• FEDERAL ELECTION COMMISSION

WASHINGTON, 0 C 20463

August 19, 1985

MEMORANDUM

TO:

FROM:

SUBJECT:

FRED EILAND

PRESS OFFICER

ROBERT J. COSTA

ASSISTANT STAFF DI~~fOil' AUDIT DIVISION

PUBLIC ISSUANCE OF FINAL AUDIT REPORT - JOHN GLENN PRESIDENTIAL COMMITTEB, INC.

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

John Glenn Presidential Committee, Inc. which was approved by the

Commission on August 14, 1985.

Informational copies of the report have been received by all

parties involved and the audit report may be released to the

pUblic.

Attachment as stated

FEC Library

RAD ~ublic Record

Office of General Counsel

•
• FEDERAL ELECTION COMMISSION

WASHINCTON,O.C 2CM63

o

REPORT OF THE AUDIT DIVISION

ON THE

JOHN GLENN PRESIDENTIAL COMMITTEE INC• ..

I. Background

A. Overview

This report is based on an audit of the John Glenn

Presidential Committee Inc. ("the Committee") to determine

whether there has been compliance with the provisions of the

Federal Election Campaign Act of 1971, as amended ("the Act") and

the Presidential Primary Matching Payment Account Act. The audit

was conducted pursuant to 26 U.S.C. S 9038(a) which states that

"after each matching payment period, the Commission shall conduct

a thorough examination and audit of the qualified campaign

expenses of every candidate and his authorized committees who

received payments under Section 9037."

In addition, 26 U.S.~. § 9039(b) and 11 C.F.R. S 9038.1

(a) (2) state, in relevant part, that the Commission may conduct

other examinations and audits from time to time as it deems

necessary.

The Committee registered with the Federal Election

Commission on January 13, 1983 as the principal campaign committee of Senator John Glenn. i / In addition, the Committee

conducted activities of an exploratory nature commencing October

1, 1982. The related receipts and disbursements were included in

the first report filed after registration. The Committee

maintains its headquarters in Washington, D.C.

The audit covered the period October 1, 1982, through

April 30, 1984, the final coverage date of the most recent report filed with the Commission at the time of the audit. In addition,

certain activity was reviewed through June 29, 1984 for the

•

1/ On October 9, 1984, the Candidate authorized The Democratic

Unity Committee, a joint fundraising committee. However,

the Audit staff was informed that this committee had no

receipts or disbursements during the period of audit•
•

2

Statement of Net Outstanding Campaign Obligations and through August 31, 1984 for allocation to State limitations. The

Committee reported an opening cash balance of $-0-, total

receipts of $13,365,239.41, total disbursements of

$12,982,821.96, and a closing cash balance of $383,575.99.1/

The Committee has continued to receive contributions

and make disbursements. In addition, revised statements of Net

Outstanding Campaign Obligations have been··submitted with each

matching fund submission as required by 11 C.P.R. § 9034.S(d).

Under 11 C.F.R. S 9038.1(b) (3) and (e) (4) additional fieldwork

will be conducted and addenda to this report issued as necessary.

This report is based upon documents and working papers which support each of the factual statements. They form part of

tne record upon which the Commission based its decisions on the

matters in the report and were available to Commissioners and

appropriate staff for review.

B. Key Personnel

The Treasurers of the Committee during the period audited were: ...,..

• Mr. Robert A. Farmer

Mr. William R. White Inception - 4/19/84

4/19/84 - Present

e

"

•

C. Scope

The audit included such tests as verification of total

reported receipts, disbursements and individual transactions:

review of required supporting documentation; analysis of

Committee debts and obligations; review of contribution and

expenditure limitations; and such other audit procedures as

deemed necessary under the circumstances.

II. Findings and Recommendations Related to Title 2 of the

United States Code

Matters Referred to the Office of Genera1 Counsel

Certain matters noted during the audit were referred to the

Office of General Counsel for further action.

2/ The totals do not foot due to math discrepancies•
eIII. Findings and Recommendations Related to Title 26

of the United States Code

A. Calculation of Repayment Ratio

Section 9038(b) (2) of Title 26 of the United States

Code states that if the Commission determines that any amount of

any payment made to a candidate from the matching payment account

was used for purposes other than to defray qualified campaign

expenses or to repay loans the proceeds of ·which were used to

defray qualified campaign expenses, it shall notify such

candidate of the amount so used, and the candidate shall pay to

the Secretary an amount equal to such an amount.

The Commission, in a Notice of Proposed Rulemaking published in the Federal Register on June 28, 1984, set forth a

pro-rata formula which wOuld base repayments for non-qualified

campaign expenses on the proportion of federal funds to total

funds received by the candidate. Further, the final version and

the Explanation and Justification was published in the Federal

Register on August 22, 1984 and transmitted to Congress.

On March 5, 1985 the revised regulations were

resubmitted for pUblication. The proposed regulations were

before the Congress for 30 legislative days as of May 20, 1985,

e and were approved by the Commission for publication in final form

on June 11, 1985.

Section 9038.2(b) (2) (iii) of Title 11 of the Code of

Federal Regulations, as revised, states that the amount of any

repayment sought under this section shall bear the same ratio to

the total amount determined to have been used for non-qualified campaign expenses as the amount of matching funds certified to

the candidate bears to the total amount of deposits of

contributions and matching funds as of the candidate's date of

ineligibility.

The formula and its application with respect to the

Committee's receipt activity is as follows:

Total Matching Funds Certified Through

Date of Ineligibility (3/16/84)

Numerator + Private Contributions

Received through 3/16/84

$2,797,848.40

$2,797,848.40 + $6,457,736.61

:. .302288

Thus, the repayment ratio for non-qualified campaign e expenses is 30.2288'.
• B. Use of Funds for Non-Qualified Campaign Expenses- Allocation of Disbursements to States

o

•

Section 9038.2(b) (2) (i) (Al of Title 11 of the Code of

Federal RegUlations provides, in part, that the Commission may

determine that amount(s) of any payments made to a candidate from

the matching payment account, or contributions received by the

candidate, were used for purposes other than qualified campaign

expenses. Further, 11 C.F.R. § 9038.2(b) (2) (ii) (A) provides, in

part, that an example of a Commission repayment determination

under paragraph (b) (2) of this section includes determinations

that a candidate, a ·candidate's authorized committee(s), or

agents have made expenditures in excess of the limitations set

forth in 11 C.F.R. S 9035.

Section 9035(a) of Title 26 of the United States Code

states, in part, that no candidate shall knowingly incur

qualified campaign expenses in excess of the expenditure

limitation applicable under section 441a(b) (1) (A) of Title 2.

Sections 44la(b) (1) (A) and 44la(c) of Title 2 of the

United States Code provide, in part, that no candidate for the

office of President of the United States who is eligible under

Section 9033 of Title 26 to receive payments from the Secretary of the Treasury may make expenditures in anyone State

aggregating in excess of the greater of 16 cents multiplied by the voting age population of th~ State, or $200,000, as adjusted

by the changes in the Consumer Price Index.

Section 106.2(a) (1) of Title 11 of the Code of Federal

Regulations states, in part, that expenditures incurred by a

candidate's authorized committee(s) for the purpose of

influencing the nomination of that candidate for the office of

President with respect to a particular State shall be allocated

to that State. An expenditure shall not necessarily be allocated

to the State in which the expenditure is incurred or paid.

The Committee maintains its accounting system on an

accrual, rather than a cash, basis. The system includes an

automated general ledger and accounts payable system which are

divided by cost centers representing the various national

headquarters departments. The cost centers are subdivided by

accounts which describe the nature of the expenses. Further, a

cost center and the associated sub-accounts are maintained for

each State. · Certain of the general ledger accounts are defined

by the Committee as subject to a 10% exemption from overall and

state limitations for both fundraising and for compliance •
•

•

Since the Reports of Receipts and Disbursements must be

prepared on a cash basis, the expenses recorded in the accounts

payable system are subtracted from the expenses contained on the

general ledger to arrive at reportable expenditures. Therefore,

(unpaid) expenses which are recognized as allocable to States in

the Committee's general ledger are not disclosed on FEC Report

Form 3P, page 3 until the debts are paid.

The Audit staff's review of FEC -Form 3P, Page 3 filed

for the period ending August 31, 1984 revealed that the Committee

allocated expenditures totaling $703,124.62 to the Iowa

limitation of $684,537.50 and allocated $468,841.70 to the New

Hampshire limitation of $404,000. As a result of statistical

sampling and other review procedures performed during the

fieldwork and the analysis of the Committee response to the

interim audit report, the Audit staff noted the areas discussed

at sections 1. through 3. below requiring adjustments to the

above totals.

The amounts shown below as adjustments to Committee's

allocations represent only amounts paid as of August 31, 1984.

In addition, accounts payable relating to Iowa and New Hampshire totaling $77,281.72 and $40,516.94, respectively, were

identified. The interim report noted that absent a showing that

the limitation had not been exceeded, the Audit staff intended to

recommend that a repayment be calculated based on both amounts

paid a~jd payable.

In the February 19, 1985 response to the interim audit

report, the Committee stated that it:

"challenges the inclusion of debts incurred

but unpaid as non-qualified campaign

expenses, for which the Committee must repay

a pro rata portion to the government. Although section 9035 of Title 26 of the

United States Code imposes a limitation on

expenditures incurred in excess of the state

expenditure limitation, section 9038.2(b) (2)

imposes a repayment obligation only where matching payments are used for

purposes other than those set forth in

that section. (Emphasis added). As

pointed out in the Audit Report, an

example of a Commission repayment determination under that section

includes determination that a

candidate's authorized committee has

made expenditures in excess of the

limitations set forth in 11 C.F.R.

Section 9035. Therefore, the Committee
• '"

believes that if any of the debt and

obligations exceed the state expenditure limitations, a pro rata portion should

be repaid to the government only when

the Committee actually uses matching funds to pay these debts.-

The Commission has considered the Committee's argument

and concluded that only those amounts in excess of the

limitations which have been paid will be subject to repayment.

However, it should be noted that any amount which relates to

either Iowa or New ~ampshire and was paid between September 1,

1984 and the disbursement of the Committee's final matching fund

payment will require an additional repayment determination. (The

Committee's final Matching Fund Payment was certified by the

Commission on March 20, 1985).

Copies of the Audit staff's working papers detailing

the findings in Sections 2-3 were presented to the Committee

prior to the exit conference with Committee officials.

Workpapers containing the Audit staff's analysis of the

adjustments in Section 1 were presented to the Committee when the

work was completed.

In ~ne February 19, 1985 response to the interim

audit report, the Committee indicated that while reviewing its

accounting records to prepare its response to one ° of the

adjustments to State allocations recommended in the interim

report, a procedural error in the Committee's original allocation

calculations was discovered.

1. Procedural Error in the Committee Allocation

Calculations

•

The Committee's method for determining amounts

allocable to the state expenditure limitations was as follows:

For each report, a worksheet was prepared to

calculate expenditures subject to the state limitation. The

process began with a cumulative general ledger amount for

expenses coded to each state from the automated general ledger. From this figure, accounts payable were subtracted to convert

from an accrual to a cash basis figure. Then, fundraising and

compliance deductions for state office overhead and for salaries

related to the states were manually calculated, posted to the

worksheet, and subtracted, resulting in an election-to-date

allocation to the State. To determine the charge for the

reporting period, the election-to-date allocation total from the

preceding report was subtracted•
• The procedural error resulted from the Committee's

failure to post the manually calculated compliance and

fundraising deductions to the automated general ledger. Since

the starting point for a given report's state allocation

calculations was an unadjusted cumulative general ledger figure, the deductions for compliance and fundraising calculated for all

previous reports were negated. Therefore, the allocation of

expenditures to states was consistently overstated by the amount

of these unrecorded exemptions. .

Since the interim audit report had used the August 31, 1984 reported allocations as the starting point for the

calculation of an audited amount allocable to Iowa and New

Hampshire ($703,124.62 and $468,841.70, respectively), the

Committee response contained a reduction to the August 31, 1984

reported figure. The amount of the reductions calculated by the

Committee was $116,641.88 for Iowa and $84,893.87 for New

Hampshire, leaving $586,482.74 allocated to Iowa and $383,947.84

to New Hampshire.

However, the Committee's calculations contained a

number of errors. The Committee did not use the most recent

revision to the general ledger in all cases and accounts payable

at December 31, 1983 were not treated properly. In addition, the

Committee's general ledger generates two summary totals each

month providing different information. The Committee did not

consistently use the same total. Adjustmealts were made to

correct this inconsistency and to include all appropriate amounts

at August 31, 1984. 1/ .

