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• FEDERAL ELECTION COI\1,\·llSS10N

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REPORT OF THE AUDIT DIVISION

ON

RUPPE FOR CONGRESS CO~~ITTEE

I. Backqround

A. Overview

This report is based on the audit of the Ruppe for

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

Division of the Federal Election Commission in 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 ("the Act"). The audit was

conducted pursuant to Section 438(a) (8) of Title 2 of the

United States Code which directs the Commission to make from

time to time audits and field investigations with respect to

reportS and statements filed under the provisions of the Act.

T~e Committee oriqi~ally registered with the Clerk

of the United States House of Representatives on April 17, 1972,

as a political committee supporting the Honorable Philip E. Ruppe,

candidaf·e from the 11th Congressional District of ~1ichigan. On

March 16, 1976, the Candidate designated the Ruppe for Congress

Co~~ittee as his principal campaign committee. The Committee

maintains its headquarters in Lake Linden, Michigan.

The audit covered the period January 1, 1975, the

effecti7e date of the Act as amended, through June 30, 1977, the

final coverage date of the latest report filed by the Committee

at the time of the aUdit. During that period the Committee

reported beginning cash-an-hand of $721.38, total receipts of

$169,930.10, total e:<penditures of $168,505.94, and ending cashon-hand of $2,145.54.

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 decision

on the matters in the report and were available to Commissioners

and appropriate staff for review.
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B. Key Personnel

The principal officers of the Committee during the

audit ?eriod were Thoma-s F. Hruby, Chairman, and Chester J.

Hhcault, Treasurer.

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c. Scope

The audit included such tests as verification of

reported receipts and expenditures and individual transactions:

review of requ~red supporting documentation and an31ysis of

Commit~ee debts and obligations: and such other audit procedures

as dce~ed necessary under the circumstances.

II. Auditor's Statement and Description of Findinas

I:. is the opinion of the Autlit staf:, based upon e:-:aminatio:l

of the reports and statements filed and che records presented,

that, except for the deficiencies noted below, the reports and

state~ents of the Ruppe for Congress Committee fairly present the

financi31 activities of the Committee for the period covered by

the aucit. Further, except as noted below, no material proble~s

in ccmpl¥ing with the Federal Election Campaign Act were dis- • covered during the course of the audit.

A. APP3;c~t Cor~or~tc Cont~ibutions

Section 441b(a) of Title 2, United States Code, states,

in pa~~, that it is unlawful for anv corooration to make a

cont~i~~tion or expenditure in connection with anv election to

any political office and unlawful tor any candidate, politic~l

cOIT~it~ee, or other person to knowingly accept or receive any cont~i~ution f~om a corpocation.

A review of the Con~ittce's contribution records

revealed that 13 contributions, totaling $800.00, were received

from 12 apparent corporate entities. The Committee was infor~cd

on Se?~~nber 27, 1977, by the Audit staff of the apparent corporate

status of the contributors and ag~eed to refund any contributi~ns

from corporat~ ~ntity.

The ~at~cr was referred to the Commission's Office of

General Couns0l on ~ovember 2, 1977, where Matter Under Review

475(77) was initiated. The review conducted by the Office of

General Counsel indicated the following:

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1) The Committee refunded eight (8) corporate

contributions totaling $575.00; . 2} The Committee returned the contribution check of

one (1) corporation in the amount of $25.00:

3) The Committee attempted to refund one (1) corporate

contribution totaling $50.00; however, the Committee's refund

check was ne~:er cashed and further attempts at contacting the

corpor3tion have noe been successful;

4) The Committee refunded one (1) apparent corporate

contribution totaling $25.00, which later was found not to be

incorporated; and

5) The Committee did not refund the remaining two (2)

corpora~c co~tributions, although these were drawn on an account

of an incorporat~d entity. No further action by the Committee

was dec~ed necessary, since the drawing account of the executive

of the cor~oration ~o which the expense was charged was reimbursed

bv him for t:1e amount of the contributions ($125.00) 1/• . -

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RECAP:

TOTAL

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(1)

(2)

(3 )

(4)

(5 )

$ Value

$5i5.00

25.00

50.00

25.00

125.00

$800.00

# of Contributions

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1

2

13

Eas~d on t~~se f3Cts and the Committee's prompt action

in refundi~g the mo~ics, the Commission voted on May 18, 1978, to

close ~he macte~ ~it~ ~o further acticn.

