Final Audit Report of tlie 

Commission on the 

United Association Political 

Education Committee 

January 1, 2007 - December 31, 2008 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(tiie Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.' The audit 

determines whether the 

conunittee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Committee (p. 2) 

The United Association Political Education Committee is a separate 

segregated fund of tiie United Association of Joumeymen and 

Apprentices of the Plumbing and Pipefitting Industry of the United 

States and Canada, headquartered in Annapolis, MD. For more 

information, see the Committee Organization chart, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals $ 3,130,530 

o Transfers from Affiliates 313,467 

o Refunds from Federal Candidates 33,500 

o Other Receipts 230.574 

Total Receipts $ 3,708,071 

• Disbursements 

o Contributions to Federal Candidates $ 2,103,850 

o Independent Expenditures 510,314 

o Operating Expenditures 72,655 

o Otiier Disbursements 1.392.617 

Total Disbursements $ 4,079,436 

Commission Findings (p. 3) 

• Excessive Contributions to Candidates and Other Political 

Conunittees (Finding 1) 

• Failure to Timely File Notices and Properly Disclose 

Independent Expenditures (Finding 2) 

• Failure to Properly Disclose Transfers from Affiliated 

Committees (Finding 3) 

2 U.S.C. §438(b). 
Final Audit Report of the 

Cominission on the United 

Association Political Education 

Committee 

January 1, 2007 - December 31, 2008 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Audit Hearing 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Commission Findings 3 

Part IV. Commission Findings 

Finding 1. Excessive Contributions to Candidates and Other Political 

Committees 5 

Finding 2. Failure to Timely File Notices and Properly Disclose 

Independent Expenditures 7 

Finding 3. Failure to Properly Disclose Transfers from Affiliated 

Committees 10 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the United Association Political Education Committee^ 

(UAPEC), undertaken by the Audit Division of the Federal Election Conunission (the 

Commission) in accordance with the Federal Election Campaign Act of 1971, as 

amended (tiie Act). The Audit Division conducted the audit pursuant to 2 U.S.C. 

§438(b), which permits tiie Commission to conduct audits and field investigations of any 

political committee tiiat is required to file a report under 2 U.S.C. §434. Prior to 

conductmg any audit under this subsection, the Commission must perform an intemal 

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. 2 U.S.C. §438(b). 

Scope of Audit 

Following Coinmission approved procedures, the Audit staff evaluated various risk 

factors and as a result, this audit examined: 

1. the disclosure of disbursements, debts and obligations. 

2. the disclosure of expenses allocated between federal and non-federal accounts. 

3. the review of contributions made to federal candidates. 

4. the disclosure of individual contributor's occupation and name of employer. 

5. the consistency between reported figures and bank records. 

6. the completeness of records; and. 

7. other committee operations necessary to the review. 

Audit Hearing 

UAPEC declined the opportunity for a hearing. 

^ On June 10,2010, UAPEC amended its Statement of Organization and changed its name to the United 

Association Political Education Committee (United Association of Journeymen and Apprentice's of the 

Plumbing and Pipefitting Industry of the United States and Canada). UAPEC also added its connected 

organization's name to its Statement of Organization in this amendment. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Dateof Registration September 23,1976 

• Audit Coverage January 1,2007 - December 31,2008 

Headquarters Annapolis, Maryland 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Three 

Treasurer 

• Treasurer When Audit Was Conducted William P. Hite 

• Treasurer During Period Covered by Audit William P. Hite 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Volunteer staff and consultant 

Overview of Financial Activity 

(Audited Amounts) 

Cash on hand @ January 1,2007 $ 1,121,310 

o Contributions from Individuals 3,130,530 

o Transfers from Affiliates 313,467 

0 Refunds from Federal Candidates 33,500 

o Other Receipts 230,574 

Total Receipts $3,708,071 

o Contributions to Federal Candidates 2,103,850 

o Independent Expenditures 510,314 

o Operating Expenditures 72,655 

o Other Disbursements 1,392,617 

Total Disbursements $4,079,436 

Cash on hand @ December 31,2008 $ 749,945 
Part III 

Summaries 

Commission Findings 

Finding I. Excessive Contributions to Candidates and 

Other Political Committees 

The Audit staff identified 12 contributions made by UAPEC to 9 candidate committees 

and 2 other political committees that, when aggregated with contributions made by its 

affiliates, appeared to have exceeded the limitation by $42,225. The excessive 

contributions were not eligible for redesignation. UAPEC provided evidence that two of 

the excessive contributions, totaling $10,000, were timely resolved and that it received 

refunds totaling $7,225 from five recipient committees. UAPEC also provided copies of 

letters mailed to the remaining four committees requesting refunds of $25,000. 