Considering this information, the Audit staff

determined that, prior to the application of the adjustments described below, the FEe Form 3P, Page 3 filed for the period ending August 31, 1984 should have contained expenditures

allocated to Iowa and New Hampshire totaling $595,240.69 and

$394,593.05, respectively. Therefore, appropriate adjustments

were made to the recap of allocable expenditures on page 25 of

this report.

2. Specific Allocation Methods

Section l06.2(b) (2) of Title 11 of the Code of

Federal Regulations states that expenditures that fall within the

categories listed below shall be allocated based on the following methods. The method used to allocate a category of expenditures shall be based on consistent data for each State to which an

allocation is made •

• 3/ Includes the August 31, 1984 balance in the asset accounts

"Refundable Deposits", "Furniture and Fixtures", and "Office

Equipment" contained in the General Ledger's Iowa and New

Hampshire cost centers.
•

,.",

•

•

a. Media Expenditures

Section l06.2(b) (2) (i) CB) of Title 11 of the

Code of Federal Regulations requires that expenditures for radio,

television and similar types of advertisements purchased in a

particular media market that covers more than one State shall be

allocated to each State in proportion to the estimated audience.

This allocation of expenditures, including any commission charged for the purchase of broadcast media, shall··be made using industry market data.

The Committee retained the services of a

media firm located in New York. The allocation of radio and

television broadcasts was based upon total household estimates

contained in A. C. Nielsen Company's U.S. Television Household

Estimates. The Audit staff analyzed the firm's media time charge

allocations and determined that the amounts allocable to Iowa and

New Hampshire were reasonable. However, the Audit staff noted

that the Committee overstated media expenditures subject to Iowa

allocation by $24,758.13 and understated media expenditures subject to New Hampshire allocation by $24,193.19. These

misstatements resulted from the Committee's use of the media

firm's preliminary allocations and its failure to make

appropriate corrections when final figures were received.

In the February 19, 1985 response to the

interim audit repo~c, the Committee agreed that it did overstate

media expenditures allocable to Iowa, but disagreed that it

understated media expenditures allocable to New Hampshire by $24,193.19.

The Committee stated that:

"The Audit staff allocated 100% of the media

costs incurred for advertisements shown on WMOR-TV,

Manchester, New Hampshire to New Hampshire. The

Nielson ratings which were used by Sawyer to

allocate other expenditures to states should be

used for the WMUR-TV expenditures as well. The

Nielson ratings show that 14.6 percent of the

New Hampshire audience is reached by Boston/

Manchester stations. Therefore, only $5,102.02

should be allocated to New Hampshire."

First, it is noted that the Audit staff did

not allocate the media costs. Rather, as noted above and in the

interim audit report, the Audit staff analyzed the time charge allocations determined by the media firm retained by the

Committee. Secondly, with the consent of the Committee, the

Audit staff discussed the allocation of WMUR-TV with a

representative of the media firm. The representative informed

the Audit staff that due to the limited range of WMUR-TV, the

broadcasts should be totally allocated to New Hampshire.
•

•

However, in light of the argument presented in the Committee's

response, the Audit staff contacted the A.C. Neilson Company in

order to determine how WMUR should be allocated. It was learned

that for some purposes Manchester, New Hampshire is considered a

separate market with separate market data. Bowever, it is

included in the Boston, Manchester Designated Market Area in the

U.S. Television Household Estimates used by the Committee for

allocation purposes. Therefore, the amount by which the New

Hampshire media allocation was understated has been reduced from

the $24,193.19 contained in the interim audit report to

$5,102.02, or a reduction of $19,091.17 (Total WMUR Media Buys - [Total WMOR media buys x New Hampshire percentage' or $22,355.00

-[$22,355.00 x 14.6\1 $19,091.17).

b. Salaries, Employer FICA, and

Consultant Fees

Sectinn l06.2(b) (2) (ii) of Title 11 of the

Code of Federal Regulations requires that except for expenditures exempted under paragraph (c) of this section (relating to

compliance costs and fundraising expenditures), salaries paid to

persons working in a particular State for five consecutive days

or more, including advance staff, shall be allocated to each

State in proportion to the amount of time spent in that State

during a payroll period.

The Audit staff's review revealed persons incurring expenditures in one State for five or more consecutive

days. Their names were traced to payroll records to determine

whether the salaries, employer FICA, or consultant fees had been

allocated to the State in which the expenditures were incurred.

Based upon this review, the Audit staff

determined that additional amounts had been paid for salaries,

employer FICA, and consultant fees totaling $8,881.80 that should

be allocated to Iowa and $1,231.27 to New Hampshire. (These

amounts are net of the 10% exclusion for exempt fundraising and

compliance.) It appeared that for the most part these persons

were assigned to the national headquarters, but were temporarily working within Iowa and New Hampshire.

In the February 19, 1985 response to the

interim audit report, the Committee expressed its disagreement with the finding because, "approximately $3,000 of salary paid to

Jerry Vento was allocated to Iowa after he was named National

Campaign Manager and returned to Washington.- Further, the

Committee disagreed with the Audit staff's allocations because

they're based on the assumption that -if an advance staff member

reserved hotel rooms or executed automobile leases for five or
•

more days in a state the particular person was actually working in that state for five or more days. That assumption is

incorrect because it was common practice for staff members to

base themselves in one state and work from there in other

states."

With regard to Jerry Vento, the Audit staff

reviewed the documentation and determined that the salary allocation should be reduced by $2,486.64. This represents Mr.

Vento's salary. for the period less exemptions for compliance and

fundraising which had been allowed. Therefore, a reduction of

$2,486.64 has been ~ade in the amount shown on page 25.

With regard to the other allocations,

documentary evidence indicated that the person was in the State

to which the allocation adjustments were made for five or more

days. Absen~ further demonstration that the persons were not

where the documentation indicates, the adjustment to the totals

will remain unchanged.

Section l06.2(b) (2) (iii) of Title 11 of the

Code of Federal Regulations states that travel and subsistence

expenditures for persons working in a State for five consecutive

days or more shall be allocated to that State in proportion to

the aIllount of time spent in each State during a payrolJ period. This same allocation method shall apply to intra-state travel and

subsistence expenditures of the candidate and his family or the

candidate's representatives.

The Audit staff's review of supporting documentation revealed that expenditures for subsistence and

intra-state travel had been incurred by persons ordinarily assigned to the Committee's national headquarters, but who were

temporarily assigned within Iowa or New Hampshire for 5 or more

consecutive days. This review revealed that, in several

instances, the expenditures incurred in Iowa and New Hampshire by these persons were applied to national operations and not

allocated to these States.

Based upon the review, the Audit staff

determined that additional intra-state travel and subsistence

payments totaling $1,081.71 should be allocated to Iowa and

$32,951.95 ·to New Hampshire.

The Committee's position presented in

response to this finding and the Audit staff's comments regarding that position are the same as those discussed in Finding III.B.2.b. above. No adjustments to the allocations presented

above have been made.

.~

•

•

c. Intra-State Travel and Subsistence

Expenditures
d. •

o

If'

...,..

•

Compliance Costs and Fundraising Expenditures

Section 106.2(b) (2) (iv) of Title 11 of the

Code of Federal Regulations requires that, except for

expenditures exempted under paragraph (c) of this section

(relating to national campaign salaries and overhead), overhead

expenditures of offices located in a particular State shall be

allocated to that State. For purposes of .this section, overhead

expenditures include, but are not limited to, rent, utilities,

office equipment, furniture, supplies, and telephone service base

charges.'

Section 106.2(c) (5) of Title 11 of the Code

of Federal Regulations provides, in part, that an amount equal to

10' of overhead expenditures in a particular State may be

excluded from allocation to that State as an exempt compliance

cost and an additional amount equal to 10' of overhead

expenditures may be excluded as exempt fundraising expenditures, but this latter exemption shall not apply within 28 calendar days of the primary election.

The Audit staff determined that it was the

Committee's practice to apply compliance and fundraising exemptions to certain categories of expenditures that were

classified as overhead expenditures, as well as to some nonoverhead items. The documentp~ion associated with these

expenditures was reviewed to determine whether: (1) certain of

these categories were properly classified as overhead and (2) the

non-overhead items could reasonably be allocated using the

overhead percentages. This review revealed the following:

(i) Media

Media time totaling $37,405.54 was

excluded from the Iowa limitation and $28,403.74 from the New

Hampshire limitation. One half of each of these amounts was

applied to exempt compliance and the remainder to exempt fundraising, reducing expenditures subject to the respective State's limitation accordingly.

In support of this practice, the

Committee presented a memorandum from an accounting firm dated

June 5, 1984, which contained the rationale for including certain

costs in the overhead pool•

•
• stated:

With respect to media, the memorandum

-

•

-The media advertisements that the campaign ran

were compliance, fundraising and political in

nature. They were compliance related in that

they contained a contribution limitation message, and they weIe fundraising related in that they advised where contributions could be sent. The

political nature of the media advertisements is

obvious. These costs were allocated to the

various cost centeIs by means of the overhead

pool to avoid a judgmental allocation that

would be difficult to support and justify."

(ii) Polling

Employing the practice noted in (1)

above, the Committee excluded $2,333.68 from the Iowa limitation

and $8,432.02 from the New Hampshire limitation. The memorandum

from the accounting firm mentioned in (i) above stated:

-The polling costs that the Committee incurred

were compliance, fundraising and political in

nature. They were compliance related in that

a portion of the pollsters' charge was related

to the level of detail they were required

to disclose to the Committee to ~upport the

state allocations required for reporting to

the Federal Election Commission. Polling

costs were of a fundraising nature in that

the result (sic) of polling were used to shape issues, speeches, etc., which, in turn,

provided a benefit to the fundraising effort. Again, these costs were allocated

to the various cost centers by means of the

overhead pool to avoid a judgmental allocation that would be difficult to support and justify."

The interim audit report, approved by the Commission January 15, 1985, stated that the Audit staff does

not feel that the rationale stated in the memorandum merits the

exclusion of the above noted expenditures from State allocation.

Although the accounting firm did not specifically identify these

expenditures as overhead, the memorandum indicated that the

purpose of allocating by means of the overhead pool was to avoid

a judgmental allocation difficult to support and justify, however, these costs by their very nature are not overhead and

should not be treated as such. To apply a 20' exclusion across
•

....f'

•

the board for these expenditures, with no support other than that

it would be difficult to support and justify a judgemental allocation, is not a reasonable basis for excluding any portion of such costs from State limitations.

The interim audit report also noted that

the provisions of Title 11 of the Code of Federal Regulations other than 11 C.F.R. S 106.2 (c) (1) and (2) (concerning national

advertising, nationwide polls, and media production costs) are

completely silent with respect to exempting any percentage of

media and polling from allocation. However, the Audit staff does

recognize that it is. possible that a certain percentage of such

expenditures could be applicable to fundraising and compliance. The Audit staff recommended that in order to exempt any portion from State limitations, the Committee should perform an in-depth analysis of all media and polling expenditures allocable to Iowa

and New Hampshire, and prepare detailed records supporting the

percentage exempt from these State allocations. This analysis

should entail a review of each advertisement placed and each poll conducted to determine what percentage of the content was

fundraising and/or compliance in nature. Further, the Committee

must consider the 28 day rule on fundraising as referenced at 11

C.F.R. § 106.2(c) (5) in the analysis. Finally, copies of the

working papers supporting the analysis should be presented to the

Audit Division for review within 30 days of receipt of the

interim report.

In the February 19, 1985 response to the

media portion of this finding the Committee stated:

"In light of the fact that the regulations allow a 20% allocation of overhead expenditures for fundraising and compliance costs due to

the commonly and officially r~cognized

difficulty of allocating such expenditures with any degree of precision, the Committee

believes that a 20' exclusion (10% for

fundraising and 10' for compliance) for media

costs is a reasonable percentage that should

be allowed without requiring further supporting documentation."

As explained above, the Audit staff

disagrees that these non-overhead expenditures can be allocated

using the percentages provided for overhead in 11 C.F.R. S

106.2(0) (5) 'simply because of the difficulty in determining any other reasonable method. This conclusion is further buttressed

by the specific guidance on the allocation of media in 11 C.F.R.

S l06.2(b)(2)(i) •
•

I."

•

However, the Committee did provide

specific information concerning an October 1983, 30 minute

broadcast in Iowa. The response stated that in the opinion of

their media firm -that advertisement was produced and aired

exclusively for fundraising purposes.- In support of this

statement, the Committee notes a more than 300' increase in

contributions from Iowa, when comparing activity in the period

August 12 to October 12, 1983 with October 13 to December 13,

1983. Bowever, the Audit staff believes such a comparison is

affected by factors in addition to a single television broadcast,

including proximity to the caucus date and overall increases in

campaign fundraisi~g efforts.

