•

to

FI])[RAI. [I.ECTION COMMISSION

1\11

) Sl~1t I N.W.

WA~t tlNG Il)N.D.C. :l()4(,)

•

..

• REPORT OF TUE AUDIT DIVISION

ON TltE

CLAUDE PEPPER CI\f.1PAIGN COr,U~ITT[E

J• Uack9.l"ound

A. Overview

-----

This report is based upon an audit of the Claude Pepper Campi\i~Jn Committee (lithe Committee") undertaken by the Audit Division

of the Fcde,"al Election Commission in accordance \'/ith the Commission's

aud; t po1icy to dctcrmi ne \·,hcther therc has been comp1i ance \·,i th the

provisions of the federal Election Campaign Act of-1971, as amendell

(lithe Act"). The audit \"as conducted pursuant to Section 438(a)(8)

of Title 2 of the United States Code \'Jhich directs the Commission to

make from time to ti~e audits and field investigations with respect

to reports and statements fi 1cd under' th(~ p,"ovisions of the Act•

The Committee registercd \·Jith the Federal Elcction

COllnlission on August 30, 1976, as the principal campaign committee

desi gnaied by the Itonorab1c C1 ilude Ppppe,~, candi da te for c1ecti on to

the United States House of Representatives from the 14th Congressional

District of Florida. The Committee maintains its headquarters in ~1 i umi Be(l ch, rlorida.

The audit covered the period lluly 1, 1976, thl"ough Sept.ember

30, 1977. The CotlHl1ittcc ,"cporlcd a heqinning Cush balance at l.luly 1,

19,6, of -0-, total receipts of SS9,415.G6, total expcnditures of

$47,271.32, and a closing cash balancc of $12,144.34 at December 31,

1976. }j

This audit report is based on documents and \'/orking papers

supporting cach of its fuctual stutCIllPlltS. They form part of the

reco,"d upon \'lhich thp Commission l>i\~ed it.s decisions on the matters

in the rcpol"t ilnd \'Jcrc ava i 1ab1c to C()u:iaissi oners and appropri alc '.

staff for review.

.11 1he Comni t tee fi 1cd fEe Form 3" fo,,- the fi '''S t tht"cc( 3)

quarters of 1977.
B. Key Personnel

The principal officers of the Committee during the period

audited '"lere r'1r. Allen Clcl1lcnt5, Jr•• Chairman, and Ms. Adele ~lcaver.

Treasurer. •

c. Scope ..

•

,

II

" .

•

The ill.dit included such tests as verification qf total

report.ed receipts and expenditures and individual tr(ln~,Jc.tiohs;

revi(I\., of required 5upporling documentation; analysis of Committee

deht.!. and obli~F\lions; ilnd, such other audit procedures as deemed

nCCl'$!".ilry unde ,. the c i rcullls lanccs.

JI. A~l!li torI s_ .S_ta.~.(~~..!.('~J.. __an~l!.cscri pti ~n of Find; ngs

It is the opinion of the Audit staff, bascd upon examination of

the reports and 5 ta temen l~, fi 1ed and the records presented, that,

cxcppl for the dcficiencif'~) noted belo\lr, the reports and statements

of the Claude pppper Cump~tign Committee fairly present the financial

activities of the Commitl(~(~ for the period cover"cd by the audit.

Further, except as noted ['P10\'1, no material pl'oblcms in complying

'"lith the Feder"al Election Cllmpaign Act ''Jere discovered during the

course of the audit.

A. Reten1. ; on 0 f Sl!PJ).(~t t i 09 Documcn ~_~t.] on

Section 1132(<1) of Title 2, United St.ates Code, requires

the tr"Casur-Cl" of any po1i t i ('it1 comllli t tee to ooti!in and J~eep il rccci pted

bill, stating the par"ticular's, for' ever'y cxpl'llditur'c in excess of $100

in amount, and for" any such expenditure in a lesser amount, if the

a9~Jl"egate amount of such expcnditlU"cs to the samc person during a

ca1coda," year exceeds $100.

Section 102.~(()('1) of Title 11, Code of Fcdel"al Rcgulations,

providcs that \·;hen a l"ecflipted bill is not availahle, the treasure," may

retain the callcel1pd chc.'ck, sho\'/ing payment, unci the bill, invoice or

other contcmpor~\nculls memorandum of the tran5action.