The Commission approved a finding that UAPEC made excessive contributions in the 

amount of $42,225 and tiiat $25,000 of tiiat amount remains outstanding. (For more 

detail, see p. 5) 

Finding 2. Failure to Timely File Notices and Properly 

Disclose Independent Expenditures 

UAPEC disclosed independent expenditures, totaling $510,314, on Schedule E (Itemized 

Independent Expenditures). The independent expenditures were reported when paid, which 

in most cases was after the date of the election. UAPEC should have disclosed tiiese 

independent expenditures as memo entries on Schedule E and a corresponding debt on 

Schedule D. Finally, UAPEC failed to timely file any corresponding 24 or 48-hour notices. 

UAPEC agreed with the Audit staffs conclusion and, as recommended, provided a written 

copy of its new procedures. 

The Commission approved a fmding that UAPEC was required to file 24 or 48-hour 

notices for independent expenditures based on the dissemination date rather tiian payment 

date, and that UAPEC failed to keep a record of the dissemination date for the materials 

that were the result of the independent expenditures. UAPEC may consider the date such 

materials are delivered to its headquarters as the dissemination date for the purpose of 

filing 24 or 48-hour notices. (For more detail, see p. 7) 

Finding 3. Failure to Properly Disclose Transfers From 

Affiliated Committees 

UAPEC incorrectly disclosed transfers from affiliated political committees totaling 

$313,467, as either unitemized contributions from individuals or as contributions from 

other political committees. These transfers should have been reported and itemized as 
Transfers from Affiliated/Other Party Committees. UAPEC complied with the Audit 

staffs recommendation and filed amended reports properly disclosing all of the transfers. 

The Commission approved a finding that UAPEC failed to properly disclose transfers 

from affiliated coinmittees. (For more detail, see p. 10) 
Part IV 

Findings and Recommendations 

Finding 1. Excessive Contributions to Candidates and 

other Political Committees 

Summaiy 

The Audit staff identified 12 contributions made by UAPEC to 9 candidate committees 

and 2 other political committees that, when aggregated with contributions made by its 

affiliates, appeared to have exceeded the limitation by $42,225. The excessive 

contributions were not eligible for redesignation. U^E C provided evidence that two of 

the excessive contributions, totaling $10,000, were timely resolved and that it received 

refunds totaling $7,225 from five recipient committees. UAPEC also provided copies of 

letters mailed to the remaining four committees requesting refunds of $25,000. 

The Commission approved a fmding that UAPEC made excessive contributions in the 

amount of $42,225 and tiiat $25,000 of tiiat amount remains outstanding. 

Legal Standard 

A. Authorized Committee Limits. No multicandidate political committee shall make 

contributions to an authorized committee that aggregate more than $5,000 per election or 

to any other political committee in any calendar year which, in the aggregate, exceeds 

$5,000. 2 U.S.C. §441a(a)(2)(A) and (C); 11 CFR §110.2(b) and (d). 

B. Contribution Limitations for Affiliated Committees. For the purposes of the 

contribution limitations of 11 CFR §110.2, all contributions made by more than one 

affiliated committee, regardless if they are political committees under 11 CFR §100.5, 

shall be considered to be made by a single political conimittee. 11 CFR §110.3(a)(1). 