The Committee also submitted the

following description of the broadcast provided by their media

firm:

"Five times during the program the following

appears on the screen:

Join the Glenn Campaign

1-800-237-1984

At the end of the show the following appears:

Join the Glenn Campaign

1-800-237-1984

or write

John Glenn

507 lOth Street

Suite 510

Des Moines, Iowa 50309

Paid for and authorized by the John Glenn

Presidential Committee, Inc.

Robert A. Farmer, Treasurer.

The following voice over is heard:

'John Glenn is taking his campaign to the

people and he needs your help. Your

organizational help, your financial help and he needs it now. Please call 1-800-

237-1984, that's (number) or write (address).

You can help America believe in the future

again. Become a part of the Glenn Campaign.

Call (number) that's (number). Join the

John Glenn Campaign today. Call (number)

That's (number).'·
•

•

Based on a review of this material, it

appears that the broadcast was for both fundraising and

organizational purposes. Therefore, a reduction in the amount of

media cost attributed to the Iowa expenditure limitation has been

made. The amount is $9,281.10 or 50' of the portion of the cost

originally charged to the Iowa 1imitation.!/

With regard to the polling portion of

this finding, the Committee's February 19,· 1985 response commented ftfor the reasons stated above regarding the difficulty, if not impossibility, of quantifying such costs for media

expenditures and overhead costs, the Committee believes that a

20\ exclusion is a reasonable amount that should be allowed

without further supporting documentation."

The Audit staff notes that, synonymous with the comments noted above, there also is no provision which

routinely permits a 20% exclusion of polling costs for exempt fundraising and compliance purposes. Moreover, 11 C.F.R. S

106.2(b) (2) (vi) prescribes a specific method of allocating public opinion polling. Therefore, the amounts requiring allocation

remain unchanged.

(iii) Telephone

The interim audit report contained the

Audit staff's comments that the Committee originally applied the

full amounts of expenditures for total telephone service,

including interstate service related to Iowa·and New Hampshire,

to the Iowa and New Hampshire limitations. The Committee also

applied to these limitations reimbursements to persons for the

use of personal and coin-operated telephones and certain

expenditures to non-telephone company vendors in conjunction with

major mail and telephone programs.

Twenty percent of these expenditures associated with Iowa and 20% associated with New Hampshire were

excluded from the respective State limitations based upon the

interpretation of the provisions concerning exempt compliance and

fundraising.

i/ The cost of the broadcast was $33,275.59. According to the

estimates contained in the A. C. Nielson Company's U.S. TV

Household Estimates, $18,562.20 is allocable to Iowa. Fifty

percent of that amount is $9,281.10 •
•

."

,.r

I'..

•

After realizing that only base charges and long distance telephone calls within a State (rather than

gross charges) required allocation to States, the Committee

analyzed invoices associated with telephone companies in Iowa and

New Hampshire and reallocated the expenditures. However, the

Committee failed to adjust the corresponding amounts charged to

exempt categories. The Committee's analysis and reallocation did

not encompass the reimbursements to persons for telephone calls

or expenditures to non-telephone v~ndors in conjunction with the

major mail and telephone programs.

In view of this situation, the Audit

staff analyzed expenditures for telephone service focusing on

base charges and determined that an additional amount totaling $12,848.68 is allocable to Iowa and $7,655.31 to New Hampshire.

In the February 19, 1985 response, the

Committee stated that it has been unable to complete its analysis of the proposed adjustments to telephone expenditures because of

limited time and resources, and that relevant factual materials

will be submitted when it becomes available.

Since the Committee has not submitted

any material to demonstrate that this adjustment should not be

applied to State limitations, the dollar amount of the adjustment remains unchanged.

(iv) Fundraising Expenditures - 28 Day Rule

In addition to the expenditures addressed above, the Audit staff reviewed other expenditures included in the overhead pool for which the Committee excluded

10% of the dollar amount from the Iowa and New Bampshire limitations and applied the resulting amount to exempt fundraising. The purpose of the review was to determine whether

any expenditures incurred within 28 days of the Iowa and New

Hampshire primaries had been improperly excluded from State

limitations.

Based upon this review, the Audit staff

determined that an additional amount totaling $5,635.11 should be

allocated to Iowa and $4,448.62 to New Hampshire.

In the February 19, 1985 response the

Committee stated that also due to limited time and resources it

has been unable to complete its analysis of the proposed adjustments to the exempt overhead fundraising costs, and that

relevant factual material will be submitted When it becomes

available •
•

•

Since the Committee has not submitted any material to

demonstrate that this adjustment should not be applied to State

limitations, the total dollar amount of this adjustment remains

unchanged.

e. Public Opinion Polling Expenditures

Section 106.2(b) (2) (vi) of Title 11 of the

Code of Federal Regulations states that expenditures incurred for

the taking of a pUblic opinion poll covering only one State shall

be allocated to tha~ State. Except for expenditures incurred in

conducting a nationwide poll, expenditures incurred for the

taking of a public opinion poll covering two or more States shall

be allocated to those States, based on the number of people interviewed in each State.

Section 106.2(c) (1) (iii) of Title 11 of the

Code of Federal Regulations states that expenditures incurred for

the taking of a pUblic opinion poll which is conducted on a

nationwide basis need not be allocated to any State.

The Committee engaged a Maryland vendor who

conducted public opinion polls. Several documents from the

vendor contained statements that certain of these polls were

national surveys. However, these same documents listed a limited

number of States or counties in which the surveys were conducted,

thereby indicating that the polls were not conducted en a

nationwide basis. Further, in several instances, the

documentation did not list the number of people interviewed in

each State, thus the Committee did not allocate these particular

surveys based upon the number of people interviewed in each

State.

The following are specific instances in which

payments for non-nationwide polls, relating exclusively, or in

part, to Iowa and New Hampshire were either not allocated or were

misallocated with respect to the Iowa and New Hampshire

limitations:

Invoice «2-0002 dated July 28, 1983 contained

a statement that the poll was a "National Survey" although the

invoice listed Iowa, New Hampshire, Alabama, and "Midwest

Counties" as the areas in which the survey was conducted. The

invoice listed the total fee for the survey ($40,150) and the

total number of people (1,318). An insertion made on the invoice

indicated that the survey was conducted in six States.

Therefore, the Committee allocated one-sixth ($6,691.66) to Iowa

and one-sixth to New Hampshire •
•

L"

...,..

•

•

..0

On October 24, 1984, the Committee presented

a memorandum to the Audit Division which contained a listing of

the number of interviewees in each of the six States. It appears that the memorandum was prepared by the Committee after

obtaining the information orally from the polling firm.

Based upon the number of people interviewed

in Iowa and New Hampshire, as listed in the memorandum, the Audit

staff has identified additional polling expenses allocable to

Iowa totaling $2,447.19 [$40,150 x (300/1318)] - [$40,150 x

(1/6)] and to New Hampshire totaling $2,599.50 [$40,150 x

(305/13l8)J - [$40,150 x (1/6)].

Invoice i2-0005 dated December 13, 1983 also

contained a statement that the poll was a "National Survey" although the invoice listed Iowa, New Hampshire, Georgia, Alabama

and Florida as the States in which the survey was conducted. The

invoice listed one total fee for the survey and one total for the

number of people interviewed. Therefore, the Committee allocated

one-fifth ($11,668.40) to Iowa and one-fifth to New Hampshire.

The Committee's memorandum noted above

contained a listing of the number of interviewees in each of the

five States•

Based upon the number of people interviewed

in Ic~a and New hampshire as listed in the memorandum, the Audit

staff has determined that the Committee overallocated these

polling expenses to Iowa in the amount of $2,368.94 ($62,370 x

(307/2059)] - [$58,342 x (lIS)] ~/ and to New Hampshire in the

amount of $1,036.12 [$62,370 x (351/2059)] - [$58,342 x (1/5)].

Invoice '2-0006 for $5,000 dated December 13,

1983 for a survey conducted in four States contained the number

of interviewees in each State as follows:

New Hampshire 150

Florida 100

Alabama 75

Georgia -12

Total 400

51 The Committee failed to allocate a portion of this invoice

totaling $4,028.00 •
•

co

'.~

19

The Committee did not allocate any portion of

this survey to New Hampshire, although the regulations require that $1,875 [$5,000 x (150/400)] be allocated to New Hampshire.

- Invoice 12-00010 dated March 12, 1984

totaling $36,951.50 contained a statement that the service

performed was "For National Research, Inc;- The invoice also

contained a statement that the fee was for "New Hampshire Voter

ID and GOTV (February 6 - February 28, 1984)".

The Committee did not allocate any of the

amount to New Hampshire.

Invoice 12-0008 dated February 20, 1984

contained expenditures allocable to New Hampshire totaling $13,450 for opinion surveys dated February 12, 19, and 21, 1984.

This amount has not been allocated to New Hampshire.

Invoice 12-0009 dated March 12, 1984

contained expenditures allocable to New Hampshire totaling $11,020 for opinion surveys dated February 22, 24, and 26, 1984.

The Committee has paid $5,438.68 of this amount. This amount

also has not been allocated to New Bampshire.

Maryland Vendor Recap

Invoice 12-0002

Invoice 12-0005

Invoice 12-0006

Invoice 12-00010

Invoice 12-0008

Invoice t2-0009

Total

New Hampshire

$ 2,599.50

( 1,036.12)

1,875.00

36,957.50

13,450.00

5,438.68

$59,284.56

•

Based upon the review of the above noted

invoices, and the memorandum received OCtober 24, 1984, the Audit

staff has determined that the Committee undera110cated polling

expenses to Iowa totaling $78.25 (Invoice 2-0002 $2,447.19 - Invoice 2-0005 $2,368.94) and underallocated polling expenses to

New Hampshire totaling $59,284.56 •
•

A New York vendor provided what it termed

-Focus Group Surveys" totaling $20,553.62 to evaluate media

placed in Iowa, New Hampshire and Massachusetts. The original documentation supporting these expenditures was deficient for

determining the amount required to be allocated to each State in

that it did not contain either the number of people interviewed

or the dollar amount incurred in each State. The Committee

applied the total amount ($20,553.62) to national headquarters expenditures, and did not allocate any portion of the amount to

Iowa or New Hampshire. 61 The Committee has paid $10,000 of this

amount. .

On October 24, 1984, the Committee presented additional documentation to the Audit Division from the vendor.

This documentation 'contained the number of "Respondents Interviewed by State".

Since the documentation showed that one

fourth of the interviewees were in Iowa and one half were in New

Hampshire, the Committee should have allocated $5,138.41

[$20,553.62 x (20/80)] to Iowa and $10,276.81 [$20,553.62 x

(40/80)] to New Hampshire. The $10,000 partial payment noted

above has been applied using these allocation ratios.

The interim audit report contained the Audit

staff's recommendation that the Committee should obtain

documentation from the vendor to support the information

contained in the memorandum presented to the Audit Division

regarding invoices 12-0002 and 12-0005 and present copies of this docum~ntation to the Audit Division within 30 days of :eceipt of

the interim report.

In the February 19, 1985 response, the

Committee presented the vendor documentation supporting the

information contained in their October 24, 1984 memorandum. The

Committee also expressed its disa~ eement with the Audit staff's

finding with respect to polls rei ~renced on invoices 12-0002, i2-

0005, 12-0006 and the "Focus Gr~~p Surveys".

The Committee argues that -those polls are

nationwide polls (and so viewed by the polling organization), the

costs of Which are not allocated to any State under 11 C.F.R. S

106.2(c) (1) (iii). Each poll questioned persons in the several

states and areas covered (with the exception of Florida in the

poll referenced on invoice number 2-0005) at the same time using the same question. The purpose of those polls was to arrive at a

national consensus of early decision makers for planning the

national campaign."

•

6/ Notwithstanding the amounts of the above noted public

opinion polls either not allocated or mis-allocated, the

Committee deducted 20' of the amount that was allocated to

Iowa and New Hampshire from these respective-State limitations as exempt compliance and fundraising. See

Finding III.B.2.d.
•

o

•

o

The regulatory provisions noted above state

that polls covering two or more States are to be allocated to

those States based on the number of people interviewed in each

state, while polls conducted on a nationwide basis need not be

allocated to any State. Given that these polls were all

conducted in 6 or fewer States, two of the three were originally

allocated by the Committee in some fashion, and that in each case

the polls covered one or more early primary States, no adjustment in the interim report allocations have been made for Invoices 2-

0002, 0005, and 0006. Further, no adjustm~nt to amounts

allocated for the "Focus Group Surveysft has been made.

