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fEDER,\l EL[CTION CO.\\,\\lSS10N

1\.!C; 1\ St ~1l1 \V.

W""t U~G tON.U.C, 20'~bj

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REPORT OF THE AUDIT DIVISION

ON

RISENHOOVER FOR CONGRESS COMMITTEE

I. BackQt"ound

A. Ovcrvic\af

This report is based on an audit of the RisenhoQ~er

for Congress Committee (lithe Committee"), undertaken by the

Audit Division of the Federal Election Commission in accor~ance

wit h the Cornm; s s ; 0 n I s a ud; t pol; cy to de t e r m; nevI he the r the r e

has been compliance with the provisions of the Federal Election

CaIII pa; 9n Act 0 f 19 71, asamend ed (" the Act II ) • The audi t VI as

conducted pursuant to Section 438(a}(B} of Title 2 of the Cnited

Stat esC0 de'" hie h d i r' ec t s the Co rom ission toma kefrom t i r1 e to

t ; In t~ a u d its and f ; e1d ; nv est; gat; 0 ns w; t h res pee t tor e POl" t sand

statements filed with it.

The Committee registered with the 0ffice of the Clerk

ofthc Un; ted Stat e s H0 usc 0 f Pep r- e sen tati veson r·' ay 7, 19 7J, ; n

sup r 0 1~ t 0 f the H0 norab1e The 0 d0 r e ~~. R; sen h0 0 ver' for t ht~ 0 f f ; c e

of Hepresentative from the Second (2nd) Congressional District

of Oklahoma. The Candidate desionated the Committee as his

pr inc i pal car.l pa i 9ncomill itt ceo n j u1y 8, 19 76. ThaC0 m1:1 itt ce

ma ; nt a ins ; t shea dq.uit r t e r s ; n \I ash i n9ton, o. C•

The a u d; teov ere d the peri 0 d fro m JII nua r y 1, 1975 t hr 0 u~l h

September 30, 1977, the final coverage date of the latest reoort

f i 1c d b'y the COinr.l itt e e· a t the t i III e 0 f the aud ; t . The C0 ri ~1 it:ee

reported a beginning cash balance at January 1, 1975 of 512,727.42,

total receipts for the period of 5205,817.24, total expenditures

for the period of $198,721.27, and a closing cash balance at

September 30, 1977 of $19,823.39.

Th; s a ud; t ; s bas edon doc UPl ent sand \-/0 r kin 9 pa c ~" S

\,' h; c h sup p0 r tea c h 0 f the f act ua 1 st a tel:1 ent s . i hey f 0 1"m r d r t 0 f

the l' ecor d up0 n \'1 h; ch the Co Il1 III ; s sion bas ed its dec; si 0 r~ S 0 r. t e

til J t t c l~ 5 i nth i S 1" epOt" tand ~'I ere ava; lob 1c toe 0 il :11 iss ion e rs nC

appropriate staff for review •

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8. Key r~r~onnc1

The p r inc i pill 0 f f ; c c r S 0 f the C0 IIIIn ; t tee \,' ere f-1 a r v; n

R; sen h0 0 ve r, Chili r ml\ n Set h Bt· il sfie 1d t Trca sur crt dur; ng the

peri 0 d J J nu..1 r.Y 1, 1975 t hr 0 U <J h j'll) r ch 6, 1975 , and Joseph H.

Cart e r t Sr., T... eJ sur e r f )~ 0 III ~, arc h 7 t 1975 t hr 0 ugh the c los e

of the period covered by the audit.

c. Sc 0 P_(~

The audit included such tests as verification of total

reported receipts and expcnditurf!s and individual transactions;

review of required supporting documentation; analysis of

Committee debt~ and obligations; and, such other audit procedures

as deemed nece~sary under the circumstances.

II. Auditor's Statement

It is the opinion of the Audit staff, based upon examination of the rcpo}"'ts and statements fil ed and the records presented, that except for the deficienci~s noted below, the reports and statements of the Risenhoover for Congress Committee fairly

present the financial activities of the Committee for the pCl"';od

co vere d by the a udit. Fu1" the r, e xc cpt a s not ed bel 0 '.'J, nomate ria 1

problems in cor;:plying with the F~deral Election Campaign f.. ct \'H~ 1" e dis co v e'''' ed du}. i n9 the c0 ur S C 0 f the a udit.

III. Findinq5 and Conclusions

A. Expendi tur'es Not Full y SupDorted

Section 432(d) of Title 2 of the United States Code states,

in part, that it shall be the dutv of the tre~surer to obtain

and keep a receipted bill, statin~ the particulars, for every

ex pen d; t U 1'" e r:: a dc i n e xc es S 0 f S1GO, and for e xpen di t Ul'" e s ; n

a lesser amount, if the aggregate amount of such expenditures

to the sume person dUl"ing u calendar yeal" exceeds S100 ..

