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REPORT OF THE AUDIT DIVISION

ON

THE CITIZENS COMMITTEE FOR THE

DEMOCRATIC NATIONAL CONVENTION, INC.

• I. 8ackground

This report covers the post-convention audit of the

Citizens Committee for the Democratic National Convention,

Inc., undertak~n by the Audit Division of the Federal

Election Commission to determine whether there has been

compliance with the provisions of the Federal Election

Campaign Act of 1971, as amended. The audit was conducted

pursuant to Section 438(a)(8) of Title 2, United States

Code, which directs the Commission to make from time to

time audits with respect to reports and statements filed

under the provisions of the Act.

The Citizens Committee for the Democratic National

Convention, Inc. filed for incorporation on December 15,

1975, for the purpose of planning, organizing and administering various welcoming activities for the delegates,

guests, and media representatives to the Democratic Nationale 0 nv en t·; 0 n he1din rJe\'1 Y0 r k Cityin J u1y, 1976 • The

Committee is a "host committee" as defined in Section 120.2

(h) of the Commission1s Rules and Regulations. The prin- cipal officers of the Committee were Mr. Preston R. Tisch,

President, and .~1r. Joseph Andre\'l Hays, Treasurer. The

Co mOl i t tee mai nt ains its he ad qua r t e rsat the L0 e\'ll sear poration offices, 666 5th Avenue, New York, New York.

The audit covered the period December 26, 1975 through December 31,1976. During that period, the Committee reported beginning cash of $-0-, receipts of $348,467.56,

expenditures of $343,609.70 and ending cash of $4,857.86.

This audit report is based on documents and working

papers supporting each of its factual statements. They form

part 0 f the t' C CO," d upo n \-1 hie h the Co IIIIII ission bas e d its dec is ion s (' nthe III a t t c rsin t his rep 0 r tand \"/ ere a vail ab1e to

Commissicners and c1ppropriute staff for revic\'l.

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• . Auditor's Stat~ment and Description of rind1ngs .. -- . It is the opinion of the Audit staff. based upon examinacion of the. reports and statements fi led and the records

presented, that, except for the dcficicnces noted below. the

rrports and statements of the Citizens Committee for the

ptmocratic National Convention, Inc. fairly present the

'inancial activities of the Committee for the period covered

by the audit. Further, except as noted below, no material

problems in complying with the Federal Election Campaign Act

were discovered during the course of the audit.

1 A. Reporting of Contributions-Tn-Kind

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Section 437 of Title 2, United States Code, requires the committee to file with the Commission a full and complete financial statement, in such form and detail as it may pre- scribe, of the sources from which it derived its funds, and

the purpose for which such funds were expended.

In three instances, the Committee's records showed

contributions-in-kind which were not disclosed in the report. These totaled $22,000.00 and in each case required itemization.

Of this amount, $21,300.00 was one invoice for public service

announcements provided by a public broadcasting T.V. station.

The error appeared to have been caused by an oversight.

We recommended on March 18, 1977, that the Committee

file amended August 31, 1976, and September 30, 1976, reports disclosing the omitted contributions-in-kind, together with an

adjusted Summary Sheet for the year-end report reflecting the

changes in the appropriate totals. On April 7. 1977, the

Commission received the Committee's amended reports including the contributions-in-kind.

B. Itemiiition of Exprnrlitures

As noted in Part A above, Section 437 of Title 2,

United States Code, requires the Committee to disclose the

purpose for which its funds were expended. In accordance

wi t h the '" cqui remen t s 0 f COinmission For'm 4, each person to

whom ex pen d i t ures hit Ve bee n III J de \., i t h; nthe cal end a ryear

in an aggregate amount in excess of $100.00 should be identifie d. tog e the r \"1 i t h the date sandam0 unt s 0 f s uchexpen di t ures •

Our review of expenditures disclosed one instance

where a series of checks, totJling $450.58 to the same

payee, \"le. re reported by the Comm; ttcc as uni temi zed

eXJlenditures.

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.'e rccomm~ndnd on Mil rch 18. 1977 t tha t the Comnlf t teo

I ,fd t h1s chan CJ (! to l h c ira 111('nd (' d 1\ uq us t J1. 1976, rep0 r t I r 0 -

,lassifyin 9 the total ~x~cnrliturcs from unitcmizcd to itemized,

and a15 o· amend t h y Cc1 r - end rep 0 r t s umm tl r y 5 hee t tore f 1ec t

these adjuslments. On April 7, 1977, the Commission received

the Committee's amended report reclassifying the expenditures in question as recommended.

c. Host Committee Contributions

Sections 121.7. 121.8 and 121.9 of the Commission's

Regulations (Proposed Regulations during the time the Committee

was in operation) set specific guidelines for host committees

in the areas of in-kind contributions as well as donations

from local businesses and labor organizations.

The contribution and expenditure reviews conducted

during the audit included tests to ensure compliance with

these provisions of the Regulations. No transfers were made to

the Democratic National Committee or the ONC Convention Committee by this Committee •

• , Our review disclosed that the activity of the Committee'

was in material compliance with the requirements of the Commission's Rulcs and Regulations.

Recommendation

It is the recommendation of the Audit staff that the Commission accept the findings mentioned above, with no additional

action. .

It is further recommended that the Committee be furnished

a copy of this report and that this report be made available to

the public after the Commission accepts the final reports of the

party convention..· committees.

III. Status of the Committee 11

At the time of the audit, the Committee had collected all

its t"cceivablcs and hud only minimal contingent liabilities

outstanding. The Committee anticipated a positive cash residue

of sevcral thousand dollars after all liabilities have been met.

Committee reprcsentatives expressed an interest in retaining the balance of monies for use by the Committee after it has

been restructured into a permuncnt citizens committee for the

promotion of convention and trade sho\'1 affairs for Nc\'1 York City.

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On Apt"i1 15, 1977, the Commission rec~ived the Committee's

t e t"min a t ion rep 0 r t s t.:l tin g t hat S3 , 11 0S. 76 \'1 as t I" J nsf err c d

to a ne\'1 account for the purposes stated in this section •

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