·The Committee also expressed its disagreement

that costs incurred for services performed by National Research,

Inc. referenced on invoice number 2-00010 are allocable to New

Hampshire. The Committee contends that since those costs were

incurred for a phone bank that was s~t up in Maryland, those

costs are not allocable to any State under 11 C.F.R. S

106.2 (c) (1) (iii). 7/

As noted above, 11 C.F.R. § 106.2(a) (1)

states that expenditures incurred by a candidate's authorized

committee for the purpose of influencing the nomination of the

candidate with respect to a particular State shall be allocated

to that State, and that an expenditure shall not necessarily be

allocated to the State in which the expenditure is incurred or

paid. In addition, 11 C.F.R. § l06.2(b) (2) (v) (B) states that

expenditures for telephone calls between two States need not be

allocated to any State.

The Committee appears to be arguing that

since the vendor who was paid to provide the New Hampshire voter

identification and get-out-the-vote surveys was in Maryland, the

interstate telephone exemption should apply to the vendor's

telephone expenses. The interstate telephone call exemption applies to expenditures made for telephone calls between two

States. This language indicates that the exemption applies to

Committee telephone service, in that the expenditures are made by

the Committee for telephone calls. In this case, the vendor

incurred expenses for telephone service and, presumably, other

operating expenses, while providing service to a client. The

•

1/ It is assumed that the Committee intended to cite 11 C.F.R.

S 106.2(b) (2) (v) (the interstate telephone service

exemption) rather than 11 C.F.R. 5 l06.2(c) (1) (iii) (the

nationwide polling exclusion). This assumption is made

given the nature of the charges and the arguments contained

in the response. Should this assumption be incorrect, itshould be noted that 11 C.F.R. § 106.2(c) (1) (iii) excludes

nationwide polls from allocation. This survey was conducted

in only one state and is allocable under 11 C.F.R. S

l06.2(b) (2) (vi). Therefore, 11 C.F.R. S 106.2(c) (1) (iii) is

not applicable.
•

-

,...

'--

•

22

Committee, on the other hand, made an expenditure for voter

identification and get-out-the-vote surveys, not for telephone

calls. Therefore, since the location of the vendor is not

relevant to the allocation of an expenditure to influence the

candidate's nomination in a particular state, and since the

exemption for interstate telephone calls does not apply to the

vendor's expenses, no adjustment to the allocation in the interim

audit report has been made.

The remaining invoices 2-0008 and 2-0009 were

not addressed in the Committee's response.

3. Other Expenditures Requiring Allocation

a. Telephone and Mail Programs

The Audit staff's review of documentation

supporting expenditures in Iowa and New Hampshire revealed that

the Committee engaged the services of two Washington, D.C. area

vendors who conducted telephone and mail programs in Iowa and New

Hampshire as follows:

According to available documentation the

Committee engaged one of the vendors to pr~vide print:ng and

telephone banks related to Iowa totaling $140,000. The

documentation from this firm contained notations-that the

billings were for time fees and other charges. Other

documentation on file contained notations that the services were

for an Iowa phone and mail program. The $140,000 was paid in

four installments. The first payment was $20,000. A copy of

this check contained a notation that the payment was for ftlowa

Communication". This payment was allocated to Iowa. The

remaining three payments were $40,000 each. One of the $40,000

checks contained a notation that it was for a "phone bank" and

another of the checks indicated that it was for "phone". The

Committee applied these three payments to its national

headquarters telephone expenditures and did not allocate any

portion of the $120,000 to Iowa.

In the February 19, 1985 response to the

interim audit report the Committee stated that:

"The Committee disagrees that the

entire $140,000 paid to

Communications Management, Inc. for

telephone and mail programs is allocable

to Iowa •••Of that amount, the cost of the

telephone calls, which were made from

Kansas City, Missouri and associated

supervision and overhead are excludible

interstate telephone calls pursuant to

11 C.F.R. Section l06.2(b) (2) (v) •••The
•

•

23

cost incurred for computer and fee time

charges are properly chargeable to

headquarters overhead pursuant to

11 C.F.R. Section 106.2(c) (1) (i). Only the charges relating to the mail program

are allocable to Iowa.-

The interstate telephone call exemption (11

C.F.R. S 106.2(b) (2) (v) (B» was designed to eliminate the

problems of trying to allocate telephone calls between offices of

a campaign committee. As noted in 2.e. above, this regulation does not cover telephone expenses of third party vendors.

The Audit staff also notes that the overhead

regulation (11 C.F.R. S 106.2(c) (1) (i» cited in the response was

designed to alleviate the allocation of overhead expenditures

incurred by a campaign committee at the national headquarters. This regulation cannot logically be extended to cover vendor

overhead expenses. If such an interpretation were followed to

its logical conclusion, almost any bill from any vendor could

have a portion allocated to Committee overhead.

The allocations in the interim audit report for this expenditure are unchanged.

New Hampshire

The Committee made an expenditure to the same

vendor totaling $10,000 for what the invoice termed "Consulting and Printing New Hampshire". The Committee applied this payment

to its national headquarters telephone expenditures and did not

allocate any portion of the $10,000 to New Hampshire.

Documentation from the other Washington, D.C.

concern indicated that it printed, prepared, and mailed "letters,

self mailers and leader kits" to New Hampshire Independents. The

total cost of this service was $19,628.09. The Committee paid $7,078.09 toward the total costs and allocated this amount to New

Hampshire. A notation on the check indicated that the service

was for ftNew Hampshire Phone Bank-Interstate ft • Bowever, when the

Committee paid the $12,600 balance, it was applied to its

national headquarters telephone expenditures. No portion of this

amount was allocated to New Hampshire.

In addition to the expenditures allocable to

New Hampshire noted in the two preceding paragraphs, supporting documentation revealed that a Maryland mailing firm prepared and

mailed 50,446 letters to persons in New Hampshire. The total

expenditure ($11,347.25) was applied to national political operations, and no portion of this amount was allocated to New

Hampshire.
•

•

24

In the February 19, 1985 response to the

interim audit report, the Committee provided a copy of additional

documentation generated by the vendor which showed that costs

totaling $5,500 for "Consulting and Printing New Hampshire" were

actually devoted to New Hampshire. The remaining costs ($4,500)

were devoted to other States. However, the Committee stated that

it "has not been able to obtain a breakdown of the total charges for the two other mail programs, but will..submit additional

factual material as it becomes available" •

. Based upon the documentation submitted by the

Committee, the Audit staff has reduced the amount of expenditures allocable to New Hampshire set forth in the recap on page 25 of

this report by $4,500.

b. Political Buttons and Bumper Stickers

The Committee engaged the services of a North

Carolina vendor to manufacture and ship political buttons and

bumper stickers to several states. The Committee applied the

entire cost of these items to its national headquarters expenditures. However, the Audit staff determined based upon the

number of these items shipped to Iowa and New Hampshire that

$6,415.72 should have been allocated to Iowa and $814.78 to New

Hampshire.

In the February 19, 1985 response, the Committee stated

that "since many of those items were picked up from Iowa and New

Hampshire and carried south for distribution, the Committee

believes that only one-third of those costs should be allocated

to their respective States".

The Audit staff notes that the documentary evidence

reviewed in conjunction with this finding indicated that these

items were routinely shipped from the manufacturer to several

States. The Committee has not provided any additional factual

evidence that many of these items were picked up from Iowa and

New Hampshire and carried south for distribution or that one

third of the cost is a reasonable estimate of Iowa and New

Hampshire usuage. Therefo~e, the amounts allocated to Iowa

($6,415.72) and New Hampshire ($814.78) remain unchanged.

c. Miscellaneous Expenditure

The Audit staff noted a $795.60 payment for

video rental equipment in Iowa which was not allocated to Iowa.

This item was not addressed in the Committee's response •

The following is a recap of payments allocable to Iowa and New Hampshire as delineated in Finding

III.k.

a
~unt Allocated by the Committee

as of August 1984

See II.A.l

Adjustments to Above

Reported Totals:

II.B.2. 8. Media Expenditures

11.8.2. b. Salaries, Employer

FICA, and Consultant

Fees

I1.B.2. c. Intra-State Travel

and Subsistence

11.B.2. d. (i) Compliance Costs and

Fundraising ExpendituresV Media

~I.B.2. d. (ii) Compliance Costs and

Fundraising Expenditures- Polling

$595,240.69

(24,758.13)

8,S8l.80

1,081.71

28,124.44

2,333.68

New Hampshire

$394,593.05

5,102.02

1,231.27

32,951.95

28,403.74

8,432.02

d. (iii) Compliance Costs and

Fundraising Expenditures - Telephone 12,848.68 7,655.31

~I.B.2. d. (iv) Fundraising Expenditures - 28 day rule

Public Opinion Polling Expenditures

.J"

II.B.3. a. Telephone and Mail

« Programs

II.B.3. b. Political Buttons and

Bumper Stickers

II.B.3. c. Miscellaneous

Expenditures

Total Amount Allocable Paid as of

8/31/84

5,635.11

2,578.25

120,000.00

6,415.72

795.60

$759,177.55

4,448.62

64,284.56

29,447.25

814.78

-0-

$577,364.57

"

Less 26 U.S.C. S 9035(a) ~te Spending Limitation

~l Amounts Paid In

Excess of State Limitations

( 684,537.50) ( 404,000.00)

$ 74,640.05 $173,364.57
•

,,,

•

•

26

The interim audit report contained the Audit staff's

recommendation that within 30 days of receipt of the report, the

Committee show that it had not exceeded the limitations.

Further, absent a showing to the contrary, it was recommended

that the Committee adjust its accounting recoras to reflect the

expenditures allocable to Iowa and New Hampshire as delineated in

the report and, where necessary, file amendments which reflect

the correct amounts allocable to these two States.

In the February 19, 1985 response to the interim audit

report, the Committee stated that the correct allocation to Iowa

is $586,482.74 and $383,947.84 to New Hampshire. These amounts

are within the statutory state spending limitations. No

amendments were filed with the respcnse to reflect changes in the

reported allocations.

In addition to the matters discussed above, Appendix I

of the Committee's February 19, 1985 response contained a

nconstitutional argument" which suggests that the state

expenditure limitations are an unconstitutional limitation of the

Committee's "First Amendment rights of freedom of speech and

Fifth Amendment equal protection principles. n

The Commission has reviewed the constitutional argument and notes that it lacks autho:ity to rule on the merits of a

constitutional challenge.

Conclusion

On August 14, 1985, the Commission made an initial

determination that the amounts paid in excess of the state

expenditure limitations are non-qualified campaign expenses. Further, the Commission determined that the pro-rata portion, $74,968.82 ($74,640.05 in Iowa plus $173,364.57 in New Hampshire $248,004.62 x .302288) must be repaid to the O.S. Treasury within 90 calendar days of receipt of this report in accordance

with 11 C.F.R. § 9038.2(d).

If the candidate does not dispute this determination within

30 calendar days of the receipt of this report, the initial

determination will be considered final.

Repayment Amount: $74,968.82
•

27

C. Determination of Net Outstanding CamDaign Obligation.

Section 9034.5(a) of Title 11 of the Code of Federal

Regulations requires that the candidate submit a Statement of Net

Outstanding Campaign Obligations (NOCO Statement) which

discloses, among other items, the total of all outstanding obligations for qualified campaign expenses and an estimate of

the necessary winding down costs within 15 days of the

candidate's date of ineligibility.

On March 16, 1984, Senator John Glenn announced that he

had withdrawn from the race for the Democratic nomination for

President of the United States. Pursuant to 11 C.F.R. S

9033.5(8), that is the date Senator Glenn's candidacy terminated

for the purpose of incurring qualified campaign expenses.

The Committee submitted their original NOCO Statement

on April 2, 1984 and has continued to submit revised NOCO

Statements on a monthly basis with each matching fund submission.

The Audit staff reviewed the NOCO Statement dated June

29, 1984 which was the most recent revision available at the time

of the review. This review was limited to the verification of

cash on hand, bank loans payable, and certain of the larger

accounts payable. The bank loans and verified accounts payable

represent in excess of $2.3 million of the Committee's total

obligations. Should the Committee's finan~ial positi~~ change substantially, additional fieldwork may be required to assess the

impact of the change on the NOCO deficit and to verify additional

components of the NOCO statement.

Presented below is the June 29, 1984 NOCO Statement

c; setting forth the Committee's financial position at that time •

..

