Attachment a~~ stated

Novembe~ 6, 1980

FHED EILAND

:::S:o:::J':11efC-./

JUDY llA~'lKINS ~,' .. ,. v .

PUBLIC ISSUANCE OF FINAL AUDIT

REPORT-tiE~OCRATIC PARTY OF NEW MEXICO

FEDERAL ELECTION COMMISSION

,:,;: FEC Li brary

RAD

'/ Public.: Record

- - - '. - -- Attached 'please, find a copy of th() final audit report·

oft"he Democratic Party of :.Je-.... r-texico which was approved by

the Commission on October ~9, 19HO.

In forma tional . copie S 0 :t:1L' n~port "lave' been. received

lJ'i ail parties involved ar..:i thi!; L-{'port may be released to

.lh.~ !Jublic as.of today, NO';c:nb('l' (), 1980;

FRO:-t: .

'ro :>

r-mr-lORANDUM

> 5UB,JECT:

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\\A"IIISCIUS. 11(" m·lld

FEDERAL ELECTION COMMISSION

The renorted endine: cash is accurate, althouqh recE'ipt ;111(:

eXDend·i ture totals· as rC'Dorted do not include the acti \. it':

of· a Committee account, ·(see Section II.A. of this r<:'l)()l-t. \

This audit report is based on documents and working

pLlpers which support e<ich of the factual statements. They for~

flnrt of the record upon which the Commission based its deci s:i n::-'

on the matters i.n the report Llnd were available to Commiss:ion('l-:~

and appropriate staff for review.

A. Overview

REPORT OF THE AUDIT DIVISION

ON THE

DEMO<.'HI\TIC PARTY OF NEW MEXICO

This report is based on an audit of the Democrnlic

Pilrty of New Mexico (tithe Committee tl ), undertaken bv thE" I\l\d it

Division of the Federal Election Commission in accordance with

th(~ Commission's audit policy to determine whether there 1I,,~.;

\1(>0.n compliance with the provisions of the Federal Election

C'illll}1Cliqn Act of 1971, ns amended (tithe Act tl). The audit Wi'S

cnnducted pursuant to Section 438(a) (8) of Title 2 of the

ttnitcd States Code which, at the time of the audit, directed

the Commission to make from time to time audits and field

investigations with respect to reports and statements filed.

under the provisions of the Act.

The COlluni ttee registered wi th the U. S. Gen(~ral

Accounting Office on May 17, 1974. The Cornmittee mai.ntains

.its headquarters in Albuquerque, New ~exico.

The audit covered the period from January 1, 1976

throuqh October 23, 1978, the final coverage date of the most

recent report filed by the COInmittee <it the time of the Lludit.

The Committee reported a beginning cQshhalLlnce on JLlnuLlry 1,

1976 of $2,210.14, total receipts for the neriod of $lOO,49~.~P,

. total expenditures for the period of ~lOl,47G.24 and a closin'

:

cash balance on October 23, 1978 of Sl,945.97. 1/

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B.

On ,1<lnUary 15, 1980, th" Commission fonoJiln!ed n letter

of audit findinCJs to the committee. 'T'he romPll;,siol1 rccommende(t

the Committee amend its re:)()rt disclosinq tlw llnn'!Jort0.d <lctivit,:".

']'he Committee reSDOl1ltcd ',,"ith .l. 10::':'(~1- which !~t::It·C"s th ..lt c.1lll' to .1

lad~ of coo!)eratiol1 fl-om former ("o::'ITIi ttee of f i cel-!-; :111(1 the· :lhs'~l\CY'

of adequate records the current '7'~-C,lsUl~er is un;,b I(' to compl y.

The letter further st<lt0S t:1at c\·(~l.·~" cffol-\: i;, h" i n<1 1:1:1 cl f' to :l':ni.:

any reoccurrence of t!h.... ~;l' :~rob 1."",....5.

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Our review of Commi ttee reprn~ts and l-"cords indi cated

th,lt for the period ,1:ll1uary 1, to December 31, lc)77, the COlnmittec

did not report the act.i.vity of one (]) of its dr~positories. fI.s a

result, ap!lroximately ~4~,915.n5 in receipt:~ :lIHI ~42,155.63 in

oxpl:'lldi tures \oJere no\. reported dUl~inCJ 1977. 'l'he E:.;ccutive Director

had no explan.:ltion fnl- the omissio:1 but aqropd to file a compre-

]wl1sive amendment to disclose the unl~eportoc1 :I(~tivit'.', if neceSSClr~'.

