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PUBLIC ISSUANCE OF FINAL AUDIT REPORT -

OHIO DEMOCRATIC PARTY VOTER REGISTRATION DRIVE

JUDY HAWKINS

BOB COSTA

FRED EILAND

PRESS OFF'ICF.

\\,·,,,IIINCION. Ill' ~n4hl

FEDERAL ELECTION COMMISSION

Attachment as stated

Informational copies of the report have been n~ceived

by all parties involved and this report may be released to

the public as of today, Hay 21, 1980.

GC: l"EC Library

RAD

Public Record lJ

May 21, 1980

At.tached please find a copy of th(: final audit report

"f the Ohio Democratic Party Voter Registration Drive which

was approved by the Commission on Hay 12, 1980.

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SUBJECT:

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TO:

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FEDERAL ELECTION COMMISSION

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REPORT OF THE AUDIT DIVISION.

ON THE

OHIO DEMOCRATIC PARTY VOTER REGISTRATION DRIVE

A. Overview

This report is based on an audit of the Ohio

Ih~mocratic Party Voter Registration Drive ("the Committee") ,

1I1ldertaken by the Audit Division of the Federal Election

Commission in accordance with the Commission's audit policy

Lo 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.

The Committee registered with the Federal Election.

Commission on August 18, 1976 as a state committee of the -

Democratic Party. The Committee maintains its headquarters inColumbUS, Ohio.

The audit covered the period from August 24,- 1976

thrOlll]h February 4, 1977, the termination date of the Committee.

The Committee reported a beginning cash balance on August 24,

1976 of $-0-, total receipts for the period of $145,750.60, total

expenditures of $145,750.60, and a closing cash balance of $-0-.

This audit report is based on documents and working

papers which support each of the factual statements. They form

part of the record upon which the Commission based its decisions

on the matters in the report and were-avai1ab1e-to Commissioners

<:lnd appropriate staff for review.

B. Key Personnel

The principal officers of the Committee during the

period audited were Mr. Arnold Pinkney, Chairman ~nd Ms. Rita

Smith, Treasurer.
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C.

The audit included such tests as verification of total

reported receipts and expenditures and individual transactions;

review of required supporting documentation and analysis of

Committee debts and obligations; and such other audit procedures

as deemed necessary under the circumstances.

II. ~~~1it_!,i~ldings and Recommendations

1\. ~ec~.=-~pt of_.Erol!!.Eited Transfers

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

states, in part, that it is unlawful for any labor organization

to make a contribution in connection with any Federal election,

or for any political committee to knowingly accept or receive

any contribution prohibited by this section.

Section 102.6(a) (2) of Title 11 of the Code of

Federal Regulations states, in part, that any political committee

which has received contributions or made expenditures to or on

behalf of any candidate for Federal office, shall either establish

a separate campaign committee which shall register and maintain

a segregated Federal account, or establish a single conunittee

which may only accept contributions permissible under the Act.

Section 102.6(b) (2) of Title 11 of the Code of Federal

RCl]ulations states, in part, that conunittees which make contributions or expenditures for or on behalf of candidates in Federal

e.ll~ctions may not receive transfers from an account or committee,

except from a conunittec or account set out in paragraphs (a) (i)

and (ii) of this section •

During the review of Committee reports and records, it

was determined that the Committee received transfers totaling

$16,700 (11.4~ of total Committee receipts), from the Ohio

Democratic Party State Campaign Account (State Conunittee) an

unregistered State party committee. The transfers received were

for $15,200 on November I, 1976; $500 on November 5, 1976;

and $1,000 on December 21, 1976. Contributions from labor

organizations arc permissible in the state, and $69,049.00 in

labor contributions were itlcntiEied as received during the period

February 16, 1976 through October 17, 1977 by the State committee.
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According to Committee officials, the transfers were

used for get-out-the-vote (GOTV) operations, and to satisfy

the Committee portion of a GOTV contract held with the 1976

Democratic Presidential Campaign Committee, Inc. However, the

Committee was not aware that the transfers were prohibited until

October 20, 1978 when they received a surface violation letter

from the Reports An.llysis Division. At that date, a refund

was not possible, due to the Committee's termination on February

4, 1977.