•
•

John Glenn Presidential Committee Inc •

Revised Statement of Net Outstanding Campaign Obligations

June 29, 1984 as Amended August 2, 1984

Assets

Petty Cash

Cash

Accounts Receivable

Refundable Deposits Accrued Interest Receivable

Capital Assets

Total Assets

Obligations

$

$

200.00

150,487.16

11,370.31

2,000.00

900.00

17,144.24

182,101.71 $ 182,101.71

Net Outstanding Campaign Obligations- Deficit

Total Obligations

( 11,854.28)

( 68,186.42)

(113,111.16)

(184,167.78)

( 9,026.90)

( 4,607.00)

( 2,644.90)

( 10,000.00)

( 18,000.00)

($696,140.04 )

e

•

Accounts Payable for

Oualified Campaign Expenses

Accrued Payroll

Estimated Phone/xerox

Expenses

Loan Payable

Estimated Winding Down

Costs 3/16/84 to 3/15/85

Salaries, Consulting ($207,799.08)

Rent ( 29,987.16)

Phone ( 36,755.36) Supplies, Postage,

Xerox, Equip. Repair Data Processing

Interest Loan

Fundraising Costs

Travel Expense Bank Service Charges Transportation

Legal

Storage/Files.

(974,153.39)

(137,344.01)

( 6,658.50)

(2,000,000.00)

([96« 140.04)

($ 3 , 814 , 295.94) (3,814 « 295.94 )

($3,632,194.23)
29

Conclusion

Between June 29, 1984 and December 31, 1984, the Committee

has reported receiving individual contributions totaling $335,136.47 and matching fund payments totaling $148,899.34.

Therefore, the Committee has not received matching fund payments

in excess of its entitlement•

•

i~; ";;~~}';~1'?:~:~~~~;~'\f:~~;~1' .,.".

-. ,"

•

Jst6/041588

FEDERAL ELECTION COMMISSION

WASHING10:-" 0 ( 2041>\

April 15, 1988

MEMORANDUM

TO:

FROM:

SUBJECT:

FRED EILAND

CHIEF, PRESS OFFICE

ROBERT J. COSTA /

ASSISTANT STAFF DI~~~ AUD IT DIVIS ION

PUBLIC ISSUANCE OF ADDENDUM TO THE

FINAL AUDIT REPORT - THE JOHN GLENN PRESIDENTIAL

COMl>lITTEE, INC.

Attached please find a copy of the Addendum to the Final

Audit Report on The John Glenn Presidential Committee, Inc.,

which was approved by the Commission on April 7, 1988.

Informational copies of the Addendum have been received by all parties involved and the Addendum may be released to the

public.

Attachment as stated

cc: Office of General Counsel

,--"Office of Public Disclosure

Reports Analysis Division

FEC Library

•
. - ., , . .

• li.. t

•

1-

I •

JS6/032888

FEDERAL ELECTION COMMISSION

WASHINGTON, 0 C 204&3

ADDENDUM TO THE

REPORT OF THE AUDIT DIVISION

ON THE

JOHN GLENN PRESIDENTIAL COMMITTEE, INC.

I. Background

A. Overview

On August 19, 1985, the Federal Election Canmission

("the Commission") released the final audit report on the John

Glenn Presidential Canmittee, Ire. ("the Canmittee"). That

report was based on an audit of the Committee conducted pursuant

to 26 U.S.C. § 9038(a) and included the Canmission"s initial

determination regarding repayment to the U.S. Treasury. The

audit covered the period October 1, 1982 through April 30, 1984.

In addition, certain activity was reviewed through June 29, 1984

for the Statement of Net Outstandi ng Campaign Obligations and

through August 31, 1904 for allocation to State limitations.

This Addendum is based on the follow-up fieldwork of

the Committee conducted pursuant to 11 C.F.R. § 9038.l(b) (3)

which states, in part, that the Canmission staff may conduct

additional fieldwork after completion of the fieldwork conducted

pursuant to paragraph (b) (1) and (2) of the section.

Also included are findings and recommendations relating

c- to the Canmittee as the result of an audit of the John Glenn

Committee 1/ (the Joint Fundraising Committee). The Joint

Fundraising Canmittee organi zed fundraising events between the

Committee and the Sloan for Congress Committee, Americans with

Hart, Inc., and the Senator John Glenn Committee.

Section 9038.1 (e) (4) of Title 11 of the Code of Federal

RegUlations states, in part, that addenda to the audit report may

be issued from time to time as circumstances warrant and

additional information becomes available. Such addenda may be

based, in part, on follow-up fieldwork conducted under paragraph

(b) (3) of this section.

ell The John Glenn Canmittee (formerly the Democratic Unity

Committee) was established to act as the fundraising

representative pursuant to 11 C.F.R. § 9034.8(b).
.,

,... ....-;' ;" r '," --.:

• 2

The follow-up fieldwork covered the period July 1, 1984

through December 31, 1985.

The audit of the Joint FWldraising Committee covered

the period April 26, 1984 through December 31, 1985.

This Addendum is based on documents and working papers

which support each of its factual statements. They form part of

the record upon which the Commission based its decisions on the

matters in the Addendum and were available to Commissioners and

appropriate staff for review.

B. Key Personnel

The Treasurer of the Committee and the Joint

Fundraising Commi ttee during the period reviewed was Mr. Willi am

Whi te •

The fieldwork included a review of receipts and

disbursements, analysis of Committee debts and obligations

(including winding down costs) and such other procedures as

deemed necessary under tt.e circumstances to determine whether the

Committee received any matching fund payments in excess of the

amount to which it was entitled and whether any amount of any

payment made from the matching payment account was used for any

purpose other than to defray the qualified campaign expenses of

the Canmittee.

~.

C. Scope

In addition, the work performed included an examination

of the Join t Fundr aising Commi ttee' s receipts and disbursements;

and a review of selected matching fund submissions with respect

to certain contributions received and submitted by the Committee.

II. Findings and Recommendations Related to Title 2 of the

United States Code

A. Stale-Dated Outstanding Committee Checks

Added Back to Cash

Sections 44lb(a) and (b) (2) of Title 2 of the United

States Code, state, in relevant part, that it is unlawful for any

corporation to make a contribution or expenditure in connection

with any election to any political office, or in connection with

any primary election held to select candidates for any political office. The term "contribution or expenditure" shall include any

•

direct or indirect payment, or any services, or anything of value

provided to any candidate, campaign committee, or political party

or organization in connection with any election to any of the

offices referred to in this section.
, -

. . '~

.r;

•

..'

3

section 100. 7(a)(1)(E) (iii) of Title 11 of the Code of

Federal Regulations provides, in part, that the term "anything of

value" includes all in-kind contributions. The provision of any

goods or services without charge or at a charge which is less

than the usual and normal charge for such goods or services is.a

contribution.

section 104.l3(a) (1) of Title 11 of the Code of Federal

Regulations states that the amount of an in-kind contribution

shall be equal to the usual and normal val ue on the date

received. Each in-kind contribution shall be reported as a

contribution in accordance with 11 C.F.R. § 104.3(a).

During the Audit staff's follow-up fieldwork it was

noted that the Committee reported a deduction in disbursements

totaling $18,039.32 identified as "Outstanding checks added to

cash due to stale date and reconciliation to bank account."

......

("-,

, ()-

The Commi ttee provided the Audi t staff a detailed list

of 69 outstanding checks to support the deduction to

disbursements. This list totaled $17,114.85, a difference of

$924.47 from the reported amount. Committee officials stated

that they were not able to reconcile the reported figure with the

list. The list includes 2 checks totaling $2,013.40 which were

written within 6 months of the date that $18,039.32 was added

back to cash and therefore did not appear to have been staleda ted.

The records provided by the Committee indicated that

most of the checks were issued to individuals in 1983 and 1984.

Forty of these checks, totaling $1,926.60, were for amounts not

exceeding $200.00 and were not identified by the Committee as

contribution refunds.

The Audit staff included in the interim addendum to the

audit report ("Interim Addendum") the $17,114.85 itemized list of

outstanding checks provided by the Committee. In addition the

Audit staff included a list identifying the 40 checks totaling $1,926.60 which were issued for amounts not aggregating in excess

of $200.00 and were not identified by the Committee as

contribution refunds.

I n the I nte r im Addendum the Audi t staff recommended

that the Committee provide the following information relevant to

the outstanding checks added back to cash.

•

1 . Reconciliation of the amounts reported ($18,039.32) and

the amounts itemized on the outstanding check list

($17,114.85) •
3.

•

...,

4

2. Except for contribution refunds, the outstanding checks

that aggregate $200.00 or less to a single payee could

be reported as in-kind contributions. Since the

Commi t tee's cash balance had been pre viously adj usted,

the in-kind contributions should be reported as a memo

entry to receipts and disbursements.

Determine whether those checks greater than $200 and

all contribution refunds are actually outstanding. For

those checks which represent a remaining liability of

the Commi ttee, report an in-kind contribution if

permissible, or take steps to effect payment.

Alternatively, the funds representing the remaining

outstanding checks could be either contributed to a tax

exempt charitable organization, or voluntarily paid to

the U.S. Treasury •

: I'....

','.

4. Amend the reports to disclose the proper disposition of

the outstanding checks and any other necessary

adjustments to the reports based on the Committee's

actions.

c

•

The Canmittee responded to the Interim Addendum by stating

that: (1) certain checks totaling $2,827.23 would be treated as

in-kind contributions: (2) $10,212.09, representing the total

checks for payments to corporations and refunds of excessive

contributions, would be contributed to a tax-exempt organization:

and (3) stop payment orders would be issued on the remaining 5

checks totaling $5,000 which the Committee asserts do not reflect

obligations of the Commi ttee.

The Committee included an annotated list which indicated the

specific disposition, as outlined above, for each stale-dated

check. The Audit staff analyzed the contributions designated for

in-kind contributions and determined that the $2,827.23 total to

be reported as in-kinds is materially correct. The Committee

explained that the 5 checks totaling $5,000 do not reflect

outstanding liabilities of the Canmittee: one contribution was

apparently not accepted by an organization: one payment was made

in error and later refunded: one check was written to the U.S.

Postmaster for postage: and two payments were apparen tly rejected

by the payees in settlement of an indeterminate obligation.

Finally, the Committee provided copies of five checks totaling $10,212.09 made payable to tax exempt charitable organizations

for the balance of the deduction in disbursements added back to

cash ($18,039.32 - $2,827.23 - $5,000 = $10,2l2.09) .

The Audit staff notes that the Committee did not reconcile

the amounts reported ($18,039.32) to the amounts itemized on the

outstanding check list ($17,114.85). However, the total

explained disposition of funds equals the reported total amount.
A •

•

••

-

(J'

. .

5

The Audit staff accepts the Committee's explanation for the

disposition of the funds related to the stale-dated checks added

back to cash.

Recommendation 'I

The Audit staff recommends no further action in this matter.

B. VISA Payments Made on Behalf of the Senator

John Glenn Commi ttee

Section 44la (a) of Title 2 of the Uni ted States Code

provides, in part, that no person shall make contributions to any candidate and his authorized political committee with respect to

any election for Federal office which, in the aggregate, exceed

$1,000. Person is defined at 2 U.S.C. S 431(11), in relevant

part, as a committee. In addition, 2 U.S.C. § 44la(f) states

that no candidate shall knowingly accept any contribution in

violation of the limits on contributions.

Sections 434(b) (4) and (5) of Title 2 of the United

States Code sta te, in part, that each report shall disclose the

total amount of all disbursements along with the name and address

of each person to whom an expenditure in an aggregate amount or

value in excess of $200 within the calendar year is made by the

reporting committee to meet committee operating expense, together

with the date, amount, and purpose of such operating expenditure.

The Act, at 2 U.S.C. § 434(b) (8), requires that each report shall

disclose the amount and nature of outstanding debts and

obligations owed by or to such political committee.

On August 15, 1985 and September 17, 1985 the Canmittee

received $11,125.00 and $23,885.04 respectively from the Senate

Canmittee. The Committee's October 15 Quarterly Report for 1985

indicates that the payments were for "Reimbursement of VISA."

•

Canmittee officials explained that early in 1983 the

Senate Committee was insolvent and the John Glenn Presidential

Canmittee made payments to VISA on behalf of the Senate

Committee. Once financially able, the Senate Committee would

reimburse the Canmittee for all payments. The activity,

including debts and obligations, reported by the Sena te Commi ttee

during the period of these VISA payments is scheduled on

Attachment I.

In suppor t of the e xplanat i on, Cornmi t tee of f i ci als

provided the Audi t staff wi th copies of some VISA sta temen ts for

six credit cards issued to the Senate Committee.
•

.."\

r

.....

•

6

The statements dated 9/23/82, 10/25/82, 1/25/83,

7/25/83, and 4/24/84 were presented in support of the $23,885.04

payment to the Committee. These statements indicated that

$24,331.04 in payments had been credited against the outstanding

balances: $10,657.04 credited to the 1/25/83 statements on

1/03/83; $3,674 credited to the 7/25/83 ~tatements on 7/12/83;

and $10,000 credited to the 4/24/84 statements on 3/29/84. (See

Attachment II.)

