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~/ CONGRESS!CNAL AUDIT REFORT •

Candidate/Committee: Baltasar Corrada del Rio

State:

District:

Location:

Puerto Rico

Puerto Rico

Puerto Rico

j·e

?ol ; ti cal P~-rt:l Affi 1; at; en:

Major O~ponent(s):

Otner Cand~dates Audited:

New Progressive Party

Jaime Benitez

Jaime Benitez

10tas Cast: General E'ec:~on - Jaime Benitez 663,160 - 46

Baltasar Corrada del Rio 705,162 - ~9

Baltasar Quinones Elias 72,988 - .5

PrimarJ E1ecticn - Unknown

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ro~al Receipts for ?ericd:

iotal E~penditur~s for P~ricd:

_. -~ ...1 (... • • bl) ~,rs: ~Iec~a~ 1r apcl~ca e: 1976
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With this release, Puerto Rico is now complete •

March 30, 1979

Attached please find copies of the final audit reports

for the Comite Pro Baltasar Corrada (P.R.) and the Comite

Amigos de Jaime Benitez {P.R.} which were approved by the

Commission on January 25, 1979 and February 16, 1979

respectively.

As of this date, March 30, 1979, all informational copies

of the report have been received by all parties involved and

these reports may be released to the public.

l"RED EILAND

PRESS OFFICE

BOB COSTA ,~ JUDY HAWKINS.;-

PUBLIC ISSUANCE OF FINAL

AUDIT RE'PO'RTS

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REPORT OF ~HE AUDIT DIVISION

ON THF COMJ~F PRO BALTAgAR CORPADA

I. Backqround

A. Overview

This report is based on an auoit of the Comite Pro

Baltasar Corrada ("the COMmittee"), undertaken hy the ~.udit

Division of the Federal Election COMmission in accordance with

the' C6mml'~fsio-ii" sauditpolicy ·todetermine··whether·..·there lla.s

been compliance with the provisions of the Federal Flection

Campaign Act of 1971, as amended (lithe ]\ct n ). ~he nudit was

conducted pursuant to ~ection 438(a) (8) of ~it1e 2 of the

United States Code which directs the Commission to make from

time to time audits and field investigations with respect to

reports and statements filed under the provisions of the let.

The Committee registered with the Federal Flection

Commission on ~arch 29, 1976, in sunnort of Ra1tasar Corrada

for the office of Pesident Commissioner from the Commonwealth

of Puerto Rico. On !larch 31, 1976, the Committee was designated

bv the Candidate as his princinal campaian COmMittee for the

1976 election. The coronittee maintains its headquarters in

Sahturce, Puerto Rico.

~he audit covered the period from January 12, 1976,

throuqh September 30, 1977, the final coverage date of the

latest report filed by the COMMittee at the time of the audit

fieldwork. During this period the Coro~ittee reporterl a

beginning cash balance of $5,513.98, total receipts of

$66,410.00, total expenditures of $~4,878.56 and a closing

cash balance on September 30, 1977, of $2,125.00
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This audit report is based on documents and working papc~r:) which support each of the factual statements. "'hey form

part of the record upon which the Commission based its decisions

on th0 matters in the report and were available to Commissioners

and appropriate staff for review.

B. Key Personnel

The principal officers of the Committee during the

period of the audit were: Wilfredo Vivoni, Chairman (and

Treasurer from ~1arch 29, 1976, through April 18, 1976);

Ivan ~arcia, Vice Chairman; and Ana Nevarez de Sprague,

Treasurer from April 19, 1976, through the close of the

audit period.

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~he audit included such tests as verr~~catfon of

total reported receipts and expenditures and individual

transactions; review of required supporting documentation;

analysis of Committee debts and obligations; and such other

audit procedures as deemed necessary under the circumstances.

II. Auditor's Statement and Description of Findings

It is the opinion of the Audit staff, based upon examination

of the reports and statements filed and the records presented,

that, except for the deficiencies noted below, the reports and

statements of the Comite Pro Baltasar Corrada fairly present

the financial activities of the Committee for the period covered

by the audit. Further, except as noted below, no material

problems in complying with the Federal ~lection Campaign Act

were discovered during the course of the audit.

