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FEDERAL ElECTION COMMISSION

11.'1" "11\111 :'I.j W

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REPORT OF TIlE AUDIT DIVISION

ON 'rilE

SHRIVER FOR PRI·::aOENT cor,mITTRE

I. I3nckqround

This report covers an audit of the Shriver for President

Com:'!'ittee (lithe Committee") unc1(~rtaken by the Audit Division

of the Federal Election Comr'lis~;i.on to determine whether there

has been compliance with the provisions of the Federal n1ection

Cnmpui~n T\ct of 1971 ns aMended (lithe Act"). The audit wns

conducted pursuant to S0ction 438(a) (8) of Title 2 and Section

9038(n) of Title 26 of the United Stntes Code.

Section 438(n) (8) directs the Commission lito make froM

time to time audits nne1 field investinations with respect to

reports and statements filee: under th~ provisions of this

chapter, and with respect to n11eqed failures to file any report

or stat:Clilent required under the provisions of this chapter, and

to give priority to auditin~ and field investigating of the

verification for, nnd the receipt and use of, any ~ayments

reccl VOtl by a canc1ic1.:J.te under Ch,lpter 95 or Cha?ter 96 of the

Internnl Hc:venue Code of J.~::J·l." Section 9038 (a) of Title ~G

states thnt "after ench l::.:ltchinq p;lyment period, the ('0mmir~:;j(1n

shn11 conduct a thorough exn~inntion and audit of the qunlified

cnmp.. iqn e:-:penses of evc:7~' canclid.tte and his authorized comn:i.tt(~c~S

who received payments undnr S0~tion 9037."

'1'he Comr.littce wa:.. est:lblislwtl ns the princip.:t1 campaic:n

committee of: R. Snrqcnt ~~1~i':(~r on ,lulu 15, 1975. Tho nri:1cip.ll

offi.cers of the Conu1littcc at t.~:i' time of the audit \·:ere· "iill.i.~n

i-lcCon:li.ck Bl.:ti.r, Jr., l\.rt:1t~:::- 'RClnnoy, Sr. and Chesterfield Srd. t:1,

CO-C.h':li rncrsnns, Leveo S.':1C~10::, '1're<:.1;,urer from ,Tul'! 15, 1975 te'

i\!)riJ. 1S', 1970; "lillinm ? 1:0]1'.', 'rrc.:tsurer from T\nril 15, 19,,;"G

to NOVC::lbc~r 7, 1977 nnd ;·.1.:111 .-r,· Spnt~, 'l'reasurer from ~~o\'cmb('l' J,

1977 to prcscnt. The CC::',::li ttl',~ maintains its headrm.:trtcn; i:l

\'l.:tshi nrrton, D. C •

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Find inC1s .ind Conclu:-d.ons

T;1':-~!i: fL(nll'(~r: al~(\ stc:1t.·x: .:is ori(:1.n.:lll'.. reported, alt::ouc:!l

it h'-I:, L''::-L':l nntc~t: th:1 t: th,:,y a're arithr::eticc:111y inC()l-r-~ct.

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1"' !'f:-r;cnte~t1 bole'..: i s a~othcr m~lttcr noted durincr the au..::.i t

[or '...'l::''.:h t!1L~ .:\ud.it st.J.::[ feels no CO::U:lission"uction is-'-:c:1~-rantc~d.

0n Janua!:'v 24, 1979, the Committee filed a cO~Drelwn~i ":0

amendment covering ~his period disclosing the required informutio~.

'1'h!::; rn.-Itter had bee:1 referred to the Office of Gener.J.l

Coum:;cl fo~ their revim-i and consideration as i'1UR (n.:tttc" l;nc!("-!~ Re'-: i 1.:\-:) 904 .:111(1 \-/;15 closed a fter the c()r.~::1ittce fi 10(:

.:H:1'-'::d!:lC·!:l:~~ d.i.scl(\;,ing the informc:1tion.

