MH002776

FEDERAL ElfCTION COMMISSION

Ma r c h 31, 1992

MEMORANDUM

TO:

FROM:

SUBJECT:

FRED EILAND

CHIEF, PRESS OFFICE

ASSISTANT

ROBERT J. COSTA

STAFF DIR~~ ~­ AUDIT DIVISION

PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT

ON ENRON POLITICAL ACTION COMMITTEE

Attached please find a copy of the Final Audit Report onEnron Political Action Committee, which was approved by the

Coaaiesion on March 18, 1992.

-- ---In-formational- copies--of- the--re-po-rt----nave----been----r-e-e-e-i-ve-d--by--all

parties involved and the report may be released to the public.

Attachaent as stated

cc: Office of General Counsel

Office of Public Disclosure~~

Reports Analysis Division

FEe Library
FEDERAL ELECTION COMMISSION

\YASHINCTON. 0 C %0-&6)

FINAL •••oaT or THE AUDr~ CIV!~10N

ON

KRaOH POLITICAL ACTION COKMITTEE

""00691

A91-3S

r·

I. Background

A. OVervi."

Tbia report is baled on an audit of Enron Political

Action co~tt••, (-the CO..1tt••"1, undertaken by the Au~t

Division of-the F.deral Election CO..1 ••ion in accordanc.with the

prov1aloa. of the rederal Election Caapai'ft Act of 1971, .a

-.ended (-the AC~·). The audit v•• conducted pu~su.ftt to Section

438(b) o!~Tltl. 2 of the UDi~.d Stat•• Code vbich Itat••, 1n part, dwlt---tb..--~Q_i••ioa--aay--cODd.ct. -auclita -.Dct--ful1t---1lI.,..t.1;CJ.~ion. of

aay political ca..it~. required to f11•• repoct UDder S.otion

43. of-tbia title. .rtoc to coaductiA, aDy audit UDder tbi• ••C~10D, tbe C~••iOlt alaaU pecton. all lat.ellal r••t.,,·o!= c.poc~.-fl1ed by ••lected co..&, to d.t.~D. if the-reports filed by a pactlcalac co..&t~ t the the••bold requl~...ntl

for aubacaDtl&l ca.pl1aace with tbe Act.

~. C~c~•• r.,l.~.c.d vi~ the red.cal 11ea~loft

C~••10D oD-October 20, 1". uadec tbe n... Hoc~.rn .oll~ical

Action C~~•• (IOaIAC) aad v•• oci,iaal1y be"qa.rtece. 1n

OIIaba, Nebc••ka. fte C~t,•• < ru•• aD· ..lid•• State.at-'af

Oc,ant••tloR OD J....rr 11, 1"7, C....tD9 1~..... to aaCOD

'o11tical.AetloD C~t~•••!1 Ita h.adquart.r. ia in Boa.~aft, T..... .

fte audit coy.ced the p.riod fro. Jaauary 1, 19.9 to.. D.ceaber

31. litO. fte c~tt•• reported a.c••h balance on January 1, lie, ot=S32C.SJ, total reo.ipt. of $335,791.37, total

di.bur.....t. of $331,2.'.00, and. c••b balance on Dece.a.r 31,

1190 of-<S125.1Q).!1

y

'rior·t~ the ...a~ftt, the Co~tt••'1 n... va. chaa,ed frc. Nortb.~ft 'olltic.l-A~ion Co-.1tte. to InterHorth Political AC~ioD C~tte. to.BRO/InterHarth 'AC.

Tb.·C~tte.'. reported cash balanc•• were uDderstated. Se.

riDella, II. A.-
,-

2

This report is baa.d on documents and workpap.rq suppartinq each of its factual state••nta. Tn. documents ~ni

workpap.rl form part of the record upon which the C"aail', '.;. h~~..ri

\t1 ~.ci.ion. on the matters in this report, and were ava~~.O!. to

co.-i••ion.rs and appropriate staff for review.

B. Key Per.s~nnal

Durinq the period covered by the audit, the tr•••urer of

the Co..itt•• wa. Robbie Leaver.

c. Scope

The audit included such telts as verification of total

reported receipts and disbursements and individual transactionl'

review of required supportlnq documentation: analys18 of

CO.-ltt•• debts and obliqatl0nl: and such other audit procedures

a. d••••4 necessary under the c~reums~ances.

II. Audit FindinQI and Recommendations

A. Mis.tat••ent of rinancial Activity

Sections 434(b){1), (2) and (4) of Title 2 of the United

Sute. Code state, ift -part, that ••cn- report aball d1Icl-oa-.th.

a.ount of ca.h en hand at the beg1nnin9 of .ach reportin9 period, tb. to~al a-aunt of all receipts, and the total aaaunt of'all

di.bur••••nt. for the reporting period and calendar year.