A. Apparent Corporate Contributions

Section 44lb(a) of Title 2 of the United States Code

states in part, that it is unlawful for any corporation to make

a contribution or expenditure in connection with any election to

any political office, and unlawful for any candidate, political

committee, or other person to knowingly accept or receive any

contributions from a corporation.
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nuring our review of receipt and expenditure records,

we noted seven (7) possible corporate contributions which had

been depo!iited in the Committee bank account and refunded 14 months

prior to t'hc audit. Four (4) of these entities (with contributions

totalinq $575) were verified as corporations by the Secretary of

State's office, San Juan, Puerto Pica.

As all of the contributions were vo1untarilv refunded

(all but one within the same reporting period), and since the

total dollar amount was less than 1% of the total reportable

receipts, we advised the Committee that no further action was

necessary 1n this matter. \~e noted, however, that all findings

are subject to Commission review and policy. Therefore, in

accordance with Commission ?olicy, we referred this matter to

the Office of General Counsel on ~ay 3, 1978, where ~atter

Under Review #588(78) was instituted.

On ~"ay 24,· 1-978-, the Commission found .reaso.n tQ b.~li~ve

that three (3) of the corporations, contributing a total of ~500,

had violated 2 U.S.C. 44lb by making corporate contributions to

the Comite Pro Ba1tasar Corrada. Letters of notification were

mailed to the three (3) respondents on ~ugust 18, 1978, two (2)

of which have responded confirming the refund by the Committee

and acknowledging that corporate contributions to federal

candidates are unlawful. ~o (2) notification letters to the

third respondent have been returned unclaimed.

Based on Commission policy and the recommendation of

the Office of General Counsel, the Commission voted on Reptember

28, 1978, to close the file and take no further action in this

case •

B. Registration and Reportinq of In-Kind Contributions

Sections 433(a) and 434(a) of Title 2 of the United

States Code require political committees making expenditures

during a calendar year in an ag~rcqate a~ount exceeding Sl,OOO

to file with the Commission a statc~ent of organization and

reports of receipts and expennitures.

Section 434(h) (7) of 'l'itlc 2, TJnited States C00e,

requires a political committee supportinq a candidate for

election to Federal office to report contributions made to such
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2) telephone service;

1) office space and facilLtiesi

Information obtained during the audit of the Committee

indicated that the Committee's political party, the New Progressive Party of Puerto Rico (NPP), may have attained filing

status under the Act without registering or reporting with the

Commission by providing the Committee the following support:

committee which exceed in the aggregate $100, not otherwise

disclosed under Section 434(b). Furthermore, Section 104.3(a)

(1) of Title 11 of the Code of Federal Regulations states that

"each in-kind contribution shall be valued at the usual and normal

charge on the date received and reported if in excess of $100 on

the appropriate schedule of receipts, identified as to its nature

and listed as an in-kind contribution."

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In accordance with Commission policy, this matter was

referred to the Office of General Counsel on January 4, 1978,

where Matter Under Review 489(78) was instituted.

On January 27, 1978, the Commission found reason to

believe that the NPP was a political committee which, in failing

to register and report in-kind contributions to the Corrada

Committee, violated 2 U.S.C. Section 433(a) and 434(a). Further,

on March 16, 1978, the Commission found reason to believe the

Committee had violated 2 U.S.C. Section 434(b) by failing to

report receipt of in-kind contributions from the NPP.

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political rallies which provided a forum for

speeches by party candidates including the

candidate for Resident Commissioner; and

media coverage for the party ticket which may

have benefited the Corrada Campaign.

Respondents replied to Commission inquiries that the

value of rent and telephone services provided to the Committee

by the NPP was not much more than $100, and that the costs of

media covered political rallies and fundraisers, paid for by the

NPP and attended by Corrada and many other candidates, would be

extremely difficult to allocate to anyone candidate's benefit.

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The investigation conducted by the Office of General

COllO:;"} determined that the value of rental facilitieB and

te1t'l'hone services allocable to the Commi t tee approximated only

$130. In addition, although its investigation did di~close

substilntial NPP expenditures for rallies, determining a fair and

specific dollar value allocable to the Committee would be very

difficult. Based on the fact that Mr. Corrada appear('d at Party

functions primarily as a Party figure in support of tilt' NPP

gubernatorial candidate and that the Committee conduct ..d its

own media and fundraising campaign, the Office of Gen('t'al Counsel

recommended no further action be taken in this matter. It was

also recommended that both the Committee and the NPP be' advised

of the reportable nature of in-kind contributions, and that state

party expenditures on behalf of Federal candidates should be

allocated and reported by the party to reflect the benefit to be

derived by each candidate.