R0C()i~lm01V~"I·.ion

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1\. C'f'mmi ttee Reports

- 'rhi~; dlHli t report is based on documents and ''larking pupers

support in" e.,ch of its factual statements. They form part of

the record lIpon which the Commission based its decisions on the

matters in t.his report and were available to Commissioners and

appropri.:lt:l' ~taff for revie...,. "

()ur revim'l of Committee files con firmed that Commi ttc,.~

reports \Vcr,-~ incomplete for the months of February and ~~arch,

1976. 'rho sunwary pages were omitted for the March report and

blunk for tho February report. In addition, the itemized schedules

subr.1i tted for those periods were incomplete. "Specificall~l, a _

loan and 10u n repuymcnt in the amount of S50,000 was not disclL~.

i\lso, u sample of expenditures made during the period ,July 15, 1975

throu~Jh ,J1Hlc 30, 1976 ''lere tested for proper itemization on disclosure rer'orts. '1'l1e majority of the sample items ''lhich ,·,ere not

properly it~rni~ed \Vere expenditures made during February and ~arch of 197G.

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

requires the full disclosure of all financial activity by the

Committee during the reporting period.

'rho audit covered the period from July 15, 1975 through

June 30, 1977. During the period the Committee reported

beqinninq e'-1sh of $-0-; receipts of $1,379,319.12; e:.:penditures

of $1,3R:i,4~3.26 and ending cash of $4,550.97. !/

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The Committee received a loan in the amount of

$50,000 in Fcbruary, 1976 (sec A above). The proceeds of

this loan ,,,ere paid directly to one (1) vendor and two (2)

state committees by the bank without first being deposi.ted

into a Commi.ttee depository as required by Section 4371> of

Title 2 of the.United States Code.

C. Un<1ll,lli f ied Campaiqn Expcmscs

Scction 9038 (b) (2) of Ti.tle 26 of the United :;I:ates

Code providcs that if the Commission determines that any amount

of any payment made to a candidate from the matching payment

account was used for any purpose other than: to defray the

qualified campaiqn e:·:penses with respect to ,,,hich such payment

was made; or to repay loans the proceeds of which were used, or

otherwise to restore funds (other than contributions to defray

clUalified camnaicrn e:·:nenses ,,,hich \-lOre received and expended)

which "lOre used, .to t1~[ray qualified campaign expenses'it shull

notify such candidate of the amount so nsed, and the candidate

shall pay to the Seci~C'tary or his delegate an amount equal to

such a::1ount.

Section 00J2(9) (A) of Title 26 of the United Statcs

Code defines a qu.l1 ified campaign expense as a purchase, paY~1c::;t:,

distribution, 10.:1.n, advance, deposit, or gift of money or of

anvthinq of value incurred bv a candidate, or bv his authori:-:cd

cOI;mli. t tee, in conncction ,,,itil his car.maicm for ~omination or

election; and neither the incurring or p~ymC'nt of which,consUtutcs

a violation of any law of the United States or the state in "::1 ich

the expanse is incurred or paid.

Scction 432(d) of Title 2 of the United States Coderequires thut the treasurer obtain and keep a receipted ,bill st~ttincr the JXlrticulars, for every expcnditure made by or on behal~ of a nolitical comnittee in excess of ~]OO in amouht a~d

for any such' e:·:!)cnc'!i t\lre in a lesser anount, .i f the aq~irC(:,lte

ar.·lount of such e:·::)cnc1itu:;.cs to the same person durinq a cillc:;c:::r '.?C.:l~" c:·:cc:(~(ls $] 00.
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1. Immfficicntly Documented Fxnenditurcs

In addi tion, records in support of Co:mni ttee

~ccounts maintained in Massach115etts and ~~ssissippi remain"

i ;~("OI:lP lete. Oriq ina11~/ the U!:iount of insufficiently docurnen t0d

,'x:x;ndi.tures made from the ~·1assachusetts account was $15,320.2l.

'j'l:is ni'!O\lnt had been rec11~ced to $11,119.10. .

At the t:i.~1(~ of the initial fielchlOrk records

~v~ila!)lQ for the Mississip?i account consisted of copies, of

:xm}: st.J.t:el:1ents obtained by the iiudi t staff through direct

CC:1 lac!'. \-d. l11 ,:m indivi.l':ual\....ho h"c1 been involved with the

!·:~~.... ~:;i~::~;j,nlJi c;]l:m::d,cf;1. Sl:;)sen\l.'ntl,· suf.:'icipr:t docur..cntatiOl~

...::~s pr-(~:~~;1[,(::d for a pcY."tiC'n ~[ .th~~· $5,16·1.07 i.n ex!'e:1ditures.

