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FEDERAL El£CTION COM,\1ISSION

1~lS K Sl RLll N \\'

W,\~HING10~.[)C. 204bJ J U1y 12, 1917

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REPORT OF THE AUDIT DIVISION

ON THE

CHURCH FOR PRESIDENT COMMITTEE, INC.

I. Background

This report covers an audit of the Church for President

Committee, Inc., undertaken by the Audit Division, to determine

whether there has been compliance with the Federal Election

Campaign Act of 1971, as amended (lithe Act"). The audit was

conducted pursuant to Section 438(a)(8) of the Act, which

directs the Commission to give priority to auditing of the

verification for, and the receipt and use of, any payments received by a candidate under Chapters 95 or 96 of the Internal

Revenue Code of 1954, and by authority of Section 9038{a) which

directs the Commission after each matching payment period to

conduct a thorough examination and audit of the qualified campaign expenses of every candidate and his authorized committees that received payments under Section 9037.

The audit covered the period from December 12, 1975,

through June 7, 1977. During the period December 12, 1975,

through March 31, 1977, the Committee reported total receipts of $1,771,079.71 and total expenditures of $1,746,105.00 1/.

As of June 7, 1977, the Co~mittee had $7,641.87 in cash

on hand and $8,727.16 in remaining debt.

The principal officers of the Committee during the

period covered by the audit were Mr. Car1 l Burke, Chairman;

Mr. Henry Kirne1man, Finance Chairman; and Mr. William Landau,

Treasurer.

This audit report is based on documents and working

papers supporting each of its factual statements. They form

part of the record upon which the Commission based its

decisions on the matters in this report, and were available

to Commissioners and appropriate staff for review.

1/ Total reported receipts and expenditures figures are over-.

stated per the report due to arithmetical errcr~. After correctlng

the arithmetic, the correct receipts are $1,743.776.32 and the

expenditures are $1,732,095.05 •

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Findings and Conclusions

A. Disclosure of Contributor Informatlon

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Section,434(b)(2) of the Act requires that disclosure

reports contain the full name and mailing address (occupation and the principal place of business, if any) of each person who has contributed in excess of $100 to a committee within

a calendar year, together with the amount and date of such

contributions. Also Section 434(b) of the Act states the

committee treasurer shall be deemed to be in compliance when

they can show best efforts have been used to obtain the

information required by Section 434(b).

We reviewed the Committee's contribution records and

disclosure reports to determine whether the Committee had

properly disclosed the identity of individuals contributing in excess of $100.00. Our review showed that 49 of the 452

contributors (10.84%) tested were not properly disclosed.

The Committee filed an amendment to Schedule A on November

11, 1976, which listed 40 of the 49 contributors not previously itemized as contributing in excess of SlOO.OO.

Similarly, we reviewed the Committee records and reports

to determine whether it had obtained and reported the occupation and principal place of business of reported contributors. Of the 154 contributors tested, the occupation and

principal place of business was not disclosed for 44 (28.57%),

although the informiltion was available in the Committee records

for 19 of the contributors. Again, the Committee filed an

amendment to disclose the occupation and principal place of

business for 30 of the 44 contributors, and it has requested

such information from the reported contributors for which it

was lacking.

B. Contribution In Excess Of Limit

Section 441a{a)(1){A) of the Act states that no person shall make contributions to any candidate and his authorized

political committees in excess of $1,000 for any Federal

election .
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The review of the Committee's contributor records disclosed one individual who had contributed $1,110 to the

Comrni ltee, or $110 in excess of the $1,000 1imit. After we

informed the Committee of the excessive contribution, they statpd they would refund the excessive amount of the contribution. The Committee's records and the January 31 report ref1l'ct the return of $110 to the contributor on October

25, 1976.

c. Failure To Itemize Receipts~gregating In

Excess Of $100

Sections 434(b)(4) and (7) of the Act state all transfers

received from political committees and each rebate, refund

or other receipt in excess of $100.00 shall be itemized including the amounts and dates.

The review disclosed the Committee did not itemize rebates. refunds, or other receipts exceeding $100.00 or aggre- gating in excess of $100.00 during the period January 1976

through June 1976. The number of receipts and the associated

dollar amounts are categorized as follows:

At our request the Committee filed an amendment on October

13, 1976, itemizing the receipts noted above.