Based-on the recommendation .o_f thJ,~ _Offj.c~._9f general

Counsel, the Commission voted on August 30, 1978, to take no

further action and close the file, as well as to notify the

parties involved accordingly.

c. Recordkeeping for. Receipts from Fundraiser

Section 432 (c) (1) and (2) of 'ritle 2 of the United

States Code states that the lreasurer of a political conunittee

shall keep a detailed and exact account of all contributions

made to or for such comrnitte(', to include identification of

every person making a contriLution in excess of $50 with the

date and amount thereof and, if a person's contributions

aggrpqate more than $100, thl" account shall include the

OCCUptt tion and principal plact! of business (if any).

During our audi t r(~view of receipts, no accounts or

records were available for proceeds from a post-general

election fundraising dinner held June 24, 1977, in San Juan,

Puerto Rico. The total amount raised ($32,150 at $50 per

person) was reported on the appropriate Schedule D and included

in receipt totals, althougll the individual contributors were

not identified on reports •

As the fundraiser represents 48.41~ of the dollar

value of total reported receipts, we requested that the Committee

itemize the source of the contributions aggregating in excess of

$100 on their amended report for 1977, and obtain documentation

for the contributions and provide them for our review •
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On March 21, 1978, the Committee filed an amended

July 10, 1977 report itemizing all but $50 of the fundraising

receipts.

Recommenclation

As the Committee has providcrl an accountina of the fundraiser r(~c0ipts by filinq thp appropriate arnen~.ment, we

recor.unencl no further action on this matter.

D. Itemization of Expenditures in Rxcess of $100

Section 434(h) (9) of Title 2 of the United States Code

requires a committee to disclose the name and address of each

person to whom expenditures have been made within a calendar

year aggregating in excess of $100, together with the amount,

date, and· purpose of .eache.xP.eDJliJ::lJ-re.!

During our audit review of expenditures, it was

determined that six (6) expenditures (23.08% of all itemizable

expenditures) each in excess of $100, were not itemized on

disclosure reports. These expenditures total ~25,30l.20 and

represent 45.23% of the dollar valu~ of total itemizable

expenditures.

~he Committee indicated that these itemizations had

been inadvertently excluded. '~e noted during the audit that

the omitted itemizations were corrected on amendments prepared,

but not filed prior to the audit fieldwork. At our request,

the Committee submitted these amendments on January 28, 197R,

and February 1, 1978.

Recommendation

As the Committee filed the appropriate amendments, we

recommend no further action in this matter.

F. Recordkeeping for Expenditures

Section 432{d) of ~itle 2 of the united ~tates rode

requires the committee treasurer to obtain and keep a receipted

bill stating the particulars for every expenditure made in excess

of or aggregating in excess of $100 within a calendar year. Section
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l02.9(c) (4), Titl0 11, Code of Ferleral Regulations, provides that

the treasurer may kf~ep the canceled check and a bill, invoice, or

other contemporan('O\lR memorandum of the transaction supplied to the

committee by the p .. yec.

During our review of expenditures, it was determined

that for 10 expend.itures (38.46% of the total number aggreqatinq

in exce5R of ~100) documentation consisted only of the canceled

checks. ~hesc expenditures totaled $6,738.90 or 12.05% of the

total dollar value of expenditures requirinq documentation.

Ne recommended that the Committee furnish for our

review, additional documentation supportinq these expenditures

or evidence of a reasonable effort to obtain it. On January 28,

1978, and March 22, 1978, the Committee provided information

which substantially complies with our request.

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'Recornrnendation

As substantial compliance was achieved, no

action is recommended in this matter.

F. nisclosnrp of Committee Depository

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Sections 433(b) (9) and (c) of ~itle 2 of the united

States Code requir(' that a committee reveal in its statement

of organization or any amendments thereto, a listing of all

banks, safety deposit boxes, or other repositories used by

the committee.

