FEDERAL ELECTION COMMISSION

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December 1, 1997

MEMORANDUM

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TO:

FROM:

SUBJECT:

RON M. HARRIS

PRESS OFFICER

PRESS OFFICE

.ROBERTJ. COSTA

ASSISTANT STAFF DIRECTOR

AUDIT DIVISION

PUBLIC ISSUANCE OF THE REPORT OF THE AUDIT DIVISION ON

THEJOEROGERSFORCONGRESSCO~TTEE

Attached please find a copy ofthe report and related documents on the Joe Rogers

for Congress Committee which was approved by the Commission on November 21, 1997.

Infonnational copies ofthe report have been received by all parties involved and

the report may be released to the public.

Attachment as stated

cc: Office ofGeneral Counsel

Office ofPublic Disclosure

Reports Analysis Division

FEe Library
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REPORT OF THE AUDIT DIVISION

ON THE

JOE ROGERS

FOR

CONGRESS COMMITTEE

Approved November 21, 1997

FEDERAL ELECTION COMMISSION

999 E STREET, N.W.

WASHINGTON, D.C.
TABLE OF CONTENTS

JOE ROGERS FOR CONGRESS COMMITIEE

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CJ Page •07 Executive Summary

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{} Final Audit Report

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25 Background

5 ..1 Findings 7 823 Transmittal to Committee 17

Chronology 19
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REPORT OF THE AUDIT DIVISION

ON THE

JOE ROGERS FOR CONGRESS COMMIlTEE

EXECUTIVE SUMMARY

The Joe Rogers for Congress Committee (the Committee) registered with the Clerk ofthe

u.s. House ofRepresentatives on July 13, 1995 as the principal campaign committee ofJoe

Rogers (the Candidate), Republican candidate for the U.S. House ofRepresentatives from the

S~te ofColorado, 1st District.

The audit was conducted pursuant to 2 U.S.C. §438(b), which states that the

Commission may conduct audits ofany political committee whose reports fail to meet the

threshold level ofcompliance set by the Commission.

The findings ofthe audit were presented to the Committee at the completion of

fieldwork on May 8., 1997 and later in the interim audit report. The Committee's response to

those findings is contained in the audit report.

The following is an overview ofthe findings contained in the audit report. The Audit

staff's testing of contributions was limited because the Committee could not produce a

computerized file or other listing ofall contributions received during the audit period.

APPARENT EXCESSIVE CONTRIBUTIONS - 2 U.S.C. §44.1a(a)(I). Initially, the

review of contributions from individuals, although limited by incomplete records, identified 17

apparent excessive contributions totaling $18.085. There was no evidence that the Committee

had attempted to contact these contributors for the purpose ofobtaining reattributions or

redesignations ofthe contributions. In addition, the Committee did not deposit these excessive

contributions into a separate account, nor were there sufficient funds available for most ofthe

audit period with which to refund these contributions.

The Committee took exception to this matter stating it had complied with the "spirit of

the 51,000 per-election limitation" but filed Schedules D (Debts and Obligations) disclosing

these excessive contributions as debts. In addition, as a result ofthe Committee's submission

of additional documentation with respect to another matter, the amount ofthe excessive

contribution made by one individual was reduced by 52,000 and three additional contributors

who had contributed in excess oftheir limitation by a total of$5,000 were identified.

Therefore, the Committee received 20 excessive contributions, totaling 521,085.

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ApPARENT PERSONAL USE OF CAMPAIGN FUNpS - 2 U.S.C. §439a and II CFR

§113.1(g). Disbursements totaling $15,709 were identified that raised concerns about whether

they were ofa personal nature. These disbursements were payments on a credit card which,

according to the Treasurer, was used by the Candidate. No documentation, such as copies of

the billing statements, was available to detennine the "campaign" or "personal" nature of

expenses.

In response to the Interim Audit Report, the Committee provided records

detailing individual transactions. These documents indicated that the payments were campaign

related.

MlsiSTATEMENT OF FINANCIAL Acrly'ry - 2 U.S.C. §434(b)(1), (2) and (4). A

reconciliation ofthe Committee's reported activity to its bank activity revealed that material

misstatements OCCUlTed with respect to reports filed for the period from the Committee's initial

deposit on March 8, 1995 through January 31, 1996.