Neither the Senate Committee nor the Presidential

Committee reported any expenditures to VISA corresponding to the

credits (totaling $10,657.04) shown on the 1/25/83 statements

during the period 1/01/82 to 3/31/83. In addition, neither

committee reported the debt owed to VISA which corresponds to

these amounts on their reports covering the period 1/01/82 to

3/31/83. Further, the Senate Committee did not report any

obligation owed to the Committee.

The $3,674 payment was credited to the 7/25/83 VISA

statements on 7/12/83. This expenditure did not appear to have

been reported by either the Presidential Committee or the Senate

Committee. The Senate Committee did not report any obligation to

VISA or the Committee between 1/01/82 and 12/31/84. Although the

7/25/83 statements indicated an ending balance of $30,262.34,

neither the Senate Committee nor the Presidential Committee

reported any obligation to VISA at the close of the reporting

peri cd 7/01/83 to 9/30/83.

The 4/24/84 statements indicated that $10,000 was

credited to the statements on 3/29/84. The Audit staff verified

that the $10,000 credit was actually paid by wire transfer with

Committee funds. The expenditure to VISA was reported by the

Committee on the transaction date shown on the VISA statements. However, neither the Senate Committee nor the Presidential

Committee disclosed the amounts owed to VISA on any report

between 1/01/84 to 6/30/84. (See Attachmen tIll.)

To support the $11,125.00 payment to the Committee, the

Audit staff was provided with a listing of 14 check numbers and

amounts from a Committee account. The checks, dated May 16, 1984

through June 18, 1985, represent payments to VISA in the amount

of $11,125.00. See Attachment IV. The Committee reported

payments to VISA in the amounts and on the dates itemized on the

Committee's listing. Senate Committee VISA statements dated May

23, 1984 indicate that payments totaling $1,804.00 were made

against the outstanding balances. This amount is the same as

Check 15652 dated May 16, 1984 which appears on the Committee's

listing of 14 checks. The Committee did not provide VISA

statements subsequent to May 16, 1984 to verify that the

remaining $9,321.00 in payments ($11,125.00 less $1,804.00) made

by the Committee were credited to the Senate Committee VISA

accounts.
, ,

-' -- -- ---

2.

A

•

o

t'

7

In the Interim Addendum it was noted that, if the

Committee did in fact make $35,010.04 ($11,125.00 + $23,885.04)

in payments to VISA on behalf of the Senate Committee for

expenses incurred in connection with the Candidate's Senate

campaign, the following Concerns were raised:

1. The amounts owed to VISA and to the Presidential

Committee by the Senate Committee for VISA

payments were not disclosed by the Senate

Committee as required by 2 U.S.C. 434(b) (8);

The amounts owed VISA, if the debt was in fact

assumed by the Presidential Committee, were not

disclosed on the Committee reports as required by

2 U.S.C. § 434(b) (8). Further, the amounts owed

to the Canmittee by the Senate Canmittee were not

reflected on the Committee's reports;

"'.

3.

4.

Of the payments totaling $35,010.04 that the

Committee states were made on behalf of the Senate

Committee, $13,885.04 in expenditures ($35,010.04 - $10,000 -$11,125) were not disclosed as required

by 2 U. S.C. § 434 (b) (4) ;

Of the payments totaling $35,010.04 that the

Committee states were made on behalf of the Senate

Committee, the Audit staff verified that

$11,804.00 ($10,000 + $1,804) were actually

credited to VISA statements and paid from

Committee funds.

I n the I nte r im Addendum the Audi t staff recommended

that within 30 days of receipt of this report the Committee

provide documentation and evidence on the following:

1. Debit memos or canceled checks demonstrating that

the Committee paid $10,657.04 to VISA on 1/25/83

and $3,228 ($3,674 less $446) on 7/25/83. The

Audit staff further recommended that the Committee

demonstrate how the payments to VISA were

disclosed as required by 2 U.S.C. § 434(b) (4) and

how the balances owed VISA were disclosed as

required by 2 U.S.C. § 434(b) (8):

•

2. Copies of VISA statements demonstrating that the

reported payments totaling $9,321 ($11,125 - $1,804) for the period June 11, 1984 through June

18, 1985 were credi ted to th e VISA sta tements of

the Senate Committee;
3.

•

•

•

••

8

Provide evidence that the $35,010.04 payments were

expenses of the Senate campaign and not the

Presidential campaign.

With regard to 1. above, the Committee responded that

the $10,657.04 payment to VISA was made by 6 checks from the

National Council on Public Policy ("NCPP"), a registered

committee within Senator John Glenn's structure of organizations.

The Committee states that these payments were for expenses

incurred by Senator John Glenn while campaigning for other

candidates during the 1982 general election campaign. The

Committee further states that all expenditures were reported by

NCPP, a portion as in-kind contributions allocable to the various

candidates on whose behalf the trips were made. The Committee

attributed the balance of these VISA charges to Senator Glenn's

activities as a pUblic figure. The Committee further explained

that the $10,657.04 amount was mistakenly paid by the Senate

Committee to the Presidential Committee rather than to NCPP.

The Committee stated that the Presidential Committee will refund

the $10,657.04 to the Senate Committee. The Audit staff reviewed

the reports of the NCPP and noted that this committee reported

$10,657.13 in payments to VISA of which $4,190.56 were reported

as in-kind contributions on behalf of federal and non-federal

candida tes.

The Committee did not provide debit memos or canceled

checks, as requested by the Audit staff, to support the $3,228

($3,674 less $446) payment to VISA by the Committee. Instead,

the Committee referred the Audit staff to a reported payment by

the Presidential Committee for $3,787, and reconciled this amount

to the $3,674 amount by presenting a copy of a seventh VISA

statement dated July 25, 1983 showing a credit for $113 - the

difference between $3,787 and $3,674. Thus the $3,787 report

total represents credits to 7 credit cards; the $3,228 amount

represents credits to 5 of these cards.

The Audit staff acknowledges that the reported payment

by the Presidential Committee ($3,787) will reconcile to the

amount ($3,228) claimed by the Committee. Although the Committee

did not provide debit memos or canceled checks to demonstrate

that the Committee paid the $3,228, the Audit staff notes that

the bank reconciliation to the reported figures for 1983 support

the correctness of the reported disbursements •
•

......

T

-

9

With regard to the disclosure of the $10,657.04 and

$3,228 balances owed VISA, the Committee stated that the

$10,657.04 balance was not reported as an obligation because the

entire amount was incurred and paid within the same reporting

period; the Committee further contends that the amounts owed on

the Senate Committee VISA statements (which includes the $3,228

payment) were never formally assumed by the Presidential

Committee and were never obligations of the presidential

Committee. The Committee acknowledges that the VISA balances

should have been reported; the Committee stated that an amendment

would be filed to show the balances as a debt of the Senate

Committee. However, the Committee did not explain why the

payments made by the Presidential Committee were not reported as

receivables from the Senate Committee if, as contended, they were

not Presidential expenses.

With regard to Recommendation 2. above, the Canmittee

materially complied with the recommendation of the Audit staff by

providing copies of VISA statements that materially supported the

reported payments totaling $9,321 for the period June 11, 1984

through June 18, 1985. These payments reported by the

Presidential Committee were credited to the VISA statements of

the Senate Committee.

In response to Recommendation 3. above, the Canmittee

did not provide any evidence that the payments were expenses of

the Senate campaign. The Committee contended only that the

payments were not expenses of the Presidential campaign on the

following basis:

r·· a)

b)

c)

d)

The

•

regard to the

following:

All charges comprising the $35,010.04 amount were

made prior to the formation of the Presidential

Committee;

Charges on the VISA accounts cannot be related to

the Presidential campaign;

An affidavit by the Executive Assistant to Senator

Glenn stating that no charges on VISA are

attributable to the Presidential campaign; and

the John Glenn Exploratory Committee had VISA

cards in its name in order to ensure that Senate

Committee cards were not used.

Audi t st aff re viewed the VISA sta tements wi th

contentions summarized above and noted the
• 10

(1 )

( 2)

All charges, other that high balance fees, late

payment fees, and finance charges, were incurred

prior to 1983.

Between September 23, 1982 and December 23, 1982

the charges incurred on the six credit cards

totaled $32,019.27;

'"

......

I'~

r

~.

c (4 )

...... ( 5) .-.

f:""

Four of the six cards, showing incurrences

totaling $23,006.93 for this same period, were in

the names of persons who were either on the

Presidential Committee payroll or were receiving

reimbursement from the Presidential Committee for

expenses during 1982. Two card holders were on

the payroll of the Presidential Committee

effective October 21, 1982 (including the

Senator's Executive Assistant who provided the

affidavit) and incurred charges totaling

$19,548.45 between September 23, 1982 and December

23, 1982. The charges incurred by the individuals

receiving reimbursement for expenses totaled

$3,458.48. One of these individuals was salaried

by the Presidential Committee in December, 1982.

A fifth card was in the name of the candidate;

( 3)

The Presidential Committee commenced activity on

October 1, 1982; and

No one of the VISA card holders was salaried by

the Senate Committee in 1982 after the inception

of the Presidential Committee. Only one expense

reimbursement payment ($75.50) was reported to a

VISA card holder by the Senate Committee after

September 23, 1982.

It is the opinion of the Audit staff that the inception

date of the Presidential campaign considered in conjunction with

the fact that most of the VISA charges were made by employees

and/or associates of the Presidential Committee does not support

the Committee's contention that these charges were not related to

the Presidential campaign.

The Audit staff also reviewed the reports of the

Presidential Committee and reconstructed the following financial

position of the Presidential Committee at the times the

reimbursements from the Senate Committtee were received:

•
- f _ _ _ -- -«If -- .-

. " '. /,'

• 11

Beginning cash on hand reported by the

Presidential Committee July 1, 1985:

$10,674.54

Add: Reported receipts

July 1 - September 30, 1985

($45,721.86) net of

transfers from the Senate

Canmittee ($35,010.04)

Adjusted available cash

($10,674.54 plus $10,711.82)

$10,711.82

$21,386.36

o

"".

•

The Audit staff notes that without the $35,010.04

transfer-in from the Senate Committee the Presidential Committee

would have been unable to make the interest payments totaling $51,462.08 paid to four banks during the July 1 to September 30,

1985 reporting period. The $11,125 portion of the transfer on

8/15/85 coincided with interest payments totaling $12,690.88 made

on 8/19/85. The $23,885.04 portion transferred on 9/17/85

coincided with interest payments totaling $17,656.92 made on

9/16/85. The interest payments totaling $16,685.80 made on

7/15/85 were apparently made on a negative reported cash-on-hand

position; the Canmittee adjusted the cash position on 9/30/85 by adding $18,039.32 in stale dated checks to cash.

Conclusion

In the Commission's OplnlOn, the Committee has failed to

demonstrate that the 1982 charges on the Senate Committee's VISA

cards were unrelated to the Presidential campaign. Many of the

VISA charges were incurred by persons who were either salaried by

or receiving reimbursements from the Presidential Committee.

These charges were incurred two years after the 1980 Senate

Election and four years prior to the 1986 Senate election, but at

a time when the Presidential Exploratory Committee was beginning

its activity. Further, at the time the VISA charges were

incurred, the Senate Committee reported only one debt of

$5,000.00.

At the time of the transfers from the Senate Committee to

the Presidential Committee, the Senate Committee's reports

indicated that it had been solvent for at least a year. Also, at

the time of the transfers, the Presidential Committee was in a

cash poor position for meeting interest payments due on bank

loans. These loans were the subject of a Commission compliance

action at that time.
•

•

12

As acknowledged by the Committee, neither the Senate

Committee nor the Presidential Committee reported any amount owed

to or due from the other. Finally, the use of the Senate

Committee's credit cards by the NCPP for a portion of the expense

discussed above raise questions about the relationship between

the NCPP, the Senate Committee and the Presidential Committee.

In Advisory Opinion 1987-4, the Commission permitted the

Senate Committee to transfer excess campaign funds from the 1986

Senate Committee to the Presidential Committee to assist in debt

retirement. Arguably, the transfers which occurred in 1985 could

be similarly viewed. Given the Committee's acknowledgement of

the reporting deficiencies discussed above and Advisory Opinion

1987-4, the Commission has decided to take no further action at

this time.

III. Findings and Recommendations Related to Title 26

of the United States Code

A. Misallocation of Joint Fundraising Proceeds

Section 9038 (b) (1) of Title 26 of the United States

Code states, in part, that if the Commission determines that any portion of the payments made to a candidate from the matching

payment account was in excess of the aggregate amount of payments

to which such candidate was entitled, the candidate shall pay to

the Secretary an amount equal to the amount of excess payments.

