I .

FEDERAL ELECTION COMMISSION

\V"~ItIN<;ION.·[)c: !()4hl

Overviet..,

":'he Cor.,"li tteC:! IS rcnnrted totals do not halance due to nrobl~~s related t~ committee disclosure of receints and ~x~cndituies ~hich weie corrcritcd ~hio~q~ ~mendme~tsfi1cd.

A.

~/

I. Background

~he audit of the Committee for the ~e-rlection of

ConeJrossman Eerr.,an Badillo covered the period from Januarvl, 19/6

throuah Sentember 30, 1977, the final covcraqe date of the ter~

rnina tion report. The .Conuni ttt~c reported a heqinninq cash hnlanc0.:

'on ,Tanuary i, 1976 of $-0-, ,totu.lrecedp.ts for the period of

$70,353.01, total eXDcnditurcs for the neriod .of S74,472.n9 and

a closinc::r ca.sh balance on 9/30/77 of SI, 850.00 •.!/

"t'he COIDJllittee for the Re-'P.lection of c.onqressJ!lan Herman

Badillo re9istered wi t~ the r.ler}: of the House of'Renresentatives

on .Tune 21, 197 J as the principal campaicm committee, of Eerm.:ln· ,- nadillo~ The Friends of Herman Badii16 registered with the Feder~l

:Election Commission on Yarch 3, 1977 as a fundraisinq committee

for ~errnan Badillo, candidate for the IT.S. Ho~se6f Renreseritativos

for the 21st ,District of New York. ~he Committees maintained their

headquarters in New York City, New York.

REPORT OF TIIE1\UDI'!' DIVISION ON '!'HE

COMrUTTEE· FOR 'l'lm" RE-ELEC'!'ION OF

Cm!r,RF.SS~1]"'~J mmr·1At-J B;'T'lILLO

AND THE,'

FRIENDS' OF HERr"AN· BADILLO

'This report, is based' on an 'audit 6f, theCornmitte'e For,'

The Re-F,lection of ConqressJ!lan Herman' Badillo"and the Friends

of Herman Badillo ("the Conuni ttee (s) If), undertaken by the",

Audit Division of the Federal Election r.ommission in accordance

with the Comrnission~saudit policy,to, determine whether there-

,has been' compliance· wi th the pro'lisions of the Federal F.lection

Campaign Act: of: 1971 ,as amended: ("the J.\.ct"),~. '!'he audits were ' conducted pursuant to Section 438(a) (8), of '!'itle, 2 ,of the,

tTnitedStates-('ode-which'directs the Commission to make, from

time to time audits and field invci~tig~~ioriswith respect to

reports and statements filed under the provisions of:the·Act.

.1

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A. Preser':at'i:ol1 of r'~xt)enditure p.eceipts

B. Key Personnel

c. Scone

· .' -2-

In addition, Section l02.9(c) (4) of Title 11, Code of

Federal Reaulations $tatcs, in part, that when a receipted bill

is not availLlble, the treasurer m.:l': keen the cancelled check

shm·:inc: Dir:!:1ent: 0:: the bill; and tiw bill, invoice, or other

~<)n ':.,:'::moi:-,J.rv~o\ls ~cm~,r:1ndum of the! tr.:lns.:1ction.

Section 432 (d) of ~itle 2, united States Code states,

in cart, that it shall he the dutv of the treasurer to obtain

ancl keen a receinted bill, statin; the particulars, for ever;

exnenditure made bv or on behalf of a political committee in"

excess of ~l()() in amount, and for an\" such expenditure in a

lesser amount, if the annreqatc amou~t of such expenditures to

the same person durinC] the cah~nc1ar year exceeds ~lOO.

Thc audit ~ncluded such tests as verification of

total reported rece~~ts and expenditures and individual transactions~ re~iew of necruired sunp?rti~q documentation and analysisl of the Cornmlttee's debts and obllgatl0ns~ and, such other oroccdures as deemed necessary under the circumstances. .

I r. Audi t Fi ndincrs nnd PecomI!1,endations Hi th Pespcct to the

Committee For r~he Re-Election of C'onaressrnan Herm."111 Badillo

The princi~a1 officers of the Co~mittees during the

period audited \-lere ~. Hugo ~'orales, Chairman~ nr. Pedro Luis

Hodriauez, Treasurer (Committee For '!'he Re-Election of Congressr:1l:mHerman Badillo) and ~artin Fife, '!'reasurer (Friends of Herman

Bildillo).

This audit ~eport is based on documents and workin~

papers which support ~ach of the factual statements. ~hey form

part of the record u~on which the Commission based its decisions

on the matters in the report and were available to Commissioners

and anprol)riate st"af!f for reVie\".

The audit o<f the 'Priends of Herman Badillo covered the, •

period from ~~arch 3, 11977, through Hay 31, 1977, the final -

coverage date of the 'termination report. ':!'he Committee reoorted

a beginning cash balance on March 3, 1977 of $-0-, total receints

for the period of $2~.,042.46, total exoenditures for the oeriod of

$26,037.46 and a c1os~ng cash balance on May 31, 1977 of ~5.00.

r
Recommendation

Recornr:le!1c:a tion

B. DisclosuJ"(' pf an In-kind Contribution

-3- , .