The Committee filed amended disclosure reports. However, as the result of

documentation submitted in response to another matter, receipts and disbursements were

identified which had not passed through Committee bank accounts and had not been included in

the Committee's reported activity for 1995. When infonned ofthis matter, the Committee filed

additional amended reports.

RECORDI\EEPING FOR AND DISCLOSURE OF RECEIPTS - 2 U.S.C. §432(c) & (d) and

434(b)(3)(A). The Committee failed to maintain any records for reported in-kind contributions,

totaling 536,696, and for about 36% ofthe moneys deposited by the Committee. In addition,

for contributions from individuals, totaling 522,450, the Committee's files failed to contain a

record ofthe contributor's occupation and name ofemployer or any evidence ofsubsequent

efforts to obtain the infonnation. Finally, contributions from individuals, totaling 528,325,

were disclosed inadequately on Schedules A (Itemized Receipts).

The Committee provided copies ofmemoranda and response fonns handdelivered to individuals who had made in-kind contributions; as well copies of any responses it

had received. The Committee also provided photocopies of contributor checks to support

deposited moneys for which records had not been maintained and evidence ofits recent efforts

to obtain missing occupation/name ofemployer infonnation. Finally, the Committee provided

amended Schedules A (Itemized Receipts) materially disclosing the missing infonnation.

DISCLOSURE Of CONTBIRtUlONS FROM POLITICAL COMMITIEES - 2 U.S.C.

§434(b)(3)(B). Seven contributions from political committees, totaling 57,225, were not

itemized. Additionallyt for contributions from political committees, totaling $16,250, the

contributor's address was either incompletely disclosed, or not disclosed at all. For most of

these contributions, the Committee·s files did not contain a record ofthe needed infonnation.

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The Committee's response included amended Schedules A (Itemized Receipts)

,~ materially colTeCting its disclosure reports.

RECORDKEEPING FOR AND DISCLOSUg OF D'SI"MEMENTS - 2 U.S.C. §§432 (c)(S)

"(d) and 434(b)(4)(A) &, (S)(A). Committee records for disbursements, totaling S80,S18, did

not contain the vendor's address. Additionally., for disbursements made by wire transfer,

totaling 587,909, no debit memos or otherrecord ofthe disbursements were maintained.

Finally, Committee disclosure reports did not adequately disclose disbursements, totaling

$44,621.

CJ The Committee'5 response provided the missing documentation and disclosure

C} infonnation. In addition, the Committee submitted amended disclosure reports.

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FEDERAL ELECTION COMMISSION

\\ "SHI!';G TO'\ 0 C 204h 4

REPORTOF THE AUDITDIVISION

ON THE

JOE ROGERS FOR CONGRESS COMMITTEE

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I. BACKGROUND

A. AUDIT AUTHORITY

This report is based on an audit ofthe Joe Rogers For Congress

Committee (the Committee), undertaken by the Audit Division ofthe Federal Election

Commission in accordance with the provisions ofthe Federal Election Campaign Act of

1971, as amended (the Act). The audit was conducted pursuant to Section 438(b) ofTitle

2 ofthe United States Code which states, in part, that the Commission may conduct

audits and field investigations of any political committee required to file a report under

Section 434 ofthis title. Prior to conducting any audit under this subsection, the

Commission shall perform an internal review ofreports filed by selected committees to

determine ifthe reports filed by a particular committee meet the threshold requirements

for substantial compliance with the Act.

B. AUDIT COVERAGE

The audit covered the period from the Committee's initial deposit on

March 8, 1995 through December 31. 1996. The Committee reported a beginning cash

balance ofSO; total receipts for the period of $431 ,806; total disbursements for the period

of$423.738; and an ending cash balance of$4,308. 1

c. CAMPAIGN ORGANIZATION

The Committee registered with the Clerk ofthe U.S. House of

Representatives on July 13, 1995 as the principal campaign committee ofJoe Rogers (the

Candidate), Republican candidate for the U.S. House ofRepresentatives from the State of

Colorado, 1st District.

All amounts in this repon have been rounded to the nearest dollar. Additionally. these amounts

do not foot as a result ofthe Comminee amending (reducing) its figure for beginning cash on

hand on its 1996 April Quanerly Repon (see Finding II.C.).

