
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, April 29, 1990                   TAG: 9004290169
SECTION: VIRGINIA                    PAGE: B8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: RICHMOND                                LENGTH: Medium

AUDIT PANEL CLEARS GOP IN TAX CASE

State Republican Party chairman Donald W. Huffman said Saturday that an audit committee's report on the party's books found no evidence of wrongdoing by current party members.

More than 100 state GOP central committee members, unit chairmen, elected officials and staff members went over the committee's report in the wake of an embarrassing payroll tax fiasco.

Following the unsuccessful gubernatorial campaign of Marshall Coleman last fall, the party disclosed that it owed the IRS about $240,000 in unpaid employee taxes, interest and penalties. To help pay the taxes and interest, the party borrowed $125,000.

Earlier this month, the Virginia GOP announced that it had abandoned its fight with the Internal Revenue Service over the tax penalty and paid a $76,000 fine.

The party has blamed the problem on a bookkeeper who has since been fired.

"There is no evidence of any kind of intentional wrongdoing; there was no one else involved in the money that was missing; no one else was involved in any kind of cover-up," Huffman said.

He admitted the party had not overseen its books sufficiently. "It is not the case now," he said.

"A good many of the recommendations that the audit review committee made have already been implemented," he said. One, an annual audit, was approved by the central committee in open session Saturday morning.

Huffman said fund raising "has not suffered from this . . . we're very much on target." But he was concerned that fund raising might suffer if the report had been made public.

Only members of the central committee were permitted to stay in the room when the report was discussed. And Huffman said the report will be kept secret, even from party members, "because it involves all the internal workings of the party and all its fund-raising ability, financing . . . they went into every aspect of our operation," he said.

"In a state where another party totally dominates the political process, if we had to reveal our donor list - particularly our major donors - those people would be intimidated and a lot of them would not contribute to us," he said.

by CNB