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By Mike Dorning, Washington Bureau. Tribune Staff Writer Ray Gibson contributed to this report.
July 17, 1998

WASHINGTON -- The Federal Election Commission acknowledged Thursday that a campaign charge card was used to pay personal expenses for the 1992 campaign manager and then-fiance of Illinois Democratic Sen. Carol Moseley-Braun.

But an FEC spokesman said the agency decided not to penalize the campaign because auditors were convinced the amount of personal expenses charged was offset by reimbursements owed campaign manager Kgosie Matthews for legitimate expenses.

Spokesman Ron Harris said the FEC's decision to "net-out" the personal expenses charged to the campaign "is not unusual or unprecedented."

The Internal Revenue Service is investigating allegations Matthews diverted campaign funds for personal use, according to government sources. In 1995, IRS investigators twice sought to initiate a grand jury investigation of Moseley-Braun on the same grounds but were turned down by the U.S. Justice Department.

Reacting to reports this week of the Justice Department decision, the non-partisan Congressional Accountability Project Thursday called for an investigation into "whether any improper political intervention did, in fact, occur."

Among the expenses Matthews charged to the Senate campaign was a three-day stay with Moseley-Braun at a $950-a-night suite in the Four Seasons Hotel in Maui, Hawaii, in November 1992.

The FEC allowed Matthews to count as a legitimate campaign expense half the cost of the Four Seasons stay, Harris said. The $4,068 Four Seasons bill included meals at the hotel's Pacific Grill, a $36 room service breakfast and a $140 limousine ride, according to a copy obtained by the Tribune.

Harris said he was unable to determine immediately why his agency allowed half the cost of the trip as a legitimate campaign expense.

"The auditors were satisfied that at least part of this trip was campaign-related. I can't provide more details than that," Harris said.

Moseley-Braun campaign officials previously have said the Maui trip was for fundraising and that the campaign was reimbursed for the cost because not enough funds were raised to justify it as being campaign-related.

On Thursday, she said the trip was for an "aborted fundraiser."

"It was supposed to be a fundraiser. But because the fundraiser didn't come off, we turned around and came back," Moseley-Braun said.

"As far as we're concerned, these issues were resolved a long time ago. They did not even warrant a mention in the (1996) FEC audit" of the campaign, said Lyn Utrecht, a campaign attorney.

The 1996 audit found irregularities including $249,212 in campaign spending for which auditors could not find documentation. It did not make any findings concerning personal use of campaign funds.

Campaign charge card receipts obtained under the Freedom of Information Act from the FEC show Matthews used his campaign charge card for $6,258 in personal expenses, including $2,610 for clothing from Bernini Sport in Beverly Hills and a $449 purchase at a Giorgio Armani boutique. But lawyers for the Moseley-Braun campaign told FEC auditors that Matthews was owed $6,418 for legitimate expenses.

In some cases, receipts were available to verify the expenses but in others not, according to FEC documents.

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