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The Treasurer ofthe Committee from its inception until January 30, 1996,

was Stacey Browne. Mr. David Sprecace became the Treasurer on January 31, 1996 and

is the current Treasurer. The Committee maintains its headquarters in Denver, Colorado.

To manage its financial activity, the Committee used three bank accounts.

From these accounts, the Committee made approximately 800 disbursements. The

Committee received about 1,850 contributions from individuals, totaling approximately

5317,700, which represented about 75% ofthe Committee's total receipts. In addition,

the Committee received 118 contributions from political action committees and other

committees, such as party committees and candidate committees, totaling about $109,200

(or 25% oftotal receipts); and received interest, totaling $1,420 (less than .3% oftotal

receipts).

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The audit covered the following general categories; however, the scope of

our testing ofcontributions received from individuals was limited. The Committee's

contribution records were not maintained in a manner which would have allowed the

Audit staffto perform the substantive testing nonnally undertaken when reviewing

contributions because the Committee could not produce a computerized file or other

listing ofall contributions received during the audit period. The Committee's files

included an incomplete printout ofcontributions received during 1996 and photocopies of

contributor checks deposited to Committee bank accounts.

The scope ofthe Audit stairs testing regarding Committee disbursements

was also limited because the records provided were predominately generated by the

Committee rather than the payee.

The audit included testing ofthe following general categories:

1. The receipt ofcontributions or loans in excess ofthe statutory limitations

(see Finding II.A.);

2. the receipt of contributions from prohibited sources; such as those from

corporations or labor organizations;

3. proper disclosure of contributions from individuals, political committees

and other entities, to include the itemization of contributions when

required, as well as, the completeness and accuracy ofthe infonnation

disclosed (see Findings 11.0. and E.);

4. proper disclosure ofdisbursements including the itemization of

disbursements when required, as well as. the completeness and accuracy of

the infonnation disclosed (see Finding II.F.);

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proper disclosure ofCommittee debts and obligations;

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6. the accuracy oftotal reported receipts, disbursements and cash balances as

compared to Committee bank records (see Finding II.C.);

7. adequate recordkeeping ofCommittee transactions (see Findings 11.0. and

F.); and,

8. other audit procedures that were deemed necessary in the situation

(see Finding II.B.).

Unless specifically discussed below, no material non-compliance was

detected. It should be noted that the Commission may pursue any ofthe matters

discussed in this report in an enforcement action.

II. AUDIT FINDINGS AND RECOMMENDATIONS

A. . APPARENT EXCESSIVE CONTRIBUTIONS

Section 441a(aXI) ofTitJe 2 ofthe United States Code states, that no

person shall make contributions to any candidate and his authorized political committees

with respect to any election for Federal Office which, in the aggregate, exceed 51,000.

Section JOO.7(a)(l)(iii) ofTitle tI ofthe Code ofFederal Regulations

states, in part, that the term "contribution·" includes a gifi subscription, loan, advance, or

deposit ofmoney or anything of value made by any person for the purpose ofinfluencing

any election for Federal office. The tenn "anything ofvalue" includes all in-kind

contributions.

Section I03.3(b)(3) ofTitle II ofthe Code ofFederal Regulations states,

in part, that contributions which exceed the contribution limitations may be deposited

into a campaign depository or returned to the contributor. Ifany such contribution is

deposited, the treasurer may request redesignation or reattribution ofthe contribution by

the contributor in accordance with 11 CFR 11 0.1 (b) or 110.1(k). Ifa redesignation or

reattribution is not obtained, the treasurer shall, within 60 days ofthe treasurer's receipt of

the contribution, refund the contribution to the contributor.

Section I03.3(b)(4) ofTitJe 11 ofthe Code ofFederal Regulations states,

in relevant part, that any contribution which appears to be illegal under II CFR

103.3(b)(3), and which is deposited into a campaign depository shall not be used for any

disbursements by the political committee until the contribution has been detennined to be

legal. The political committee must either establish a separate account in a campaign

depository for such contributions or maintain sufficient funds to make all such refunds.

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Section IIO.I(k) ofTitle II ofthe Code ofFederal Regulations states, in

part, that any contribution made by more than one person, shall include the signature of

each contributor on the chec~ money order, or other negotiable instrument or in a

separate writing. A contribution made by more than one person that does indicate the

amount to be attributed to each contributor shall be attributed equally to each contributor.

