r.1ay 31, 1979

PUBLIC ISSUANCE OF AUDIT REPOR'r -

VERHON'l' 51'ATE DEHOCRA'rIC FI..:DERAL

CA:-IPAIG:-l C01-1!vlI'l'T!~E

FRED EILAND

PRESS OFFICE

BOB COS'l'l\

(\

JUDY HAWKINS \!'-~

I\r, "I KtI I ,,\\'.

W·\"fn"\;c.IO".IH . .!(I·It,\

FEDERAl. ELECTION COt,,\MISSION

cc: FEe Libru.ry

l~i\D

~ub1ic Record

As of this date, Nay 31, 1979, all informational copies

of the report have been received by all parties involved and

the report may be released to the public.

Attached please find a copy of the final audit report

for the Vermont State Democratic Federal Campaign Committee

\..;hich was approved by the Commission on May 23, 1979.

SUI3JEC'l' :

FROH:

TIllWlIGIl :

'1'0 :

~mHc) H]\NDUM

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F[DERAl. ELECTION COMMISSION

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T~lis and 1" report is hased on documents and workin(r

!Japcrs \'lhich suppnl-L- (~;tch of t.hc f~ictual statnJilcnts. '1'hey fo~-:':

part of the record upon \·!hj ch the CO!nl:1iSS ion h<lsed its deci5io~1S

on the TIliJ.tt.ers i.n t'ht~ l'C:1ort .:lnc1 ',,!ere aVilil<l}jle to Commissioners

;1,.~,1, ""V)"O'~"-l''11-,..., ct·,·-· 1-0"- 1-("'\~]' ."\.r .. ." \. .. .: .- .:.. .-. ... L L.: ... 1 ... I I .._ # •• -. ••

A. Overview

The Comm:i I t 1'0. rec; istered wi t:h the f'ec1eral Election

Cor::'lission on octob('!' :~O, 197G. 'I'he Committee maintains its

heCldquarters in Bur.l i n'l ton, Ven:lon t.

REPOR'r OF THE AUDIT DIVISION

ON TIlE

VER!'\ON'l' ~~'I'l\'I'E Dm·1QCRATIC FEDr.Rl\L C7\rIlPAIr.N COr-1r·H'T'TEE

The aucU t: covcred the p01:iod from October 1, 197G, t!w

initiCll coveri1C1c c1;lh: of the fir~t re!)ort filed, throuqh f~arch 3J.,

1978, the final CO'v{'I'.lCle date of tho latest renort filed bv t!10

Cor:11:1ittGe Cit the t:i!lll\ of the audit. 'ehe COT!'mittce renorte~l il

bc,q inninq c<lsh b':lL1Ill",' <It October 1, 1976 of $ -0-, total recci:)t-,,,

for the '-,criod of ~~:~("G(i7.21, tot-al expenditures for the ~cricc:

of $26,621.05, arv101 clr:>"inn C.:lsh bCllance at ~'!<lrch 31, 1978 of

$46.16.

This report is based on an audit of the Vermont

S ta t:e Democratic Fec1c'r;ll Campaign Cammi ttee (" the COMmittee") ,

undertaken by the Audit Division of the Federal Election r.ommisslnl1

in Clccordance with th0 Commission's iludit policy to determine

\vhc.ther there h<lS bc(~n compl:i.ilncc vT:i.th the provisions of the

Federal Election C<lmp'li.qn Act of 1971, ,15 amended (lithe J.\ct lt).

The audit was conducteJ nurSuClnt to Section 438(a) (8) of Title

of the united St<lte!; Code ......hich direct;; the cOMMission t.O make

from tir.1c to tir.1e <luc!.it.s and field invl'~~tiq<ltions \vith respect to

rel'o~ts and statemcnts filed with it.

I. Backqround

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C. Scope

13. Kev Personnel --'-

II. .:\udi 1:or' s Stutement .:1nd Description of Findinqs

l':a nn:ll-].:cd Contri111lt ions . '.. ---p-~~---------_.__._--

Section 441a(a) (3) of: Title 2 of t:·lC l1nitec1 States

CC,(!\2 s t" tc~s, 1.11 part, t11at all. contril)11t:ion~ T!1-:lc1e b'y u. })erson,

c.1t.h,"):: directly or indirectly, on behalf of .:1 particular canc1ic1l1tc',

i:.c1::(:':'n<; con1:rjbutions '.'1hich .:u·e in "n,/ \';.:1y el1rm.:lrked or otherWjs0 dir~cted Ulrouqh i1n internedi.:1ryor conduit to such cundidat.o,

s!,.-d::' b.: treated as contributions from SUC~1 Dl.:rson to such c.:1nc1id:l h'.

