'.

FRED EILAND

PRESS OFFICE

JUDY HAWKINS:·1

( - _.-

BOB COSTA

PUBLIC ISSUANCE OF AUDIT REPORT -

EVANS FOR CONGRESS CAMPAIGN FUND AND

TIlE HONORABLE BILLY L. EVANS (GA/8)

HOI RAL ELECTION COMMISSIOl\:

January 11, 1980

cc: FEC Library

RAD

Public Record

Attachment as stated

With this release the 8th District of Georgia is now

complete.

All informational copies of the report have been received

by all parties involved and this report may be released to the

public.

Attached please find a copy of the final audit report

of the Evans for Congress Campaign Fund and the Honorable

Billy L. Evans (GS/8) which was approved by the Commission

on December 31, 1979.

SUBJECT:

FROM:

THROllGH:

MEMORANDUM

TO:

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WASHINGTON, 0 C 204fd

FEDERAL ELECTION COMMISSION

This audit report is based on documents and working

papers which support each of the factual statements. They

form part of the record upon which the Commission based its

decisions on the matters in the report and were available to

Cor.~issioners and appropriate staff for review •

The Audit covered the period from May 5, 1976, the inco~­

tion date of Committee activity through September 30, 1977 the

final coverage date of the latest report filed by the Co~~ittee

at the time of the audit. The Co~~ittee reported a beginning

cash balance of -0-, total receipts for the period of $250,285.44,

total expenditures for the period of $249,017.27 and a closing

cash balance of $1,268.17. The Candidate reported a beginning

cash balance of -0-, total receipts for the period of $11,624.00,

total expenditures for the period of $11,558.55 and a closing

cash balance of $65.45.

The Committee registered with the Fp.ueral Election

Con~~ission on July 1, 1976 in support of Billy Lee Evans candidate

for the Office of U.S. Representative from the 8th Congressional

District of Georgia. The Committee maintains its headquarters in

f.1.:icon, Georgia.

A. Overview

REPORT OF THE AUDIT DIVISION

ON

THE EVANS FOR CONGRESS CAMPAIGN FUND

AND

THE HONORABLE BILLY L. EVANS

This report is based on an audit of the Evans For

Congress Campaign Fund (tithe Committee") and the Honorable

Billy L. Evans, undertaken by the Audit Division of the Federal

Election COIn.Tt\ission ill accordance with the Commission's audit

policy to determine whether there has been compliance with the

provisions of the Federal Election Campaign Act of 1971, as

amended (lithe Act"). The audit was conducted pursuant to Section

438{a) (8) of Title 2 of the United States Code which directs the

Commission to ma~e from time to time audits and fie~c investigations

with respect to reports and statements filed under the provisions

of the Act.

I. Backqround c

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COMMITTEE

A. Excessive Contributions

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Mr. Frank C. Pinkston, Chairman, 7/1/76 - 5/30/77

Mr. Cecil Passmore, Chairman, 5/31/77 - 9/30/77

Mr. Dennis Beall~ Treasurer, 7/1/76 - 1/31/77

Mr. John E. James, Treasurer, 1/31/77 - 9/30/77

C. Scope

Committee records show the receipt of three (3) loans

totaling $30,000.00. Comprising ~his total is one (1) ~oan

of $15,000.00 from a bank secured by collateral from an individual,

one (1) loan of $10,000.00 from an individual, and one (1) loan

of $5,000.00 from two (2) individuals. .

Section 44la(f) of Title 2, United States Code, in

part, states that no candidate or political committee shall

knowingly accept any contribution in violation of the provisions

of this section.

This matter was referred to the Commission's Office of

General Counsel on March 9, 1978, where Matter Under Review (MUR)

551(78) was initiated. On July 14, 1978, the Commission found

reasonable cause to believe that the above violations had

occurred and directed the Office of General Counsel to inititate

Section 44la(a) (1) IA) of Title 2, united States Code,

prohibits a person from making a contribution to any candidate

and his authorized political committees with respect to any

election for Federal office which, in the aggregate, exceeds

$1,000.00.

Findings and Recommendations

The audit included such tests as verification of

total reported receipts and expenditures and individual

transactions; review of required supporting documentation and

analysis of Committee debts and obligations; and such other

audit procedures as deemed necessary under the circumstances •

B. Key Personnel

The principal officers of the committee during the

period covered by the audit were as follows:

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B. Prohibitc~ Contributions

On July 19, 1978 the Co~~ission voted to include the

Comr:1i t":ee' s accc'pt;mce of these contributiom~ in the proposed

conciliation agreement to be sent to the Committee.

