RI-;l'OR'I' OF 'rllE AllDI'l' DIVISION

ON 'rilE

St\S~;ER FOR SENA'rE COi\1NI'l"I'EE

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A. Overview

Backq rou l~,~~

The audit covered the !;eri()~1 Februar'l 27, 1976

throush December 31, 1977, the final covernse: date of tl10 mos t

rc~cent ret:;ort filed :Jy the Cor,::ni t L~~0 .:tt the time of the: uudi t.

()U 1- ins that pc:ric)d, the Commi t tc:e I:cpal'ted a bC(j:Lnnin(J c.:1sh

balunce of $ -0-, total n~cei!Jts oJ: $1,077, G18. 64, total

(,:.:penc1i tures of :~] 1067 , 32'1 • 03, .:111(1 ~1n cnclinlJ cash bulancc 0 f

~~10, 294. 61.

'1'110 Commi l L.', l~e(J h; terot.1 \Vi th the Federal Election

Commission on Fcbl-'U~ll";" :~3, 197G as the principal campaign

committoe ':::csiqn.:ltcd h'/ the llonor.:lble Jamt~S R. Sasser, the

Dcmocra tic c.:1111Ud.:l te for election to the United States Senate

from the Sl:.1l(! of 'l.'C'nll,-)ssec~. '1'11e Co:nmittee maintains its

he.:1dquart01.-s ,1 n ~;.:1s11'.' ille:, 'l'enr1C's~-:;ce.

This replwt .I :.; based upon an audit of the Sasser

For Senate Committc~~ (" tho Committee"), undertaken by the

Audit Division of th\.' I'\~deral E1L~ction Commission in

accordance wi th th..) Commission's audit policy to determine

\"hether thc.:rc h.:1S lJ~~L'll compli.:1ncc \d. th the provisions 0 r the

Feder.:11 Election C.:1l1li)~li<jn ,\ct of ]~l71, as amended (lithe Act").

'1'he audit \':as C011l1UCtl,~d jlursu.::u:t to Section 438(a) (8) of

'1'i t.le 2 of the Uni tt.:'! :; tates Co(l~~ \·:hich directs the Commission

to make from time to t. i Ille uudi ts .:1nd field investi9ations wi th

respect to report~5 al!d :;latt!l1lents filed under the provisions

of the ,\ct.

This ::lUdi l rCpOl~t is b.:1scd on documents and \-Jorking

p::llJors sU;.J;Jortinu l:'~lch 0 fits fuctual stut('mt~nts. 'rhcy fOl:m

\J.:ll:t 0:: the n,~co]:,: lll)Un ',.:11.i ell t:1C COlllr.1ission based its decisio:1S

on the i:',.:ttters in Lhi.~; j-L'pOl:t .:111(,1 were uVuilublc to Con:missiol:c·:':';

and .:t;,;;;l:Op~-.i~ltL: ~3t:..:1rf fuI- 1'('vio\·:•

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B. Key Personnel

'l'he principal officers of the Committee durinq the

period audited were Mr. John W. Kelley, Chairman and Mr. W. Gary

Blackburn, Treasurer from February 23, 1976 through AUCJust 11,

1977: and Mr. Vincent Wehby, Treasurer from August 15, 1977

throush December 31, 1977.

'l'he audit included such te~iU; as verification of total

reported receipts and expenditures and individual transactions:

review of "required supporting documentation: analysis of

Co~nittac debts and obligaions: and, such other audit procedurcs

as deomed necessary under the circumstances.

II. Auditor's Statement and Description of Findings

It is the opinion of the Audit staff, based upon examination

of the reports and statements filed and the records presented,

tha t, e:·:cept for the deficiencies noted be 1m.; , the reports and

stat.:cments of the Sasser for Senate conunitt~e fairly present the

financial activities of the Committee for the period covered by

the aucU t. Further, except as noted bclmv, no material problems

in c()!:1plying with the Federal Election Campaign i\ct \vere discovered

during the course of the aUdit.

:\. Receipt of Corporate Contributions

Section 44lb(a) of Title 2 of the United States Code

states, in part, that it is unlawful for any corporation to make

a contribution or expenditure in connection with any Federal

ch)ction to political office, and unlawful for any candidate,

political committee, or other person to knowingly accept or

rcce.i.v~ ani such contributions from a corporation.

A review of the contribution records, including copies

of ccntributor checks and verification with the appropriate

Sccret~ll.·ics of State, indicated that 21 corporations made 27

contributions, totalin~l $7,197, to the SaSS01: for Senate CommittL~o.

