• FEDERAL ELECTION COMMISSION

WASHINGTON, 0 C 20463

February 1, 1982

'MEMORANDUM

TO:

FROM:

SUBJECT:

FRED EILAND

PRESS OFFICER..

BOB COSTA

PUBLIC ISSUANCE OF FINAL AUDIT REPORT - TENNESSEE CARTER/MONDALE VICTORY FUND

COMMITTEE

,....,

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

Tennessee Carter/Mondale Victory Fund Committee which was

approved by the Commission on January 7, 1982.

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

as of today, February 1, 1982.

Attachment as stated

cc: FEC Library

RAD

Public Record
FEDERAL ELECTION COMMISSION

WASHINCTON. DC. 20463

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REPORT or THE AUDIT DIVISION

ON THE

TENNESSEE CARTER/MONDALE VICTORY FUND COMMITTEE

I. Backsround

A. Overview

This report 1s based on an aud~t of the Tennessee

Carter/Mondale Victory Fund (lithe Committee"), to determine

whether there has been compliance with the provisions of the

Federal Election Campailn Act of 1971, as amended ("the Act").

The audit was conducted pursuant to Sect~oD 9007(a) of Title 26

of the United States Code which states that "after each

presidential election, the Commission shall conduct a thorough

examination and audit of the qualified campaign expenses of the

candidates of each political party for President and Vice

President."

.The Committee registered with the Federal Election

Commission on October 16, 1980. Also OD October 16, 1980, the

Committee was authorized by President Jimmy Carter to conduct

joint fundraising with the Tennessee Democratic State Party and

the Compliance Fund of the Carter/Mondale ie-election Committee,

Inc. The joint event held by the Committee was a fundraisiug

concert in Memphis, Tennessee, on October 9, 1980, preceded by

a cocktail reception and followed by a breakfast. No other

joint activity was conducted. The Committee maintains its

headquarters in Washington, D.C •

The audit covered the period from October 1, 1980

through May 27, 1981. The Committee reported an opening cash

balance of $-0-, total receipts of $41,018.00, total expenditures

of $41,624.50, and a closing cash balance of $-0- during the

period. 1/ . This report is based upon documents and working papers

supporting 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 Cocm1ssioners and appropriate

staff for review •

The Committee's reported activity did Dot balance due to

incorrect disclosure adjustments relating to returned

contributor ehecks, contribution refunds, and a.bank error.
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B. Key Personnel

The principal officers of the Committee du~inl the

period audited were Ms. Myra Stile., Treasurer. and Mr. S. Lee

Kling, Assistant Treasurer.

C. Scope

The audit included such tests a8 verification of the

disclosure of total receipts and expenditure. and individual

transactions; review of required supportinl documentation and

· analysis of debts and obligations; and such other audit procedures

as deemed necessary under the circumstance.. Bowever, the Audit

staff's review of receipts was limited due to the lack of record.

maintained for cont~ibution8 resu1tina from ticket aales by the

concert promotor.

II. Audit Finding and Recommendation

A. Advance Payments Affecting Distribution

of Fundraising Proceeds

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Section 104.3«a)4)(iii)(A) of Title 11 of the Code

of Federal Regulations states, in part, that each report shalI

diselose each authorized committee whieh makes a transfer to the

reporting committee, together with the date and amount of such

transfer.

Section 100.7(a)(1) and (a)(l)(iii)(A) of Title 11

of the Code of Federal Regulations def:Lnes'''c:ontribut10n,'' in

part, as a gift, subscription, loan, advance, or deposit of money

or anything of value (which includes all in-kind contributions)

made by any person for the purpose of influencing any election

for Federal office.

Section 106.1(b) of Title 11 of the Code of Federal

Regulations states, in part, that an authorized expenditure

'"", made by a candidate or political committee on behalf of another

candidate shall be reported as a contribution in-kind (transfer)

to the candidate on whose behalf the expenditure was made.

Contributions and expenditures relating to the joint

fundraising event held by the Committee vere to be allocated

70% to the Carter/Mondale Re-election Committee, Inc., and 30%

to the Tennessee Democratic State Party. 1/ However, during the

1/ The agreement also specified that in order to ensure that no

individual exceeded their contribution limitation (2 U.S.C.

~ect1on 44la(a)(1)(A», previous contributions by an individual

to either participating committee would be considered,

thereby possibly altering the allocation percentage.
allocation of joint fundraising expenses, the Committee did

not allocate three (3) expenditures totalins $10,492.49 made

~in advance by the Carter/Mondale Re-election Committee, Inc.,

for media placement and travel expenses related to the

entertainer's appearance. Based upon Advisory Opinions issued

by the Commission in connection with joint fUDdraisiDg 11, any

advance payments made in relation to a joint fundraising event

should be allocated in the same proportion as are the proceeds

of the event in order to preclude the making of an in-kind

contribution. Therefore, since the Committee di~ not allocate

these payments based on the agreed upon distribution percentages,

the Carter/Mondale Re-election Committee, Inc., baa effectively

made an in-kind contribution of $3,147.75 (30% of $10,492.49) to

the Tennessee Democratic State Party.

to·preclude a re-ca1culation of the distribution, the.

Carter/Mondale Re-election Committee, Inc., has stated that they

would agree to itemize an in-kind contribution of $3,147.75 to

the Tennessee Democratic State Party.

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In the interim audit report, the Audit staff recommended

that the Committee either;

1) request a refund of $3,147.75 from Tennessee

Campaign 'SO, !/ transfer the refund to the Carter/Mondale

Re-election Committee, Inc., and file an aaended report to

disclose the transaction; or

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2) request that-the Carter/Mondale Re-election

Committee, Inc. file an amended report to disclose. an in-kind

contribution to the Tennessee Democratic State Party of $3,147.75.

the Commission also determined that the Committee was

required to submit copies of applicable request letters and

amendments to the Audit staff for review within 30 days of receipt

of the report.

On November lS, 19S1, the Committee submitted to the

Audit staff a copy of a letter from the Tennessee Carter/Mondale

Victory Fund to the Carter/Mandale Re-election Cocmittee requesting

that the Carter/Mondala Re-election Committee amend its reports to

disclose the above in-kind contribution. The amendment was filed

as requested.

Recommendation

the Audit staff recommends no further action.

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See Advisory Opinions 1977-8, 1977-14, 1977-61,

1979-12 and 1979-35 •

The Tennessee Democratic State Party portion

of the joint fundraising event was transferred

to the Tennessee Campaign '80.