Durin9 thQ Tx'rioc1 covc'l-l'd h~" tIl(' ilud.i t, Sf!ction 434 (h) (1)

throuqh (3), (8), (9) and (11) of Ti th' 7., l'niterl Sti:ltes Code,

rCCluired, in part, a politi.cal committ0l' tn includo in its rCI)Ol"t~~

the nmount of cash Oil hand at the: h('C1ilinlll(l of the rC'portinq p(~l-i()d,

the identification of each DerSOI1 fr01:1 w!lnn1 it has n::,ceivcd cont"l"ibutions or made exppncli.tures, \·:hi('~ in tl1'"' aqqreq.:lte exceeds S10n,

dUl"inq the calendnr yeill" together \d th the eli! te, amount and tot.11

sum of all contrihut.ions and expcnc1.ituros wit-Ilin the calendar yoar.

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The audit included such tests u.s verification of totu.l

reported receipts alld expenditures ,111c1 individual transactions:

review of required :;\Ipportinq docum(~ntation: and analysis of

ComP1i ttec debts and obI i Gn tions; nr:d such other audit procedures

u.s deemed necessary und(:,r the ci rC\lmst.:lnccs.

N.:lme Office Period in office

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Mr. Ben Alexander Chairman 1-1-76 2-29-76

MI- • G. M. Glover r.hairm.ln 3-1-76 5-15-77

lVl r . Dan Croy Chairman 5-16-77 - 7-21-78

MI- • IJawrence Inqr.:lm Chu.irmill1 7-22-78 - 10-23-78

MI- • Odis Echols, .lr. Treasurer 1-1-76 2-29-76

Mr. .lerry N. Smith 'T'rea~urer 3-1-76 2-12-78

1\1r. Eliu Romero 'l'reasurC'r 2-13-78 - 10-23-78

c. Scope ._-'-

!<ey !:Cl_~s<:?.~~n~}_

The principal officers of t.he Committee durinq the

period of the audit were the followinq:

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On June 12, 1980, this matter was referred to the

Office of General Counsel for non-compliance with the letter

of audit findings. In a response dated September 3, 19RO,

the Office of General Counsel recommended that this matter

not be pursued as a Matter ttnder Review. "'his recommendation

results from the Committee's response to the letter of au~it

findings discussed ahove and from consideration of the

Committee total Federal activity durinq the audit period.

This Federal activity consisted of $],250 in transfers to the

National Party Committee compared to total Federal, state and

local activity of llpproximately $144,000.

Pecommendlltion

The Audit staff is in agreement with the Office of ~eneral

Counsel anel recommend~~ no further action be taken. However, if

the Committee contempl;ltes future Federal activity consideration

should be qiven to est~blishinq a separate bank account to be

used solely for feder;11 funds.

Section 44lb(a) of Title 2 of the Pnited States Code

~tates, in part, th~t it is unlawful for any corporation to make

.1 contribution or expenditure in connection with any Federal

l!lection to political office, and it is unlawful for any candidate,

!lolitical committee, or other person to knowingly accept or receiv0

any such contribution .

A review of the Committee's contribution records and

vcrific~tion with the appropriate Secretary of State, indicated

that ono (1) corporation made a contribution of ~lon during 1977

to the Committee.

~he Committee's Executive nirector was unable to nrovicl0

lln explanation of the receipt but agreed to take the apnropriatc

action.

This rnatt0r was forwarded to the nffice of ~eneral

Counsel on ~"a~' 10, 1979, \-vherc it was marie pitl-t of ~1atter {"n(lt')}"

Hev i e\v 999 (7 <)) •

On l\ucP.lst 14, 1979 the Commission found reason to

believe that the r0nmittee violated 2 11.S.C. Section 44Ib(a),

voted to closo tho fi10 and take no additional action on this

matter. The Committee was subsequently notifi0d of the

commission's determination.

HeCOmme!1dat ion

In view of the Commission's determination, the l\udit staf~

recommends no furthe-r action on this matter.
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C. I ..imitations on Contributions

f,(~ction 44la(a) (1) (C) and 44la(£) of 'ritle 2 of the

Uni ted Statc's Code requires, in part, that no person shall make

COlltiihutioll:; to any other political committee (State party

commlttep) in any calendar year which, in the aqgregate, exceed

$1),000, and I:h;1 t no political commi ttee shall knmvinqly accept

any contribution in violation of the !)rovisions of this Section.

l\ddition3lly, dllrinq the period cover0d by the audit, Section

100.4(a) (1) (i) of th(~ Code of FCl1c:-r31 T}equlations derinen, in

!lart, a loan to include a quarnnt0c, endorscment, and any other

form of security where the risk n~ non-payment rests with ..•the

quar.:\ntor. ... , and that a loan i!; ;1 contrihntion to the extent

th~lt the ob1 i qation remains outstand i.nq •

During the cour.se of the- audit, it was determin('!c1 that

an offici31 of the Committee was t:,t" qllarantor of a ~10, 000 loan

incurred by the Committee durinr. ~"arch 1977. 'T'he loan remained

outstan(linq until November 1978 \';:'lOn t.he balance ($8,179.33) was

paid off, thus satisfyinq the obl~q;ltinn.