'[:10 COI:1::lission voted to t.::ke no further action with respect

to t.he Candidate in this m.::tter.

On J:.lly 11, 1979, the Cor..:nission voted to take no further

actio:1 \·:ith re9.:lrd to the violation of 2 U.S.C. 441a(a) (1) (t\)

1.:y t::e 0:1e individu.::il providing collateral for the bank lOcln 0: S15,000.00 .

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On April 13, 1978, the Commission found rea£:on to

believe that the crnmnittee violated 2 U.S.(~. 441b(a) by accepting

these cO:l"t.~-ibution~;. During the Comr.1itte:c:':-, preparation of its

response to the Commission's finding (4/13/78), the Commit-.tee

discovere~ and voluntarily ad~itted receipt of an additional

$500.00 contribution from a corpor.:lte account.

This matter was included in the conciliation agreement

signed ~':' the: CO\llmittee on October 10, 1979 \oJhich also provideL1

for a ch'il l.J(·nc.d.ty of $400.00. On ~c"Tembcr 14, 1979, the

Comm.i.S.3.io:1 voted tu close the file.

During our examination of Committee records, we found

the Committee accepted contributions from eight (8) business

entit1es which were subsequently verified as incorporated with

the Secretary of St~tc.

Section 44lb(a) of Title 2, United States Code, in

part, prohibits any national bank or any corporation from making

a contribution in connection with any Federal Election and

prohibits any candidat:e or political committee from accepting

any conlLibution from any natio~a1 bank or any corporation.

The matter W.:lS referred to the Commission's Office

of General Cou~se1 on March 9, 1978, where Matter Under Review

(MUR) 551(78) was initiated. Subsequent investigation by the

Office o~ General Cou~sel determined that only three (3) of the

contributions totaling ~400.00, were received from one (1) bank

and t\\·o (2) corpol"Qtions.

Subsequent additional efforts at conciliation resulted

in a conciliation aggrement approved by the Commission and signed

by the Committee 2/ on October 10, 1979. The Committee also paid

a civil penalty of $400.00. On November 14, 1979, the Commission

voted to close the file.

conciliation efforts. On July 11, 197~, the Commission found

probable cause to believe that three (3) individuals 1/ had

violated 2 U.S.C. 44la(a) (1) (A) by making excessive contributions

and that the Committee and the Candidate had violated 2 U.S.C.

44la(f) by accepting excessive contributions.

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C. Retention of Receipted Bills

Section 432(d} of Title 2, United States Code,

requires the Treasurer to obtain and keep a receipted bill,

stating the particulars, for every expenditure made by or

on behalf of a political conunittee in excess of $100 in amount,

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

-1: ")lmt of such expenditun~s te: the same person during a calendar • ':.1. c':·:cecds $100. Section 102.9(c} (4) of Title II, Code of

::" :·-':·~ll Regulations, provides that when a receipted bill is not

available, the treasurer ma.y keep the cancelled check(s} showing pa~lment (s) of the bill; anr] the bill, invoice or other contem- pSl:~meous memorandum of th0. transaction.

Corrmittee records showed it made 281 expenditures

totaling $232,478.35 which required supporting documentation.

We found the Committee ha.d not obtained or kept a receipted

bill or 0ther contemporancous memorandum in support of 150 or 53~ of those expenditures totaling $190,803.24 (82% of total

monies rcquiring support). However, all but 11 expenditures

totaling $3,802.56 were supported with a cancelled check. The

Cormnittce rr.ai.ntained no othcr record of its expenditures,

although it. did record thc purpose of expenditure on 139 of

its checks. As a result, we were unable to determine the

purpose of expenditure for those items which were not supported

by a cancelled check.

One hundred and nineteen of the inadequately supported

expenditures werc made in amounts in excess of $100 and includeJ

3·\ c:-:pcndi tU~C::3 totallin:J ~85, 976.86 made to purchase advertisitl<J. rl'be remaining 31 e:·:pcndi tures were made in amounts of

$100 or less, but tote\l e:·:pc,ldit'..lres to each of the pa~'ees

aggregated in excess of $100 during the ~~lendar year.

Cor.-'::'ittee officials stated that, although they \..;ere

m';<1!-C of a fc'.·; undocumen ted e:~pc:1ditun:!s, they did not realize

such a l<l~'gc nu",ber of e:·:pcmditures had been insufficiently

doc ur.~en ted. \';e: recommended tha t t.he Com..,it tee obtain and submi t

tIll! required docUl:1entation, or e\'idence of their efforts to

ol.lt.,in it.