'l'hc treasurer was auvised of this matter on April 20, 1978 •
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S~'ction 432 (c.l) or Title of tht! Unitc'd States Code ~~ti.t~s, in P~ll"t, that it shall be the duty of the treasurer to

obt.:1i:l anu k.,.l!-' a recoiptel..l bill, stalin" tho particulars, for

l.:\·cr:· c:.:!Jundi 1.11'0 m~,\.lc by 01- on bt..:h.:tl f of a political committec

in \.~:·:c\,;ss oi :;:100 i.ll .:1mount, and for an'! such e:-:pcl1diture in a h'~::;cr ,:U:lOllnt, if the .:19<Jrl..''.:nle a::~Olmt or such expenditures to t.!l~~ o5.l.:.\..: lJ" n~\.'a durinc: il c",l vndar ~·c:ar c:·:c('ods $100 •

B. Pl~~~St-,rvation of t::-:p('llditm".2s 1>C1('umelltatioll

Ba~ed upon thu recommendation, tIl\' Commission deterrnineu o~.

~·!.:1rch lot, 1979 to take no further a(:tiol1 .l<jainst the Sasser For ~~'·:l~ltt..~ COI:1miLtel.· and the contribut01-S wit h respect to this matt-· ...

In accol·~.lance with Commission policy, this matter was

referred to the Office of General Counsel on OCtober 6, 1978

where Matter Under Review 765 was initiated. On December 7,

1978, the Commission found reason to uulieve that the Sasser

1,'or Sa.:-natc Committee anc1 three (3) of t.he contributors may hilv(~

violated Section 4411J(a) of Title 2 of Iht> United States Code,

\·Jhich prohibits the usc or corporate fund:; in connection with Fed~ral elections•

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On ~t.:1rch 9, 1979, the General CounB,'l's report noted that lh~' informathlll gathered from r<.'~pond.'ul H' statements revealed

lh.1t tlw Comm i ttc'e made no l;nO\l1i nc; acet 'l'l.mce of corporate

contributions. As the corporate monie:: wpre refunded, the Gener.::l

Counsel rcconmll!lldcd that no further aet in" be taken il\jaim:t the

l"1..'spondents ilnd to close th~~ file •

Dast:d upon the recommendation or the Audit starr, th~

'1'1"t.'mmrer of I he Sasser For Senate Committee refunded fi\·~ (5)

of the contributions totaling $500.00 and provided docUDlcnlation

which demonslrated that the remaining 22 contributions totaling

$6,697.00 were not funded from corporate sources.

"urin" the audit, we were advised by the bookkeeper

I h.lt the COlllllli t lee attempted to verify the corporate or

non-corpor.,l... ulatus of contributions received from busincss

L'ntiLie3 hi' t"Iephone contact with the appropriate Secrl·taries

of State.

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\'le were inforllll~d by officiuls of the Committee that.

several items were paid for in advunce, but rcceillts were not

OUld i lwd from the vendol':; (spccifically, rClC..lio an<1 television

slat.ioll::;). In addition, the vendors did not provide Clny

doc\l1tIl.~l1li.ltion, unlcsl; a :;i'ec.i.fi.c rcqucl,t. \v':l!, m<1de for it. The

o[ri<~i.:ds stated t.hal: t1wy \-:ill attcmpt to obtain the rClluired

c!OCIII1l'.' 11 tel t ion .

S~~ction .13,; (b) (9), Ti.tle 2, t..:nit,_~d Stat'2S code, staL;s,

in p,irt, tl1.:1l: (l~lC:1 rc:)orl shull C():~t:,1in t.hl"! id...~nti.fication () r ~-!.Ich pl~1~~.;on to \·:hoHl c~:·:nl..~nc! i turL'~; have be.~n made b'l such COI;;:-::.i.:. ::.c:.{;

\.;.ithin the: c.:110ndar ':-L~~ll" in ,111 aL1L:1~"'(J\lte aI:tollnL or v;lue in e:-:::'vss

o t' ~;: 100, till.' ,l!:lOUl1 t, d.-I te.', .:u1 ..1 P'_l}':)O~;'::; of: c.:1cil ~~l1C:l (~:-:pc:ndi turl."! .

