illegal] contributions.” The report pointed out, however, that those copies weren’t sufficient proof. “To date, the [campaign] has not provided copies [front and back] of negotiated refund checks,” the March report said. A spokeswoman for the FEC, Sharon Snyder, declined to comment on the campaign’s new batch of checks. The FEC’s inquiry into Diaz-Balart’s campaign practices is ongoing. Diaz-Balart’s campaign has been at odds with the FEC over a series of findings by auditors who found the congressman’s office less than cooperative during their investigation. Those findings include $114,000 in missing cash, allegedly sloppy record keeping, and about $100,000 in undisclosed disbursements by the campaign. In the last four years, the FEC has cited the Diaz-Balart campaign nine times for failing to file required contribution disclosure forms. That includes three times this year. FEC records show the Diaz-Balart campaign didn’t file any contribution or expenditure reports due this year until mid-October. Since then, its reports have been submitted on time. Diaz-Balart, who Potter said was unaware of those problematic audit findings until the Daily Business Review reported them on Nov. 6, was re-elected to Congress the next day. He faced only token write-in opposition. But a week earlier the Review had reported the campaign’s repeated failures to file timely reports with the FEC, and reported that Diaz-Balart had become the first member of Congress whose re-election campaign faced thousands of dollars in fines for failing to file under new rules authorized by Congress. Potter, the congressman’s attorney, says Diaz-Balart isn’t to blame for any possible wrongdoing by his campaign. “Under the FEC law, the responsible person is the treasurer. The congressman is not expected to review reports or be responsible for the committee’s actions,” said Potter. Until Riesco was hired last month, Diaz-Balart’s campaign treasurer was Ayuban Tomas. Tomas, however, has been in ill health for several years and has not been serving in that capacity, Carbonell said previously. Since Nov. 6, Diaz-Balart’s campaign has moved aggressively to address its FEC problems. The congressman’s most recent FEC filings state that on Nov. 13 his campaign paid $10,000 to Potter’s law firm for “FEC advice.” Three days later, the campaign paid $1,500 to Shayna Bechtel, a Miami attorney, for “legal advice.” And the campaign recently acquired software that aids in campaign management. The campaign paid $4,825 to Aristotle Publishing, a software firm whose products include Campaign Manager 4.1, a software program that helps managers meet the legal requirements of managing a campaign.

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