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FEDERAL ELECTION COMMISSION

\\'A~HING10'. DC 204bJ

A83-l6

Septembet 9, 1983

MEMORANDUM

TO: FRED EILAND

PRESS OFFICER

FROM: BOB COSTA

.1••'1""\. I~' l L.-'

"

SUBJECT: PUBLIC ISSUANCE OF FINAL AUDIT REPORT - DON MILLS FOR CONGRESS AND KENTUCKIANS

FOR A DEMOCRATIC CONGRESS

I

.4t

•

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

Don Mills for Congress and Kentuckians for a Democratic Congress

which was approved by the Commission on August 31, 1983.

Informational copies of the report were sent to all parties

involved on August 31, 1983 and the report may be released to the

pUblic.

Attachment as stated

cc: FEe Library

RAD

JUblic Record
FEDERAL ELECTION COMMISSION··

\\·~~H'NC10". 0 C 204&3

AE3-16

REPORT OF THE AUDIT DIVISION

ON

DON MILLS FOR CONGRESS

AND

KENTUCKIANS FOR A DEMOCRATIC CONGRESS

I. Background

A. Overview .'

.. '.

....

......

This report is based on an audit of Don Mills For

Congress and Kentuckians For A Democratic Congress ("the

Committees"), undertaken by the Audit Division of the Federal

Election Commission in accordance with the Commission's audit

policy to determine whether there has bee~ co~pliance with the

provisions of the Federal Election Campaign Act of 1971, as

amended ("the Act"). The audit was conducted pursuant to Section

43S(b) of Title 2 of the United States Code which states, in

part, that the Commission may conduct audits and field

investigations of any political committee re~uired to file a

report under Section 434 cf this title. ?rior to conducting any

audit under this section, the Commission s~all perform an

internal review of reports filed by selected committees to

determine if the reports filed by a partic~lar committee meet the

threshold requirements for substantial cc~;:iance with the Act.

The Don Mills For Congress co~~:t:es registered as the:

canciaate's principal campaign com~ittee ~::~'the Federal ~lecticn Co~~ission on April 12, 1982. ~~~ ;entuckians For A D€~ocratic Co~S:€ss.co~mittee registerec as a~ authorized joint f~~c ~aisinc co~~ittee of the ca~didate ~::~ ~he Federal Election CO~~i5sion on Augest 30, 1982. Both Co~~:::ees maintained

headquarters in Frankfort, Kentucky.

The audit of the Don ~i11s For :c~s:ess committee

cove:ed the pe~iod April 1, 1982 throush ~~~e~ber 31, 1982. The Co~~ittee reported an opening cash on ha~= ~alance on April 1,

19£2 of $-0-; total receipts for the perio= of $110,962.70; total cisburse~ents for the oeriod of $105,003.;;: and a closing cash • - I

bala~ce on December 31, 1982 of $867.25. ~/

1/ Based on reported receipts and expenc:~ures, reported ending

cash is misstated by $5,091.68.
3

In the interim audit report, the Audit staff

recommended that the committee file a comprehen~iv~ C'lJII~IIU"'~J'lt fUL'

1982 to correct these misstatements. On August 19, 1983 the

Committee filed the amendment which materially complied with the

recommendation.

Recommendation

-.

No further action is necessary.

2. Itemization of Contributions

Section l04.3(a) (4) (i) of Title 11, Code of

Federal Regulations states that the identification of each

contributor and the aggregate year-to-date total for such

contributor shall be reported for each person, other than any

committee, who makes a contribution(s) which aggregates in excess

of $200 per calendar year, together with the date of receipt and,

amount of any such contribution.

Section 100.12 of Title 11, Code of Federal

Regulations defines identification, in the case of an individual,.

as the name, the mailing address, and the occupation of such

individual as well as the name of his or her employer.

A review of the disclosure reports indicated that

the Committee cid not disclose the occupation and/or name of

employer for 43 of 66 contributions from individuals. This

represents 65.15% of the total individual contributions itemized

on the Committee's reports. The Committee's bookkeeper explained

that the omissions resulted from a misuncerstanding of the

requirements concerning the disclosure of ccc~pation and name of

employer for contr ibutors. .'

o Also, t~e Committee did net c:~close the aggregat~ vea:-to-aate totals for 4~ of the 66 ina:~:c~al contributors

:-t:.-:-':' ..:.,-_ ..:_L€'-o 0 ..n ~l-o ~.~ ....... ~-or~c:: _~ .'-- {66 • 67~}~, an0" '1- _I ,....:

..... __1C., c o-~:b u\.rJ. U 1 tOons from

pcl:~iccl cc~~it~ee~ (69.5~).