The Committee engaged in two separate joint fundraising

events during the matching payment period. The Sloan For

Congress Committee participated in the first event (October 12,

1984); Americans With Hart, Inc. participated in the second event

(December 14, 1984). During the review of the Joint Fundraising

Committee's records, the Audit staff noted that the proceeds

relative to both events were not allocated in accordance with the

agreements. During this review, the following matters were

noted.

1. The Committee and the Sloan For Congress

Committee ("the Sloan Committee")

The agreement entered into between the above named

committees states that fundraising proceeds shall be allocated

two-thirds to the Sloan Committee and one-third to the Committee,

and related expenditures shall be allocated according to the same

formula utilized for allocating fundraising proceeds .

The proceeds received as a result of the

fundraising event, adjusted for contributions in excess of the

limit as provided by 2 U.S.C. § 441a(a) (1) (A), totaled $8,641, of

which $8,611 was distributed among the participants. The Joint

Fundraising Committee allocated, on a 100% basis, 42

contributions totaling $2,611 to the Committee.
2.

•

".J

,"

r-

•

13

The Committee submitted 31 of these contributions

for matching funds in accordance with 11 C.F.R. S 9034.2(c) (7).

These contributions were subsequently matched in the amount of

$1,736. According to the formula stated in the agreement, the

Committee should have received one-third of the proceeds of each

allocable contribution. It should be noted that 3 of the

contributions, totaling $100, were earmarked directly to the

Sloan Committee and therefore not allocable one-third to the

Presidential Committee. Hence, the correct matchable amount is

$545.33 [($1,736 - $100) x .333331.

The Audit staff expressed the opinion in the

Interim Addendum that the Committee received $1,190.67 ($1,736 - $545.33) in matching funds in excess of the amount to which it

was entitled. (See Attachment V.)

The Committee and Americans With Hart, Inc.

(" the Har t Commi ttee")

The agreement entered into between the above named

committees states that total proceeds from the event will be

divided between the committees in direct proportion to the

percentage of the total proceeds raised by each committee. If a

contributor gives an amount which, if allocated in accordance

with the above formula, would cause that contributor to exceed

the maximum that can be contributed to one of the committees, the

excessive portion of that contribution will be allocated to the

other committee. Furthermore, the agreement states "in the event

that checks are received that are payable to either of the

[Presidential candidate's] committees as a result of a

solicitation authorized by this agreement, it is agreed and

understood that such checks may be endorsed over to the

Democratic Unity Committee and deposited in that committee's

account the same as if they were originally written to the

Democratic Unity Committee."

A joint fundraising event involving the two

committees was held on December 14, 1984. The proceeds, as

adjusted, received as a result of the fundraising event totaled

$56,100. 2/ The Audit staff noted that the Joint Fundraising

Committee reported receipts from the event totaling $42,355. The

difference represented the value of contributions made by checks

payable to either candidate, in which case the Joint Fundraising

Committee forwarded these checks directly to the participants•

~/ This figure is net of three contribution refunds totaling $1,000.
•

.,

I''''

jO

14

The Joint Fundraising Committee allocated 87.7% of

the gross proceeds to the Committee and 12.3% to the Hart

Committee. However, based on our analysis of the Joint

Fundraising Committee's records, only 65% of the contributions

should have been allocated to the Committee and 35% to the Hart

Committee.

The Audit staff determined that of the total

misa110cated contributions, 88 totaling $16,829.92 were submitted

for matching in two separate submissions. The amount of matching

funds received by the Committee relative to the 88 contributions

submitted totaled $16,822.78.

Based on our review of the matching fund

submissions and application of the allocation formula per the

joint fund raising agreement, the Audit staff noted that for the

88 contributions submitted and matched, the Committee should have

received only $12,856.45 in matching funds.

The Interim Addendum stated that it was the

opinion of the Audit staff that the Committee received $3,966.33

($16,822.78 - $12,856.45) in matching funds in excess of the

amount to which it was entitled. 1/

Recap: Overpayment of Matching Funds

Joint Fundraising Events

0:

John Glenn Presidential Committee, Inc./

Sloan for Congress Committee

(Find i ng I I!. A. 1. )

John Glenn Presidential Committee, Inc./

Americans With Hart, Inc.

(Finding II1.A.2.)

Total Amount of 26 U.S.C.

§ 9038 (b) (1) Repayment

$1,190. 67 i/

3,966.33 !/

$5,157.00

~/ The amount calculated is based on the difference between the

amount(s) submitted and matched versus the amount(s) that

should have been matched.

This amount was contained in the Interim Audit Report of the

Joint Fundraising Committee.
•

.~

...

;~..

15

I n the I nte rim Addendum the Audi t staff i ncl uded

the comments made by the Joint Fundraising committee in response

to the interim audit report on that committee concerning this

same issue.

Concerning the application of the allocation

formula which resulted in the overpayment determination of

$1,190.67, in response to an interim audit report, the Joint

Fundraising Committee stated that the committee intended to apply

the allocation formula of the joint fundraising agreement to the

total amount raised by the event, not to each and every

contribution on an individual basis. The Audit staff noted that

the solicitation material sent to the contributors specifically

stated that the proceeds would be distributed two-thirds to the

Sloan Committee and one-third to the Committee. The solicitation

also informed the contributor that he could designate his

contribution to a particular candidate, and advised the

contributor that the allocation may change if a contribution is

received that would exceed the amount a contributor may give to

any participant. In addition, the Audit staff noted that an

internal memorandum found in the Joint Fundraising Committee

files summarized a communication with an Audit Division staff

member. The Joint Fundraising Committee was advised that, in the

opinion of the staff member, they were bound by the information

printed on the contribution card, rather than distributing the

checks as the committee intended. The Audit staff expressed the

opinion that the regulations and advisory opinions advocate the

individual allocation of contributions. Furthermore, in this

case the contributors were 1) informed of the allocation formula,

2) given notice that they may designate their contribution, and

3) advised that the allocation formula may change if a

contribution would exceed the amount a contributor may give to

any participant. These notices appear to suggest to the

contributor a contribution-by-contribution allocation.

With regard to the application of the allocation

formula which resulted in the overpayment determination of

$3,966.33, the Joint Fundraising Committee responded to the

Interim Audit Report of that committee that certain checks

written to the candidates were unrelated to the joint fundraising

event, were not received as a result of the solicitation, and

were delivered inadvertently to the fundraising representative.

The committee further contended that these checks should not be

included in the allocation operation "merely because the checks

were sent to the joint fundraising representative." The Audit

staff reviewed the dates on the checks relative to both the date

of the joint fundraising event and the solicitation period and

•

expressed the opinion in the Interim Addendum that, absent some

further documentation, the committee had not demonstrated that

these checks are unrelated to the joint fundraising event and are

not a result of the solicitation for this event.
•

•

•

16

The Audit staff recommended in the Interim

Addendum that, absent a showing to the contrary within 30 days of

the receipt of that addendum, the Commission make an initial

determination that the Committee repay $5,157.00 to the u.s.

Treasury pursuant to 26 U.S.C. S 9038(b) (1).

The Audit staff notes that in the Final Audit

Report of the Joint Fundraising Committee, the Commission

approved the Audit staff recommendation of no further action in

the matter of the misallocation of proceeds from the

Committee/Hart Committee event which gave rise to the receipt of

matching funds in excess of the amount to which it was entitled.

This recommendation was made in view of 1) the relatively small

amount of misallocation involved, 2) the indeterminate allocation

formula within the joint fundraising agreement, and 3) the

various possible interpretations of that agreement.

With respect to the $1,190.67 ($5,157.00 less

$3,966.33) resulting from the misallocation of proceeds from the

Committee/Sloan Committee event, the Committee responded to the

Interim Addendum by reasserting that it intended to allocate the

total proceeds from the Committee/Sloan Committee event in a onetime calculation. The Committee argues that the notices included

in the fundraising notice (notice to contributors that they could

designate their contributions and notice to contributors that the

allocation formula could change) "~ reguired by 11 C.F.R.

§ 9034.8(c) (3)." The Committee concludes from this requirement

that "The Committee had no choice with respect to their inclusion

in the fundraising notice, and thus those notices are not

evidence of what either the Glenn Committee or the Sloan

Committee intended."

The Committee contends that the written notice

required under the provisions of 11 C.F.R. § 9034.8(c) (3) "should

not be used to impose requirements on the formula contained in

the written [fundraising] agreement under 11 C.F.R.

§ 9034.8(c) (1). The Committee also argues that "that

[fundraising] agreement refers to 'proceeds from the event' and

not 'individual contributions'."

In response to the advice from an Audit Division

staff member which was summarized in an internal memorandum of

the Joint Fundraising Committee (discussed above), the Committee

contends that the conversation "occurred after the written

[fundraising] agreement was entered into, [and] cannot

retroactively affect the intent of the parties."

The Audit staff is of the opinion that the

Committee has failed to demonstrate that the Committee did not

receive $1,190.67 in matching funds in excess of the amount to

which it was entitled.
•

,....

,"

17

Recommendation 12

The Audit staff recommends that the Commission make an

initial determination that the Committee repay $1,190.67 to the

U.S. Treasury pursuant to 26 U.S.C. S 9038(b) (1).

B. Determination of Net Outstanding Campaign

Obligations

section 9034.5(a) of Title 11 of the Code of

Federal Regulations requires that the candidate submit a

Statement of Net Outstanding Campaign Obligations (NOCO

Statement) which discloses, among other items, the total of all

outstanding obligations for qualified campaign expenses and an

estimate of the necessary winding down costs within 15 days of

the candidate's date of ineligibility.

On March 16, 1984, Senator John Glenn announced

that he had withdrawn from the race for the Democratic nomination

for Presiden t of the United Sta tes. Pursuant to 11 C. F. R.

§ 9033.5(a), March 16, 1984 is the date Senator Glenn's candidacy

terminated for the purpose of incurring qualified campaign

expenses.

The Committee submitted their original NOCO

Statement on April 2, 1984 and continued to submit revised NOCO

Statements on a monthly basis with each matching fund submission

through February 28, 1985.

During the initial audit fieldwork, the Audit ...... staff reviewed the NOCO Sta tement da ted June 29, 1984. This

review was limited to the verification of cash on hand, bank l~ loans payable, and certain of the larger accounts payable. The

bank loans and verified accounts payable represent in excess of

$2.3 million of the Committee's total obligations. During the

follow-up fieldwork, the Audit staff determined that there was no

material change to the Committee's financial position and

therefore no material change to the NOCO deficit.

Presented below is the June 29, 1984 NOCO Statement

setting forth the Committee's financial position at that time .

•
18

John Glenn Presidential Committee, Inc.

Revised Statement of Net Outstanding Campaign Obligations

June 29, 1984 as Amended August 2, 1984

($3,632,194.23)

200.00

150,487.16

11,370.31

2,000.00

900.00

17,144.24

182,101.71 $ 182,101.71

(137,344.01)

6,658.50)

(974,153.39)

(2,000,000.00)

$

$

(696,140.04)

($3,814,295.94) (3,814,295.94)

11,854.28)

( 68,186.42)

(113,111.16)

(184, 167. 78)

( 9,026.90)

( 4,607.00)

( 2,644.90)

( 10,000.00)

( 18,000.00)

($696,140.04)

Consulting ($207,799.08)

( 29,987.16)

( 36,755.36)

Net Outstanding Campaign Ob1igationsDeficit

Salaries,

Rent

Phone

Supplies, Postage,

Xerox, Equip. Repair

Data Processing

I nte rest Loan

Fundraising Costs

Travel Expense

Bank Service Charges

T r a ns po r ta t i on

Legal

S torage/F i1es

Accrued Payroll

Estimated Phone/Xerox

Expenses

Total Obligations

Accounts Payable for

Qualified Campaign

Expenses

Obligat ions

Loan Payable

Petty Cash

Cash

Accounts Receivable

Refundable Deposits

Accrued Interest Receivable

Capital Assets

Tota 1 Asse ts

Estimated Winding Down

Costs 3/16/84 to 3/15/85

Assets

•

•
>,

)-

,..

>

:,

"'"

.~

".