On P~br~llrv 16, 1979, the Connittce aITI0ndod its reDo~ts

disclosin(l thQ contribn tio~, then~~o;c, '....p r0 comnonc1 no' furthc r ac~ion 0~-this mutter:'· . .

'!'he COITIlllittl"!" did not ref)Ol~t thc~ receint of a ~l,OI)O

in":'J.:ind contribution rl-orn a labor tmi on pol i ticill action commi tte(~.

Section 41.1 (1') (~) of '::'it1(~ 2, of the I'nited States

Code states, in Da~t, that each report under this Section shall

disclose the' name and address (occun.-I tion and )')ri ncina1 place

of business, . if any) 0: each person who has mad(~ contributions

within a calendar year i~an aggre0ate amount or value in excess

of SlO(), toqethcl- \I!it:l t.ho amount and date of such contributions. c ,- _ , " ,

Based on the abO\'l~ information \oJe r0commend that no further

action on this rna t ter ..

The Commith'l' submitted documentation for 80 expenditures

tot.-Jl ina S42, 104.37 and presented evidence of its efforts to

obt~in the documentation for 3R other expenditures totalina

$7,657.41. However, the Committee an~arently failed to obtain or

demonstate its efforh: to obtain thfl documentation for the remainiWT 16 expendi tu}", ':: totalinq $ 3, 1(,H .10. In addition, the

Commiltee submitted C'lll'ies of 12 of the lR checks requested •.

Our r<~view of Committee records revealed that 134

expenditures totaling~53,129.88 reauiring sunnorting documentation were not documented with bills, invoices, or other

contemporaneous memorandum, and 18 of the 134 exnenditures

were not smmort:l'd wi th cancelled checks. This represents 87.5°,

of the number and 85.2':, of the total dollar value of expenditures

requiring documpntati0n.

In.ad,1il:.Lon~:,'ction 104~3(1l) (1) and (2).0f. 7it1ell

. of the. Code' of' F~"!lh··I-.t t 1,:c'(Tula tions recTeli res thll t each in-kind

. contribution in e~·:c,~~;::; ()f S100 be itcmi~ed cis u receint and

expenditure on thca:':'::n:lrinte schec1ulc, identified as to its'

nature':!, and renort(~d :1:: .:tn "in-}:ind' contribution."

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Our review of the Committee's exnenditure records revea'od

that eiaht (8) exnenditures totalinq S14,3fJl.46 were not sunnortel

with bills, invoices, or other conternnoraneous memorandum. This

represents Gl.5~ of the number anJ 55.1~ o( the total dollar valu

of exn(~nditures requin~d to be itenized. I!m':c':er, each exnencUturc

was sUl)portl~ll b'/ <t cllllcelled check.

,

Recor.u:1cnda ti on

.. -AC. Mal-t:r~r~; Heferred to the ()f~icc of r.eneral Counsel

_._----

• I

B. ~~att0r:) Ref.erred to the Of:i::e of General Counsel

On ,Tanllar'/ 2'), 1979, the Commi ttee sllbmi tted the sllnnortina

documentation for the e:·:nenditures, theref()n:~, \..e recommend no

further action Oil this matter.

A. ~t:..rlh'_"f)ina Por F.xncnc1i tures

In addition, Section 102.9(c) (4) of Title 11, Code of

Federal Regulations states, in ?art, that when a receintedbill

is not available, the treasurer may keep the cancelled check

showina ~ayment of the bill; and the bill, invoice, or other

contemporaneous memorandum o~ the transaction.

Ccrttl in otb:.!r P1ilt:tC'rs note6 r:.U,1.!1'I the Clllr.i t were

refc~rn:d to the.: Conl:d.ssi.on' s ()~~ice 0: Gr:r.('!~Cll Counsp-l "or

consi~crntion on Anri1 12, 1~79.

Section -"32 (d) of Title 2, of the.United States Code

states, j n par-t, 'hilt it shall be th(~ duty of the treasurer

to obtain and k(!.·p a receipted bill, stating the narticulars,

for every exoen,liture made by or on behalf of a political

cornmi ttcc in eXCf~:;:'; of $100 in amount, and for any such

expenditure in a lesser amount, if the aggregate amount of such

exnenditures to the same person during a calendar year exceeds.

$100.

III. Audit pjndill'_':: and Recommendations

\'1i th Respc!(" '-0 the Friends of Herman Badillo

Certaill other matters notec durinq the audit were

referreo to llw ("lIl1Jltission' s Office of: ~eneral Counsel for

consideration 011 I\pril 12, 1979.
FEDERAL ELECTION COi\·\,\-\ISSION

1\2') I\. SIKIH :"loW.

\\'·'~HI~C'O""IH ,!rt4hi

AIDrrI(IW. lNFURMATION REGMIDING 'lHIS O~

MAY BE lOCATED IN A CXH'LE'l'ED CD1PLIANCE ACmE

FILE RELEASED BY nm CXH1ISSICtt AND MAlE PUBLIC IN

nm PUBLIC REXDRDSOFFICE. FUR '1HIS PAR1'ICtJLAR

ORGANIZATION'S CXH'LE'l'ED a::K'LIANCE ACrIOO FILE

SlMPLY JSK FUR nm PRESS StJK\RY OF MJR /1 1SY .

'DIE PRFSS stJoMARY wm.. PROVIDE A BRIEF HIS'roRY OF

nm CASE AND A SlH1ARY OF nm ACrICItS TAKEN, IF AN'{.