PHILADELPHIA (AP) — Bonuses paid out by organizers of last year's Democratic National Convention in Philadelphia did not violate terms of a $10 million state grant, but the IRS should look into the payments, Pennsylvania government auditors said Monday.
Auditor General Eugene DePasquale said the 26-page grant agreement with the Department of Community and Economic Development did not require the Democrats to use up their privately raised funds before spending the state subsidy. He said he could find no recent agency contract with such a "claw-back" requirement.
"That's ridiculous," DePasquale, a Democrat, said in a news release . "Nobody has ever thought to say, 'Hey, use all the private money first, and then use the taxpayers' money'? Nobody? Ever?"
He said "the confusing nature of nonprofit law" and payments to bid and host committee members led him to refer the findings to the Internal Revenue Service. Public money wasn't used for the bonuses, DePasquale noted.
The report concluded that the $10 million state grant paid for venue rental, event production and construction.
In all, the committee raised $86 million in public and private money to support the convention, where Hillary Clinton was nominated as her party's presidential candidate.
Former Democratic Gov. Ed Rendell, the host committee chairman, approved $1.037 million in bonuses to staffers and interns.
The audit said Rendell, working for no direct salary, said he saw the payments as deferred compensation that he had promised.
Another $1.1 million was donated to charity.
Rendell said in a statement that the report showed the host committee met terms of the state grant "and spent those funds completely appropriately and in accordance with legislators' parameters."
Senate Republican leaders said they remain concerned the Democrats did not return money left over, and faulted Rendell for acting beyond his authority.
"Those decisions made by Gov. Rendell to distribute bonuses remain, at best, problematic," wrote Sens. Joe Scarnati, Jake Corman and Pat Browne.
They asked Democratic Gov. Tom Wolf to require claw-back provisions in future contracts by the Department of Community and Economic Development.