I

MEMOHJ\NDUM

TO:

THROUGH:

FROM:

SUBJECT:

f f·DERAl ELECTION COMMISSION

\VA')HINC, ION D C ,?04fd

February 11, 1980

FRED EILAND L)~

PRESS OFFICE ? · BOB COSTA ~- Q\J

JUDY lIAWKIN~

PUBLIC lSSUANCE OF AUDIT REPORT -

ACTIVE BALLOT CLUB, A DEPARTMENT

OF RE'I'/\ r L CLERKS INTERNATIONAL UNION

• .1

I

I

•

Attached please find a copy of the final audit report

of the Active B~llot Club, A Department of Retail Clerks

International Union which was approved by the Conunission on

February 1, 1980.

Informational copies of the report have been received

by the parties involved and this repo~t may be released to

the pubJ.ic •

Attachment as statcu

cc: FEe Library

RAD

Public Records
I FEDERAL ELECTION COMMISSION

WASHING TO!'i. () ( 204h \

REPORT OF THE AUDIT DIVISION

ON THE

ACTIVE BALLOT CLUB, A DEPARTMENT OF THE

RETAIL CLERKS INTERNATIONAL UNION

I. Background

A. Overview

•,..

-

•

'rhis report is based upon an audit of the Active Ballot

Club, A Department of the Retail Clerks International Union

{"Active Ballot Club") undertaken by the Audit Division 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 ("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 tim~ audiLs and field investigations with respect to reports

and statements filed under the provisions of the Act •

The Active Ballot Club ("ABC") registered with the

Clerk of the United States House of Representatives on April 17,

1972, and maintains its headquarters in Washington, D.C. The

primary function of the ABC is contributing funds to candidates

seeking Federal office.

The audit covered the period from January 1, 1977

through January 31, 1979, the final coverage date of the most

recent report filed by the ABC at the time of the audit. The

ABC reported an opening cash balance on January 1, 1977 of

$87,936.27, total receipts for the period of $469,827.57, total

expenditures for the period of $369,335.18, and a closing cash

balance on January 31, 1979 of $188,428.66.

This audit report is based upon 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 available to Commissioners

and appropriate staff for review •
I

-2-

B. K{~y Personnc 1

'I'he principal officers of the ABC during the period

audited w"rp Mr. James T. Housewright, Chairman from January 1,

to 1977 to r~f~plcmber 27, 1977; Mr. William H. Wynn, Chairman from

September }', 1977 to the present; r1r. William H. Wynn, Treasurer

from JllnUllt-y 1, 1977 to September 27, 1977; and Mr. Thomas G.

Whaley, TrPd~>urer from September 27, 1977 to the present.

c. Scope

'I'he audit included such tests as verification of total

reported rflccipts, expenditures and individual transactions;

review of r('quirQd supporting docl1T1lpntation; analysis of Commi ttee

debts and obligations; and such ot IH\r audit procedures as dcpmed

necessary under the circumstances.

II. Audit Findings and Recommendations

A. Contribution Solicitation In Non-Compliance

with Appropriate Requirements

~.

•

Section l14.5(a) (2) of Title 11 of the Code of

Ft.\dcrc:11 Rcqulations st.:1tes, in pilrt, that a guideline for

contributions milY be sUCJCJested by a labor organization, or its

sl'parate segregated fund, provided that the person soliciting

or the f"olicitation informs the pcrsons being solicited -

suggestions; and

(ii) that an individual is free to contribute

mor0 or ](\SS than the guidelines suggest and the labor organization

will not f~lvor or disadvantage anyone by reason of the amount of

their contribution or their decision not to contribute.

In addition, Section ll~.5(a) (3) requires that any

person soliciting an employee or member for a contribution to a

separate segregated fund must inform the employee or member of the

politicloll purposes of the fund at the time of the solicitation.

