MLP000753

FEDERAL ELECTION COMMISSION

WASHINCTON. 0 C 20463

July 17, 1991

MEMORANDUM

TO:

FROM:

SUBJECT:

FRED EILAND

CHIEF, PRESS OFFICE

ROBERT J. COSTA

ASSISTANT STAFF DIREC

AUDIT DIVISION

PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT ON

ANNA ESHOO FOR CONGRESS

Attached please find a copy of the Final Audit Report on

Anna Eshoo for Congress which was approved by the Coamission on

July 10, 1991.

Informational copies of the report have been received by all parties involved and the report may be released to the

public.

Attachaent as stated

cc: pffice of General Counsel

v'Office of Public Disclosure

Reports Analysis Division

FEe Library
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FEDERAL ELECTION COMMISSION

REPORT OF THE AUDIT DIVISION

ON

ANNA ESHOO FOR CONGRESS

Background

A. Overview

14LP000137

A89-11

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This report is based on an audit of Anna Eshoo for

Congress Committee ("the Committee"), undertaken by the Audit

Division of the Federal Election Commission in accordance with the

provisions of the Federal Election Campaign Act of 1971, as

amended ("the Act"). The audit was conducted pursuant to 2 u.s.c.

§438(b) 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 of this title. Prior

to conducting any audit under this section, the Commission shall

perform an internal review of reports filed by selected committees

to determine if the reports filed by a particular coaaittee meet

the th['e_shoJd _re-quirements---f-or-subs-tantial-- -compl1ance---witn -th-e--- -----Act ..

The Coaaittee registered with the Clerk of the Bouse of

Representatives on January 4, 1988 and maintained its headquarters

in Atherton, California from inception to October 18, 1988. The

Committee currently maintains its headquarters in Sacra.enta,

California. The audit covered the period fro. Deceaber 10, 1987,

the inception date of the bank activity, through Deceaber 31,

1988, the closing date for the latest report filed at the time of

the ~~dit. The Committee reported a cash balance on January 1,

1987 of $-0-; total receipts of $1,092,768.67; total disbursements

of $1,089,572.79; and a cash balance on December 31, 1988 of

$3,207 .. 86~~/

This audit report is based on documents and workpapers

which support each of its factual statements a They form part of

the record upon which the Commission based its decisions on the

matters in the report and were available to the Commissioners and

appropriate staff for review.

~/ The totals do not foot due to a discrepancy in the reported

cash balances.
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B. Key Personnel

The Treasurer of the Committee from inception to October

18, 1988 was Joseph E. Bergeron. The current Treasurer is

Lance H. Olson.

c. Scope

The audit included such tests as verification of total

reported receipts and disbursements and individual transactions;

review of required supporting documentation; analysis of Committee

debts and obligations; and such other audit procedures as deemed

necessary under the circumstances.

II. Audit Findings and Recommendations

A. Excessive Contributions from Individuals

section 441a(a)(1)(A} of Title 2 of the United States

Code states, in part, 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

$1,000. An election is defined at 2 u.s.c. 5431(1)(a) to include

general and primary elections.

The regulations at 11 C.F.R. S110.1(b)(2) state, in

relevant part, that "wi th respect to any election" 1Re~!,!I:j__; ~J) th_~ _ ---cas-e-of-- a-----contr ibution designated -in--wt'i~fn9-for a -pa-rticular·

election, the election so designated; in the case of a contribution not designated in writing, for a primary election if made

on or before the date of the primary, and for a general election

if made after the date of the primary.

Section 110.1(k) of Title 11 of the Code of Federal

Regulations states, in part, that any contribution made by aore

than one person, except for a contribution made by a partnersbip,

shall include the signature of each contributor on the check,

money order, or other negotiable instrument or in a separate

writing_ A contribution made by more than one person that does

not indicate the amount to be attributed to each contributcr shall

be attributed equally to each contributor. If a contribution to a

candidate on its face or when aggregated with other contributions

from the same contributor exceeds the limitations on contributions,

the Treasurer 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 if the treasurer of the recipient political. committee

asks the contributor whether the contribution is intended to be a

joint contribution by more than one person, and informs the

contributor that he or she may request the return of the excessive

portion of the contribution if it is not intended to be a joint

contribution; and within sixty days from the date of the

treasurer's receipt of the contribution, the contributors provide

the treasurer with a written reattribution of the contribution,
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which is signed by each contributor, and which indicates the

amount to be attributed to each contributor if equal attribution

is not intended.