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1/ In addi~ion to t~c contribution from a drawing account

noced above in item (5), included in item (1) are two (2)

contributions ($100.00 each) from drawing accounts which

where later reimbursed, but were also refunded by the

Committee.
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B. Incominq Transfers

Section 434(b) (4) of Titl0 2, united States Code,

requires that a reporting conunittCt~ disclose the name and

address of all political com~Llittce:.; from which transfers

are received, together with the amounts and dates of all

transfers.

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Our e:-:.::lmination of Comnlittee receipt records rC''lcaled

46 transf~rs-in from oolitical committees (28.22~ of all transrersin) \alhiCh ~oJere not it~mized on Committee reports. The unitemizcd

transfers total $7,350.00 or 9.34~ of the dollar value of transfers

received. Fort a/ (40) of the uni temized transfers-in a.oJcr'~ in amoun t~

of $100.00 or l;_'ss. In addi tion, all i ternized trans fcr~; \aJcre list., I,.'

on line 15a rathc~r than line lab of FEC Form 3. Th·2 ~r'':--l:''iurcr std"

that he h.::ld been of the ooinion that the Committee was required tq

itemize only tho5(~ transfers aggreqating in e:-:cess of $100.00. H,'

attributed the other problems to clerical error.

We reconuncnded that the Committee file comprehe:1sive ~cnded renorts to in(; luJe the addi tions and corrections :ncn tioI~e( 1

above. On-February 2~, 1973, the COIThllisr;ion recei-::cd the Commi ttec I s co:npr'2hcns i.·Je .m:c!ndcd reports, as requested. •

Reco~J:1en·ja t ion

Si:iCC the Comrni t:.":'"\ !1c::lS filed the amended report:s, as

requested, no .J.dditioildL action is recommended.

c. Itc~i2~tion 01- Individual and In-Kind Cont=ib~tions

Section ~34(b) (2) of Title 2, united States Cede,

requires that a comr:littet~ disclose the full na~c, mailing

address, occ~p3tion and pr.incipal place of busi~ess of c.J.ch

person whose contribution3 aggregate in excess of $100.00 within

a calendar year, tog~thcr with the amount and date of the

contributions.

Our examination of the Committee's receipt r~cords

revc.J.lcd that 17 ccn~ributions rcqu~rina itemization (2~.29~

of all cont.rib'..ltions requirinq it~mization) fr~m Ii contributors

Jid not ~pp~ar on Ccrr~littee reports. These con~ributions tot~l

$3,162.50 or l6.01~ of t~e dollar v3lue of all contributions

requiring icc:i1:'::ation. In addition, one (1) in-kind contribution

of $25'+.75 was not reoorteri as :-euuir-ed. The Comni ttee '!'re~~\l!·cr

concluded t~a~ th~se i~0~S ~erc i~adve~te~tly cmi~ted•

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We recommended that the Committee file comprehensive

amended reports to include th0ne items. On February 22, 1978,

the Commission receivefl the Conunittce's comprehensive amended

reports, as requested.

Recommendation

Since the Committee has filed the amended reports, as

requested, no additional action is recommended.

D. Itemization of Expenditures

Section 434(b) (9) of Title 2, United states Code,

requires that a committee disclose the identity of each person

to whom expenditures have been made which aggregate in excess

of $100.00 within a calendar year, together with the amount,

d~tc, and purpose of each expenditure.

Our examination of Committee expenditure records

revealed that 37 of 318 expenditures aggregating in excess

of S100.00 (11.64~ of the total itemizable expenditures), were

not itemized as required. These expenditures total $2,060.11

or 1.271 of the tot31 dollar value of the funds requiring

itQmizution.