Further, Sc'ction 114.5(a) (4) requ.ires that any persons soliciting

an ('mploy(~c or member for a contribution to a separate segregated

fund must inform the employee or member at the time of such

solicit'1Lion of his or her right to refuse to so contribute without

uny reprisal. Section ll4.5(a) (5) further states that any written

solicit~tion for contributions to a separate segregated fund which

is addrl~~:;sed to .:1n employee or member must contain statements

which comply with the requirement~-; of paragraphs (a) (3) and (4) of

this St>ction, and if a guideline is suggested, statements which

comply with the requirements of paragraph (a) (2) of this section.
I

.'

I

I. t

-)-

Our review of the solicitation materials, such as

letters addressed to employees and members soliciting contributions

in conjunction with Century Club membership renewals and silver

card sales, disclosed that the materials were apparently not in

compliance with the requirements outlined above. This is based

upon the fact that: a) the solicitees were not informed, as

required by Seetioll 1l4.5(a) (2), that the dollar amounts specified

in the solicitation materials were merely a suggestion, and that

more or less than thf' ~;tated amount may be 'liven. In addition, the

solicitees were not informed that the labor organization will

not favor or disadvdut d(Je anyone by reason of the amount of

their contribution or lheir decision not to contribute at all;

b) the solicitation materials did not contain statements informing

the solicitees of the political purposes of the fund, as required

by Section l14.5(a) (3); and (c) the solicitation materials did not

contain statements informing the solicitccs of the right to refuse

to so contribute without any reprisal, as required by Section

114.5('1) (4).

With resp0ct to the dollar amounts specified in

the solicitation materials, we were informed by Active Ballot Club

officials that under the present system, solicitecs cannot contribute

l('ss than the stated amount, but if they did not wish to contribute

.. t. all, they were und("lr no compulsion to do :,().

l~\ 'commenda tion

Based ulJon the Audit staff's reconun(~ndation, the Active

Ballot Club presenled d copy 0: its newly adopted solicitation procedures on OctoDer 31, 1979 w~lich appear to L<.~ in compliance with

tht.... requiremen ts outli.netl above. Addi tionall y, the ABC agreed to

fUl'nish copies of materials containing the r('ltllired information prior

to making any further written solicitations. Further, the Active

Bl1Llot Club advised its personnel and the locdl unions of these

r\~quiremcnts. 'rhcreforc, the Audit staff r()l"OlllHlends no further action

on the matter.

B. Required Notice not Included

On Solicitation Materials

Section 435 (b) of rritle 2 of the Un it cd States

Code states that c~ch conunittee shall incluu(' un the face or

front page of all lit~rature and advertiseffiPHls soliciting

contributions the follo\ving notice:
I

-4-

"A copy of our report is filed with the

Federal Election Commission and is

available for purchase from the Federal

Election Commission, Washington, D.C."

During our review of the solicitation materials

outlined in paragraph (A) above we determined that the required

notiet' was not included th~reon.

[{("'commendation

Based upon the Audit staff's recommendation, the ABC included

the notice in the revised solicitation procedures outlined in

p~raqraph (A) above. Therefore, no further action is recommended

on the matter. c·

- C. Itemization of Individual Contributions

c

•

Section 434(b) (2) of Title 2 of the United States

Code requires that each report of receipts and expenditures shall

disclose the full name and mailing address (occupation and the

principal place of business, if any) of each person who has made

one or more contributions to or for such committee within the

c~lcndar year in ~n aggregate amount or value in excess of $100,

tOCJcthcr with ~he amount and date of such contributions.