The Audit staff r.conciled the Caaaitt••'. reported activity to ita bank activity far the period January 1, lie, to

Dece.a.r 31, 1990. Tbe reconciliation rev••led that the reported

ca.b balance. were under.tatea. AD understate••nt of $12,981.86

exi.ted at the be,lnnin9 of the audit p.riod (January 1, 1,.,), aDd v•• cacried forward throu'ft to the r.ported c••h on haad at

Dec.aber 31, 1990.

In addition, reported di.bur••••at. for the cal.ndar

year 1990 were underatated by a n.t aaaunt of $6,057.97. The UDd.r.~ate••nt v•• a re.ult oLtb. Co~tt•• fal11n9 to r.port dl.buc....nt. totallnq $1,257.97, report1n9 dl.bur••••nt. to~allD9 $200, lub.equently void.d without makin9 an adju.taent to

tbe repocta, and adju.t1nq the 1990 reports far voided 19'7~1989

dl.bur....nt. tatalinq $5,000. Th••• di.bur••••ntl can.iatla of

out.tanding chicks written in 1987 (S300), 19•• ($2,800), and 1989

($1,900) whicb were voided by the Co..itt•• in calendar year 1990.

In.te.d of a.endinq ita 1987, 19a8, and 1989 reportl, the· Co~tt•• erroneously reduced the .aount of reported 1990

di.bur••••nt. by $5,000.

With r••plct to the uDdlr.tate.ent of.ca'h on hand, the

tr•••urer explain.d that the under.tat••eat in.be,inninq ca.h on

huel ($12,"1.86) wa. due to. check., i ••u.d by· the Coll&1tt••·..that
3

were lo.~, returned, or never caabed and not adjusted on tbe Co~t~••'. reports. She addwd that th••• error. aay be an

accu.ulatlon c~ errors dat1n9 a. far b~ck .a 1980.!1

The l'~etic audit report reec...nded the Co..itt•••••nd

it. next report to correct the .1.1~.te••nt in the calh on hanG

balance.

In re.pe~~e ~~ the interlm audit report, the COa.1ttee

filed an a••nded diaclosure report for the period January 1 to

January 31, 1991 in which the mla.tat•••nt in the beqlnnln9 ca.h

on hand wa. materially corrected.

aeco...ndat1on 11

The Audit staff recommends no further actio~on this matter.

B. Disclosure of Recelcts

S.c~ion 434(b)(3)(A) of ~ltl. 2 of the United Sta~•• Code stat••, in part, that each report under this lect1Qn_~bould

di8Clo•• the id.ntification of .~cb person who contribut•• an

.-aunt ift exc••• of $200 or an a99re,ated a.eunt in exc••• of $200 vi~ln the calendar y.ar, te!_ther with the date and a-aUDt of aDy '.CD cODtributioD.

In addition, Section 104.3(&)(4) of Titl. 11 of-the Code

ol.red.cal a_VU1.tiona r.qai~e. that tn. i4.ft~tflc.tloft aDd the .99~.9a~e yeac-to-date total for e.ch contributor b. repoctea.

OUr revie. r••••l.d tbat C~tt.. reports cOD~aiDed

, ••tele. for contributions required to be It.~••Q Oft Sca.dal. AI

h.....r, a ..~.rial nuaber of·.rrora vere nOCed 1n the repocted ."c8.ate y••c-tQ~.t••.aunts.

The ..jorlty of the CQ~t~••'. cODtributlon. veee

receiv.d via payroll deductloD. "cb pay peciod, a c08PQtert.ed

lilt detaillD9 ••ch ••,10".'. cODtrlbutioft vas forwarded.to the

tr•••ucec. The tr•••uc.r iadleated that the .99~.9.t. y••~-to~.tl

a..aata v.~. calculated aaDually liDce the coaput.riaed liat did

not caB~1n any .9'~.9.te &aOUDta.

At:tb. exit coaf.renc., tbe tr•••ucer atated tha~ in

calculatlD9 the a'9re,.te ye.r-to-datl ••oUA~a, abe attributed the

error. to her .aDual Iy.te. of preparin, the reports.

Glven that tbe required contribution. vere it.at••d,

albeit 1n-.cae instanc•• with an incorrect .'9r.,ate y••r-to-date

1/ Tb. Audit Ita!f w•• unable to verify the tr.a.urlr'l- .~t...Dt linee tbe'activity occurr.d.out.ida of tbe·audit

p.riod.and th.·rlco~d. vere unaYailable for:our re.tlv.
total, the Au41t .~aff do•• notf••l th.~ an ...adiD9 aalioft is

.acraD&ed in thla c.... Howe¥.r. the C~tt•• Ibould revi•• its p~oc.duc.. in tbia are. to in.ure ,proper dlacloaure on future c.pol:~••

The int.ria audit report reco...nded that the Coaaitt•• either d••i ••••yat•• to calculate correctly the a99te,ate

year-to-date cOQtribution &.oun~s, or introduc. ad.~.~. internal cOD~rQl. to ita pr•••nt procedure to ~. r24'

J""' p.:oper diacloa"ce in

the future •

• eca...ndatlon 12

The Audit staff reeo...nda no further actlen on thia matter.