D. Failure to Report Fundraising Events

Section 434(b)(6) of the Act requires the Committee to

report the amount of proceeds from fundraising events.

Also, Section 434(b) of the Act states the committee treasurer

shall be deemed to be in compliance when he can show that

"best efforts" have been used to obtain and submit the information required by Section 434(b) .

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Cat e!l0 '~l No. 0 f Rece i pt s

Secret Service 9

Transfers from non-affiliated

political committees 4

Refunds, sale of assets and

press reimbursements 23

Amount

$26,212.92

4,794.62

14,393.01

$45:-400:-55
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Our review disclosed that the Committee held eight

fundraising events for which the proceeds were not itemized

separately by event. At our request the Committee filed an

amendment on November 1, 1976, disclosing the existence of

the events. However, the date of one fundraising event and

the amounts collected at three of the events were not separately

itemized although they were reported in the Committee's total

receipts and expenditures. A Committee representative stated

that they were unable to obtain the missing information after

the fact.

E. Failure to Itemize the Receipt of a Lo~n

Sections 434(b)(5) and (12) of the Act require each

loan aggregating in excess of $100 from any person to be

itemized with the full name and mailing address of the lender

along with the amount, date, and the Committee's reporting

of the amount and na~ure of debts owed by the Committee.

Our review disclosed a $15,000 loan received on June 5,

1976, from the Idaho for Church Committee; however, the loan

was not reported as a debt, nor itemized as a receipt by the

Church for President Committee. At our request, the loan was

itemized as a debt on the October 10, 1976 Report.

F• Re p_~~_~en t s

Part 134.3(c)(2) of the Commission's Regulations provides

that if on the last day of candidate eligibility there are

net outstanding campaign obligations, any matching payments

received may be retained for a period not exceeding six

months after the end of the matching payment period in order

to liquidate those obligations. Any amounts paid which are

not used to liquidate the net outsanding campaign obligations

within six months 5ha11 be repaid to the Treasury.

Section 9038(b)(2) of the Act provides that if the

Commission determines that any portion or amount of any

payment made to a candidate from the matching payment account

was used for any purpose other than:

(1) to defray the qualified campaign expenses with

respect to which such payment was made; or

(2) to repay loans, the proceeds of which were used or

otherwise to restore funds {other than contributions to

defray qualified campaign expenses which were received and

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expended) which were used, to defray qualified campaign

.expenses; shall notify the candidate of the amount so used.

and the candidate shall pay to the Secretary or his delegate

an amount equal to such amount.

The Commission preliminarily determined June 14, 1976.

to be the day on which Senator Church's candidacy terminated.

Senator Church was so informed by letter and did not object

to the preliminary determination, thereby making it conclusive.

He then became ineligible to receive matching payments other

than to defray qualified campaign expenses after that date.

On the date of Senator Church's ineligibility, (June 14, 1976),

his Committee had $203,540.00 in net outstanding campaign obligations.

The Committee still had net outstanding campaign ohligations in the amount of $19,527.65 on January 21, 1977,

thp date of the Committee's final submission for matching funds

and the Commission subsequently certified $17,921.50 for payment

to the Committee on March 8, 1977. Since the net outstanding

campaign obligations exceeded the amount of the matching funds

payments, no repayment is required under the provisions of

Part 134.3(c)(2), and our review disclosed no expenditures nor

debts owed which \6Jere other than "qualified campaign expenses".

G. Recommendation

Based on the number of instances of the Committee's

failure to satisfy the disclosure requirements of the

Act, the audit staff recommends the Commission determine that

the Committee's disclosure prior to our audit was not accept- able. However, subsequent Committee action in filing amended

reports has corrected the public record and, therefore, we

recommend that the Commission find that the Committee is now

in substantial compliance with the Act.

H. Auditor's Opinion

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Except for the matters specifically noted in this report, the audit disclosed that the Church for President Committee,

Inc., conducted their activities in accordance with the Federal

Election Campaign Act of 1971, as amended, and Chapter 96 of

Title 26, U.S.C., in all material aspects .
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