Our review of the receipts records disclosec 45

contributions, each in an aggregate amount or value in excess

()f $100, totalinq $6,912.00 not itemized by the Active Ballot

Clul>. The majority of these contributions, according to the

Act i Vt' Ballot Club officials, resulted from two (2) Century

Club collections made by a local during the same year representint} $100.00 membership amounts for 1978 and an early collection

toward the 1979 membership. In addition, we determined, based

upon conversations with Active Ballot Club officials, that it is

customary for individuals who contribute $100.00 each year in

conjunction with the Century Club to also contribute $2.00

during the same year for the purchase of Silver Cards. As a

result, it is reasonable to conclude that individuals within

this category made contributions, each totaling $102.00 in the

aqqreqate amount or value, during a calendar year, thus requiring

itemization. However, no system was maintained in order to

perform a cross-aggregation check between the records of Century

Club members and Silver Card sales, and vice versa, to determine

whether any of the contributions did, in fact, exceed $100.00

durinq the year.
I

-

I

-_._-- ------------

-5-

Th(~ J\ct i V0 Ballot Club officia Is stated that since

thf' locals do not illways provide Silver (\trd ticket stubs when

s('JHlinq the proc0{'d~ of the sales to headquarters, combined with

t hp costs involve·d, it is virtually impossible to maintain an

..qqreqCltion SystPl1I qf this nature.

fl. '(~ommendut ion

Based upon thf' Audit staff's recommendation, thp ABC filed

;tTl umended report on Octobf\r 31, 1979 itcmizinq the 45 contrihutions totalinq $6,912.00. ~herefore, no further action is r0commended on this portion of the matter. However, in response to

our recommendation that the J\.BC develop a syst-pm to perform t1

cross-agqreqation check of the contributions rC'ceived throuqh its

two (2) r0ccipts mpthods, the ARC proposed Cl system which the

Audit staff felt would not adequately fulfill the aggregation

function. Therefore, the Audit staff presented a counter

proposal to the ABC which recommended that s1.nce the problem

is conccntruted in the Century Club which contains fewer members

than there are Silvpr Card purchasers, a procedure be instituted

requiring each Centllry Club member to report to the Active

:~,:.l :c:'-_ C~1,-::~~ ~~'. OJ ~~:4 .. ' --.. 1~~,:1 ,:1()llLlr~ ~~7,.)~~~t l): S ~:-l'_~:~ ;-'~::"~1.::;

purchaS0d by the mC'mIH'r durinq the periods coinciding with l\RC

disclosure reportinq periods. On lJanuary 10, 1980, the Active

B\lllot Cluh conc;urr~··d with the connter proposal and provided a

dr;lft lett{~r whicb it intends to send to each of the Ccnt.ury

Club contributors informing them of the requiremen~. rr'herefore,

the Audit staff recommends no further action on the matter.

D.

I

Section 412 (c) (2.) of Title 2 of tlH' lJnited States

Code states, in part, th~lt it sholl be the <1nt y of the treasurer

of a pol.iticLll committee to keep Ll detailed dud exact account of

Lhp identification of cvC'r'l person making u contribution in excess

of 550, and the dat·(~ and uffiount thereof and, if a person's

contributions aqqrpqatc more than ~lOO, the account shall include

t h(' occupotion ond principol place of business (if any).

J\ccordiTlq to Sc'ction 100.10, 100.11, and 100.12

of 1'itle 11 of th(· ('odp of Feder.."1l Requlations, "identification"

fTl(',lnS, in the cas(' of ~ln individuul, his or her full name,

includinq the fir~t t1C:lmc, middle nLlme or initi'-ll, if available,

l~st name, and full address of his or her principal place of

residcncL". "OccupdL ion" means principal job title and whether

or not sclf-cmploypd. "Principal place of business" means the

full n3r.1C" unc1t~r \vh i eh the' business is conducted and the ci ty and

st.,tt.~ in which thf' p(~rson is employed or conducts business.
I

~.

-6-

nurinq the audit, we determinpd that the contribution

records did not contain the addresses of individuals who

contributC'<1 ..mounts in excess of $50, and addresses and occupations

of individ\1.. I·~ who contributed aqqreqatp amounts in excess of $100.

\~e noted tll.ll it W'lS the usual practice for written communications

to be addr(\:;~;.'d to individuals in care of their assigned union

locals.