Our review of Committee bank records revealed the

use of a depository which had not been disclosed as required

on the Committee's statement of organization or amen0ments

thereto. ~he bank account was opened to handle receipts and

expenditures for a fundraiser held in June 1977; it is now

the sole committee depository.

l1e recommended that the Committee amend their statement

of organization to disclose the depository. On r1arch 22, 1978,

the Committee satisfactorily disclosed the cl0pository in an

amended statement of orqanization.
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As the Committee satisfactorily amended the statement of

oryanization, no further action is recommended in this matter.

G. Disclosure of Occupation and Principal Place of Business

Section 434(b) (2) of Title 2 of the United Slates

Code requires in part, that the conwittee disclose the (ull name

and mailing address, occupation and principal place of business,

if any, of each person whose contributions aggregate greater thun

$100 within a calendar year together with the amount and date of

such contributions.

During the audit review of receipts, it was determined

that 35 contributions (IOOb of the total contributions requ1r1ng

i temi-zation-) did -not have ade_quatec_on. triQ~t:9J:· mal ling addre S5 ,

occupation and principal place of business information on reports.

We requested that the Committee obtain the contributor

information and submit it with the appropriate amended reports.

The Committee filed these amendments on January 28, 1978, which

substantially complied with our requests.

Recommendation

As the appropriate information was provided, we recommended

no further action in this matter.

H. Reporting of Debts and Obligations

Section 434(b) (12) of Title 2 of the United States Code

states that reports filed by committees shall disclose the amount

and nature of debts and obli<Jations, and that these shall be

reported continuously until extinguished.

During our review of debts and obligations, it was

determined that the Committee reported incorrect amounts for

their obligation for advertising expenses•
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Recommendation

As the Committee amended the appropriate schedule, no

further action is recommended.

We requested that the Co~ittee submit a corrected

Schedule C to reflect the actual debt incurred, payments made,

and balance outstandinq. 'rhe Committee agreed to submit the

appropriate schedule with their amendments for the period

endinq September 30, 1977. On February 1, 1978, we received

the Committee's amended report accurately reflecting the

status of the obligation.

I. Other ~1atters

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Listed below are other matters for which the Audit

staff feels no fur·ther action. is required by. tb.~ .CQrrunittee.

1. ~he review of expenditures revealed that two (2)

checks totaling ~2,825, each in excess of $100, were made

payable to "cash", but were not identifiable as petty cash

transactions under Section 102.10 of the Commisssion's Regulations. In each case, the ultimate payee was disclosed fully or

in part on reports. The Committee kept no records of $900 in

expenditures reported as petty cash. Committee officials noted

the reluctance of many vendors and individuals to accept checks

for services. In addition, our review of bank records indicates

that receipts totaling $1,960 were reported but not deposited in

the Committee depository, and expenditures totaling $1,960 were

reported but not paid by check. The Committee agreed to avoid

the use of cash for other than petty cash purposes in future

transactions.

? ~he Committee made two (2) $1,000 cash deposits

of receipts from fundraisers. rlo documentation was available

to identify contributors. ~he Committee was advised of their

responsibility regarding recordkeeping and reportinq of fundraisers. They aqreed to follow these guidelines in future

fundraising activity.

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On January 28, 1978, the Committee submitted

documentation identifying the contributors to one (1) of the

funrlraisers •
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FEDERAL. ELECTION CO~\~\ISSION

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ADDITIONAL INFORMATION RECARDING '!HIS ORGANIZATION

MAY BE LOCATED IN A CDMPI.ETED OOMPLIANCE ACrION

FILE RELEASED BY THE CDMrSSION AND~ ~MAt>E -PuBLIC m

'!BE PUBLIC REOORDS OFFICE. FUR THIS PARTICULAR

ORGANIZATION'S COMPLETED CDMPLIANCE ACI'ION FILE

SlMPLY }Sf! EOR '!HE PRESS StM1ARY OF MUR /1 .yj'r

'mE PRESS sm+1ARY WIIL PROVIDE A BRIEF HIS'roRY OF

'l1IE CASE AND A sm+1ARY OF THE ACl'IONS TAKEN, IF f.E{.

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SlMPLY JSK FOR 'lHE PRESS StI+1ARY OF MUR 41 sJ?J' .

'!lIE PRESS StM1ARY WILL PROVIDE A BRIEF HISIDRY OF

'mE CASE AND A SUt+1ARY OF mE ACl'IONS TAKEN, IF M:rl•

Audit 4! /7/
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