C. Disclosure"! of E:·:l.'~:;nditUl~es

Based upon the Committee's e!fforts outlinecl above, the AuJit

~;t.aff recommend::; that thl.~ Com;;;ission dc,t(}rmine that the Commi.ttt.:t~ 11as demonstrated its best efforts to comply with scction 432(J)

or 'fitle 2 of the united States colle Gnd that no furt:1i~r action

1Jt.' LIken on this mat.ter.

Bilsed upon thl.~ i\lldil: :; La f f' s recolllml~11lIiltion, the! Commi ttce

ubt.<1 inc~d c10cumentu tion i 11 :all;port: of 287 e:.,:pendi Lures totaling

$Hi7,G21.0.1 and suumit.tc'd I.;opics for the Audit staff's review.

'l'hil; reclucf'd the number o!" insuf f. iclently llocumcn ted expendi tun:;s

to 52 totaling $15,628.2] which rcpre~~ents 3.27·~; of the number

and 1.70:;' of the total dolLI]" Gntount of all e:-:pencUtures requiri::"::

such documentation. In ,lddition, the Conulli.ttee submitted evi.d0n'~l.'

of its best efforts to obtain docul:lentation in support of 34

e::pLmdi tur<~S tot.:tlinq $9, lS9 .11.

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l{l~cOlllmeI1l1ation

Our p.view of the expendi ture record:; disclosed that:

339 e:-:pcnclitun.'H, each aqgregatinq in excess o!" ~ilOO anli total i ll\l

~;.1.83,249.25, Wt.'n~ not supported by bills, invoicl"!s or other

conteInroraneous memoranda. lIo\vever, cancelled checks were

presented -[or each of the 339 expendit.ures. '1'his represents

2l.3l~ of the number and 20.00S of the dollar amount of the

operating expenditures rl!<luiriny supporting documentation.

1"\1 '"I-.her, section l02.9(c) (4) of the Conunission's

!{I".llllations stutes, in part, that insteilll of a receipted bill,

t1w treasurer may keep the cancelled check showing payment of

t111~ bill; and the bill, invoice, or other contemporaneous

ml~mor andurn.

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w~ determined that the Commiltea did not itemize 90

•.':':I"'l1'litures, each aggregating in l.'xcass of $100, totaling ~'j, ~"O.50. 'l'h1s r('presents 5.65;' of tho number and 1.03':. of

tilt-' dollar amount of the expenditures itemized and required to

iJl' i t ..mized by tht..' committee.

Tho offkials of the Committ('(~ informed us that the

e:.:pcnditure a~(JP·q•• tion system was inadvertontl'l maintained by

)"l.'portinq periocl •.Ither than by calendilr year, because th.' format

of disclosuro sci,.·dulcs for cxpenditun's docs not include spaces

for aq(Jrcgate yc.II' to date totals. The Officials agreed to file

uh olll\t..'lulet..l report .ilcmi~ing the c,,:penditurcs.

Rcco!!'.ntendation

Rased upon th.' Aud itstaff' s recommendation, tho Conunit tee

filed nn amended r~!,ort. on July 18, 1978 itemizing the expenditur"s. 'l'heref:oro, 110 rut~thcr action is rccom~l~ndcd 011 ..he matter.

~;L'cticn 433(1,) (2), 'l'it1~ 2, Unit.t..'d Sl~\teS Cod,', states

that: Lhe sL.ltenl\.::1t of ol'Jani;~ntion shall itWllld~~ the .1oUII'.'S,

lludr'.u~es, and rcl.lt.iow.:hips of affiliah'c1 tH' connecled organiz~­

lion:;. In addition, ;",\'UUll 433(c), 'i'it.k :!, united Bt':ltes Code,

~L:l'.!'~ that any ('h.lll';'': in information in a ~1.llt...:ml.:nL o( oroanL:a:.ion

~~hall be rcporb.·d to Lilt' Conuninsion \·;i thin a 1a-day period" follc.d :1_;

th.~ chan',il'.

It \·ran dl~ tc nllined that the Commi l I ",' did not amC'ud

its statement of orqallil.ation tf) disclos<'" two (2) affili.'lted

CO::lr.li t: Let.~H.

'l'hc lJon::::..:t.'i"'L" \,;a~; lma\·:al"0 th:lt tilt' stale:ffi(.'nt of

or j,::li:t.alion ar.v~nd::,.:nl \':a5 not on file, and t':·:pro.'sscd a \';1111n.::l'. :;:-;

to :- i1,~ Lh." ':l!l,end;'~l::1'':' ~:iHclon.i.n'.1 the commi ttl ".>5.