'":i

i~-l~

f«

It

SIIIlIIIu

..ew••,_ I., 1...... D....c 11 1..5, th C_I" .. ... c....... c••I'd.. _tcl••I_ totalI.. •••" .....2 ... ..'0111.. , .. ..,...u ..tall.. PD,.,1.... ..,.,

••, "'.

ee.lt.. Me ... c••I ... _tal.. , .....,...h I ...... or Ite ..U'l_.,.
•

JS6/032888

Attachment I

Reported Activity

Senator John Glenn Canmittee !/

Report Beginning Receipts Disbursements EnHng Debts £/

Period Cash Cash , Obligations

1/1/80 to

12/31/80

(Amendment ) $ 80,319.80 $830,279.94 $774,888.51 $135,711.23 $5,000

1/1/81 to

12/31/81

l' (Amendmen t ) 135,711.23 21,941.06 88,254.89 69,397.40 5,000

cr 1/1/82 to .,., 12/31/82

(Amendment) 69,397.40 18,399.25 87,326.23 470.42 5,000

0.83 to /83 470.42 2,550.00 887.51 2,132.91 5,000

7/1/83 to

r- 12/31/83 2,132.91 1,020.00 817.22 2,335.69 5,000

:-..... 1/1/84 to ._ 6/30/84

(Amendment) 4,824.65 ~/ 1,000.00 1,059.53 4,765.12 5,000

0"

7/1/84 to ~- 12/31/84 4,765.12 58,743.00 13,760.45 49,747.67 5,000

1/ The Audit staff could not determine whether the activity reported from

1/01/81 to 12/31/84 was for the 1980 Senate Campaign, the 1986 Senate

Campaign, or for some other purpose.

1/ All reported amounts represent loan from Candidate.

1/ As amended •

•
•

1/ Credit represents difference

between the $24,331.04 total

and the amount ($23,885.04)

presented by Committee as

reimbursable.

2/ Payment verified by Audit staff •

Attachment I I

Schedule of Credits Made to VISA Statements

Which Canmittee Presented in Support of

$23,885.04 Reimbursable Payment

Date of Amount Credited Transaction Posti n9 Amount ReJ.X>r ted Statements on S ta temen t Date Date by Canmi t tee

January 25, 1983 $ 2,508.62

126.78

361.66

888.05

481.89

6,290.04

Subtotal $10,657.04 12/31/82 1/03/83 $ -0-

25, 1983 $ 174.00

392.00

722.00

446.00 l/ r 822.00 0. 1,118.00

Subtotal $ 3,674.00 7/12/83 7/12/83 $ -0-

24, 1984 $ 191.00

368.00

2,089.00

1,292.00

2,715.00

3,345.00

Subtotal $10,000.00 '£/ 3/29/84 3/29/84 $10,000

Total $24,331.04 $10,000

•
• Attachment III

Schedule of Obligations to VISA Reported by

John Glenn Presidential Committee and

Senator John Glenn CCIIlmittee

Report

Dates

1) John Glenn

Presidenti al

Committee

Beginning

Balance Incurrence Payment

Balance

Outstanding

Inception

to

March 31, 1983 $

April 1, 1983

to

June 30, 1983

-0- $ 8,973.99

8,973.99!/ 23,825.09

$ -0- $ 8,973.99

19,134.42!/ 13,664.66

October 1,

1983 to

December 31,

1985!/ No obligations reported to VISA

2) Senator

John Glenn

Committee

.....

.-

"-.

July 1, 1983 to

Septembe r 30,

1983 13,664.66 12,960.63 26,625.29~/ -0-

......

('0

January 1,

1982 to

December 31, 1984~/ No obligations reported to VISA

Payments on beginning balance (total) and incurrences made

on or after 4/01/83.

Paid 4/01/83.

All payments were for incurrences reported on or after 4/01/83.

Includes following report periods: October 1-December 31,

1983, January 1984, February 1984, March 1984, April 1984,

May 1984, June 1984, July 1984, August 1984, September

1984, October 1984, November 1984, December 1984, 1/01/85-

3/31/85, 4/01/85-6/30/85, 7/01/85-9/30/85, 10/01/85-12/31/85.

Includes following reports: 1/01/82-12/31/82 (amendment),

1/01/83-6/30/83,7/01/83-12/31/83, 1/01/84-6/30/84 (amendment),

7/01/84-12/31/84.

1/

!/

~/

!I

• ~/
,

•

JS6/032888

Attachrnen t IV

Schedule of Payments Reported by John Glenn

Presidential Canmittee and Stated to be

Reimbursable by the Senator John Glenn Canmittee

Date of VISA Payment Payment Amount Purpose per per Committee Amount Reported Report

May 16, 1984 $ 1,804 ,!/ $ 1,804 Travel and

subsistence

June 11, 1984 764 764 VISA payment

July 12, 1984 546 546 Travel and

subsistence

'.J August 17, 1984 965 965 Travel and

subsistence

September 14, 1984 739 739 Travel and ' .... subsistence

f October 17, 1984 751 751 Travel and 0. subsistence

November 12, 1984 720 720 Travel and

subsistence

December 14, 1984 710 710 Travel and

subsistence

January 16, 1985 703 703 Travel and

subsistence

February 27, 1985 693 693 Travel and

subs istence

March 15, 1985 706 706 Travel and

subsistence

April 16, 1985 698 698 Travel and

subsi s te nc e

May 13, 1985 666 666 Travel and

subsistence

June 18, 1985 660 660 Travel and

subsistence

• Total $11,125 $11,125

1/ Payment to VISA verified by Audit staff.
•

• Attachment V

Page 1 of 3

Schedule of Non-Matchable Joint Fundraising

Contributions Submitted for Matching Funds

John Glenn Presidential Canmittee, Inc./Sloan For Congress Canmittee

(1 ) (2) (3) (4) ( 5)

Correct Non-Matchable Name of Amount Amount Matchable Amount Contri butor Submitted Matched Amount (C01 •3-C01 .4 )

1. Blair,

Jeanne M. $ 100.00 $ 100.00 $ 33.33 $ 66.67

2. TorpPetersen,

Janis 50.00 50.00 16.67 33.33

., 3 • Light,

(to Timothy 100.00 100.00 33.33 66.67

,... 4. Enright,

Amy Baker 50.00 50.00 16.67 33.33

r

.Hughes,

.0 John W. 50.00 50.00 16.67 33.33

6. Self,

r:'" Jon M. 100.00 100.00 33.33 66.67

1'. 7. Hall,

,- Anne Luken 50.00 50.00 16.67 33.33

8. Hall, 1" Anne Luken 50.00 50.00 16.67 33.33 ~V'

9. Taggart,

Thomas M. 100.00 100.00 33.33 66.67

10. White,

Pamela L. 50.00 50.00 16.67 33.33

11. Woodyard,

David o. 50.00 50.00 , 16.67 33.33

12. Webb,

Graydon D. 150.00 150.00 50.00 100.00

13. Schmarr,

John M. 35.00 35.00 11.67 23.33

.1ahertY,

William J. 25.00 25.00 -0- 25.00
Schedule of Non-Matchable Joi nt Fundraising

Contri butions Submitted for Matchi ng Funds

John Glenn Pres identi al Canmi t tee, Inc. /S loan For Congress Canmi t tee

Amount

Submitted

23. Patterson, Jr.,

Charles F.,

66.67

25.00

66.67

66.67

50.00

33.33

33.33

33.33

10.00

16.67

16.67

16.67

14.00

10.00

$

( 5)

Non-Matchable

Amount

(C01 .3 -C01. 4 )

Attachment V

Page 2 of 3

7.00

-0-

8.33

8.33

5.00

5.00

8.33

33.33

16.67

33.33

16.67

33.33

16.67

$ -0-

( 4)

Correct

Matchable

Amount

25.00

( 3)

50.00

50.00

25.00

21.00

25.00

25.00

50.00

15.00

15.00

100.00

100.00

100.00

$ 50.00

Amount

Matched

( 2)

50.00

25.00

50.00

50.00

25.00

25.00

21.00

15.00

25.00

50.00

15.00

100.00

100.00

100.00

$

Martin,

James L.

Hughes,

Ann Farrell

Name of

Contri butor

(1 )

15. Smith,

Robert L.

16. Maybr uck,

P. J.

17. McDermott,

Cindy J.

25. Chessman,

G. Wallace

24. Potter,

Sylvia V.

26. Brown, Robert

Clarke

•

eld,

rancis B.

27. Young,

Thomas A.

•

r

(":'18. Juniper,

Linda S.

19. Vanbuskirk,

Joann S. 'Oe Luft , Carole A.
• Attachment V

Page 3 of 3

Schedule of Non-Matchable Joint Fundraiaing

Contrl butions Submitted for Matchi ng Funds

John Glenn Presidential Canmittee, Irx:./Sloan For Congress Ccnmittee

(1 ) (2) ( 3) (4) ( 5)

Correct Non-Matchable

Name of Amount Amount Matchable Amount

Contri butor Submitted Matched Amount (Col.3-Col.4 )

29. Maynard, Jr.,

John, $ 10.00 $ 10.00 $ 3.33 $ 6.67

30. Robertson,

Michael B. 100.00 100.00 33.33 66.67

31. Ackley,

., Eleanor 15.00 15.00 5.00 10.00

,.,.

r

.yo

Total $1,736.00 $1,736.00 $545.33 $1,190.67

•

.

{LLr

JG,4/0,t98B 1J

FEDERAL ELECTION COMMISSION

WASHING TON D (" 204b.1

f r , " •• -) •

• ... ,-16

.~

r.....

......

July 19, 1988

Attachments as stated

Attached please find a copy of a letter from William R.

White, Treasurer, John Glenn Presidential Committee, Inc, and

a copy of the receipt from the U.S. Treasury relative to a 26

U.S.C. S 9038(b) (1) repayment contained in the Addendum to the

Final Audit Report.

/

I •

~:~ 'I-II"~

REPORT - COMMITTEE, INC. -

THE COMMISSIO~~~.~~

JOHN C. SURIN

STAFF 01 RECTO I .., ROBERT J. COSTA I I '. '; " ,~

ASSISTANT STAFF DIRECTOR

AUDIT DIVISI?N

ADDENDUM TO ~INAL AUDIT

JOHN GLENN PRESIDENTIAL

REPAYMENT RECEIVED

SUBJECT:

THROUGH:

MEMORANDUM

'1'0:

FROM:

"-, ,

-'" "\

V

'<r

...()

I

0

"-

c

C7"
•

II

....-:e-nll7oClW

CAIU: &ANUS WAllllNCft'CllC

..... a.I.~UI

__AX:~II7""

. }:'R'EmIE6~1'~ t:,~~i~~J~~:-.~?:t:f~;:·;:~~\:~::·~~;~~:\~8~:~~~{;~~~~~,:.

fEDERAl rtrcilNi

t ·.1· ..•!:(~f#..':iS$IDM . .'. 88JUL 19 An 8: 3;

July 15, 1188

Mr. JOSQph stoltz

Audit Division

Federal Election Commission

ggg E street, N.W.

Washington, D.C. 20463

Dear Joe:

Pursuant to our conversation tOday, I a. eneloaing the

committee's check with respect to its repay.ent obligation arising out of the interim addendum to the final audit report.

':r

~I

o

"-

C'

WRW/id

Enclosure

Sincerely,

~. White
JG14/071988

for the

U. S. Treasury

WASHINGTON, 0 C 20463

FEDERAL ElECTION COMMISSION

for ~he

Federal Election Commission

•

Received from ~he Federal Election Commission on July 19, 1988,

a check 16544 drawn on the account of Bank One, Columbus, Ohio,

in ~he amount of $1,190.67 from ~he John Glenn Presidential

\ Committee, Inc., for repayment pursuant to 26 U.S.C. 5 9038(b) (1)

resulting from the Addendum to ~he Final Audit Report on John

Glenn Presiden~ia1 Committee, Inc. This repayment is to be

deposited into ~he Presidential Primary Ma~ching Payment Account

in accordance with 26 U.S.C. 59038(d).

..
• •

JG14/07l988

FEDERAL ELECTION COMMISSION

WASHINCTON. DC 20463

Received from the Federal Election Commission on July 19, 1988,

a check 16544 drawn on the account of Bank One, Columbus, Ohio,

in the amount of $1,190.67 from the John Glenn Presidential

Committee, Inc., for repayment pursuant to 26 U.S.C. 5 9038(b) (1)

resulting from the Addendum to the Final Audit Report on John

Glenn Presidential Committee, Inc. This repayment is to be

C) deposited into the Presidential Primary Matching Payment Account

~, in accordance with 26 U.S.C. S 9038(d).

for the

Federal Election Commission

cilW-p

for the

u. S. Treasury

JOHN GLENN

PRESIDENTIAL COMMlnEE INC.

NORTH CAPITOL ST., NW•• SUITE 407

WASHINGTON, D. C. 20001 . .JUly 15

6544

PAYTO OBDEBOF- TIm u.s. Treasw:y, Bureau. f ,..~--- F' .al Oper ti 0 \;IVV~AillCllt manC1.8 alS $1,190.67

_....:Q1e~:-.'Dlous~~and~~Q1e~~Hundred~~~N~i.ne~ty=.r...~and~~6.!.J.7 /l~O~O -uDOLLARS

.: BAf;JK ONE. E.

aANK ONE. COLUMBUS, HA

Co4wll\llul, OHIO Q271

,

... •• c ••c_ ••••••••