In the interim audit re?o~t, the hucit staff :eco~illended that the Committee file amenCEC receipt schedules to

include this rec~isite information. o~ ~~cust 19: 1983 the Co~~ittee fileo-a~enaed schedules whic~ ~a~erially complied with

tte hucit staff's reco~mendation.

~o further action is necessary.

:
i,r4 ... "I'~-_:_-~:_- _~ 1:' •• .:3~~ •• ~_,.. •• .:. -. ....

Section 434(b) (5) of Title ~, ~~ited States Code

requires that each report under this sectic~ shall disclose the

name and address of each person to whow a~ expenditure in an

aggregate amount or value in excess of $200 ~ithin the calendar

yeat is made by the IepoIting committee to meet a candidate or

committee operating expense, together with the date, amount, and

purpose of such expenditure.

1'.. !'~t.'~~~, ('\~ n;c=,..lnc:=nr~ r~nt)rT!=; and exoenditure

records indicated that the Committee did· not itemize~63

expenditures which required itemization totaling $9,006.07. This

represents 38.41% of the total number and 9.33% of the total

dollar value of expenditures requiring ite~ization. The

bookkeeper explained that he misunderstood the requirement to

itemize expenditures less than $200 when tr-e aggregate value of

such expenditures exceed $200.

Also, the Committee did not ?!o?erly itemize 66

expenditures totaling $45,375.03 on its reports. This represents

40.24% of the total number and 47.00% of t~e total dollar value

of expenditures requiring itemization. Fo: the most part, the

expenditures were itemized without a mciling address shown for

the payee.

In the interim audit report, the Audit staff

recomrnencec that the Committee file amencec ex~enditure schedules

to correctly itemize the above expenditures. On August 19, 1983

the Comffiittee filed amended schedules ~~ic~ ~c:erially complied ~ith the huait staff's recommendation.

°No further action is necessary.

~. Co~tinuous Re~ortinq of ~~::5 a~c Oblioations

Section 10~.11{a) of Ti:l: :1, :oce of Federal Regulatio~s states in part that debts cn= :~:i;ations owed by or

to a noli tical committee ~hich remain ou~s:~~c:no shall be

conti;uously reported on separate schec~:~= ~~~ii extinguished.

A revie~ of loan recorcs :~::ca:ec that the Co~~ittee obtained 3 loans totaling $8,~~O: cne (1) from the

candidate for 52,500: one (1) from the ca~=:ca~e'5 brother for

$900: a~c one (l) fro~ a bank for $5,OCC =:-s:gnea by both the candid~te and his brother. The brothe:'s ~a~e ~as deleted as an

endorser on the $5,000 loan in early SeF~E=~er ~hen the treasurer
,"

5

~=~ =~~i~~~ th~t t~p pndn~sement was consioered a contribution to

the extent that the loan was outstanding. TnlS resulteu in a

contribution in excess of the limitation i~?osed by 2 U.S.C.

441a(a) (1) for a period of 3 1/2 months.

The Committee included the necessary schedules

disclosing these loans in the report period during which the loan

was obtained. However, the Committee di~ ~ot file the necessary

schedules in subsequent reports disclosing the loans through

repayment. These loans represented the only debts and

obligations incurred by the Committee.

With respect to the repayment of the loans, the

loan of $5,000 was repaid with interest on November 5, 1982. The

loan of $2,500 was repaid with interest on October 27, 1982. The

loan of $900 remained outstanding. It should be Qoted that the

loan of $900 from the candidate's brother which was made on May

13, 1982 required a written designation from the brother showing:

that the loan was designated for the general election because the

brother had made an earlier contribution of $1,000 to the

Committee on April 6, 1982. The primary election was held on May

25, 1982.

On August 19, 1983 the Coa~ittee complied with the reco~mendation made by the Audit Divisio~ in the interim audit

report by providing a written statement from the candidate's

brother forgiving the $900 loan to the Cc~~ittee as well as

designating the forgiveness as a contribution to the general

election. In addition, the Committee provided schedules for the

other 2 lo~ns disclosing them through repa:~ent.

Recc~mendation

~o further action is necessary.

II!. Kentuckia~s For A Democratic Conc:ess

h. ~ucit Findino and Reco~menac~:~~

Based on examination of the re~c:ts and statements

filed and the records presented by the C;~~ittee, no material pro~le~s in complying with the Federal E:E=tio~ Campaign Act were ciscc~e~ec during the course of the audi~.