'l':,~~~~C' l"i':-;;d.ncd a totul 0:: S·;,015.(i~ in c:':!'l(:'l':clitures from the '1~ <- • ""0 i.,·' , ,.,,,, ., ,...1, c..o" .~.~ -t ... ,1 l' 1 tation in- .·._.,sl·· .. '_·lJ:)~ aCCOl....... \';"_" .. <._,-, SIll :.01. L:t. )} C 0cumen

su~ficicnt to establish connection to the campaign.
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'l'he final audi t r~pol·t was approved by the Commission

on i\U9ust 2, 1978 and the Committee rc!c.:l~ived the Commission's

fL:1al detenninution with respect to repayment on August 17,

1') 7 3. Furllll'r, the Commi ttee requested and \vilS ~p:-anted an

I::·:tcnsion l)f 30 tlays to submit the information requested in the

h~tter of ulhlLL findings.

On t\u(Jur~ t 2, 1978, the Commission had determined tha t

17 expenditures, totaliny $9,011.81 identified during a 100%

ro'.'io\·I. of tIl(! Caromi ttee I s headquarters bank accounts were unqualified cumpuign expenses. During the 30 day extension period,

tho Conunitb:.'Q submitted adequate documentation which reduced

the <l::\ount froll1 $9,011.81 to $788.32. Furthermore, the amount

of urH..iuCllificd campaign expenses relating to the z..lassachusetts

b.ink account \vas reduced from $11,119.10 to $4,487.36; while the

u:::ount of unquLl1ified campaign expenses relating to the Mississippi

bu~~ account was reduced from $4,015.62 to $375.00. Thus, as of

October 16, 1978, the amount of unqualified campaign expenses totaled

$5,650.68.

Since the expiration of the extension of time granted

to t:1e Comrr,i t tee, they s ubmi t ted an additional $ 2,091. 95 of'

doc~::::ent.::ltion in support of c:·:penc!itures from the Massachusetts

uccou~t rc~ucinl; the anount of unqualified campaign expenses to S~,295.41.

On J~muary 17, 1979, the Commission determined that

cX~0~ditures Lota1ing $3,558.73 ($788.32 - 100~ review;

$~,395.41 - M.::l~sClchusetts account; anc! $375.00 - Mississippi

aCCDi.::1t) arc cO:lsidered unclualified campaign c:·:penses and

rC::.::'·~·.:lble in full to the United St.:ltc:; 'l're.:lsury.

'rile CanLlidate was notified of this determination

u':" le::ter c1.::lted J.:lnuary 30, 1979, ilnd received by Committee

o::::iciClls on Fobruilry 10, 1979, thcn.d/! extending the 30 day

()l:~;cction pCI~iod to Harcn 12, 1979 Clnd the 90 day repayment

:"~~'i-o(l to ~l<:iY 10, 1979.
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578.00

375.00

$1,553.00

$ 600.00

Hississipj;)i Account

100~ review of expenditure records

at Committee Headquarters

Traf~ic and Parkinq Violation Fines

n.

A.

Insufficiently Documented Expenditures

2.

1.

On S0~~'tcmbcr 27, 1cn '), the Com:ll ittee remi t ted a check

payablo to the United SLates Treasury in the amOullt of $1,553.00.