Section l02.9(c)(4) of the Commission's Regulations stutes,

i n part, t hat \,' hen arecei pte d bi , 1 i s not ava; 1ab1e, the t 1'" cas ur'" e r

may keep the cancelled check ar.d the bill, invoice or other

contemporaneous memorandum.

A 1'" evic\'1 0 f COinmit tee r ceo r ds 1" eve a1edthot the Comin itt e e

fa i 1edt 0 0 bt ina bill, i nv0 ; ceol"\ 0 the l~ con t cmpo.· anco U S

r.1 em 0 }' J 11 dUr.1 f 0 ,. 114 ex r end i t ures ; n e xc e s S 0 f, 0 rag 9l' l\ 9J tin 9

; n e xc cs S 0 f S100, (3 9 . 18 :~ 0 f the tot a1 nUIII bet'" 0 f e xpen di t U l' e s ,~c <1 ui l'i n~1 sue h st. r po r tin9 doc ur.1 en tation) and tot a11 i n9 S65, 7:: 9. 40 (36.66~ of the total dollar J~ount of expenditures requiring s uch sup po r : ; n(j doc umen tat ; 0 n) . The Co t:lIil ; t t c did not pro vide

any explanation for the luck of supporting documentation •

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The Committee obtilined 61 l)f the 114 ncccssilry documents,

totali naSS0 , 021. 85 ,1 n d mad c t I- r:l J va; 1c1 h 1f~ tot hc Au d; t 5 t a f f

for rev i C\-1 • I n add i t ion t t h C() rn rn ; t t (~ e 0 f fie i a1s pre sen ted

evidence of theil' efforts to obtain the documentc1tion for the

rcmilining 53 items. It is the orinian of the Audit staff that

the Comm; t tee has der.l 0 ns t r J ted its best p f for t s too b t a ina 11 d

submit the required documentJtion in accordance with Section

102 • 9 ( e) 0 f the Co mOl iss; 0 n I s Reg u1a t ion s • The ref 0 ret no f u t· the r

action ;s recommended.

B. Disclosure of Loans and Loan Repayments

Section 434(b)(5) of Title 2 of the United States Code

requires a political committee to disclose in its reports each

loan to or from any per'son within the calendar year in an

a9q reg ate am0 lj ntar val uc i n exc es S 0 f S1() 0, \'J; t h the f u11

nit Ii1 esan d mail i ng udd r t~ sse s oft he 1end e rs, end 0 r s e rs, and

9 ua ran tor S, and the d,1 tean d a r~~ 0 u n t 0 f S u c h loa n s •

Section 434(b)(7) of Title 2 of the United States Code

s tatesthat e a c h comIII ittc ere POt' t s hal 1 d; s c10 5 e ea c h con t r i -

bution, rebate, refund, or other receipt in excess of $100.

During the course of the audit, it was determined that

the Committee failed to t"eport three (3) lOJns to three (3)

; nd i vi d ua 1 s a 11 d the loa n }" e pJ ... i:1 er. t s fro In the i nd i 'I ; d11 J 1s . i he

loa ns \,,' c r' e each ; n exc c s s a f S100 II nd tot a11 ed S303 . 00 . The

Treasurer of the Committee exp~ail1ed that ut the time the

rep 0 l" t VI asp l' epa r' ed hC \-, J sun =. I,'; a l" e 0 f the setran sac t ion s •

RecomIII end J t ion

I tis the l~ e comIII cnl! J t ion 0 f the Auditst a f f t hat n0

action betl1 k t~ non t h; s md t t e r s; nc e the C0 III In; s S ion r ec e i vedan

aIn end cdr ept) ~': 0 n :i 0 'I (~In bp r 2 1, 1977 dis c los i n9 the loa nsan d

lou n l' epa yin e nt 5 a s r equi ted .

c. Disclosure of ContY'~butions and Exnenditures

Section 434(b)(8) ane (11) of Title 2 of the United

Stat esC0 dest J t e s, i n pJ r t, t hat a pol; t ; cal comr.l ittCemu s t

disclose;n its reports the total sum of all receipts and the

totil 1 s Uti1 0 f all c xpen c: i t ures by 0 r for s uc h c 0 r.1 i.1; t tee 0 r

candidate during the reporting period.

Dtil" i n the co lJ l" C efthe au d; t, ; t \aJ as de t c r:ll ; ned t hat

the Co rll;~ itt eel·e:) (\ r t L' d t. hc S i1 :'~ l" ec e; p t san d ex pen d i t u res

tot J 11 i n 9 S2 , 1 7G'. 0 a 0 nthe J u / 1, 19 76 t h l" 0 lJ\) h f\ lJ u s t 8, 1 9 76

rep 0 r t J nct the j\ l~ Sus t C), 1976 : :1 r 0 u~f h Sp pte i;~ C r 13, 19 76 r C ;J crt , the)' cby 0 vcrs:. J i n'j '" i' Cc i p t $ r~ d ex pen d i t lJ r' $ • Tt: ceomr.l; t t e

Tl' C u~d It' (~ r l~ x;) 1i: ; :~ d t h,1 t the d0 U b1C l'ePOt' tin 9 \., U s due t 0 a

boo k ~: ec pin 9 C l' r 0 r' •

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R~cornm~ndat;on

1tis the r e conlin end il t ion 0 f the 1\ uet its t a f f t hilt n0 act ; 0 n

be taken.on this matter, since the Commi~sion received an amended

report correcting the overstatement on rlovember 21, 1977.

