Interim Audit Report of the 

Audit Division on the 

United Association Poiiticai 

Education Committee 

January 1, 2007 - December 31, 2008 

Why the Audit 

Was Done 

Federal law pemiits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.' The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Committee (p. 2) 

The United Association Political Education Committee is a separate 

segregated fund of the United Association of Journeymen and 

Apprentices of the Plumbing and Pipefitting Industry of the United 

States and Canada, headquartered in Annapolis, MD. For more 

information, see the Committee Organization chart, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals $3,130,530 

o Transfers from Affiliates 313,467 

o Refunds from Federal Candidates 33,500 

o Other Receipts 230.574 

o Total Receipts $ 3,708,071 

Disbursements 

o Contributions to Federal Candidates $2,103,850 

o Independent Expenditures 510,314 

o Operating Expenditures 72,655 

o Other Disbursements 1.392.617 

o Total Disbursements $ 4,079,436 

Findings and Recommendations (p. 3) 

• Excessive Contributions to Candidates and Other Political 

Committees (Finding 1) 

• Failure to File Notices and Properly Disclose Independent 

Expenditures (Finding 2) 

• Failure to Properly Disclose Transfers from Affiliated 

Committees (Finding 3) 

2 U.S.C. §438(b). 
Interim Audit Report of the 

Audit Division on the 

United Association Political 

Education Committee 

January 1, 2007 - December 31, 2008 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Excessive Contributions to Candidates and Other Political 

Committees 4 

Finding 2. Failure to File Notices and Properly Disclose Independent 

Expenditures 5 

Finding 3. Failure to Properly Disclose Transfers from Affiliated 

Committees 7 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the United Association Political Education Committee^ 

(UAPEC), undertaken by the Audit Division of the Federal Election Commission (the 

Commission) in accordance with the Federal Election Campaign Act of 1971, as 

amended (the Act). The Audit Division conducted the audit pursuant to 2 U.S.C. 

§438(b), which permits the Commission to conduct audits and field investigations of any 

political committee that is required to file a report under 2 U.S.C. §434. Prior to 

conducting any audit under this subsection, the Commission must perform an internal 

review of reports filed by selected committees to determine if the reports filed by a 

particular committee meet the threshold requirements for substantial compliance with the 

Act. 2 U.S.C. §438(b). 

Scope of Audit 

Following Commission approved procedures, the Audit staff evaluated various factors 

and as a result, this audit examined: 

1. The disclosure of disbursements, debts and obligations. 

2. The disclosure of expenses allocated between federal and non-federal accounts. 

3. The review of contributions made to federal candidates. 

4. The disclosure of contributor's occupation and name of employer. 

5. The consistency between reported figures and bank records. 

6. The completeness of records. 

7. Other committee operations necessary to the review. 

^ On June 10,2010, UAPEC amended its Statement of Organization and changed its name to the United 

Association Political Education Committee (United Association of Journeymen and Apprentice's of the 

Plumbing and Pipefitting Industry of the United States and Canada). UAPEC also added its connected 

organization's name to its Statement of Organization in this amendment. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates UAPEC 

• Date of Registration September 23, 1976 

• Audit Coverage January 1,2007 - December 31, 2008 

Headquarters Annapolis, MD 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Three 

Treasurer 

• Treasurer When Audit Was Conducted William P. Hite 

• Treasurer During Period Covered by Audit William P. Hite 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Used Commonly Available Campaign 

Management Sofiware Package 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Volunteer staff and consultant 

Overview of Financial Activity 

Cash on hand January 1,2007 $ 1,121,310 

o Contributions from Individuals 3,130,530 

o Transfers from Affiliates 313,467 

o Refunds from Federal Candidates 33,500 

o Other Receipts' 230,574 

Total Receipts $ 3,708,071 

o Contributions to Federal Candidates 2,103,850 

o Independent Expenditures 510,314 

o Operating Expenditures 72,655 

o Other Disbursements 1,392,617 

Total Disbursements $ 4,079,436 

Cash on hand @ December 31,2008 $ 749,945 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Excessive Contributions to Candidates and 

Other Political Committees 

UAPEC made 12 contributions to 9 candidate committees and 2 other political 

committees that, when aggregated with contributions made by its affiliates, exceeded the 

limitation by $42,225. At this time, the excessive contributions are not eligible for 

redesignation and refunds must be obtained by UAPEC. The Audit staff recommends 

that UAPEC provide evidence demonstrating that the contributions were not excessive or 

evidence of refunds received from the recipient committees. (For more detail, see p. 4) 

Finding 2. Failure to File Notices and Properly Disclose 

Independent Expenditures 

UAPEC disclosed independent expenditures, totaling $510,314, on Schedule E, Itemized 

Independent Expenditures. Most of the independent expenditures were reported when 

paid, which in most cases was after the date of the election. UAPEC should have 

disclosed these independent expenditures as memo entries on Schedule E and a 

corresponding debt on Schedule D. Finally, UAPEC failed to file any corresponding 24 

or 48-hour notices. The Audit staff recommends that UAPEC implement procedures to 

assure future independent expenditures are properly and timely reported. (For more 

detail, see p. 5) 

Finding 3. Failure to Properly Disclose Transfers From 

Affiliated Committees 

UAPEC incorrectly disclosed transfers from affiiiated political committees totaling 

$313,467, as either unitemized contributions from individuals or as contributions from 

other political committees. These transfers should have been reported and itemized as 

Transfers from Affiliated/Other Party Committees. The Audit staff recommends that 

UAPEC amend its reports to properly disclose these transactions. 