Sllt.scquen t to t:10 clo~)e of fie 1c.'.·:o rk , the Com:ni ttee ~; uL::,':' t teLl co~)ies of the rt:'qui rCL1 supporting docur.1en tation for

}07 c:-:;)ondit'-l~-c~ totalincJ $l~5,9.17.55. F.lthough 43 expenditures (lS~ o~ total expenditures) totaling $44,855.69 (19~ of total

monies e;·~pc:1(:·:::l) rcmain insuf::icien t.l~' documented, the COrnr:'littee sub~itted evi~cncc of its bcst efforts in the form of certified

letters sent to vendors requesting the required documentation

to SllPl)o:.-t c:-:;;':"::1(:i tures m.:lc:e to them•
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Recommendation

We recommend no further action with respect to

this matter.

D. Itemization of Transfers from Political Committees

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

rc~ui~es that each report filed under this section shall

~iisclose the name and address of each political committee or

c~ndidate from which the reporting committee or the candidate

received, or to which that COllllU.l ttee or candidate made, any

transfer of fundB, together wjth the amounts and dates of

all transfers.

Committee records showed the receipt of 95 transfers

from political conwittees totalling $47,750.00. The Committee

failed to itemize 31 (or 331) of these transfers totaling

$3,950.00 (8% of the dollar value of total transfers receiv~d).

Twenty-eight of the 31 unitemi~ed transfers were in amounts

of $100 or less. Committee officials stated that they were

unaware all transfers, regardless of a~ount, require itemization.

In addition, the Co~nittee disclosed transfers received

with individual contributions on Line 15 of its Summary Sheets

rather than on Line 18 as required by the instructions in

FEe FOl:m 3. \'Je recommended the Committee file a comprehensive

ilmcnd~cnt itc~i2ing the tra~sfcrs as required and correcting

the Co::mLi. t tee's year-to-date totals.

Subsequent to th~ close of fieldwork, the Committee

submitted comprehensive amendments to its disclosure reports

itcmi~ing the 31 transfers as req~ired. The comprehensive

.:ill1Llnc.::::ent also shmved these transfLlrs disclosed on Line 18 of

its SL::::'-:1.J.r1' Sheets as req~ired.

l~t~corr.raend.:lt ion

\';13 recon...-:1end no further action with respect to

this matter.

E. "Itemization of Contributions

Sect-ion 434(b) (2) of Title 2, United States Code,

r'~~'1tlires that each report under this section shall disclose

the ful.l name and muiling address (occupation and princip.:ll

place of business, if any) of each person who has made one

or mere contributions to or for such committee or candidate

within the calendar year in an aggregate amount or value in

excess of $100, together with the amount and date of such

contributions.
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committee records showed the Committee received

148 contributions totalling $36,882.56 from individuals which ,

requir~d itemization. We found the Committee failed to itemize

41 contributions totaling $5,205.00. The Committee offered no

explanation as to why this information was 'not itemized as

required. We recommended the Committee file a comprehensive,

amundrnent itemizing the individual contributions as required.

Subsequent to the close of fieldwork, the Committee

::": -~ ".~ :l comprehensive amendment to its disclosure reports

.1 t.~:;;i;:ing the 41 contributions as required.

Recomrncndution

We recommend no further action be taken with respect

to thi:.; matter •

F. Fundraising Events

Section l02.9(d) of Title II, Code of Federal

Regulations states it shall be the duty of the treasurer of

a political committee or an agent authorized by the tred~urer

to receive contributions and or make expenditures, to keep

.full and complete records of proceeds from the sale of tickets

. and mass collections at each dinner, luncheon, rally, and other

fU:ldr.J.ising eve£1ts, including the date, location, .and nature of

euch event.

The Committee reports showed ihat nine (9) fundraisi~g events were held, generating proceeds of $74,624.~0.

The CO-::'''':littee failed to retain a detailed and exact accouilt of

t~o (2)fundraising events, totaling $6,128.00 (8~ of total

proccQ~s). One (1) event with proceeds of $3,550.00 was held

on February 12, 1977. The other event with proceeds of

$2,578.00 was held on April 30, 1977. We'recommended the

Co~~~ittee obtain and submit a detailed and exact account of

t~o (2) fundraising events as required.

Subsequent to the close of fieldwork, the Committee

sub~itted full and complete records of the proceeds from the

t~o (2) fundraising events noted above. The records show the

cLi:..c, location, and nature of each of the t\oJO (2) events as

~~ll,as.various vouchers and receipted bills from vendors as

1'"0 ..1tl.l ~ca.