Ifa contribution to a candidate on its face or when aggregated with other contributions

from the same contributor exceeds the limitations on contributions, the treasmer may ask

the contributor whether the contribution was intended to be a joint contribution by more

. than one person. A contribution shall be considered to be reattributed to another

contributor ifthe treasurer ofthe recipient political committee asks the contributor

whether the contribution is intended to be a joint contribution by more than one person,

and infonns the contributor that he or she may request a return ofthe excessive portion of

the contribution ifit is not intended to be a joint contribution; and within 60 days from

the date ofthe treasurer's receipt ofthe contribution, the contributors provide a written

reattribution ofthe contribution, which is signed by each contributor, and which indicates

the amount to be attributed to each contributor if equal attribution is not intended.

. Section 1I 0.1 (b)(5) ofTitle 11 ofthe Code ofFederal Regulations states,

in relevant part, that the treasurer ofan authorized political committee may request a

written redesignation ofa contribution by the contributor for a different election ifthe

contribution exceeds the limitation on contributions set forth in 11 CFR 110.1(b)(1). A

contribution shall be considered to be redesignated for another election ifthe treasurer of

the recipient authorized committee requests that the contributor provide a written

redesignation ofthe contribution and infonns the contributor that the contributor may

request a refund ofthe contribution and within 60 days froml the date ofthe treasurer's

receipt ofthe contribution, the contributor provides the treasurer with a signed

redesignation ofthe contribution for another election.

Section 110.1(1)(5) ofTitle 1I ofthe Code ofFederal Regulations states,

in part, that if a political committee does not retain the written records concerning

redesignations or reattributions, the redesignation or reattribution shall not be effective

and the original designation or attribution shall control.

Section 432(h) ofTitle 2 ofthe United States Code states, in relevant part,

that each political committee shall maintain at least one checking account and such other

accounts as the committee detennines at a depository designated by such committee. All

receipts received by such committee shall be deposited in such accounts. No

disbursements may be made (other than petty cash disbursements) by such committee

except by check drawn on such accounts in accordance with this section.

At the time ofthe audit fieldwork. the Audit staff's review ofcontributions

from individuals, although limited by incomplete records. identified 17 apparent

excessive contributions totaling SI8.085. We did not find any evidence that the

Committee attempted to contact these contributors for the purpose ofobtaining

reanributions or redesignations ofthe contributions.

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In addition, the Committee did not deposit these excessive contributions

into a separate account, nor were there sufficient funds available for most ofthe audit

period with which to refund these contributions. The Audit staffdetennined that the

Committee's cash on balance as of 12-31-96 was $5,206 and is not sufficient to make the

necessary refunds.

At the exit conference, the Committee's Treasurer was presented with a

. schedule detailing the apparent excessive contributions. The Treasurer indicated that

refunds would be made, but sufficient funds may not be available.

In the interim audit report, the Audit staffrecommended that the

Committee provide evidence demonstrating that the contributions in question were not

excessive. It was further recommended that, absent such evidence, the Committee refund

these contributions and provide evidence ofsuch refunds (copies ofthe front and back of

the negotiated refund checks) for our review. Iffunds were not currently available to

make the necessary refunds, the Audit staffrecommended that the excessive contributions

be disclosed as debts on Schedule D (Debts and Obligations) until such time that funds

became available to make the refunds.

In response to the interim audit report, the Committee Treasurer submitted

a letter which states that the Committee finds this recommendation"...particularly

troublesome." The letter notes that none ofthese individuals contributed in excess ofthe

overall $2.000 limitation and states that"...all (ofthe contributors) intended that $1,000

would be allocated to the primary election and $1 '1000 would be allocated to the general

election." The response concludes that .....the Committee complied with the spirit ofthe

$1000 per-election limitation." In addition, Schedules D were submitted which disclosed

these excessive contributions as debts ofthe Committee, describing each debt as

··Disputed excessive contribution".

In addition. during a subsequent telephone conversation, the Candidate

emphasized that when such a contribution was received, he would advise the contributor

that only SI,000 could be used for the primary election and any excess would have to be

applied to the general election.