C. Redesignation of Excessive Contributions. When an authorized candidate 

committee receives an excessive contribution, (or a contribution that exceeds the 

committee's net debts outstanding), the conunittee may ask the contributor to redesignate 

the excess portion of the contribution for use in another election. The committee must 

inform the contributor that: 

1. The redesignation must be signed by the contributor; 

2. The redesignation must be received by the committee within 60 days after the 

committee received the original contribution; and 

3. The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(b)(5). 

Within 60 days after receivmg the excessive contribution, the committee must either 

receive the proper redesignation or refund the excessive portion to the donor. 11 CFR 

§§103.3(b)(3) and 110.1(b)(5)(ii)(A). Furtiier, a political committee must retain written 

records conceming the redesignation in order for it to be effective. 11 CFR §110.1(1)(5). 
Facts and Analysis 

A. Facts 

The Audit staff identified contributions made by UAPEC that appeared to exceed the 

limitations by $42,225. These excessive contributions consisted of 10 contributions to 9 

candidate committees totaling $32,225 and 2 contributions to other political coinmittees 

totaling $10,000. A majority of the excessive contributions were the result of UAPEC 

not tracking contributions made by its affiliated committees. UAPEC and its affiliates 

share a contribution limitation. At this time, the excessive contributions are not eligible 

for redesignation and UAPEC can only request a refund from the recipient committees. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff provided UAPEC representatives with a schedule 

of the excessive contributions. In response, UAPEC's Legal Counsel (Counsel) provided 

copies of letters sent to each recipient committee requesting refunds of the excessive 

contributions. Counsel also related that well before the audit UAPEC underwent a 100% 

tumover in staff The new director instituted programs and procedures designed to 

monitor the contributions made by affiliates and assist in complying with the 

requirements of the Act. 

The Audit staff recommended that UAPEC provide evidence demonstrating the 

contributions were not excessive or continue to seek refunds and provide evidence of any 

refunds received. 

C. Committee Response to Interim Audit Report 

In response to the recommendation, UAPEC demonstrated that: 

• Two excessive contributions ($10,000) were resolved in a timely manner. For 

one excessive contribution, UAPEC provided documentation that it received a 

$5,000 refund in 2009. For the second excessive contribution, UAPEC provided 

copies of letters to and from the recipient committee; agreeing that the excessive 

portion ($5,000) should be deposited into the committee's non-federal account. 

The documentation discussed above was not available during the audit fieldwork. 

• It received refunds from four of the recipient committees totaling $6,725. 

• Second letters were sent to the remaining coinmittees requesting refimds totaling 

$25,500. 

D. Draft Final Audit Report 

In the Draft Final Audit Report, the Audit staff acknowledged UAPEC's efforts to 

resolve the excessive contributions it made. 

E. Committee Response to Draft Final Audit report 

In response, UAPEC acknowledged that it made excessive contributions. It stated, 

however its belief that the Draft Final Audit Report statement that the excessive 
contributions resulted from its failure to track contributions made by its affiliates was 

misleading. 

UAPEC stated it had certain procedures in place, albeit not foolproof, to track 

contributions by affiliated committees. Through the years, UAPEC had requested its 

affiliates, in writing, to advise it of contributions made to federal candidates. UAPEC 

explained that it called or otherwise communicated with affiliates that had PACs 

organized within a state where a candidate was seeking office to ascertain whether a 

contribution had aheady been made by die affiliate. UAPEC further stated it had no 

control over af^liates' day-to-day operations or access to their records. Therefore, 

identifymg contributions made by affiliates was a difficult and challengmg process. With 

respect to the remainmg excessive contributions, UAPEC noted that it made written 

requests for refunds prior to the audit. 

Finally, UAPEC provided documentation that it received an additional refund of $500 

from a candidate committee, thus reducing the remaining excessive contributions to 

$25,000 ($25,500 - $500). 

Commission Conclusion 

On June 15, 2011, the Coinmission considered the Audit Division Recommendation 

Memorandum in which the Audit Division recommended that the Commission adopt a 

finding that UAPEC made excessive contributions in the amount of $42,225 and that 

$25,000 of that amount remains outstanding. 

The Commission approved the Audit staffs recommendation. 

Finding 2. Failure to Timely File Notices and Properly 

Disclose Independent Expenditures 

Summary 

UAPEC disclosed independent expenditures, totaling $510,314, on Schedule E (Itemized 

Independent Expenditures). The independent expenditures were reported when paid, 

which in most cases was after the date of tiie election. UAPEC should have disclosed 

these independent expenditures as memo entries on Schedule E and a corresponding debt 

on Schedule D. Finally, UAPEC failed to timely file any corresponding 24 or 48-hour 

notices. UAPEC agreed with the Audit staffs conclusion and, as recommended, 

provided a written copy of its new procedures. 