H~' (:,or.'.:;",end.:'(tion

\O;C recommend no further action be taken with respect

to this mitter.
RcconHr.cndation

G. Itemization of Committee Loans

\\1(:' rec'ln;r.\Qnl1 110 further action be L,~ :!n wi th re~;pcct

to this matter.

Expendi tures from (.lthcr th.:ln Dc:? igl1.:l t:ec1~~mp.:lign

DCi)OS i to n"

II.

Section 433(b) (9) of 'l'itle 2, Unitcc.1 States Code

rf·quires euC:1 political com:-:littec' s st.:lte:r.lcnt of or~laniz.:ltion

III include a listing of all ba:1ks, safety dC20sit hoxes or I JI.!lt! r rcposi tories usod. .

Subsequc'nt to the close of ficld~...ork, the Committee

submitted an amendL'd report itemizing the $3,000.00 loan as

required.

The Con~ittee received 11 loans totaling $94,000.00.

We founu that the Committee failed to itemize one (1) loan

totaling $3,000.00 as required. 'The loan was obtained on

Septenwcr 15, 1~7G ~nd was repaid on Apr:l l~, 1977. Although

the loan remained outstanding for a period of !'leven (7) months,

it Wa::> I1c'!er itemL:ed in Committee reports as a receipt. However,

repayml..~lll of the 10;11'1 was itemized as required. t~c recommended

the C0111lHittee file comprehensive amendments amending its disclosure

report~ to itemize the loa~ as required.

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

r0.quires that reports filed under this section shall disclose

cdch loan to or from any person within the calendar year in an

il'lgregate amount or value in excess of $100, "together with the

lull names and mailing addresses (occupations and the principal

;>!accs of business, if any) of the lender, endorsers and

(.i':.1r3:1 tors, if any, the date and amount of: such loans.

Section ·137 b(.:l) (1) of 'l'itle 2, Unj':'Cl1 States Code

requi.res the princip.:ll cumpaign committee of a ccindiuate to

deposit any contributions received by such committee: into the

. dosi (jn.ltcd carr.paign depository and that no expcndi Llres may be

m.:lde by any such com..nittee on behulf of a candidatc or to

influence his election except by check drawn on su~h account.

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Documentation submitted by the Committee with respect

to two (2) fundraising events held on behalf of the Candidate

(as noted in Fi IHling E) show that two (2) depositories were used

in conjunction wi.th these two (2) events held on April 30, 1977

and. February 12, 1977. Copies of bank statements, cancelled

cl1L'cks and rece i pb-I"! hills show that 15 expenditures totaling

$:~,468.74 were Inad(! directly from proceeds of these fundraising

·":t-:~ ::5. These ('xrw1lC1 i tures were made by checks drawn on banks

. '.' ;~l:::' than thof:;e shnwn on the Commi ttees registration statement

1:-; c~lmpaign deposi t (lries. Committee officials stated that net

proc00ds (i.e. gros:; proceeds less expenses) were transferred to

the Committee from fieldworkcrs who were unm'lare of the statutory

r.:-!l1uirements. Further, Commj Ltce officials st.:1tedthat the e\"ents

were held by persons who were indepC'ndent of the Cornmittt'e.

Cormni ttee personnel hilc1 requested those persons to hold t.he

e':er.ts but had no cOIIl:rol over the ac~ivities involved in

collecting proceeds dlld making expenditures relating to them.

The Committee reporU'd total proceeds from these fllndraising

e':ents and reported tlw expenses paid from proceeds, even

though the monies were neither deposited to nor expenJed from

a designated Committee campaign depository. ~\le reconllllended

the Committee's st.:1tcment of orClanization be amended to disclose

the' accounts as Commi t tee depOsitories.

Subsequent to the close of fieldwork, the Cotn.':1i ttee

sub~itted an amendment to the Statement of Org.:1nization

disclosing the two (2) depositories melltic~ed above as campaign

de:,o::;i tories•.

T'Je reeomnK'nd no further actio:l be ta}:en wi th re:.pect

to this'matter.

Other Matters

- Presented below is a matter for which the ~udit staff

rccor:unends no further-action .