The Commi t tee m~l de 150 expend; tu res, totil1; ng $48, 141 . 94 , ,"cqui t"i ng ma i ntpn~\I\ce of ~lIpportiog documenta ti on. They di d not

maintain any type of dOtlJll~pntation for" 46 of these exppnditurcs,

tolal in~l $]2,039. S3. These i tpms represent appl"oximatcly 31~,: of the

qUilnlity and ?~':: of the tot.al dolliu" vlllue of expenditures ,"equil"ing

suppo,.. t i 119 dOcUl~~I~n ta t ion. In add ition, the Com:ni t t cp had i Ilildequa te

docul\u.'ntation, consisting of u canccl1l'd check only, fat.. one (1)

expenditure of $LSB.~O•

I

'.

. I

I

c

i

•

I

.' .~
•

I,

I c" ..

•

-3-

A Committee official explained that the cancelled checks were

not aVid lahle to support the hu1 k of the Comm; ttce's ('xpendi turcs

bl'cau!',e florida Election Lin'l rcquirc5 tho bank to for\'/ard el11 checks

dril\'/n on a po1iticdl committee's account to the rcspective state or

local supervisory office of elections. IIO\'lcver, our rcsear.ch sho\'JS

that this rlorida ~.tlltutc requires the bank to ."emit the original

documents or copip~~ of the originals, and that this 1a\'1 docs not preclude

the committee from obtaining bank recards from that bank.

In 1977, the Committee requested that the bank furnish them

copies of the canc011ed checks, and several were available to document

recent pxpendi lure~).

Subsequent to fieldwork, the Committee submitted the required

SUPPol"ting docull.cntation for 15 expenditures totaling $6,556.24. In

addi t ion, cance11 cd (hecks or other contemporaneous memorandum 't/ere

submitted in support of 26 expenditures totaling $5)095.44. This reduces

the tot.al amount of expenditures \tlhich \'1ere previously completely undocun~nted to six (6) expenditures totaling $6QO.35. As a result, 26

expendit.ures remain piu.. tial1y documented and six (6) \·Jith no documentation.

The Committee's bank \'/aS unable to provide microfilm copies of cancelled

checks for the six (6) undocumanted expenditures. Also, the Florida

Secretary of State's office informed the Committee that they did not have

the Cotl1l1dttee's bank records. Committee officials also provided the Audit

staff \',ith copies of 19 1ettcl"s representing 21 expenditures total ing

$3,954.90 sent to vendors reque~tin~) receipts. No response \'1as received

from these bus i nesscs as of Apr; 1 14, 1977, \tlhen a second 1cttcr \'laS sent

by the Co:nm; t tee. Camilli ttee offi cia1s exp1ai ned tha t 1etters request i ng

recei pts \'lCl"'C not sent to the ,"'emil i ni n9 fi ve (5) vendo'.... /payees due to a

misundc\"'stllnding in some instances, uncooper'ative vendors, and vendo'''s

\'1lli ch "lere out of bus i ness.

Recommendation

-------- In vie\'J of the Committec's ('ffol"ts to comply \'/ith S0ction 432(d)

of Title 2, United States Code and Section 102.9(c) of Title 11,

Code of Federal Reyu1ations, "IC I'ccommend no ful'thc'.... action in this

matter.

B. Itemizati(l_~ of [xpcnditul'CS

Section 434(b)(9) of Tillc 2, United Statcs Code, requires

a politic\., cO:~~'nitte~ to disclose thp identification of each pCl"son

to \\'hom cxpc'ndi turf'S have been IllJdc by such commi l tee in iln a991"c9a te

amount 0)" value in excess of $100 fo," the calendar' ye,H', together' \'1ith

the tUllOllnl, date and purpose of each such expendi tlH'C •

•

...... •,,~ , .., ~.....,.......,._ ,...-. , .,. , ', , .,.~-. ~~ " ·~1' ' _ ,~ - .." , ".." ~,., ..