The Conimission approved a finding that UAPEC was required to file 24 or 48-hour 

notices for independent expenditures based on the dissemination date rather than payment 

date, and that UAPEC failed to keep a record of the dissemination date for the materials 

that were the result of the independent expenditures. UAPEC may consider the date such 

materials are delivered to its headquarters as the dissemination date for the purpose of 

filing 24 or 48-hour notices. 
Legal Standard 

A. Definition of Independent Expenditures. The term "mdependent expenditure" 

means an expenditure by a person for a communication expressly advocating the election 

or defeat of a clearly identified candidate that is not made in coordination with any 

candidate or authorized committee or agent of a candidate. 11 CFR § 100.16(a). 

B. Disclosure Requirements - General Guidelines. An independent expenditure shall 

be reported on Schedule E if, when added to other independent expenditures made to the 

same payee during the same calendar year, it exceeds $200. Independent expenditures 

made (i.e., publicly disseminated) prior to payment should be disclosed as "memo" 

entries on Schedule E and as a reportable debt on Schedule D. Independent expenditures 

of $200 or less do not need to be itemized, though the committee must report the total of 

those expenditures on line (b) on Schedule E. 11 CFR §§104.3(b)(3)(vii), 104.4(a) and 

104.11. 

C. Last-Minute Independent Expenditure Reports (24-Hour Notices). Any 

independent expenditures aggregating $1,000 or more, with respect to any given election, 

and made after the 20*^ day but more than 24 hours before the day of an election must be 

reported and the report must be received by the Commission witiiin 24 hours after the 

expenditure is made. A 24-hour notice is required for each additional $1,000 that 

aggregates. The 24-hour notice must be filed on a Schedule E. The date that a 

communication is publicly disseminated serves as the date that the Committee must use 

to determine whether the total amount of independent expenditures has, in the aggregate, 

reached or exceeded the threshold reporting amount of $1,000. 11 CFR §§ 104.4(f) and 

104.5(g)(2). 

D. Last-Minute Independent Expenditure Reports (48-Hour Notices). Any 

independent expenditure aggregating $10,000 or more with respect to any given election, 

at any time during a calendar year, up to and mcluding the 20th day before an election, 

must disclose this activity within 48 hours each time that the expenditures aggregate 

$10,000 or more. The notices must be filed with the Commission within 48-hours after 

tiie expenditure is made. 11 CFR §§104.4(f) and 104.5(g)(1). 

Facts and Analjrsis 

A. Facts 

Between August 27,2008 and December 3,2008, UAPEC made 8 disbursements totaling 

$510,314 for the purchase of materials such as mini-billboards, yard signs, posters, shirts, 

hats, etc. These disbursements were itemized on Schedules E, in support of Barack 

Obama, filed with the report covering the period in which the payments were made. A 

majority of the independent expenditures were related to one payment, in the amount of 

$324,209, that was paid after tiie 2008 General election.^ UAPEC should have disclosed 

these independent expenditures as memo entries on Schedules E, filed with reports 

covermg the dates when the materials were disseminated, and included a corresponding 

debt on Schedule D (Debts and Obligations). 

^ UAPEC received a refund of $30,710 relative to this payment. 
Further, UAPEC did not timely file any 24 or 48-hour notices of its independent 

expenditures and did not maintain documentation of the dissemination date for any of the 

materials. However, the invoices were dated either October 31, 2008 or November 18, 

2008. Therefore, it appears likely that tiie materials were disseminated within a notice 

period. 

B. Interim Audit Report & Audit Division Recommendation 

This matter was discussed with the UAPEC representatives during the exit conference. 

In response. Counsel stated that as a result of the audit, UAPEC's staff now understands 

tiie reporting requirements for independent expenditures, including 24 and 48-hour 

notices, and, the need to document dissemination dates. However, they were unsure how 

the dissemination date would be determined since UAPEC generally distributes materials 

directly to local union members or ships the materials to local unions for distribution. 

Counsel suggested that in the future, UAPEC will change its method of recording, 

aggregating and filing the required notices based on the date that materials are first 

received at UAPEC headquarters. This date would be UAPEC's dissemination date for 

24 and 48-notices. 

The Audit staff recommended that UAPEC implement revised procedures in order to 

properly disclose independent expenditures on Schedule's E and/or D and to track 

aggregation and dissemmation for both the 24 and 48-hour notice requirements. 