D. Disclosure of Transfers from Political Committees

Section 434(b}(4) of Title 2 of the United States Code

states, in part, that a political committee must disclose in its

rep 0 r t s the naIII e and add res S 0 f e a ch pol; tic a1 cornmit tee \"/ h; c h

made any transfer of funds to the political committee, together

with the amounts and dates of all transfers.

Arevic\-/ 0 f ComTn; t tee r e cor ds rev eil 1Qd t hat the COin (11 ittee

f ail edt 0 i t em i zc t hr e e (3) t ran sfers (1. 3a{.~ 0 f the tot d 1 nul.1 b(? f

oftran 5 fers) fro In pol i tic a1 comIll; t tee s tot J 11i n 53() a. () 0 (0. 33 :'~

of total do1lal" amount of transfers). The Committee Treasurer

explained that his understanding was that only transfers in

excess of $100 required itemization.

Re C(1mmI~ nduti 0 n

It is the recommendation of the Audit staff that no

act ion bet J ken 0 nth isma t t e r sin c e the C0 I~1 miss; 0 n r ec e i vf.: dan

amended report on November 21, 1977 itemizing the three (3)

t t" aon sfers .

E.

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

r e qui r' e sap0 1; tic it 1 co mm itt (0 e to dis c los e i nits l" e POl" .:~ s

the full nJ mea nd In a ; 1i ngad dl" es s 0 f cae h p e)" son \oJ h0 has r~ a de

con t l" i but ion s too r f 0 l" S LJ C h co m:;1 ; t tee \'/ i t hi nthe col en C.:l ~"

yea 1" ina nag 9reg ate am0 U ntor val ue i n ex ce S S 0 f S100, to 9e the r

with the amount and date of such contributions.

In addition Section l04.3(a)(1) of the Commission's

regulations states that each in-kind contribution shJll be

val ued a t the usua 1 and nOt" r:. ale hal" C1 con the dII t erec c ; v (~ C

a 11 d }" ep0 r ted if; n exce S S 0 f $ 100 0 il the a pt.. 0 Pl" i J t esc r. e du1e

of receipts and expenditures, identified as to its nature and

listed as an in-kind contribution.

As a result of the review of Com~ittce contri~~t~c~ an~

c x pen d ; t lJ l" ere c a1" d s, t \" 0 (2) i n - kin d con t ro i bu l ion s t 0 ~.1 -: : i r.

$150 • 00 \-, P. 1" e not t" e p0 r ted pro per 1y a S l" ec c i ;i t S J nd cx len o~ i : u," p. S 0

The contributions were disclosed as a me~o entry on the re~Jr!s

but not ; nc 1U Cl"ldin the r cn0 I" t tot a1s • The Tto r. asur e1" 0 f : he

Commit t estil ted t hat he \'J S not a\0' arc 0 f t :~ ere POl" t ; r. 9 l" e r .. e r~ t

for i n- f', i nd i tenSilt the tin C 0 f the con t rib uti 0 n .

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Rccommendiltion

Si nee the Co mOl; S S ; 0 n r ece; vcd J n J I~lt~ ndcdr ep0 r ton r! 0 vembe r

21, J977, it ;s the recommendation of the Audit staff that no

action be taken.

F• 0 the r t·, l\ t t c rs

Pre sen ted bel 0 \'1 are mat t e rs not e d dur ; n9 the audi t for

which the staff feels no further Commission action is warranted.

Our rev; ew rl; s closed tha t the fundra is; ng events \'lcre

not reported by the Committee on Schedule 0 as required. The

Commi ttee \'/015 unabl e to deterni ne the total arlount of procel~ds from the f u1\ d r a i sin 9 eve nts; h0 ~I eve r, the Co 111 r.1 itte e \~ a sad vis e d

that in the future, all fundraising events should be disclosed

as ,"cquircu.

1n add i t ion, ; t \"1 as det er m; ne rl t hat f; ve (5) loa n

repayments to the candidate totalling Sl ,920. nO were made in

cash by the Committee from contributions received but not

de p 0 sitedin ,I ny 0 f the C0 mit tee I sacCOli n t s · The J'. udit s t af f

determi ned thil t the repayments in cash ',.Iel'e i so 1a ted ins tances.

The I\udit staff advised the Cor.;"ll ttee that in the future, all

contributions received must be ceposited into il designated

co1:1\<1 i t tee cheel: i ng ac COli ntan d a11 ex pc ndi t ures made by che ck

drawn on such an account.

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