'j'hc' i:1tc;rmediar~: or conduit shall report tho' ori"inal source und

t1:" i:1~:c'ncled rccirient of such contri:·hltion to the COf.lr.lission unti

to ~~o intended recipient.

In ] 976, the V0-rnont SLltc Dc;:::ocr.J.':ic Fec1er.:11 Cal:1pl1i r:n

('C\::::::i':~.:o(~ ("\,SDFCC") contr.:1ctE'c: for eir:ht (2) scpar.:1te Sl,OOO

bank loans to enable it to m.:1ke transfers to candidates for

FC~:.~~-:ll office. Each loan \·.'as enJors.:d b\' 11 different individul1].

';'::0 :~,c-r.;ccet1s of each loan '..:ere c1c:no"i tcc: i:1to V~DFCC' s account

l1nc1 t::il:1 trans[erred to the c:mc1i~btc~;; b'" check. VSDFCC much"' no

;1(:(:i:-. i.-:J:1,11 trallsf()l",j to these c.::.ncliJ;l tes:

It is the opinion of the Audit stuff, bused upon examination of the reports and st.:1te!l\l:nts filed and the records prc-

:.c'nto(:, that, c:·:cent for tIH: defjci(:ncies noted belm", the

n::10~' ts :lnc1 51-a l:em~nts of Lhe '.Torr-Ion t ~;ti1te !'emocratic Federal

CUn1F.J.i':n Coml1li.t·toe f.:1irly present the fin.:1ncial activities of

the C'c,:\::d ttee for the perjnd covered b'/ the .:ludit. F\.ll~ther,

C:':C0:)t as nob:~d below, no f11:1tcrial prolJlor.is in complyincr \'1ith the

Fec1c:~~ill r:lect 1.on C.:1mpaiqn i\ct \Vere d 1.sco'!orec1 durinq the course

of t::,: ;:H1dil:.

'rhe ,mdit incluc1ed such tests as veri f i cation of tnta 1

rr..:ported receipts and m:pendi ture:'> and inc1ivic1u()] transact ions;

revie,.; of required supportinq documentation, anulysis of c()mmitte(~

debts .:1nc1 obliqations; and such other audit procedures uS deemed

necess.:1P· under the circumst.:1nccs.

'\'he principal officers of the Committ:c~(' \'1cre i\1s. Carolyn

l\d! ,.:~-, Chairperson, and Hr. \\'ilyne \'1. ,1ameson, '!'reasurer.

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In its disclosure rc!)orts, VSDFCC n~f1 l"'ctel1 0.':1<:11 of

I Ilt~f>C~ loans on a schedule of debts and obliql1tions as a d.·ht

('\"l.!d to the han}:. VSDFCC disclos<~c1 each of. the endorsen: dS a

l~<'l1t:ribntnr ..]()nq with the ;nllmints of 'these loun's 'on u S(·"!t(·c!ule

of proceeds fl"()n! loans. '!'l1f~ cancfida tes who ulI:i ma'telv rC'( "~.i. vetl

the procec<.ls of the loanr; \'lf~n! n:por'ted on a schedule' of I.cansfl"rs

oul.. In 'theil" disclosure rc:nnrts, the! candido I';~s reflect I'd thc~

n)cc' i :)ts .:1S I:r,1I15 fers rec<.:i'/~!rl fvom "SDFCC. .

'l'he' "'reasurer of vsrwcc was informed that the actual

sources of theGc loans .:15 well as the endorsers, should hriv6

been disc10sed on the schedule of nroceec1s from loans, and he

:1~~cndc(: the di !~closure nmortr: acc;'rdi nql'.' •. " '

'l'!h) '1'\"();ISUrCr ,;f VSDFCC informed us that the clic1orsC'!1K',nt

of e;lch S1,000 10;1n was arranc;cd 11'/ thc~ c.:mdidate \'1ho \·;as to

\11 tim" te,l '.. rc~cI' i V(~ ,the procc:cds 0 f the -10Cin.

On ,\:,\".i.1 6, 197(), tho ;'.,uC:it st.o":::: nntificd the' Ver;l1Qn.r

~:;t:d:6 DC!11ocr,.tLc F0.eler.:11. C:1;'n1i,ir:n C'omr1l.!:toc th;11: it should mne11c1 -..

i t~; 1"l:'1'0rt.s, to disc 10set:lll_';;~'! t: r.Jnso.ct inns C1 s ('0. rmo. d:cdcontribtli.::j nns

frCl!:\ both th\.~ In:ln enoorserf; ,111(1 VSDFCC C1:1c1 notify t-hc recipient

candid;l to:: of t-lw C'arm.:1.d:i n':.