Further, it W,lS noted t:,c: s;une rommi ttee offici.:\l made

a pcn;on.-l1 loan to the Commi ttl't.' :i n tll,:, Clmount of S750.00 c1urinc:

1977. 'T'he F:·:(~cU t i ve DirC'ctor \,';15 un;)'.·;·.}"e of the detaiIs of the

loan but indit~;lted th.:\t it h3c1 lX't""':, paid off in't'10vember 1978.

This m()tter was referrC'c: to ~hc:: Office of (;eneral rOU:~5t-·"l

on ~,1ay 10, 1<179, where Mat-tt"r rn,:.:~ p('view 999(79) \"a5 instituter:'

On j'\uqusl 14,1979 tlll""' Commission found reason to boUt'\"!'

l:h;lt th,~ Committo0 violated 2 t".:::.C. St-'c\".ion 44la(f), voted to

close th.::' fi1(-' a1H.1 t3kc no fllrt:~t':l~ actioll on t.his nwtt<,r. 'nhe

committee :ll1d the officLll nott""'d "bO'lt' \'l('re' sllbseCluently notificr!

of the Commi.ssion's decision.

Recommendation

In vi(~\" of thi' Commission's ~:(!tt'I~~lination, the Jluc1it staff

recommends no fUl-th(~I~ ~lction Oll t::is 11:..tter.

D. Di!;('!OSU1-L' of 'l'r3nsft-':-~".

Dllj-inq the pcrioil CL-'\"":-"·c! l)~' t.lw .:\udit, S0ction 434(1" (.:,

of 'T':itll""'~, t:nited Stab""'s Cod .., :;'.-;\,'-1, in Jl<lrt., th;.lt e3ch rcpor::

shall cnnl:;lill th(~ n.•m.' ;In.: .:1d,::"l·~:~; L'f .,•• eh po].i.t.icI11 corrunittec

from \';1'.ich 1:111.' rOD()l-tinq commit.:" ..-·" j-.:::ccivec1 an'.' transfer of fun~:'f>,

tor;etht""'l- wi th the' amounts and ,:.;:..,,:~ P:- all tt-ailsf0rs.
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-sFurther, during the period covered by the audit, Section

10/1.:'(11) (4) of the Code of Federal Regulations stated, in part, that

euch l"'pOI-t shall disclose the identification of each political .

comm itt '~C" or other poll tical orqanization from which the reportinq

committee received any transfer of funds in any amount during thp.

reportjnq period, together with the amounts and dates of all

trnnsfers, including aggregate year-to-date transfers.

nurinq the alHHt, it was determined that the Committee

did not itemize three (3) transfers-in from political organiz.::ltions totalinq $2,423.00, rcpresentinn 25'i of the number and

]3.fi~ of the dollar amount of all transfers.

The Committee was unable to provide an explanation of

why the transfers were not itemized.

On ,Januarv 15, 1. 980, the lommission fOr\oJarded a letter

of audit finc1inqs to the COn1r:1ittee. '1'he lommission recommended

the Committee amend their reports to disclose the transfers-in .

On ~une 12, lqSO, this matter was referred to the Office

of General Counsel for non-comnliance ~ith the letter of audit

fi.nc1inqs. Based on the Com:"ittcc respons(~ to the letter of audit

fjndinqs discussed in abovo .. nd on the ~udit Division's determination that the clolLll~ \;alu(~ of thes\.:-" transfers \-1<lS included in

the Committee's total rL:cei!)U~, t.ho C'ffice of Genera] lounsel does

not recommend that this mattor he the subject of a Matter ('nder

l~cv:i C~\\· •

The l\udit staff is in ",:n"'Cn1enl: wit:1 tlw nffice of (:enerill

Couns,,] and recommends no fUl~th(~r ilct i 011 be taken.
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FEDERAL. ELECTION COf\\,\\ISSION

1\2; lI. '.t Rill ':\"w.

\\·\";HI'C IO'.D l.. ,2ll46,\

ADDrrIONAL INFURMATION REGARDING '!HIS ORGANIZATION

MAY BE IOCATED IN A 00MP1El'ED COMPLIANCE ACITON

FILE RELEASED BY 'llIE mMISSION AND MADE PUBLIC IN

'!HE PUBLIC REOORDS OFFICE. iUR'lHIS PARTICULAR

ORGANIZATION'S COMPLEl'ED CDMPLIANCE ACTION FILE

Sn1PLY }SK fUR '!HE PRESS SlM-1ARY OF MJR if 7pf' .

'!HE PRESS St»fARY WIlL PROVIDE A BRIEF HIS'roRY OF

'!HE AND A StM1ARY OF 'mE ACITONS TAKEN, IF p;Jfi.

Audit tt..2> 7