In addition, 11 C.F.R. § 110.1(1) requires the treasurer

to retain written redesignations or reattributions of a contribution signed by each contributor*

Section l03.3(b)(3} of Title 11 of the Code of Federal

Regulations states, in part, that contributions which exceed the

contribution limitation may be deposited into a campaign

depository. If any such contributions are deposited, the

treasurer may request redesignation or reattribution of the

contribution by the contributor in accordance with 11 C.F.R. §

110.1(b), 110.1(k) or 110.2(b), as appropriate. If a redesignation or reattribution is not obtained, the treasurer shall,

within 60 days of the treasurer's receipt of the contribution,

refund the contribution to the contributor.

The Audit staff reviewec contributions from individuals

and determined that the Committee had accepted seven contributions,

which were in excess of the 2 U.S.C. § 441a(a)(1)(A) limit by

$6#800. The Committee designated four of these excessive

portions, totalling $3,300, to the primary election without

written redesignation from the contributor. These contributions

were received after the date of the primary election. The

Committee attributed a $500 excessive portion of a $1#500 --- - -contributionfroa a non"';'incorporated eritity to a person who did

not sign the instrument or other attribution documentation. The

Committee also designated to the general election a $2,000

contribution made before the primary, and attributed $1,000 of

this amount to the spouse without election designation or

attribution documentation, resulting in a $2,000 excessive

portion. Finally, the Committee failed to refund the $1,000

excessive portion of a contribution from one contributor.

The Treasurer of the Committee was provided a schedule

of the excessive contributions. At the exit conference the

Treasurer acknowledged that the documentation available for the

redesignationjreattribution of the above contributions was not

adequate.

In the interim audit report the Audit staff recommended

that the Committee either demonstrate that the apparent excessive

contributions were not excessive or refund the excessive portions

and provide evidence of the refunds. If funds were not available

to make such refunds, the Audit staff recommended that the

Committee disclose the excessive contributions as debts owed by

the Committee.

In its response to the interim audit report, the

Committee states that funds were not available to make these

refunds. They attached an amended Schedule 0 (Debts and Obligations) to their 1990 Year End Report to disclose these refunds as
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debts. The Committee further stated that they will continue to

report the excessive portions as debts until the matter ia resolved.

The committee further notes that they are planning to send

letters to the contributors who made these excessive contributions

requesting redeslgnations or reattributions of the excessive

portions. They stated that as an alternative to the refunds, they

would furnish the signed letters to the Commission.

The Audit staff notes that based on the Committee's

amended Schedule D, they have complied with the interim audit report

recommendation. The Audit staff further notes that if the Committee

were to submit these letters, they would be able to eliminate the

debts they have disclosed in recognition of these outstanding

refunds. Once these debts are eliminated, as well as all other

outstanding debts, the Committee would then be able to terminate.

Recommendation 11

The Audit staff recommends no further action.

B. Earmarked Contributions not Disclosed as Earmarked

Section 441a{a)(8} of Title 2 of the United States Code,

and 11 C.F.R. S 110.6 state, in part, that contributions which are

in any way earmarked or otherwise directed to the candidate

through an intermediary or condui t are contributions- from the-- -- pe-rs-on -to the candldate.. 11 c. F. R. S 110.6 (c) ( 3) states that the

intended recipient shall disclose on his next report each conduit

through which the contribution passed.

The Audit staff reviewed contributor documentation and

determined that EMILY's List and The Peace Political Action

Committee ("Peace PAC"), both registered committees, disclosed

and/or transmitted contributions totalling $61,128 and $13,194

respectively, as earmarked to the Committee during the period July

1, 1988 through December 31, 1988. The Audit staff examined

documentation within the Committee files that materially verified

the receipt and earmarked nature of these contributions. The

Audit staff noted that the source of some earmarked contributions

were identified within the Committee data base as "EML" or "PCP".

The Committee only r~ported the earmarked nature of seven

contributions, totalling $635, from EMILY's List and failed to

disclose the earmarked nature of any contributions from the Peace

PAC for the period July 1, 1988 through December 31, 1988. Thus,

the Committee failed to disclose the earmarked nature of

contributions totalling $73,687 ($61,128 - $635 + $13,194).

During the exit conference, the Treasurer indicated that

the Committee would be willing to disclose the earmarked nature of

these contributions and the conduits' identification through a

comprehensive amendment.
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In the interi. audit report the Audit staff recommended

that the Committee file amended reports and disclose on Schedule A

the contributor/conduit information for the earaarked contributions.

The Coaaittee filed amended Schedule A's which disclosed

the source and earmarked nature of the contributions received

through EMILY's List and Peace PAC.

Recommendation 12

The Audit staff recommends no further action on this matter.