S.i.ncl~ !:ill' :\\1(11.t st-~ff l~"'(T.i.'.'('d:ll1 ':!:"0!~(1:;1('nt Oil :-1 .•'" ~, lC"l79,

d'j sclo!.d.Jl(j 1:l1L"' I-r.:lns"ctions ~1:; e:lrm;lr}:c~d C:QJlt.ributions' .:1l1l1 recc.i.':c~,.1

~1 copy of t:!h)h~tters not:if·... inn tl1(~ r(~c.~.nic'nt· can<1:i.do.l:C's of the

l!:11'!l:a!~]:inq, ij" is th(~ j·CC·()j:l:::,-"nc;.:tl:.lCll1 o!- t:ll~ :\l1l1it SI·.:·lff 1:hl1t no

!-:11~t::1')1' .:lC t.l OJl b(~ to.}:('n on 1:11 i S 1:E11: I".(~r ,

~~ ..(:;-.j.on :l.11b(a) of 'l'itl\~ :~ of t:,(: United ~~l.:1tos Code

"\"'1."'\ i l "'1"'1-t- \:,.. -' t . t· • r 4 , ,"\1 -1","'·"1 r , ... - , ., .... ,. -·0" t·; 1 01' 1':'1.\"',....,1- .' _" _<. s, ,.. ,1 :... ., _.1 ,. I l. J_ , • cL •.. " •. . .•. . (.... .• 1. : (() 1. !") 1.:l ... 0 ,1 .. "'-'l.' .

"l"'l.:lni:::1t:i.OIl t·o !:u]:r~ L1 cont\~iblltion in connr:t:t-i.on wit:1 an'.' electinn

1:0'.:111':' :~olitic:l1 "rricc~, lind it is un1;n·::1.l1 ~"Cor .:m,:, politi-c.:ll

<:oI;!lnitt.cc.~ to ]:lio\·:inl.;ly ,:H1C0.:)t: an:.' conl:rih~lt-.i.()n prohibited b,,:-' this

~~c'lct 1.0)1.

\)U!- i l~(! tl11.' 1'C'] i.e',.: (~:~ con I-x ibn t:i 0!1'';, 1. t ''','015 de tcr!;~.t :led

• ::It- '.·;::::i"CC :·,:',.:C':i.VI.'tl t\·:n (:~) c0r~tribtlti():1S t01",.-ll.ino ~~100.00

: :.:.;:.~ t',.:o (~) .1:':'"n)nt l.lhc:r or.·'.:tni:-:;lt.:i.O!1S. '1'ho ':'n~:lsurcr of'
I). D1.sclosure of Fundraisina Procoods

ReC()I'mH~ndation

Itemization of Transfers from Political Orcunizations!

committees

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Sections 434(b) (6) (7\) and (n) of ']'it.lo :~ of t.he

Unit-.<! St.:l.tcs Code reCluiro th~lt a political cOl1\I;1it.tec disclose

in .i t::; rC!1orts the total "mount of !)rocce(1s from the sale of

t:i C!:',' b; to eClch dinner, lunchc'on, ra11 y, anl1 ot.her fundruisi nq

'-"'-'.':ll: .-::-:,: l::::lSS colll)ctions m~lde Llt snell events .

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1. :lce the Commi t tee amcndc~d 1 ts reports to i temi::e the

tr;1l1:;;'crs, it is the recommendation of the Audit stuff that no

~urt::o!' action be tak(~n on tlns matter.

nurinq the rcvie", of contributions, it ,vas determined

thaL VSDFCC did not itemize six (6) transfers (66.67~ of the total

ntlml:<~r of transfers reCluired to be itemized) from 5i:,: (6)

pn15.. Uc;1] orqaniz~ltions total.inq 5400.00 (19.51". of the total

dollar amount of transfers rcqldred to be :i.tC'mi~ed). The TrC'"sm~"l'

or '.TSDFCC "'ilS informed thLlt all trunsfers reqardless of ar.l0tmt

:~hOlll(! be itemized. Pursuant. to our request, the committee fi1.c'd

an :1l'l('!1(:ed report on _luly 20, 1078 i temizinq the rcquired trans:('1'::.

