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W-\SHI,,"CTO\:. D.C. 204&3

September 4, 1985

MEMORANDUM

TO:

FROM:

SUBJECT:

FRED EILAND

PRESS OFFICER f1?

ROBERT J. COSTA

ASSISTANT STAFF Dl CTOR

AUDIT DIVISION

PUBLIC ISSUANCE OF FINAL AUDIT REPORT - 1984 SAN

FRANCISCO DEMOCRATIC CONVENTION HOST COMMITTEE,

INC. -

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Attached please find a copy of the final audit report of the

1984 San Francisco Democratic Convention Host Committee, Inc.

which was approved by the Corr~ission on August 26, 1985.

Informational copies of the report have been received by all

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

Attachment as stated

cc: FEC Library

RAD

Public Record

Office of General Counsel
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FEDERAL ELECTION COMMISSION

Report of the Audit Division

on the

1984 San Francisco Democratic Convention

Bost Committee, Inc.

I. Background

A. Overview

This report is based on an audit of the 1984 San

.Francisco Democratic Convention Host Committee, Inc. ("the

Committee") to determine whether there has been compliance with

the provisions of the Federal Election 9ampaign Act of 1971, as

amended ("the Act"). The audit was conducted pursuant to 11

C.F.R. § 9008.9 which states, in relevant part, that the

Comm\ssion shall conduct an examination and audit of each host

committee.

The Committee registered with the Federal Election

Commission on October 24, 1983 as the host committee for the 1984

Democratic National Convention. The Comm~tee maintains its headq~arters in San Francisco, California.

The audit covered the period October 21, 1983 through

December 31, 1984. During this period, the Committee reported a

beginning cash balance of $-0-, total receipts of $2,513,177.83,

total disbursements of $2,407,009.23, and an ending cash balance

on December 31, 1984 of $106,168.60.

This report is based on documents and working papers

which support 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.

B. Key Personnel

The Treasurer for the period audited was Mr. William D.

Rol1nick.

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 obli9ations~ review of contribution and
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expenditure l~~itations: and such other procedures as deemed

necessary under the circumstances.

II. Finding and Recommendation Related to Title 2

Failure to Itemize In-Kind Contribution

Section 437 of Title 2 of the United States Code

states, in relevant part, that each committee which represents a

national party in making arrangements for the convention of such

party shall file with the Commission a full and complete

financial statement, in such form and detail as it may prescribe, of the sources from which it derived its funds and the purpose

for which such funds were expended. Further, 11 C.F.R. S

9008.l2(a) provides that a host committee file post-convention or

quarterly reports on Commission FEC Form 4, to include disclosure

of all receipts and disbursements, including in-kind

contributions made with respect to a presidential nominating convention.

The Audit staff's review of the Committee's disclosure

reports and records indicated that an in-kind contribution from

the Pioneer Take Out Corp., consisting of take out meals valued

at $14,875, was not itemized as a receipt or as an expenditure •

In the interim audit report, th~ Audit staff

recommended that the Committee file an amendment disclosing this

in-kind contribution. On July 8, 1985, the recommended amendment

was filed.

Recommendation

The Audit staff recommends no further action on this matter.

« III. Finding and Recommendation Related to Title 26

Possible Prohibited Contributions

Section 9008.7(d) (2) of Title 11, Code of Federal

Regulations, states, in relevant part, that local businesses may donate funds or make in-kind contributions to a host committee

for the purpose of promoting the convention city and its

commerce. Further, it states that any business entity within the

Metropolitan Statistical Area ("MSAIt ) shall be considered local

and any business entity located outside the MSA is not local,

absent a showing that the volume of business in an area lying outside the MSA would be directly affected by the presence of the

conv:ntion •

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Dur:ng the course of the audit, the Audit staff noted

two (2) contributions, totaling $4000 from businesses apparently located outside of the MSA.

Committee representatives indicated receipts were

closely monitored for the MSA requirement and that these items

would be researched.

In the interim audit report, the Audit staff

recommended that the Committee either provide documentation

detailing why these items should not be refunded or refund these

contributions and provide evidence of such refund to the Audit

staff. On July 8, 1985, the Committee provided the Audit staff

with copies of letters from the two companies in question. These

companies' representatives assert that they provided their goods

and or services to the Committee in an effort to increase their

companies' exposure and to generate additional business as a

result of their participation.

Recommendation

The Audit staff recommends no further action on this matter •