We rccomm~ndcd th.:lt the Committee file a comprehensive

UlnenC1ea repor~ t.o inc 1ude thL~ required i temizations • On February

22, 1978, t~e Conunission rec~_:ived the COlTh~ittee's co:nprehcnsive

a.I:1(~!lli~d rc~ort, as requcsted.

Rccommend.:l tion

Si~cc the Committ~e has filed the amended report, no

additional action is recommended.

E. Other Matters

1. The Committee reported a transfer-in of

$1,000.00 from the National Education Association Political

Action CO::l.1littee on OCt~bl\r 5, 1976. Due to pending FEC

matters regarding NEAPAC, the Ruppe for Congress Conunittee

plJccd the iunus in d separat~ escrow account, reporting an

expenditure for that purpose on November 19, 1976, thereby

reducing the reported c.:lsh-on-~:and. ..
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The Committee was advised that it should include

these funds as cash-on--hand in its next report, toqether with

tln c:-:p lanel Lory note.

2. Ten itemized contributions lacked adequate

principal place of business on reports. Due to the relatively

small number of items, no amending action was requested. However, tht~ Conunittee was advised of the necessity for detailed

contributor information.

3. In at least 11 cases, the Committee did not

deposit all contributions from fundraising events within 10

days of receipt of funds as required by Section l03.3(d) of Titl~ 11, Co~e of Federal Reaulations. The Committee was

advised to promptly deposit future receipts.

4_ During 1975, the Committee reported fundraisers

on the appropriate schedules of the reporting forms. However, ... due to a change in Committee personnel in 1976, the fundraising '--------=----------:e=-=v~e=-=-n-=t--=s~w-=e;;-:r=-e=--~n-----:-o E Ii s-t-ed-on-g-c-he-du-l-e-B-e-£--F-EG-F-0~m---J-,-as-req_u_ir_e_d _

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The Treasurer agreed to submit comprehensive

amended reports to include the receipts from the fundr.:lising • even~s on appropriate schedules. On February 22, 1978, the Co~nittee submit~cd a comprehensive amended report properly

showing the receipts from fundraising events.

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Candidat=/Cc~it~ee:

CCNGRESSrCNAL AUOIT ~~?ORT

Philip E. Ruppe - 6/13/78

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State:

Ois:r-ic::

Locat~cn:

Michigan

11

Upper Peninsula

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:~1'"-1'C~41 '''; "- ... Io~~~1 _.... n6'~~~'~a-~cn· •• a. _. • Republican

i---===_----:~--=a~j ---=-c~r_O_=___~~p_C=__r.~.e=-.:...n.:...-t~{c......=s~)_:_---E ran.e-i-s-B-f-Qui--l-l-e-t-te-( 8)L-----------

'. Francis Brouilette (D) - 5/24/78

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'Iotas C~s~: G~~~r-a1 -- " :.::c:,cn - RUODe (R) 118.871 54. 8~~

Brouiiette ( D) 97,325 44.3'J

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:..t~C:1:n - ~1a 1col m t4. Dale (R) 7,863

Ruppe (R) 36,409

Totai ~ecai~ts far ?e~icd: $169,505.94 $169,930.10

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- ." :..'<;:JEnc1::Jr;s for 1966 $168,505.94

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1966

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FEDERAL ELECTION CO~11\-1ISSI0N

1\.!~ 1\ IKH I ". \ \

\\:·,..,til".C TO". l) \. ':()~b \

ADDrrIONAL mFORMATION REGARDING 'lHIS ORGANIZATION

MAY BE 1DCATED IN A OOMPLETED <DMPLIANCE ACI'ION

FILE RELEASED BY THE aJM.1ISSION AND MADE PUBLIC m

'!HE PUBLIC REOORDS OFFICE. FOR 'llIIS PARTICUlAR

ORGANIZATION'S <XH'LETED (D1pLIANCE ACI'ION FILE

SlMPLY FUR '!HE PRESS St!+fARY OF MlJR 41 ?5" .

'!BE PRESS StM1ARY WIlL PROVIDE A BRIEF HISTORY OF

'!'HE CASE AND A StM1ARY OF mE ACl'IONS TAKEN, D" Mfi•

Audit :b 95
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