The Committee's Executive Director, Mr. James Patrick

Leahy, stated that the $16,700 was transferred by the State

committee because the Ohio Democr.atic Federal Campaign Account

(the Federal campdiqn account) maintained by the State party

did not have sufficient funds to make the transfer. He also

stated, that if 1I11' Committee hild been aware of the prohibition,

additional funds could have been directed to the Federal Campaign

.Iccount.

To determine the extent of Federal support derived

from GOTV ilnd Voter Registration activities, the Audit staff

reviewed newspaper clippings maintained in Committee files,

and Conunittee expenditure documentation. No support of any

clearly identified Federal candidate was noted.

In ilddition, the staff was able to determine that

for 1976, union contributions represented 13.7% of total receipts

of the State conuni ttce. Mr. Leahy made available to the staff

all records requested.

On January 4, 1980, the Audit staff informed Committee

officials that the Office of General Counsel, in its legal

analysis, had recommended that an appropriate remedy would be

for the Ohio Democratic Federal campaign account to refund the

transfers to the State party cOlnmittee. The Committee officials

expressed a willingness to comply with this recommendation but

stated that the Ohio Democratic Federal campaign account did not

have sufficient funds at present to make the refund.

Based on the facts presented above, the Audit staff, in

concert with thl~ Office of General Counsel recommended, that

the Ohio Democratic Federal Campaiyn Account refund the three

(3) transfers totaling $16,700 to the Ohio Democratic Party

State Campaign Account on behal~ o~ its terminilted affiliate.
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Recommendation

'1'he Audi t ~:;taf f recommends that no further action be taken

un this matter.

Retention of Supporting Documentation

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B.

0:.1::: revimv of the Committee I s expL'nd i ture records

identified 35 expenditures each aggregating ill excess of $100

and totali~g $3~,550.53, not supported by receipted bills, or

()ther conce=poraneous memoranda. This represents 21.7% of the

number, a:1ci 2~ .1% 0 f the dollar amount of expenditures requiring

~upporting documentation. A cancelled check was provided for

each conmlittee expenditure. The following is a breakdo\Vl1 of the

unsupported expenditures:

I~ additiuIl, Part 102.9(c) (4) of Title 11 of the Code

of federal Regulatiolls states, in part, that when a receipted

bill is not available, the treasurer may keel) the cancelled check

showing pa~·rr.ent of the bill; ancl the bill, invoice, or other

contempora~cous memorandum.

Section 432(d) of Title 2 of the Un ted States Code

states, in part, that it shall be the duty of the treasurer to

obtain ,1lKi ~·~eei.J il re~eipted bill, statin9 the particulars, for

every exp~nditure milde by or on behalf of a political committee

in excess o~ $100 in amount and for any such expenditure in a

lesser amount, if the aggregate amount of such expenditures to

the same person duri n~J a calendi.lr year exceeds $100.

Based on thl~ Audit staffI s recommendation, the Ohio

Democratic Party Fecll'Lal Campaign Account filed an amended

1979 year end report on February 19, 19BO, disclosing the

$16,700 as a debt owed to the Ohio Democratic Party State

Campaign Account.

'I'he Audit staff also recommended that until such time that the

Ohio Democratic Feclt'l-al Campai~Jn Account has funds available

Lo make the refund, t.he amount of the transfers be reported as

d debt owed to the ohio Democratic Party State Campaign Account,

beginning '.'lith an amenclment to the most recent report filed by

the Ohio Democratic i"l~deral Campaign Account.

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1. 'J'wenty-one (21) expenditures totaling $9,850

WL'l"C transfers Lo non-reporting county committees for voter

)"t·qistration.

2. One (1) expenditure totaling $6,500 was to an

.individual for ~,et-out-the-vote purposes.

3. Thirteen (13) expenditures totaling $18,200.53

were for operating expenditures such as advertising, printing

and travel reimbursement.

On April 5, 1979, the Committee forwarded to the

Audit staff rec(~ i.pted bills, and/or contemporaneous memoranda

for 21 of the J~ unsupported expenditures. For the remaining

14 expenditures, the Committee submitted copies of first request

and follow-up letters, along with notations of additional telephone

contact with selected vendors and individuals as evidence of their

efforts to obtain the required documentation.

Reconul1enda t ion

'I'he Audit staff recommends that the Committee' 5 attempts

to obtain the expenditure documentation be considered "best

efforts", and that no further action be required. - - -