STATE OF TENNESSEE

BOARD MEMBERS

BUREAU OF ETHICS AND CAMPAIGN FINANCE

REGISTRY OF ELECTION FINANCE
404 JAMES ROBERTSON PARKWAY, SUITE 104
NASHVILLE, TN 37243-1360
(615) 741-7959
Fax: (615) 532-8905

Tom Lawless, Nashville, Chairperson

Tom Morton, Bristol, Secretary
Henry Fincher, Cookeville
Patricia Heim, Nashville
Norma Lester, Memphis

EXECUTIVE DIRECTOR
Drew Rawlins

MEMORANDUM

DATE: August10,2016
TO:

RegistryBoard

FROM:RegistryStaff
RE:

Rep.DurhamAuditUpdate

1. No receipts or invoices for expenditures. The only documentation for expenditures

(reportedandunreported)are:
a. For expenses paid directly from the campaign bank account bank statements
andcancelledcheckswereprovided.

b. For expenditures charged to Rep. Durhams personal credit card campaign

providedcreditcardstatements.

c. Forexpendituresnotpaiddirectlyfromcampaignbankaccountorcreditcard
thereisnodocumentationotherthannotationoncreditcardstatementswhen
Rep. Durham calculates the amount to reimburse himself for credit card and
otherexpenditures.

2. A $2,000 expenditure reported to Benton Smith on Rep. Durhams MidYear 2015

Supplemental report appears to have not been paid directly from Rep. Durhams
campaignaccountbasedontherecordswehavebeenprovided.

3. Approximately$10,000inunitemizedcontributions(contributionsof$100orlessfroma
singlesourceduringareportingperiod)appeartohavenotbeenreported.

4. Based on documentation provided by the campaign it appears the following

investmentsweremadewithcampaignfunds:

a. Campaignfunds,PACfundsandpersonalfundswereinvestedwithCompanyA.
Thereareseveralpromissorynotesfortheseinvestments.Interestandprincipal
payments have been made on these investments. We are receiving additional
information from Company A to determine the amount of the investments,
sourceofinvestmentsandtowhompaymentsweremade

b. A Promissory Note/Line of Credit Agreement between Rep. Durham and his

campaignwasprovided(datedOctober15,2014).Thedocumentstatestheline
of credit maximum is $30,000 and will pay 2.5% interest. Records provided
indicatethatRep.Durhamhasreceived$25,000fromhiscampaignaccountand
has paid his campaign back $15,000. There was no indication of interest paid.
(Note: there is an additional $5,000 payment from Rep. Durham to the
campaignthattookplacebeforethelineofcreditagreement).

c. An unsigned Promissory Note between Individual B and Rep. Durham in the

amountof$23,800wasprovided.Thedocumentstatesthatnointerestwillbe
payableifpaymentinfullisreceivedbyFebruary1,2016.Thereafter,interest
willaccrueat10%.TheagreementdoesnotmentionRep.Durhamscampaign
account. Documentation provided shows three (3) checks totaling $29,800
(October and November 2015) were written from Rep. Durhams campaign
account to individual B. Records do not indicate that any funds have been
repaid.

d. Documentsprovidedshowthata$10,000checkfromRep.Durhamscampaign
accounttoCompanyCclearedonDecember3,2014.Acopyofthecheckhas
investmentdenotedonit.Thereisnodocumentationforthisinvestment.

5. A blank check in the amount of $7,500 cleared on January 13, 2016. There is no
documentationforthischeck.

6. Rep. Durhams campaign bank account showed a balance of $6,856.71 on March 31,
2016.TheendingbalancereportedonRep.DurhamsAmended1stQuartercampaign
financial disclosure report, filed on June 6, 2016, is $198,253.98. At this time a
determinationcannotbemadeastotheaccuracyofRep.Durhamscampaignbalance
duetoinvestments,failuretoreportcontributionsandothertransactions.