S'-'ction 9l)"l:l (1)) (1) of: 'l'it1e 26 0:: th!"! L:aitcc.1 States

C(ld0 jl:-o,:L:.::.-:, th':lt if thl' C:)i"rli.~:;sion dc~'-'~·::linc,.; tha~: any portion

(J:. th,:- l:·:1~·::.f-::-lt !~la.j(~ t() ':t C;1:1di.ct:ttc [rc):,:,,: :'::0 m:.lt(;:1ing pa~"IncI1t

d';t;rJun:: ".;.::-<~~ in c:·:cc;;;; of: ti1t:: alj'j1~C'Fltc .:l:::"-~~1:1t of p.:l~·mcnts to

·..;;li.dl ~;~C:l c:.mdid.:lt.:) '../.:1.:3 entitled 11!l(:l:1~ ~0::tio!l 903·\, it shull

lwtif:,.' ~:'..: C:U1L:iLl~ltL', .:lt1c: t:h·,' cd!ldid:ttc s:;a11 p,ly to the Sccret.:1.r":·

(;:- hi;; (:':::'-'::(j~l::C all ;lii~Ol.::·lt coo;:.:,::} to the .:l:::t~·:..:nt 0:' c:·:ccss payr.lcnts.

RC'cnn~me:1c1at ion

Sinc0 the Committee has repaid the entire obligation, we

rccomme:1,: no further action 011 this matter.

2. Parkinq and Traffic Fine~~

Rcnavment Summa.rv ----=:: .. ..

The Commission determined that the expenditure~

for traffic and parkinq violation fines totaling $S78.00 be

considered unqualified campaign expenses and repayable in full

to the United States Treasury.

During the review of Committee files it was

detarmined that the Committee had paid traffic and/or parking

violation fines totaling $578.00.

On ~tarch 21, 1979 .:md ~tay 9, 1979, the Committee

submit lL'd documentation in support of expenses totaling

$2,SIII.73, sufficient to demonstrate that these disbursements

wer,· ,\1I;11if1ed campaicJn expenses. This submission reduced the

baLIII"(' of these unqualified campaign e:·:penses to $975.00.

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The Commission dotermincd that Mr. Sargent Shriver's

c~ndid~cy for. tha Democr~tic pre~idential nomination effectively

terr-:inated on r·';IY 11, 1976. The candidate was thus prohibited

from makin~ ~ny expenditures from Federal matching funds after

the ~bovc d~ta which had not been incurred or contracted for

prior to that dLlte.

In rt?sponse to our request of .lune 24, 1976 t.he·

CO!n:ni ttee submi tted a statement shmoJing outstanding ohl i qations

of $261,940.00 and assets of apprnximately $15,000.00 01' the

cnn~idate's date of ineligibility. As of ~anuary 21, lQ77, the

Co:;:.-:1i ttee subm i tted a statement shO\'1ing outstanding camp;tign

obligations of $231,293.38 and assets of $3,683.20. 'I'hn candidutc

received $10,G.12.00 in matching funds after January 21, 1977.

Although the r~cords presented did not allow us to vorify the

exact amount indicated outstandinq, the Audit staff was able to

verify that a substantial portion of the stated outstanding debt

\·;us larqer than the amount of matchin(J funds requested. lIenee

no payments in excess of eliqibility were received by the candidate.

II. l\ucH tor's S!. .-It:emcnt

Except for the rna ttcrssp("ci f lcally noted in this report,

the .:-illdi t disc] o~:"cl that the Camr.li ttee conducted its activities

in ~onfornity wit!l the Federal Election Cnmpaign Act of 1971, as

a:-ac:,Jec1, a:1d in cnnfonaity \o,'i th Chapter 96 of 'T'1 tIc 26, Pnited

St~tcs Cede, in nIl m~terial aspects.

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FEDERAL ElEe nON COM,\\I....~I()N

H~:; I\. "IRIII .... \\

\\·'''HI....<.IO.... IH .!Il,.,d

AIDmC&L REGARDING 'lHIS ORGANlZ.ATIC6

*Y BE lOCATED IN A QHJLE'l'ED aHLIANCE ACrIOO

FILE mI.EASED BY mE aJto1ISSI<E AND MAlE PUBLIC IN

'DIE PUBLIC REOORDS OFFICE. mR '!HIS PARTlaJLAR

ORGANIZATION'S <D1PLE'l'ED CIH'LIANCE JCr100 FILE

SIMPLY ISK FUR '!BE PRESS StJtofARY OF MJR 4f >'l'Y

'DIE PRESS stMofARY wm. PmVIDE A BRIEF HISTORY OF

'DIE CASE AND A StIft\RY OF '!HE ACrl<m TAKEN, IF AN'{.

Audit '! /6 L .