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FEDERAL ELECTION COMMISSION

WASUINGTON. 0 C 204&3

FINAL REPORT OF THE AUDIT DIVISION

ON CO~1ITTEE FOR GOOD GOVERNMENT

I. Background

A. . Overvie\'l

This report is based on an audit of the Committee For

Good Government (CFGG) (lithe Committee") 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 (lithe Act") •. The. audit was conducted . pursuant to Section 438 (a) la) of Title 2, United. States Code

which, at the time of the audit, directed 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.

The Corrmittee is a separate segregated fund of the

International Union, United Automobile,' Aerospace and Agricultural.

Implement l~orkers of l~erica (UAl~) and registered with the House

of R~~resentatives on April 17,1972. The Co~~ittee maintains

its headquarters in Detroit, ~lichigan. The Committee is affiliated . with UAlv-V-CAP \vhich solicits UAl'j members \.;ho work in factories,

while the Commit~ee solicits office and administrative personnel

of the union. The administrative and solicitation costs are paid by UAt·;.... .

. The Audit co\;ered' the period January l"~ "1977 through.

March 31, 1979, the final coverage date of the latest report

'filed by the Committee at the time of the audit. The Committee

reported a beginning cash balance of $215,365.44, receipts of $197,495~92,disbursementzpf $358,579.21 and a closing cash

balance at 3-31-79 of $54,282.15~

This audit report is based on documents ~nd working

papers supporting each of .its factu.:'tl statements. They

form part 0:- the record upon ,.;hich theCon~~ission based its

decisions on the ':ilattors in' this re:~Ol"t ~uld ,.,.ere availab10 to

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~:Key Personnel"

The key .personnel,of"the Committee during ~the period

covered by the audit were Mr .. Douglas Fraser, Chairman;

Mr. 'Emil Mazey, Secretary-Treasurer; and Mr~ Donald Moll, ,

Assistant Treasurer.

C. Scope

. .The auditinciu.ded such tests,as verification of.,

reportedreceipts'and expenditures and individual transactions;

review of required supporting documentation and analysis of . Committee debts and obligations; and such other audit procedures

deem~dn~ces~~~y,underthe circumstances. , ..

II.~'Audit Findings and Rec'omrnendations

:A., Timely Deposit.' of Contributions' into campaign Depository,,'

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Section "'103'.3 '(a) of 'I'itIe 11, Code of Federal' Regulations

, requires, in part, ,that all contributions received by a political"

'committee shall be deposited in a checking account in the appropriate

. ,campaign depository by the_treasurer ,of the committee or his/her

. agent, within 10 days of the treasurer's. receipt. Subsequent to

the audit field\'lork, Section'432(b) (2) of Title,2, United States

:: Code was amended to .require, ,in part,that contributions be fOr\olarded

: to the Committee treasurer \'lithin, 30 days of receipt, or in the case ofcon~ributions.inexcess6f$50;OO,.within-10~daysofreceipt. ". <, ,-. '

I Conversations with,Committee officials and a review

of records revealed that political contribution deductions

are made every other Thursday when employees are. paid. comIT.ittee

deductions', along, \'lith dues, pension contributions and other

,payroll, deductions for UA\v employees', are' kept, in the, Union's

general' account from \'lhich.: paychecks>are drawn. ,Once a month,'

Committe'e 'deductions are reconciled and'" the, political contributions:

are fOr\'mrdedfrom the UA\vaccotint to the Committee's designated>::

checking account.' A'n anali'sisof tliis' process revealed, 'ho\'lever';'

tha~ p6liti6al contributions during the audit period remained in

the Union general ,account for as long as eight (8) ,weeks~'" .

'l'hc Audit stuff reCO:lilllendcc1 that the Committee devise

and implement\;,ritten procedures to bring itself into compliance

with the Ac3: ,concerningti)e requir,ement that contributions be

fOr\'mrded to the Commi ttee treasurer within 30 days of receipt,

or in 'the ,case of contributions in .e:-:cess of $50: 00, \'li thin 10

days 6f receipt, in acc6rdance ,with pr~sent requirements of

2 U~S.C. 432Jb) (2)'. T~c directive e~~l~ining the procedures ~as

to be submitted to the: ,i\udi t staf:: fOr. reviC\'l \'li thin 30 .da\'s 0:

receipt 0: the inte:r-im report. -
On April 15, 1981, the Committee sUbmJ:tted a:-"proposed memorandum advising Committee officials to deposit contributions ,~ into committee accounts ina timely manner. !I -

Recommendation

Provided the committeedistr1butes-the memorandum to appropriate officials and brings itself intocompiiance, no further action is recommended on this matter.

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B. Matters Referred_to the Office of General Counsel

Certain other matters noted during the audit were referred

to the Commission's Office of General Counsel on March 4, 1981.

In addition to sUbmittingthls proposed memorandum in

response to 'the recommendation contained in the interim

report, the Committee submitted a draft memorandum on

"Solicitation of Contributions to CFGG." 'This issue was

not addressed in the interim report, and is, therefo~e beyond the scope of the final audit report. It should

be noted, hO\'1ever, that the COIr::iission does not apprcve,

or endorse. the following. paragraph contained iri the memorandum:

." HO\'1ever, CFGG may accept unsolicited contributions'

from individuals \...ho a~e not· me::1bers of the UA~';. For example, clerical and ;:::'ofessional employees '\vho

are not members of. the unicnmay execute cards

-authorizing the assignilient and checkoff of contributions to CFGG, provided-they initiated this action

without having first been-solicited or-otherwise . appraised (sicL of the existence- of CFGG by. the union. !.'.,

The type of activity described above raises' a number of'-

legal and factual questions. In this regard, the Corr~ittee is reminded that it may seek an Advisory Opinion of any

proposed course of action p~rsua:lt to_.2 U.S.C. Sectic:l 437f.