Finally, as a result ofour review of photocopies ofdeposited contributions

submitted by the Committee in response to our recommendation at Finding II.D. ofthe

interim audit repo~ the Audit staffreduced the amount ofthe excessive contribution for

one contributor by 52.000 and identified three additional contributors who had

contributed in excess oftheir limitation by a total $5.000. Further, excessive

contributions in the amounts of$10.000 and 55.000 from two contributors were not

deposited into a Committee account. According to the Treasurer, the Candidate went to

the bank and cashed the two contributor checks'I using part ofthe proceeds ($7,000) to

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purchase two money orders to make refunds to the contributors. The remaining 58,000

was deposited by the Candidate into a Committee depository. Therefore, 57,000 was not

deposited into a Committee account; and, the two refunds were not made by checks

drawn on a Committee account.

The Audit staffis not persuaded by the Committee's arguments. Our

opinion remains that, in the absence ofdocumentation showing the contributions were

redesignated, reattributed or refunded, these are excessive contributions. Further, as a

result afthe above noted adjustment to one excessive contributor and the additional

excessive contributions identified, the Committee received 20 excessive contributions

totaling 521,085.

B. ApPARENT PERSONAL USE OF CAMPAICN FUNDS

Section 439a ofTitle 2 ofthe United States Code provides, in relevant

part, tha~ amounts received by candidates as contributions that are in excess ofany

amount necessary to defray his or her expenditures may not be converted for personal

use.

Section 113.I(g) ofTitle 11 ofthe Code ofFederal Regulations defines

"personal use" (when used in this part) as any use offunds in a campaign account ofa

present or former candidate to fulfill a commitment, obligation or expense ofany person

that would exist irrespective ofthe candidate's campaign or duties as a Federal

officeholder. Further, 11 CFR §113.1(g)(I)(ii)(D) states that the Commission will

determine, on a case by base basis, whether other uses offunds in a campaign account

fulfill a commitment, obligation or expense that would exist irrespective ofthe

candidate's campaign or duties as a Federal officeholder, and therefore are personal use.

The Audit staffs review ofdisbursements identified 20 payments, totaling

$15,709, for which the lack ofdocumentation raised concerns.about whether all orsome

portion ofthese payments could be for expenses of a personal nature. These

disbursements were payments made to American Express for a credit card which,

according to the Treasurer, was used by the Candidate. No documentation, such as

copies ofthe billing statements, was available to detennine the "campaign" or "personal"

nature ofexpenses incurred by use ofthis credit card.

At the exit conference. the Committee's Treasurer was presented with a

schedule detailing the disbursements discussed above and was requested to provide

copies ofAmerican Express statements. Although the Treasurer indicated this

documentation would be provided. at the time ofthe interim audit report, the Committee

had not submitted any additional documentation.

In the interim audit report, the Audit staffrecommended that the

Committee provide copies ofall American Express billing statements (detailing

individual transa.ctions) to support payments made by the Committee. The Audit staff

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1"---- further recommended that the Committee seek reimbursement from the Candidate for any

portion ofthese disbursements detennined to be for his personal use.

As part ofits response to the interim audit report, the Committee provided

copies ofAmerican Express statements detailing individual transactions, annotated to

indicate which, ifany, charges were personal in nature. The Audit staff's review ofthese

documents indicated that the Committee's payments to American Express were for

campaign related expenditures rather than expenditures ofpersonal use.

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c. MISSTATEMENTOFFINANCIALAcnvlTY

Sections 434(b)(1), (2) and (4) ofTitle 2 ofthe United States Code state,

in part, that a political committee shall disclose the amount ofcash on hand at the

beginning ofthe reporting period and the total amount ofall receipts and all

disbursements for the reporting period and calendar year.

The Audit staff's reconciliation ofthe Committee's reported activity to its

bank activity revealed that material misstatements occurred with respect to reports filed

covering the period from the Committee's initial deposit on March 8, 1995 through

January 31, 1996.2

The Committee reported receipts of$137,684 for this period. Utilizing the

Committee's financial records, the Audit staffdetermined that the Committee should

have reported receipts of$131,801. Therefore, receipts were overstated by $5,883. This

overstatement was primarily due to the Committee's inclusion ofreceipts deposited on

February 22, 1996.

During this same period, the Committee reported disbursements of

$70,535. Based on available financial records, the Audit staffdetermined that the

Committee should have reported disbursements of$72,280. Therefore, disbursements

were understated by $1,745. This understatement resulted primarily from the

Committee's failure to report bank charges and errors in reporting in-kind transactions.

