Part I
Background

Authority for Audit

This report is based on an audit of Crane for Congress Committee (CFCC), 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 risk factors and,
as a result, this audit examined:

The receipt of excessive contributions and loans.

The receipt of contributions from prohibited sources.

The disclosure of contributions received.

The consistency between reported figures and bank records.

The completeness of records.

Other committee operations necessary to the review.

DAMAPWONS

Changes to the Law

On March 27, 2002, President Bush signed into law the Bipartisan Campaign Reform Act of
2002 (BCRA). The BCRA contains many substantial and technical changes to the federal
campaign finance law. Most of the changes became effective November 6, 2002. Except for
November 7, 2002 through December 31, 2002, the period covered by this audit pre-dates these
changes. Therefore, the statutory and regulatory requirements cited in this report are primarily
those that were in effect prior to November 7, 2002.


Facts and Analysis

Contributions from individuals required to be itemized were reviewed on a 100% basis. The
review indicated that CFCC failed to disclose or inadequately disclosed the contributor’s
occupation and/or name of employer for 37% of the contributions. Three fundraising and one
solicitation device were reviewed. One fundraising device did not contain a request for the
contributor’s full name, mailing address, occupation and name of employer or contain an
accurate statement of Federal law regarding the collection and reporting of individual contributor
identifications. In addition, CFCC was not able to provide documentation showing a subsequent
written or oral request for the missing information. As a result, CFCC has not demonstrated best
efforts to obtain, maintain and submit the required contributor information.

Interim Audit Report Recommendation
The Audit staff recommended that CFCC take the following action:

e Provide documentation such as the initial solicitation devices, phone logs, returned
contributor letters, completed contributor contact information sheets or other
materials which demonstrate that best efforts were used to obtain, maintain, and
submit the required disclosure information; or

e Absent such a demonstration, CFCC was to make an effort to contact those
individuals for which required information was missing or incomplete; and

¢ Provide documentation of such contacts, such as copies of letters to the contributors
and/or phone logs; and

¢ File complete amended reports to disclose any information obtained from those
contacts.

Committee Response to Recommendation and Audit Staff's Assessment

In response to the recommendation, CFCC was able to obtain the missing contributor’s
occupation and/or name of employer for all the contributors who were identified as inadequately
disclosed. In addition, CFCC filed the necessary amended reports. Therefore, it is the opinion of
the Audit staff that CFCC has fully complied with the recommendation.



Table of Contents

Part I. Background
Authority for Audit
Scope of Audit
Changes to the Law

Part II. Overview of Campaign
Campaign Organization
Overview of Financial Activity

Part III. Summary

Finding and Recommendation

Part IV. Finding and Recommendation

Disclosure of Contributor Information

Page


Part III
Summary

Finding and Recommendation

Disclosure of Contributor Information

Contributions from individuals Tequired to be itemized were reviewed on a 100% basis. The
review indicated that the CFCC failed to disclose or inadequately disclosed the contributor’s
Occupation and/or name of employer for 37% of the contributions. There was no documentation
to indicate that the CFCC used best efforts to obtain this information. The Audit staff
recommended that the CFCC contact the contributors, submit evidence of such contact and file
amended reports disclosing the information obtained. In response CFCC was able to obtain the
missing contributor’s occupation and/or name of employer for all the contributors who were
identified as inadequately disclosed. (For more detail, see p. 5)



FEDERAL ELECTION COMMISSION
WASHINGTON, D.C. 20463

February 24, 2004

MEMORANDUM

TO: ROBERT W. BIERSACK
PRESS OFFICER
PRESS OFFICE

FROM: JOSEPH F. srour, IY
ASSISTANT ST. P ‘CTOR
AUDIT DIVISION

SUBJECT: PUBLIC ISSUANCE OF THE AUDIT REPORT ON CRANE FOR
CONGRESS COMMITTEE

Attached please find a copy of the audit report on Crane for Congress Committee,
which was approved by the Commission on February 5, 2004.

The report may be released to the public on February 24, 2004.

Attachment as stated

ce: Office of General Counsel
Office of Public Disclosure
Reports Analysis Division
FEC Library
Web Manager


Part IV
Finding and Recommendation

| Disclosure of Contributor Information

Summary

Contributions from individuals required to be itemized were reviewed on a 100% basis. The
review indicated that CFCC failed to disclose or inadequately disclosed the contributor’s
occupation and/or name of employer for 37% of the contributions. There was no documentation
to indicate that CFCC used best efforts to obtain this information. The Audit staff recommended
that CFCC contact the contributors, submit evidence of such contact and file amended reports
disclosing the information obtained. In response CFCC was able to obtain the missing
contributor’s occupation and/or name of employer for all the contributors who were identified as

inadequately disclosed

Legal Standard
Required Information for Contributions from Individuals. For each itemized contribution

from an individual, the committee must provide the following information:
¢ The contributor’s full name and address (including zip code);
The contributor’s occupation and the name of his or her employer;
The date of receipt (the date the committee received the contribution);
The amount of the contribution; and
The election-cycle-to-date total of all contributions from the same individual. 11 CFR
§§100.12 and 104.3(a)(4) and 2 U.S.C. §434(b)(3)(A).

eecee

Best Efforts Ensures Compliance. When the treasurer of a political committee shows that the
committee used best efforts (see below) to obtain, maintain, and submit the information required
by the Act, the committee’s reports and records will be considered in compliance with the Act.
2 U.S.C. §432(h)(2)(i).

Definition of Best Efforts. The treasurer and the committee will be considered to have used
“best efforts” if the committee satisfied all of the following criteria:

e All written solicitations for contributions included:

o Acclear request for the contributor's full name, mailing address, occupation, and
name of employer; and
© The statement that such reporting is required by Federal law.

e Within 30 days after the receipt of the contribution, the treasurer made at least one effort
to obtain the missing information, in either a written request or a documented oral
request.

¢ The treasurer reported any contributor information that, although not initially provided by
the contributor, was obtained in a follow-up communication or was contained in the
committee’s records or in prior reports that the committee filed during the same two-year
election cycle. 11 CFR §104.7(b).



Report of the
Audit Division on

Crane for Congress Committee
January 1, 2001 - December 31, 2002

Why the Audit

Was Done

Federal law permits 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.

' 2 U.S.C. §438(b).

About the Committee (p. 2)

Crane for Congress Committee is the principal campaign
committee of Phillip M. Crane, Republican candidate for the
U.S. House of Representatives from the state of Illinois, 8th
Congressional District and is headquartered in Rolling
Meadows, Illinois. For more information, see chart on the
Campaign Organization, p. 2.

Financial Activity (p. 2)
e Receipts

o From Individuals $129,601
o From Political Party Committees 556,795
o Other Receipts 5,901
o Total Receipts $ 692,739
e Disbursements
o Operating Expenditures & Other $831,863
Disbursements
o Total Disbursements $ 831,863

Finding and Recommendation (p. 3)
e Disclosure of Contributor Information


Report of the
Audit Division on
Crane for Congress Committee

January 1, 2001 - December 31, 2002