(For more detail, see p. 7) 
Part IV 

Findings and Recommendations 

Finding 1. Excessive Contributions to Candidates and 

Other Political Committees 

Summary 

UAPEC made 12 contributions to 9 candidate committees and 2 other political 

committees that, when aggregated with contributions made by its affiliates, exceeded the 

limitation by $42,225. At this time, the excessive contributions are not eligible for 

redesignation and refunds must be obtained by UAPEC. The Audit staff recommends 

that UAPEC provide evidence demonstrating that the contributions were not excessive or 

evidence of refunds received from the recipient committees. 

Legal Standard 

A. Authorized Committee Limits. No multicandidate political committee shall make 

contributions to an authorized committee that aggregate more than $5,000 per election or 

to any other political committee in any calendar year which, in the aggregate, exceeds 

$5,000. 2 U.S.C. §441a(a)(2)(A) and (C), and (f); 11 CFR §§110.2(b) and (d) and 

110.9(a). 

B. Contribution Limitations for Affiliated Committees. For the purposes of the 

contribution limitations of 11 CFR 110.1, all contributions made by more than one 

affiliated committee, regardless if they are political committees under 11 CFR 100.5, 

shall be considered to be made by a single political committee. 11 CFR §110.3(a)(J). 

C. Redesignation of Excessive Contributions. When an authorized candidate 

committee receives an excessive contribution, (or a contribution that exceeds the 

committee's net debts outstanding), the committee may ask the contributor to redesignate 

the excess portion of the contribution for use in another election. The committee must 

inform the contributor that: 

1. The redesignation must be signed by the contributor; 

2. The redesignation must be received by the committee within 60 days after the 

committee received the original contribution; and 

3. The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(b)(5). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper redesignation or refund the excessive portion to the donor. 11 CFR 

§§ 103.3(b)(3) and 110.1 (b)(5)(ii)(A). Further, a political committee must retain written 

records concerning the redesignation in order for it to be effective. 11 CFR §110.1 (l)(5). 

Facts and Analysis 

Our review identified contributions made by UAPEC that exceeded the limitations by 

$42,225. These excessive contributions consisted of 10 contributions to 9 candidate 

committees totaling $32,225 and 2 contributions to other political committees totaling 

$ 10,000. A majority of the excessive contributions were the result of UAPEC not 
5 

tracking contributions made by its affiiiated committees. UAPEC and its affiliates share 

a contribution limitation. At this time, the excessive contributions are not eligible for 

redesignation. As a result, UAPEC must request a refund from the recipient committees. 

At the exit conference, the Audit staff provided UAPEC representatives with a schedule 

of the excessive contributions. In response, UAPEC's counsel (Counsel) provided copies 

of letters sent to each recipient committee requesting refunds of the excessive 

contributions. Counsel also related that well before the audit UAPEC underwent a 100% 

turnover in staff. The new director instituted programs and procedures designed to 

monitor the contributions made by affiliates and comply more fully with the requirements 

of the Act. 

Interim Audit Report Recommendation 

The Audit staff recommends that, within 30 calendar days of service of this report, 

UAPEC: 

• Provide evidence demonstrating that the contributions were not excessive. 

• Absent such evidence, the Audit staff recommends that UAPEC continue to seek 

the refund of the excessive contributions and provide evidence of all refunds 

received (copy of the front and back of the endorsed refund check). 

Finding 2. Failure to File Notices and Properly Disclose 

Independent ESxpenditures 

Summary 

UAPEC disclosed independent expenditures, totaling $510,314, on Schedule E (Itemized 

Independent Expenditures). Most of the independent expenditures were reported when 

paid, which in most cases was after the date of the election. UAPEC should have 

disclosed these independent expenditures as memo entries on Schedule E and a 

corresponding debt on Schedule D. Finally, UAPEC failed to file any corresponding 24 

or 48-hour notices. The Audit staff recommends that UAPEC implement procedures to 

assure future independent expenditures are properly and timely reported. 

Legal Standard 

A. Definition of Independent Expenditures. The term "independent expenditure" 

means an expenditure by a person for a communication expressly advocating the election 

or defeat of a clearly identified candidate that is not made in coordination with any 

candidate or authorized committee or agent of a candidate. 