As a result ofthe ofthe misstatements ofreceipts and disbursements noted

above, the Committee's reponed ending cash on hand at 1/31/96 of$67,149 was

overstated by $7,628. The Audit staffdetermined that the correct cash balance was

$59,521.

The Committee's Treasurer was provided schedules ofthe above reporting

errors at the exit conference. The Treasurer agreed to amend the Committee's disclosure

reports.

In filing its repons for 1995. the Comminee included activity through the date the repon was due.

Hence, its 1995 Mid Year repon covered the period 1/1195 to 7/31195 and its 1995 Year End

Repon covered the period from 8/1195 to 1/31/96.

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In the interim audit report, the Audit staffrecommended that the

Committee file a comprehensive amendment for the period from its inception through

1/31/96 to correct the misstatements. The Audit staffalso recommended that the

Committee correct the ending cash on hand balance shown on the latest report it has filed.

In response to the interim audit report, the Committee filed the requested

amendments to its disclosure reports. However, as the result ofdocumentation submitted

in response to Finding II.D. ofthe interim audit report, the Audit staffidentified S15,000

in both receipts and disbursements which had not passed through Committee bank

accounts and had not been included in the Committee's reported activity for 1995. When

infonned ofthis matter by telephone, the Treasurer agreed to submit amendments to

correct its disclosure reports. The Committee filed the requested amendment.

D. RECORDKEEPING FOR AND DISCLOSURE OF RECEIPTS

Sections 432(c) and (d) ofTitle 2 ofthe United States Code state, in

relevant part,.that the treasurer ofa political committee shall keep an account ofall

contributions received by or on behalfofsuch political committee; the name and address

of any person who makes any contribution in excess of550, together with the date and

amount ofsuch contribution by any person; and the identification of any person who

makes a contribution or contributions aggregating more than 5200 during a calendar year.

The treasurer shall preserve all records required to be kept by this section and copies of

all reports required to be filed by this subchapter for 3 years after the report is filed.

Section 100.7(a)(I) ofTitle 11 ofthe Code ofFederal Regulations states,

in relevant part, that the tenn contribution includes anything of value made by any person

for the purpose ofinfluencing any election for Federal office. Further, for purposes of

this section, the tenn anything ofvalue includes all in-kind contributions.

Section 434 (b)(3)(A) ofTitle 2 ofthe United State Code states that each

report shall disclose the identification ofeach person (other than a political committee)

who makes a contribution to the reporting committee during the reporting period, whose

contribution or contributions have an aggregate amount or value in excess of 5200 within

the calendar year, together with the date and amount of any such contribution.

Section 431 (13)(A) ofTitle 2 ofthe United State Code states, the term

"identification" means in the case of any individual, the name, the mailing address, and

the occupation ofsuch individual, as well as the name ofhis or her employer.

Sections 104.7(a) and (b) ofTitle 11 ofthe Code ofFederal Regulations

state, in p~ that when the treasurer ofa political committee shows that best efforts have

been used to obtain, maintain, and submit the infonnation required by the Act, any report

ofsuch committee shall be considered in compliance with the Act. The treasurer and the

committee will only be deemed to have exercised best efforts ifall written solicitations

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r '. for contributions include a clear request for the contributor's name, mailing address,

'-. occupation and name ofemployer; the treasurer makes at least one effort after the receipt

ofthe contribution, in either a written request or documented oral request, within 30 days

ofreceipt ofthe contribution, to obtain the information; and, the treasurer reports all

conbibutor infonnation not provided by the contributor, but in the committee"s

possession, including information in conbibutor records, fundraising records and

previously filed reports, in the same two year election cycle.

1. R,ccordkcepine for In-Kind Contributions

As part ofour bank reconciliations, the Audit staffidentified 63

reported in-kind contributions.. totaling 537,547. Based on a review ofthe available

receipt and disbursement records, the Audit staffdetennined that the Committee failed to

maintain any records for 61 contributions, totaling 536,696.

. In the interim audit report, the Audit staffrecommended that the

Committee demonstrate that best efforts had been used to obtain, maintain and submit the

required information. Absent such a demonstration, the Audit staffrecommended that the

Committee make an effort to contact those individuals identified as having made in-kind

contributions to obtain the information necessary for its records; and provide

documentation ofany such contacts as well as copies ofany responses received.

