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F[O[R,\l ELECTION COl',,\115510N

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REPORT OF TIlE AUDIT DIVISION

ON THE ~mALEN FOR CONGRESS COrU1ITTEE

I. Backcround

A. Overvie,v

This report is based on an audit of the t.Jhalen for

Congress Committee undertaken by the Audit Division of the

Federal Election Cor.'Jnission in accordance \·:ith the Ccmnission' s

audit policy to determine \.;h ~ther t!1cre has been cOr:1pli.:ll1Ce

'-lith the provisions 0:2 the Federal ~lection Campaign Act of

1971, as amended (the Act). The audit was conrlucted pursua~t

to Section 438(c)(S) of Title 2 of the United States Code which

directs the Conmissicn to make fron time to time riudits and

field i~vestiga=ions with rcspecc to reports and statements

f1led unJer the provisionn of the Act.

The COll~ittee re~',istered ~.;ith the Office of the

Clerk of the United Stnte~;' House of Renrc~;entativc~ on

April 17, 1972 i~l s~:?port or the EOl~or~ib~.e Charles ~1. \·n1C3.1en . .1::.,

candidate for the office or u.s. R2nrescn~~tive frow the Third

(3rd) Congres.?i.cnal .!)i~trict of.. Ohio. . On Fcbrua~y 4, .19?6,

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cn!11pa:i.[',u co:r.::~ittcc for the 19i6 election. The C01~llnittce

ftaint~incd its hC3dquarters in Daycon, Ohio.

The nudit covered the period fren January 1, 1975

throuLh S0~t2~:~bl~r .30, 1977, the finD 1 co'\·e~<:t~e da tc of the

latest report filed b~ the Co~~ittce at the time of the audit.

The Con1..~littee :-cported a bc~inning cnsh b.:tlancc on J~nuary 1,

1975 o[ $891.24, tot~l receipts for the period of $41,082.29,

tot31 expenditu~es :or the period of $41,836.37 and a closing

cash balance on Sc?~e~bcr 30, 1977 of $137.16.

This audit report is basco on doc~~cnts and \"orl~in£;

papers supporting each of its :acru..l1 st.::l ::(-:::t~nts . Thcv

forLi pa~~t of ~hL) ~ccorJ unO:1 ..:hi~h :hc Co~:.:i~sion bc:1~cd its

decisions on th~ ~3tt~rs ~11 the rC~0rt an~ ~~re available to

COr.'Juiss ioncrs and -:lpp=opria te s t3fl for rc\·ic\v .

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B. Key Personnel

The principal officers during the period covered by

the audit were as follows:

Mr. Roland F. Eichner, Chairman, 1/1/75 through 2/3/76;

1-1r. Charles W. Horlacher, Chairman, 2/4/76 through

4/12/76;

Mr. Charles W. Horlacher, Co-Chairperson, 4/13/76

through 9/30/77;

Ms. Vella }1. Heisel, Co-Chairperson, 4/13/76 through

9/30/77;

Mr. Richard M. DeLon, Treasurer, 1/1/75 through

4/7/76; and

Mr. Leo Kessler, Jr., Treasurer, 4/8/76 through

9/30/77.

c. Scope

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The audit included such tests as verification of

total repo~ted receipts and ex?enditu~~cs and individual transactions; revie~.; of required suppo'!'tin:; docun~entation; analysis

of Co~~i::ec debts and obli~ntions; and, scch other audit

l>roccdu::es as deemed necessary under the CirC\:ll1stunces.

II. Audito:-'s Statement and Dcscrintion of Findings

It is the opiniol1 of the Audit staff, based upon e:-:Q.mination

of the reports and statements filed and the records prescnt:ed,

that, except for the deficiencies noted beloH, the reports and stater:~~.lnts of the ~\'n31en £Ol.· Con~ress C~';;::l1i~tce fairly present

the fi.:·l~:1Ci.:ll accivities of the CO:ll:nittce for the period ccvereLl

by th~ :ludit. Further, except 3~ notl'd belo\v t no material

probl c:~~ in complying \.;ith the Feder31 Election Campaign l\ct

were discovered during the course of the audit.

A. Contribution in E:-:C<?5S of the TJimit3tion

Section q413(3)(1)(A) of Title 2 of the United

States CoJe provides that no pcr~on sh311 ~akc contributions

to any ci1:~~iid~tc and his authori::ed poli tic31 cC'mr.littees

with re~p~ct to any clcctio~ ~or Fedc=al office ~hich, in

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Conmlittcc records show the receipt of a loan

of $3,500.00 and a contribution of $100.00 from the Committee 'rre~surer. The records show the 10:'1n \vllS made on }t3V 20, 1976

nnd was subsequently rep~id in two installments. Th~ first

installment of $2.500.00 w~s made a day later on May 21, 1976.

The second of $1,000.00 was made three d3ys later on May 24,

1976. Each of the transactions was itemized on Committee

reports as required.

In a letter to the Clerk of the U.S. House of

Representatives on June 29, 1976, the Treasurer explained

th3t he made the loan to prc'~ent an overdraft of the Comnlittce' s

bank depository and an invalid check being provided to the

U.S. Postmaster. The Treasurer stated he was not aware at the

time that a loan was applied to an individu~l's contribution

lilnita tion.

Rl!commcndation

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As noted above, the Treasurer contributed a total of

$3,600.00 to the Committee end in so doing, exceeded his

contribution limit by $2.600.00. However, since the loan

'''<JS repaid t\7ithin period of four days, 'tole recoTI1mcnd no

action be taken with respect to this matter.

B. Other ~!~1 t ters

Listed belotv arc other deficiencies noted during

the audit for ",.;hich no 3ction is recorr.lllcnded. The Conlmittee

has been advised of the requirements of the Act which relate . to each itcln.

a) The Con~nittee failed to itclnizc the total

procc('ds of $395. CO frOl:1 a fundr~ising event on Schedule D

Uf) required. :\~O cont::ibucicn in c:{CCSS of $100 ,";:lS received

from those attPndir~;.. The anlount ~·;as reported in the

C0l1U11ittce's receipt: and expenditure totals as required.

b) The Committ~e failed to itcmi~e in-kind

contributions totalin; $253.00 and two (2) tran~fcrs from

political conlmittc~:.' to:':.:tling $150.00. The c1::10unts ""ere

reported in the CC'l1ll;littcc' s receipt and cxpcndi~urc totals

3S required.

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c) The Committee failed to retain a receipted bill or other contcmpornncous memoranda as required for four

(4) expenditures totalling $2,055.83. However, the expenditures were supported by a cancelled check.

d) The Committee made seven (7) expenditures totalling $176.15 in cash from proceeds collected from a fundraisin~ event. The funds were never deposited into

the COnUlli t tee •s deposi tory.