• .. ._ ........ JI -.!. _.. .-~ • ...., ...!',...C'!'Ir.... ,., .. .L - •
•

••

•

-4-

The Conillittcc mitde 135 expenditures, tota1in~J $45,864.26, r~quirin·9 itcmi1.ation on disclosure rc?ports. The Committee did not

1t(!mi zc 17, Ot~ 13~.'" of the expend; tures. Those omi t led held a teta1

value of $1,143.63. or 2.49~ of the total dollar value rcquring itemization. A COlllmittce official attributed the omission of these

expenditures to the Committee's lack of '(1 formal !,;y~tcll1 for the

ilggregation of expenditll,~es. The Audit staff recollllllcnded that the

Committee file an tlmendment itemizing the expenditures as required • •

On April 5, 1978, the Committee filed the appropriate

mncndmcnt disclosing the items noted above.

J~~~.~9mmenda t lQ.'l

We recommend no further action in this matter.

C. Iten~L~~t_ion of Tr~nsfers-In

Section 434(b)(4) of Title 2, United States Code, requires

in part that each report disclose, the name and address of eilch political

committce from \'Jhich the reporting committee received any transfer of

funds, togethcr' \,Ji th the amounts and da tcs of a11 transfers .

The Committee rrceivcd 43 trllnsfers of funds totaling $16,500.

Ten (10) of these tl"ilnsfCl"S, 23. 3:~ of the tota1 nUlIlber rccei ved, \'Jerc . not i trmi led on disc1OSUl"C rCpol~tS. These ten (10) had a tota 1 va1uc of $9~)O, comprising G.8~~ of the lotal dollar value of transfers l"eceived •

Furthel", the Com~lli ttCl~ rcpol"tcd both contri hutions from

individuals and transfers from othel" committees on Linc 15/\ of its disclo~ure reports, r'Jthe}" than l"Cpol"ting transfers on Linc 18 as rcquireiJ.

Thcr'cfol"C, the S59, ·115.66 in tota1 recei pts \'lhi ch thp CO!11mi ttee reported on

its detailed summlu'y pages docs not accurately rcf"lpct the' transfers of

$lG,500 from other political committees. The Audit staff recommended

tha t the Co01:ni t tee fi 1e an amended l"epol"t correcti ng th(~ di sCl"epanci cs

stated ubove.

Subsequent to ficld\'lork, the Committee filed an amendment

itemizing the ten (10) transfer's, and adjustin~l· its summ~ry pages to

ilCClIl"a tcly refl ect tota1 transfers from othel" pol iti ca1 commi ttces.

Hecom:ncndat ion

We ,"ecommcnd no fUl"thcl" action in thismatter•

..

{

t

,

,

t

t

~. _.. • - ...... ...... .... ." ...._.. .. • ..., oa. • ...
•

•

" .-.

I:

•

..

D. Acccpt.~!.~:.(~. of Corpor~Jc ContriJ!.~1ion~

Section ..,"1h(<1) of Till~ 2, United Statc~ Codc, prohibits

any political COfllillitlcc from knowingly accepting contributions from

any co,~poration. •

• The Committee accepted t\'/O (2) contributions," totaling $300,

which \·:et..c apPilrently dr(l\,/rl on corporcJtc bank c1CCollnt$. Tht! Audit stc1ff

V('" i f i (!d lhrouuh the Sec roc td ry of 5tu tc tha t Ci) ch C:():I~pil fly \·/d.5 i ncorpora lpd.

Ont' tontt'ibulioll flf ~1250 \'/a~. received on I\Uqu~t 27, 1976, and the second

cont.rihution, of ~/)O, \'Ja~ received on SC'plcmbcr c'), 197G. A Committee

off i<;itd stated that she \'JuS il\'JilrC of these conlributions, but \'/as of the

opinion that both \'/CfC intench'd llS pe,"sonal contribulions from executives

with each compllny. I\t the ~U~lucstion of the Audit. '"-.tuff, these contributions \'10re r(~funded by rpbruJt"Y 27, 1978. The CeJHI:nittec provided copies

of letters sent to these contributors and copies ()f the cancelled checks

sho\'/i ng the refund.

Recommendation

--------

The Audit stuff recommends no further' action on this matter.

E. Contt"ihution frOT~!_~_ Possiblp FOl"eigll Ntlt1_q!~J.

Sect ion 441 c (it) 0 f Tit1e 2, Uni t cd Stat(~S C(ld(~, proh; bits

(lny ppr"!,on from i1rcepting mOI\('Y or (iny other thin~l or value contributed

by a foreign nat;oI1Jl, in COllllPction \',ith an elect.ion to any political

office.