In its response to the interim audit report, the Committee provided

copies ofmemoranda (all dated October 7, 1997) and response forms hand-delivered to

individuals who had made in-kind contributions. The memorandum informs the

contributor ofthe Committee's need to document in-kind contributions received and

requests the contributor to sign and return the attached fonn confirming the nature and

amount ofthe in-kind contribution. The letter also provides a fax number to facilitate the

contributor's response, as well as a telephone number should there be any questions. In

addition. the Committee provided copies ofresponses it had ~eived from these

contributors.

2. Recordkccpinl: for Deposited Receipts

In assessing the completeness ofCommittee receipt records prior

to initiating any testing, the Audit staffdetennined that the Committee made deposits

totaling S106,830 during the period 3/8195 through 1131/96. The only records made

available by the Committee for this period consisted ofa notebook containing copies of

contributor checks, totaling $68,687. Therefore, records were not maintained by the

Committee for $38.223, or about 36% ofthe moneys deposited during this period. The

Treasurer, when advised ofthis matter during fieldwo~ stated he would try to locate the

missing records.

Further, the Audit staffperfonned a limited review ofall

contributions received from individuals in amounts greater than 5200. These

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contributions were identified using copies ofcontributor checks maintained by the

Committee. As a result ofthis review, as well as other reviews·perfonn~ the Audit staff

detennined that for 42 contributions from individuals, totaling 522,450, the Committee's

files failed to contain a record ofthe contributor's occupation and name ofemployer.

Although Committee solicitation materials contained requests for this infonnation, the

Audit staffwas unable to locate any evidence ofsubsequent efforts to obtain missing

occupation and name ofemployer.

In the interim audit report, the Audit staffrecommended that the

Committee demonstrate that best efforts had been used to obtai~ maintain and submit the

required information. Absent such a demonstration, the Audit staffrecommended that the

Committee obtain and provide for our review copies ofthe missing contributor checks

and/or other documentation for those 1995 receipts lacking a record. It was further

recommended that the Committee make an effort to contact contributors for whom no

record ofoccupation and name ofemployer was available and provide documentation of

such contacts to include copies ofresponses received; and, file amended Schedules A, by

reporting period, to disclose any information obtained from those contacts.

In its response to the interim audit report, the Committee provided

photocopies ofcontributor checks to support deposited moneys for which records had not

been maintained. Additionally, the Committee submitted evidence ofits recent efforts to

obtain and maintain the missing occupation/name of employer infonnatio~ although the

response did not contain amended Schedules A to disclose the infonnation obtained.

3. Disclosure ofReceipts

The Audit stairs review identified 50 contributions from

individuals, totaling $28,325, for which disclosure on Schedules A was inadequate. For

37 ofthese items ($21,375 from 35 contributors) the occupation and name ofemployer

information, available in Committee files, was not disclosed. The remaining errors

included the incorrect disclosure ofthe contributor's name, the date ofthe contribution,

or the amount ofthe contribution.

At the exit conference. the Committee'5 Treasurer was provided

with schedules detailing these problems. The Treasurer indicated his willingness to

obtain the infonnation and amend repons as required.

In the interim audit report. the Audit staffrecommended that the

Committee file amended Schedules A, by reporting period, to correct the disclosure

problems noted above.

As part ofits response to the interim audit report, the Committee

provided amended Schedules A materially disclosing the missing infonnation.

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DISCLOSURE OF CONTRIBUTIONS FROM POLmCAL COMMI1TEES

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Section 434 (b) (3) (B) ofTitle 2 ofthe United States Code states that each

report under this section shall disclose the identification ofeach political committee

which makes a contribution to the reporting committee during the reporting period,

together.with the date and amount ofany such contribution.

Section 431(13) ofTitle 2 ofthe United States Code provides, in part, that

the tenn "identification" means, in the case ofany person other than an individual, the

name and address ofsuch person.

Section 104.7(b) ofTitle 11 ofthe Code ofFederal Regulations states, in

part, that if best efforts have been used to obtain, maintain and submit the infonnation

required by the Act for political committees, any report ofsuch committee shall be

considered in compliance with the Act.

The Audit staffreviewed 118 contributions from political action

committees. party committees and other committees totaling SI09,207, and noted that

seven ofthese contributions, totaling $7.225, were not itemized.