Section 434(b) (4) of Title 2 of the United States COGe

Sl:Ll h '~;, in purt, that a political commi tt.ee shall disclose the

n,IJnC' :mc: address of ea~h political committee or candidate from

'·'!1leh 1-.:1C reportinq committee received "ny transfer of funds,

tOiH.'t"!wr ",i th the .:tlllounts and elutes of all trLlnsfers.

It is the recommendation of the Audit staff that no further

actlull be taken on this mutter, since the contributions hil'!e been

refl1ncl(~d and evidence of the refunds provided accordinqly.

V~;Il(-'t '(' informed us that he was encounterinq di f ficulties in obti:lin-

.i 11'1 I"'plies to his requests for information from the labor

01"'10111 i :~utions and requested to resolve the matter by refunc.1inq the

con I I' i btltions. Copies of the refund checks (front and b,ld:) were

rC'(.'I'iv(~d by the Au~1it staff for review on November 27, 1c)7B.

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:-;lnce the' C:c'::~:'~itt(~c :~i.lc·(~ Llr~ a:":c:1(~("\d statcIHC!1t ():: Or0t3nizatic/r;,

Lt is t:le n.:cn::·': ,,";!~~~:1tic'!1 eo:: the' :1'.'.:,:i.i: st.lff t:~::t n0 ~7:1rthcr action

}"\0 t:l~:c~n 0:1 thi.s :~~:lttor .

i\ ro\'i,:":l 0 f the ~.!~nnnnt.: sta to. nl~;:1(')crai:ic ~1(:'(:cral

("::::!':.,i'-::l Committee l"t)!)C")rts rC\'(:'i1.lec.1 that F~n:~cc diL1 ;";ot .:lmcnd

its ~tate~ont of orq.:lniz~lticn to disclose the current chairman,

Ctll-r(:::. c1t';posi toY"'!, and .:1 C.:l 11 eli d.:l to. Su!:::)or ted. r~'hc r='n~Clsurcr

,.,;7 ':ST;r-CC \-1~1S rcc:u(~stC'(~ to a::1C'nd the S1:Cltc;ncnt of erC:C1~·d.7..:ltion to

c!i[.;cJ.~::;c the ... fcr...·;:1t:~ntioni··d infoc:lation. On ;Tn1v 20, ]978,

t'rk' C'):::missi('1n received c,:1 ar:lenClcd st.J.te!:lcnt of orq.J.:1i~C1tion

n,:")t.i!1:: the chl:r·...~es ::is discuss:d ::ibo':e.

Sect.ion 433(8) n~ "--it·", of t:~(~ T'nit~d St.ates Code

st~b:::; that an'.! c1vll1r:e i:1 in:-Ol"PI:!tio!l :>re\·i.ou"ly SUb::1itted in

.:l st... t()l:lent of on:~mi:~... tio!l 511:111 bc"'! re!x,rt;.:lc1 to tho Commission

\d.l::1i:; .:1 10-c1(1y period fol.lm-::i nl: the c1"1.o1n(lc.

Scctinn 43'3 (J,) (5) .J.!1 1.1 «(,) of Tit1c~ 2 of the t'nited

SL1L~s Code'! states, in :)<1rt, thi1t the st.:ltc·nr:nt of orr:anization

Sh:lll incl.ude the ni1H1C, ul:(:ress, and po~;ition of other principal

officers and the name, address, offic~ sounht, and party

.J.ffi Li.:ltion 0:: c~(lch Ci:1nc!i(!:ltc ",he'ill the'! C01::~1i ttoe is st'}lportinq

;l!~d~:1 l.i.sti.11n of (1cr'()sit()ric·s.

It is t:he recommendation of the! l\udit staff that no further

action be ta}:cn on this matter, since the Com~1ission received

d:1 ,H::cmdcd report disc] osi 11(1 the total pro(~C'ec1s of the event.

Pc'cor::r:1cnd.:ltion

Durinl! the course of the il1.ldit, it "'-F\!; determined

that ~JSDPCC held a fundruisinc:! cUl1l1l' 1" at '\lhich ~~18,l07.50 in

total nroceeds were collected. Of t!lis amount, $2,750 was not

disclo~cd on a sched~lc of receints from sales nnd collections

(Schedule D). Contd.butions in~:-:ccss of or aqqreqatinrr in excess

nf ~lOO.OO were itelni.zed on the .:1.n~ropriate schedules of receipts.

Pursuant to our reqtll·~~t, the Committee filed .:1.11 amended n'port

on ~ruly 20, 197B c1:i~~closLn(l the total proceeds of the fundraise!"

on a schedule of re~<:(' i.prs from s"le5 alld collection;,.

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