B. Disclosure requirements - general guidelines. An independent expenditure shall be 

reported on Schedule E if, when added to other independent expenditures made to the 

same payee during the same calendar year, it exceeds $200. Independent expenditures 

made (i.e., publicly disseminated) prior to payment should be disclosed as "memo" 

entries on Schedule E and as a reportable debt on Schedule D. Independent expenditures 

of $200 or less do not need to be itemized, though the committee must report the total of 

those expenditures on line (b) on Schedule E. 11 CFR §§104.3(b)(3)(vii), 104.4(a) and 

104.11 
C. Last-Minute Independent Expenditure Reports (24-Hour Notices). Any 

independent expenditures aggregating $1,000 or more, with respect to any given election, 

and made after the 20* day but more than 24 hours before the day of an election must be 

reported and the report must be received by the Commission within 24 hours after the 

expenditure is made. A 24-hour notice is required for each additional $1,000 that 

aggregates. The 24-hour notice must be filed on a Schedule E. The date that a 

communication is publicly disseminated serves as the date that the Committee must use 

to determine whether the total amount of independent expenditures has, in the aggregate, 

reached or exceeded the threshold reporting amount of $1,000. 11 CFR §§104.4(f) and 

104.5(g)(2). 

D. Last-Minute Independent Expenditure Reports (48-Hour Notices). Any 

independent expenditure aggregating $10,000 or more with respect to any given election, 

at any time during a calendar year, up to and including the 20th day before an election, 

must disclose this activity within 48 hours each time that the expenditures aggregate 

$10,000 or more. The notices must be filed with the Commission within 48-hours after 

the expenditure is made. 11 CFR §§ 104.4(f) and 104.5(g)(1). 

Facts and Analysis 

Between August 27,2008 and December 3, 2008, UAPEC made 8 disbursements totaling 

$510,314 for the purchase of materials such as mini billboards, yard signs, posters, shirts, 

hats, etc. Most of these disbursements were itemized on Schedules E, in support of 

Barack Obama, filed with the report covering the period in which the payments were 

made. A majority ofthe independent expenditures were related to one invoice, in the 

amount of $324,209. That invoice was paid after the 2008 General election.^ UAPEC 

should have disclosed these independent expenditures as memo entries on Schedules E, 

filed with reports covering the dates when the materials were disseminated, and included 

a corresponding debt on Schedule D (Debts and Obligations). 

Finally, UAPEC did not file any 24 or 48-hour notices of its independent expenditures. 

Such notices should have been filed if any of the materials were disseminated within 

either the 48-hour or 24-hour notice period. UAPEC did not maintain documentation of 

the dissemination date for any of the materials. However, the invoices were dated either 

October 31,2008 or November 18,2008. Therefore, it appears likely that the materials 

were disseminated within a notice period. 

This matter was discussed with the UAPEC representatives during the exit conference. 

In response. Counsel stated that as a result of the audit, UAPEC's staff now understands 

the reporting requirements for independent expenditures, including 24 and 48-hour 

notices, and, the need to document dissemination dates. However, they were unsure how 

the dissemination date would be determined since UAPEC generally distributes materials 

directly to local union members or ships the materials to local unions for distribution. 

Counsel suggested that in the future, UAPEC will change its method of recording, 

aggregating and filing the required notices based on the date that materials are first 

received at UAPEC headquarters. This date would be UAPEC's dissemination date for 

24 and 48-notices. 

UAPEC received a refund of $30,710 relative to this payment. 
Interim Audit Report Recommendation 

The Audit staff recommends that, within 30 calendar days of service of this report, 

UAPEC implement revised procedures in order to properly disclose independent 

expenditures on Schedule's E and/or D and to track aggregation and dissemination for 

both the 24 and 48-hour notice requirements. 

Finding 3. Failure to Properly Disclose Transfers from 

AfRliated Committees 

Summary 

UAPEC incorrectly disclosed transfers from affiliated political committees totaling 

$313,467, as either unitemized contributions from individuals or as contributions from 

other political committees. These transfers should have been reported and itemized as 

Transfers from Affiliated/Other Party Committees. The Audit staff recommends that 

UAPEC amend its reports to properly disclose these transactions. 

Legal standard 

Disclosure Required for Transfers from Affiliated Committees. A political 

committee must disclose the total amount of transfers from affiiiated committees, and the 

identification of each affiiiated committee which makes a transfer to the reporting 

committee during the reporting period, together with the date and amount of each 

transfer. 2 U.S.C. §434(b)(2)(F) and (3)(D). 

Facts and Analysis 

UAPEC incorrectly disclosed transfers, totaling $313,467, from affiliated political 

committees. Four transfers $27,867 were included in the unitemized contributions from 

individuals total. The remaining 21 transfers, totaling $285,600, were itemized as 

contributions from Other Political Committees. All of these transfers should have been 

reported and itemized as Transfers from Affiliated/Other Party Committees. UAPEC 

representatives were advised of these disclosure errors at the exit conference. 

In response, UAPEC's Legal Counsel related there had initially been some uncertainty 

among UAPEC staff concerning whether the affiliates (local unions) were acting as 

collecting agents. Counsel stated after further investigation, UAPEC staff concluded the 

receipts were in fact transfers from affiliates and agreed to amend the reports as 

recommended. 

Interim Audit Report Recommendation 

The Audit staff recommends that, within 30 calendar days of service of this report, 

UAPEC amend its reports to properly disclose the transfers from the affiliated 

committees totaling $313,467 ($285,600 + 27,867) on Schedule A, Line 12, Transfers 

from Affiliated/Other Party Committees.