Additionally, the review detennined that for 14 contributions from

political committees, totaling $16.250, the contributor's address was either incompletely

disclosed on Schedule A, or not disclosed at all. For most ofthese contributions, the

Committee's files did not contain a record ofthe needed infonnation.

At the exit conference, the Committee's Treasurer was supplied with

copies ofthe workpapers detailing the contributions not itemized as well as those

contributions which were not adequately disclosed. The Treasurer indicated that the

infonnation would be obtained and repons amended, as needed.

In the interim audit report. the Audit staffrecommended that the

Committee make an effort to obtain the missing infonnation and provide documentation

ofsuch efforts. as well as submit amended Schedules A (by reporting period) correcting

the disclosure problems addressed above.

The Committee's response provided the missing infonnation and included

amended Schedules A materially correcting the disclosure problems.

F. R£CORDKEEPING FOR AND DISCLOSURE OF DISBURSEMENTS

Sections 432(c)(S) and (d) ofTitle 2 ofthe United States Code state that

the treasurer ofa political committee shall keep an account ofthe name and address of

every person to whom any disbursement is made. the date, amount and purpose ofthe

disbursemen~ and the name ofthe candidate and the office sought by the candidate, if

any, for whom the disbursement was made. including a receipt. invoice or canceled check

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for each disbursement in excess of5200. The treasurer shall preserve all records required

to be kept by this section and copies ofall reports required to be filed by this subchapter

for 3 years after the report is filed~

Sections 434(b)(4XA) and (S) (A) ofTitle 2 ofthe United States Code

state that each report shall disclose expenditures made to meet candidate or committee

operating expenses, and the name and address of each person to whom an expenditure in

an aggregate amount ofvalue in excess of52oo within the calendar year is made by the

reporting committee to meet a candidate or committee operating expense, together with

the date, amount, and purpose ofsuch operating expenditure.

The Audit staffreviewed all Committee disbursements to detennine if

records were maintained as required and ifthe disbursements were adequately disclosed.

This review determined that the records maintained for 92 disbursements, totaling

580,518, did not contain the vendor's address. Additionally, for three disbW'Sements

made by. wire transfer, totaling 587,909, no debit memos or other record ofthe

disbursements (other than reponed information) were maintained.

The Audit staffalso identified 6S disbursements, totaling $44,621, for

which the address was not adequately disclosed, or for which the required memo entries

were not provided for credit card payments.

At the exit conference, the Committee's Treasurer was provided with

schedules detailing these problems. The Treasurer indicated the infonnation would be

obtained and reports amended.

In the interim audit report, the Audit staffrecommended the Committee

obtain and submit the missing disbursement infonnation noted above (to include originals

or copies ofthe three debit memos and related invoices) and/or provide an explanation of

the Committee's efforts to obtain this infonnation. The Audit.stafffurther recommended

that the Committee file Amended Schedules B, by reporting period, to disclose the

missing addresses and memo entries.

The Committee's response provided the missing documentation and

disclosure infonnation. In addition, the Committee submitted amendments to its

disclosure repons which materially correct the disclosure problems noted above.

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FEDERAL ElECTIO~ CO"'1f\.1ISSI0~

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November 24, 1997

Mr. David Sprecace. Treasurer

Joe Rogers for Congress Committee

333 East 16th Ave., #403

Denver, CO 80203

Dear Mr. Sprecace:

Attached please find the Repon ofthe Audit Division on the Joe Rogers for

Congress Committee. The Commission approved the repCln on November 21.1997.

The Commission approved Final Audit Repon will be placed on the public record

on December I. 1997. Should you have any questions regarding the public release ofthe

repon, please contact the Commission's Press Office at (202) 219-4155. Any questions

you have related to matters co\'ered during the audit or in the repan should be directed to

Philomena Brooks or ."Iex Boniey:icz ofthe Audit Di\'ision at (202) 219-3720 or toU free

at (800) 424-9530.

Sincerel)'.

~~&--- Assistant Staff Director

Audit Division

Attachment as stated

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CHRONOLOGY

JOE ROGERS FOR CONGRESS COMMITIEE

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J\udit Fieldwork

Interim Audit Report to

the Committee

Response Received to the

Interim Audit Report

Final Audit Report Approved

Page 19

4/28/97 - 5/16/97

8/19/97

10122/97

11/21/97
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