C. Committee Response to Interim Audit Report 

In response, UAPEC agreed with the Audit staffs conclusion and, as recommended, 

provided a written copy of its new independent expenditure tracking procedures. 

D. Draft Final Audit Report 

In the Draft Final Audit Report, the Audit staff acknowledged that UAPEC provided a 

copy of its new procedures for tracking independent expenditures. 

E. Committee Response to Draft Final Audit Report 

In response, UAPEC stated, that although it understood the 24-hour and 48-hour 

independent expenditure notice requirement, it did not believe that the Act or Regulations 

provided any guidance on when materials such as yard signs, mini-billboards, shirts, hats, 

etc., should be considered disseminated. Therefore, although it planned on implementing 

its new revised procedures, it requested a clarification conceming the precise date when 

the 24 and 48-hour notices should have been filed. 

Commission Conclusion 

On June 15,2011, the Commission considered the Audit Division Recommendation 

Memorandum, in which the Audit Division recommended that the Commission adopt a 

finding that UAPEC was required to file 24 or 48-hour notices for independent 

expenditures based on the dissemination date rather than payment date, and that UAPEC 

failed to keep a record of the dissemination date for the materials that were the result of 

the independent expenditures. UAPEC may consider the date such materials are 
10 

delivered to its headquarters as the dissemmation date for the purpose of filing 24 or 48-

hour notices. 

The Commission approved the Audit staffs recommendation. The Coinmission intends 

to consider these issues with respect to independent expenditure reporting and make a 

public statement regarding these issues. 

Finding 3. Failure to Properly Disclose Transfers from 

Affiliated Committees 

Summary 

UAPEC incoirectly disclosed transfers from affiliated political coinmittees totaling 

$313,467, as either unitemized contributions from individuals or as contributions from 

otiier political committees. These transfers should have been reported and itemized as 

Transfers from Affiliated/Otiier Party Conunittees. UAPEC complied with the Audit 

staffs recommendation and filed amended reports properly disclosing all of the transfers. 

The Coinmission approved a finding that UAPEC failed to properly disclose transfers 

from affiliated coinmittees. 

Legal Standard 

Disclosure Required for Transfers from Affiliated Committees. A political 

committee must disclose the total amount of transfers from afQliated committees, and the 

identification of each affiliated committee which makes a transfer to the reporting 

committee during the reporting period, together with the date and amount of each 

transfer. 2 U.S.C. §434(b)(2)(F) and (3)(D). 

Facts and Analysis 

A. Facts 

UAPEC incorrectly disclosed transfers, totaling $313,467, from affiliated political 

committees. Transfers from four affiliated committees, totaling $27,867, were included 

in the unitemized contributions from individuals total. The remaining transfers from 21 

affiliated committees, totaling $285,600, were itemized as contributions from Other 

Political Committees. All of these transfers should have been reported and itemized as 

Transfers from Affiliated/Other Party Committees. 

B. Interim Audit Report & Audit Division Recommendation 

UAPEC representatives were advised of these disclosure errors at the exit conference. In 

response, UAPEC's Counsel related there had initially been some uncertainty among 

UAPEC staff conceming whether the affiliates (local unions) were acting as collecting 

agents. Counsel stated after further investigation, UAPEC staff concluded the receipts 

were in fact transfers from affiliates and agreed to amend the reports as recommended. 

The Audit staff recommended that UAPEC amend its reports to properly disclose the 

transfers from tiie affiliated committees totaling $313,467 ($285,600 + 27,867) on 

Schedule A, Line 12, Transfers from Affiliated/Other Party Coinmittees. 
11 

C. Committee Response to Interim Audit Report 

In response, UAPEC filed amended reports properly disclosing all of the transfers. 

D. Draft Final Audit Report 

In the Draft Final Audit Report, the Audit staff acknowledged that UAPEC amended its 

reports disclosing transfer from affiliated coinmittees. 

Commission Conclusion 

On June 15,2011, the Coinmission considered the Audit Division Recommendation 

Memorandum m which the Audit Division recommended that the Coinmission adopt a 

fmding that UAPEC failed to properly disclose transfers from affiliated committees. 

The Coinmission approved the Audit staff's recommendation.