Ba~0d UiJOn t:-.\.· ;~\ldit star:'s r(~comml.:l1dation, t!w committ.... \.~

filt.d an amended st':ttcllit.'nt of organizat.ion on Jul::; 19, 1978 di~~lonino.j the r:,:·.i~ir,,·d information. '~'hert:r~lrc, no further act·:'.':l

i:; r~·Ct'r.ml,'nc.ll"d C~: l;~'-' m.l t: tor.
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'·'tlllribtition. in Exec•• of Limitation

::··ction 441aCa) (1) CA) and (2) CAl of 'fitlo 2, Unltad

Slat\!8 Code·, states, in part, that DO poraon sball llako a

eontributinn to any candidate and bi. autborb:ocI politic,,'

committees wi th r~sllOCt t.o any election for Pederal offico which,

in the agg.·.·•.late, exceeds $1,000, and DO ault.icandidai:o political c..~nd11itt,--e :;1.,.11 milkc .uch contribution. which, in tho aqeJrogat.",

cxcu\.!d $S, ....O. In addit.ion, Spction cl4laCf) of ,.itlo 2 of the

Cnited Stat C':.J Code, stat.cs, in part, that no candidate or political

committru :.h..l11 knowinCJly accept such contrlbutions.

::··,-~lion 110.1 Ca) (2) (i1) of the COIIIia.ion'. ~a1.tion.

states, in 1',lrt, that ·with respoct to any election· _au ift t.he

case of a e!ontriiJution not designated in writintj for a part.icu1ar ~lection, rCn" a prima~' election, if made on or before tbo date

of t.h~ electic:\, or for a (,(,ncral elect-ion, if lIlilde aftor tile ,1at(~ of tht" p."i~ar~' el\!ction.

,\n an.:lli·sis of ~·ontribution r\..'cords, includiDCj copie.

of ~"nt ributcr ch\.~cks, indicatC'd th~t nine (9) contributioDs

l1nu t\\O (2) tr:lnsft.~rs were receivpu after the dab! of the prlmar)' t:'h~clion and \\"\1r\1 u!)plititd to tho r·_'tircr.:\'nt. of thu primary dobt

without wri t.~I.':1 l.l"silfnation from t.h.) contributor and/or transferor.

Tlw nin-.J ('J) contrihutions totaled $4,8i5.00 and tho two (2)

tra:lgfl.~rs t I'~ ",:~d $3,500.00. In each instance the amount applio<1

to th,' prb",!"..,. debt would have exc\~\'lk'<1 tho applicable limitations

for the (J(-'I1,':",,: election, if applh!\t to th~ goneral olt)ction.

;\ I t ;:ou~;h, the officials of the Co..-unittce informed ua

that the d(':~L:~ation8 wore entered on the contributors' check.,

our review n~- ':0F1 es of th.., checks disclosed no (lasignation for

thcec conll'i:' ..~:.~on.i; nnd transfers.

n.-.uwd t:: (':~ i;hc Audit staff's reco:;.;:·.~r.datilln, the cornmitt~~\.,

!'J'"o·:i..i,yt! «i(h·:~::',.::~~ation on Jul~' 18, 19i5 that \.l\.."m01ultrO\t\~s that

the contr-i.b;;~ ~::13 anu tr':Ul~f0rs Wt-l"'.' d("~~L_m..ltc~ for prir.tary ..:~L~.s. 'J'ht'~""':-::"'~' no furt.her action io J"\.lco::1:r.·')l1d\.~d on the mattl·r.
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FEDERAL ElECTION COM,'v1ISSION

II.!') S1I.:t 1I ,,\\'

"\··'''HI..... C; IO\; I H . 20-lb I

AIl)mCNAL REGARDING '!HIS ORGANIZATION

MAY BE lDrA'l'ED IN A CXH'LE'lED aH'LIANCE ACrIW

FILE RELEASED BY '!HE CXM1ISSI~ AND MADE PUBLIC IN

'lHE PUBLIC REOORDS OFFICE. FUR '!HIS PARTICULAR

ORGANIZATION'S CXH'LE'lED OOMPLIANCE JCrIW FlLE

SlMPLY JSK FUR mE PRESS stHofARY OF MlJR II ? {J' .

'lHE PRESS stH-1ARY WILL PROVIDE A BRIEF HIS'roRY OF

'!HE CA$ AND A sut+fARY OF '!HE ACl'IONS TAKEN, IF AN'l.

Audit ~I: /6S·