. The Committee rcr:ist.ered \I.'ith the Feder.:'!l Election

Co::u~ission b\" letter. (;n Jul\" 1,1976. Hov:evcr, theCor..::littc<::

reForts shO\\'~itr0ct'iv'ed and eXl't::.';;~:cd .::lFpro:·:il~late]y S19,000.00

p:::-ior to Jul::" 1, 197(,. lIenee, theCon::~ittee dic1not' file a

State~ent of Or9allj~~tion in a ti~0lymanner, as required t~

-Section 433(.:1) of Title 2, United States Code .
Section 437b(a) (1) of Title 2, United States Code,

'.:;t.\itcs that each candidate shall designate one or more national

or Stilte banks as his camp~ign depositories.

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CANDIDATE

. Findings and Recommendations

A. Expenditure of Funds from Other

than Designated Account

Section l03.3(a) of Title 11, Code of Federal

Regulations, states that all contributions received by a candidate

shall be deposited in a checking account in the ~ppropriate

campaign depository and that expenditures may be made by a

candidate only by check drawn on an account in a designated

-campaign depository, except for expenditures of $100 or less made

from a petty cash fund maintained pursuant to Section 102.10.

During our revie\oJ of the Candidates carnlJ'-li·}n records,

we found that a total of $11,974.00 in receipts were deposited'

and a total of $11,989.00 in expenditures had been made from

a bank account which had not been designated a campaign

depository. The records d10W that the account is entitIed the

"Billy L. Evans Campaign Fund." We recor.lrnended. that an amended

Statement of Candidacy be filed on FEC Form 2 or by letter

designating the aLove mentioned account as a campaign depository~

Subsequent to the close of fieldwork, the Con~,ittee

st,Ltmittec1 an amendment to the original Statement of Organization

designating the ,above mentioned account as a campaign depository.

'Recommendation

We recommend no further action with respect to this matter.

B. Retention of Receipted Bills

Section l02.9(c) of Title 11, Code of Federal

Regulations states it sh311 be the duty of a can~idate (not

having received. a waiver under Section 101.3) to obtain and

kl'CP a receipted bill for every e:-:lJendi ture ,made b J' or on

1>,-'h~llf of the candidate in e;·:cess of $100, or if in a lesser

al::ount, if the aggregate amount. of expenditures during a

cdlendar year to the sar:\':~ person exceeds $100. rl'!1t-~ receiDted

bill shall contain the iL1enti=ication of the persoll to whom

the e:·:pendi t.ure is made; the date, amount, an": particulars

of the expenditure. When a receipted bill is not available,

tile cancelled check showina navment(s) of the bill and the

bill, invoice or other conte~p;raneous memorandum of the

transaction con t..:lining thl! saF..c information as mL'n tioned

above may be kept •
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During the period April 30, 1976 through September

1, 197(" the Candidate's reports contained 18 itemized

expenditures totaling $11,332.93. At the time of the audit,

six (6) expenditures totaling $7,674.97 (68% of the total

dollar value of itemized expenditures) lacked any supporting

documcntatiol1. The remaini.ng 12 expenditures totaling

$3,658.00 were supported by cancelled check only. We

rl~commcnded that the Candidate obtain and submit copies of

~;:.:~ si:.: (6) cancelled checks not ava~.lable in addition to

.:.'\ ': JurLing documentation (i. e., bills, invoices, or contemf:;t"~::euus memoranda) for the entire 18 expenditures or present

evidence of an effort to do so. .

S~bsequent to the close of fieldwork, the Candidate

sub::li tted copies of the requirf'd supporting documentaton ~or

15 expenditures totaling $10,832.93. Although, three (3)

expenditures totaling $500.00 remain insufficiently documented,

the Candi~ate has submitted evidence of his best efforts in the

for~ of certified letters to vendors requesting the required

docu~cntation to support expenditures made to them.

Recor.'.::1cndiltion

\';0 recommend no·- fUl-ther action with respect to this matter.
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FEDERAL. ElECTION CO,\\,\\ISSION

H2", 110:11 I '" \\'.

\\·' ....HI ,C.J()'.IH· 2114hl

ADDmONAL INroRMATION REGARDING 'IRIS ORGANIZATION

MAY BE IDCATED IN A OOMPLETED CD1PLIANCE ACIION

FILE RELF.ASED BY THE cnM[SSION AND MADE PUBLIC IN

'mE PUBLIC REOORDS OFFICE. IDR '!HIS PARTICULAR

ORGANIZATION'S OOMPLETED CD1PLIANCE ACIION FILE

SIMPLY ASK roR THE PRESS StM1ARY OF MUR 41 ~-s,

'mE PRESS stM1ARY WIlL PROVIDE A BRIEF HISTORY OF

'mE CASE AND A StM1ARY OF THE AmONS TAKEN, IF Mfi.

Audit 1fr 2/z..