The Com:nittee acceotpd il $100 contribution frotH an individual

\'lho i~ president of c1 const.rllction comp(lny located in Caracas, Vcn~zLJela.

lhe dppu1.y-tret!sur'et.. stated th~\t the contribution \'~J$ nCll qU\2stioncd

by the (;ollunittf'e, as the' contributor" scheck \'!JS drl\\':n on tl bank account

lociltpd in the lIn"ited StJt(~~. SLJb~equent to field\'Jork, t.he Com:nittce

d(!t.ermincd thut the individud J NitS not an American citL:en and refunded

thp contribution on february 20, 1978.

•l~eC(lmnH'ndJ __• 4 ••• t i on_

The Audit staff rccon~n(?rH.ls no fur'ther action •

"~"'~~.""••""""""6••• """ ....., , .." ..........-:- __ ,-_..."w' _.-..4 - -•• -..
.... .. t

•

•

•

F. .E.U.i!l.9..9f orf, cc ~rElunt J!.Cl.I!.Ot"t .

Section 439cl of Titl~ 2. United s.tates Code and Srction 113.4(a)

and (h) of Title 11 of lh(' Code of rl'dcrill Regulcltions requires all fcdcl"al

offir('holdcr~ h"vin~J office "ccounts to file a rnport on April 15 and

Octoher 15 of (',leh year. ThQ October 15 .report shall di$clos<? all receipts

and di ~~hursclll('lIls from Apt"i 1 1 through September 30 of the year the report is fi 1pel. •

A$ (t t"('~ult of the audit of- the Claude Pepper Caml1aign Committec,

the Audit st.iltf determined that the Candidate maintained u Congressional

office ilCCOLJll t for \'Jhi eh 110 ."('ports of recC?i pts and expendi lures had been

fi 1pd. At lhv r(~qucst of ltH! Aud i t ~,la f f, the Catld i dll tc fi 1cd cl report

of t.td!". accoullt on Nnrch '1.7, 1978, d if.(;lo~~ing cash on hand, January 1, 1975,

of ~I 13,09(l • 5? , to l ill r('ce i pt S 0 f SS, (I(tl •70 , total expendi t ures 0 f $18, 758 . 22 , and it (;lo~in9 <.:a~h bultlnce on June 1, 1977, of $-0-.

l~ccom:ncnd(1t i 011 ------...-----.-

The J\udit $t~ff rccommends no further action in this matter.

I

f

!

.

i

I
... .•.. . • CO~GRESSICNAL AUOIT ~E?aRT

,

• Cand,

"d·a_=·/cw..... .. ~,· •... co· '. _..-" Claude Pepper

•

6~S/78

State: Florida

•

E:

Distric:: 14

Locat~cn: Miami

Political ~ar~J ~ffiliation: Democrat

Evelio S. Estrella (R) . (

•• .~uc," tac: Estrella 6/5/78

Votes Cas:: G~neral ~l;c:icn

Primar:,/ ~1 ec~-: en -

Claude Pepper (0) - 82,665

Evelio Estrella (R) - 30,7i4

Unopposed

•

=. _:4 .. ~-~~ '"': "n"-· 'c~~" ~, " • 1rs.. ... i :: _ • _ ... ,,1 I : .. I 1 .. w , ... I "

$59,415.66

$4i,271.32

U. S. Senate - 1936 - 1950

U. S. House - 1962
•

r

L

•

'.

•

FEDERAL ELECTION COMMISSION

H2~ 1\ 1Rll I ,,\\

\\'r\"til~GlO'-'.l) l . .!{)4b

ADDITIONAL INFORMATION REGARDING mrs ORGANIZATION

MAY BE IDCATED IN A CXJMPLETED COMPLIANCE ACIION

FILE RELEASED BY THE aDtISSION AND MADE PUBLIC IN

'l1iE PUBLIC REOORDS OFFICE. FOR 'lH1S PARTICULAR

OBGANIZATION'S COMPLETED CDMPLIANCE ACIION FILE

SIMPLY JSK FUR 'mE PRESS StH-1ARY OF MlJR 41 h {

'!BE PRESS St»1ARY WILL PROVIDE A BRIEF HIS'roRY OF

'mE CASE AND A sm+1ARY OF THE ACl'IONS TAKEN, IF f.NY•
.; I •

.:.C ,r....

" I

~. ,

4'"

.1•

•it