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RL11,2/041988

FEDERAL ELECTION COMMISSION

WASHINCTON. DC 204fI)

A81-1

Ap r I 1 19 , 1988

MEMORANDUM

~. Attached please find a copy of the final audit report of

Municipal Bond Investors Committee which was approved by the

Canmission on Apri 1 8, 1988.

Informational copies of the report have been received by all

o parties involved and the report may be released to the pUblic.

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c

TO:

FROM:

SUBJEcr:

FRED EILAND

alIEF, PRESS OFFICE

ASSISTANT

ROBERT J. COSTA

STAFF DIRE~~Y­ ~­

AUDIT DIV IS ION

PUBLIC ISSUANCE OF FINAL AUDIT REPORI' -

MUNICIPAL BOND INVESTORS COMMITTEE

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Attachment as stated

cc: Orice of General Counsel

Office or Public Disclosurev

Reports Analysis Division

FEC Library
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RL872/042l88

FEDERAL ElECTION COMMISSION

WASHINGTON 0 ( 204b.1

A87-34

REPORT OF THE AUDIT DIVISION

ON

MUNICIPAL BOND INVESTORS COMMITTEE

1. Background

A. Overview

This report is based on an audit of the Municipal Bond

Investors Committee ("the Committee") undertaken by the Audit

Division of the Federal Election Commission in accordance with

the provisions of the Federal Election Campaign Act of 1971, as

amended (lithe Act"). The audit was conducted pursuant to 2

U.S.C. § 438(b) which states, i~ part, that the Commission may

conduct audits and field investigations of any political

committee required to file a report under Section 434 of this

title. Prior to conducting any audit under this section, the

Commission shall perform an internal review of reports filed by

selected committees to determine if the reports filed by a

particular committee meet the threshold requirements for

substantial compliance with the Act.

The Committee registered with the Federal Election

Commission on March 9, 1987, and maintains its headquarters in

Miami Lakes, Florida.

The audit covered the period from the Committee's

inception, February 19, 1986 through December 31, 1986. The

Committee reported an opening cash balance of $-0-1 total

receipts of $91,570.001 total disbursements of $70,531.00 and a

cash on hand balance at December 31, 1986 of $21,039.

This report is based on documents and workpapers which

support each of its factual statements. They form part of the

record upon which the Commission based its decisions on the

matters in the report and were available to the Commissioners and

appropriate staff for review.

B. Key Personnel

The Treasurer of the Committee during the period

audited was Mr. C. Richard Lehmann.
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C. Scope

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The audit included such tests as verification of total

reported receipts, disbursements and individual transactionsl

review of required supporting documentation, analysis of

Committee debts and obligationsl and such other audit procedures

as deemed necessary under the circumstances.

II. Au~it Findings and Recommendations

A. Misstatement of Financial Activity

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

states in part that each report filed under this section by a

political committee shall disclose for the reporting period and

calender year, the total amount of all receipts and all

disbursements.

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The misstatement of receipts was the result of:

Over reporting a loan received, ($3000)

unreported refund, $500

unreported receipts, $39,028.83

The misstatement of disbursements was primarily the

result of:

A reconciliation of bank activity to reported activity revealed that the Committee's reported receipts were understated

by a net amount of $36,528.83 and reported disbursements were

understated by a net amount of $36,965.86, representing 28.51\ of

reportable receipts and 34.38\ of reportable disbursements.

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o Unreported disbursements, $36,868.83

The Committee Treasurer stated that the unreported receipts and disbursements were in many cases due to the

Committee making expenditures on behalf of other entities

associated with the Committee which were subsequently reimbursed

by those entities. Since the transactions netted out the

Treasurer felt it was not necessary to report the receipts and

disbursements. The Committee treasurer stated that an amended

report would be filed correcting the misstatements noted above •

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Friends of Bob Torrice11i, Inc. is the principal campaign

committee for Congressman Robert G. Torrice11i 9th District

N.J. The Congressional primary date in New Jersey was June

3, 1986, therefore, these contributions are considered to

have been made with respect to the 1986 general election.

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

states that no multicandidate political committee shall make

contributions to any candidate and his authorized political committee with respect to any election for Federal office which,

in the aggregate, exceed $5,000.

Section 441a(a) (4) states, in part, that for purposes of paragraph (2), the term Wmulticandidate political committee"

means a political committee which has been registered for a

period of not less than 6 months, which has received

contributions from more than SO persons, and except for any State

political party organization, has made contributions to 5 or more

candidates for Federal office.

Prior to filing a statement of organization with the

Commission on March 9, 1987, the Committee made four

contribqtions totalling $6,931.46 (3/24/86, $1,5007 9/8/86, $1,00011, 9/16/86, $2,50017, 10/13/86 $1,931.461/ in-kind) to

Friends of Bob Torricelli, Inc.

Section 44la(a) (1) (A) of Title 2 of the United States

Code states that no person shall make contributions to any candidate and his authorized political committees with respect to

any election for Federal office which, in the aggregate, exceed

$1,000.

In the interim audit report, the Audit staff

recommended that within 30 days of receipt of the report the

Committee file a comprehensive amendment correcting the misstated

activity. On March 22, 1988, the Committee filed a comprehensive amendment correcting the misstated activity.

Recommendation '1

The Audit staff recommends no further action be taken on

this matter.

B. Contribution Made in Excess of Limit

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Person is defined at 2 U.S.C. S 431(11), in part, to

include an individual, partnership, committee, association,

corporation, labor organization, or any other organization or

r group of persons.

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Since the Committee did not qualify as a multlcandldate committee

at the time the contributions were made it was limited to $1,000

per election.!/ The Committee has therefore exceeded the

contribution limit to the Torricelli campaign by $4,931.46. It

should be noted that a $500 refund was received by the Comm~ttee

from the Torricelli Committee on June 3, 1986.

Regarding the in-kind contribution noted above,

Committee files contained a letter dated 10/13/86, addressed to

Friends of Torricelli which indicated that $1,931.46 in printing and postage was paid on behalf of Friends of Torricelli.

Committee bank records contained a check dated 10/9/86 payable to

the Committee Treasurer's corporation for $1,931.46. The

Committee Treasurer stated that he paid the expenses and was

later reimbursed by the Committee however, the Treasurer did not

provide any documents to support his payment of the original

expenses.

In the interim audit report, the Audit staff

recommended that within 30 days of receipt of the report the

Committee provide evidence that the direct contributions,

totaling $3,000, are not excessive or seek a refund of the

remaining $2,500 in excessive contributions. In addition the

f Audit staff recommended that the Committee provide evidence that ~.the $1,931.46 payment made on behalf of the Torricelli Committee

is not an excessive contribution or seek a refund. A copy(s) . . (front and back) of the check(s) used to pay the $1,931.46 in

original invoices is to be provided to the Audit staff within the

30 day period. On March 24, 1988, the Committee provided the

Audit staff with a copy of a refund check in the amount of

$4,431.46 received from the Torricelli Committee.

Recommendation 12

The Audit staff recommends no further action be taken in

oc this matter.

C. Matters Referred to Office of General Counsel

Certain other matters noted during the audit have been

referred to the Office of General Counsel.

2/ Bad the Committee filed a statement of organization timely,

it would have attained multi-candidate status on August 19,

1986 •

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