Hflcommenda t. i ('11

Based nl/()t\ the Audit staff's recommendation, the Activf'

Ballot Club clqrecd to obtain the contribution information

and incorpnt·.. tJ' it into their records. Additionally, procedures havf'\ h('('n developed to ensure that contr ibution records

arc mainta i npd in consonance wi th the requirement~l set forth

above. 'rhe l\ct- i ve Ballot Club has informed the local unions

of the requi rpnu"'nts. Thcr0forc, the l\ud i t sta ff recommends

no further Llction on the matter .

E. .!_!1~J~'~l'late Discl osurc of Reimbursements

Section 434(b) (7) of Title 2 of the llnited States

Code requirc~ the disclosure of each contribution, rebate, or

other receipt in excess of SIOO not otherwise listed on the

rE'ports of rc~ccipts and cxpendi turcs.

Our review of the receipts activity on the 1978

year end roport revealed th2t six (fi) r(~imbursements totaling

$4,100.00 recoived from fO\lr (4) committees were disclosed as

tr~nsfers. total of $2,800 of the amount was received from

t\'l/O (2) unr~qisterec1 committees ($1,300 from one and ~1,500 from

the other). Had the a~=ove itclms been bonafide transfers in excess

of $],000 made by each of the two (2) unreqistered committees, the

situation would have ordinarily required them to register and file

reports of receipts and expenditures with the Commission. However,

our further review revealed that expenditures had been made which

benefited the four (4) committees and they reimbursed the Active

Ballot Club in an amount equivalent to the expenditures.

RecommcndCltion

Bascct upon the Audit staff's recommendation, the ~ctive

Ballot Cluh filed an amended report on October 31, 1979 rcclassifyinq the rccciuts from transfers to reimbursements. ~hcrcfore, no

further acti()~ is recomnK'ndcd on the matter.
I F.

-7-

Matters Referred to the Office Cfc-n-e-ral Counsel

-

•

Presented below arC' matters noted durinq the audit

which wert' lAcfcrred to the r011lmi ssian I s Office of ~eneral

Cau n ~i c 1 () 11 ,J u 1y 30, 197 9 far (·()n sidc r c:1 t ion.

(1) Transmittal of funds on a timely basis;

(2) Solicitation p,'ocedur0si and,

(3) Transfer of funds from non-Federal to Federal

accounts.
,

•..,

FEDERAL ELECTION COMI\1ISSION

WASHINGTON 0 l ~04h\

--.

-

I

-

REPORT OF THE AUDIT DIVISION

ON THE

ACTIVE BALLOT CLUB, A DEPARTMENT OF THE

RETAIL CLERKS INTERNATIONAL UNION

I. Background

A. Overview

This report is based upon an audit of the Active Ballot

Club, A Department of the Retail Clerks International Union

("Active Ballot Club") undertaken by the Audit Division 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 ("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 Active Ballot Club ("ABC") registered with the

Clerk of the United States ~ouse of Representatives on April 17,

1972, and maintains its headquarters in Washington, D.C. The

primary function of the ABC is contributing funds to candidates

seeking Federal office.

The audit covered the period from January 1, 1977

through January 31, 1979, the final coverage date of the most

recent report filed by the ABC at the time of the audit. The

ABC reported an opening cash balance on January 1, 1977 of

$87,936.27, total receipts for the period of $469,827.57, total

expenditures for the period of $369,335.18, and a closing cash

balance on January 31, 1979 of $188,428.66.

This audit report is based upon 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 available to Commissioners

and appropriate staff for review.
,

r.~

-

-2-

B. Key Personnel

The principal officers of the ABC during the period

audited were Mr. James T. Housewright, Chairman from January 1,

to 1977 to September 27, 1977; Mr. William H. Wynn, Chairman from

September 27, 1977 to the present: r1r. William H. Wynn, Treasurer

from January 1, 1977 to September 27, 1977: and Mr. Thomas G.

Whaley, Treasurer from September 27, 1977 to the present.

C. Scope

The audit included such tests as verification of total

reported receipts, expenditurc~ and individual transactions:

revi(~w of required supporting documentation: analysis of Committee

debts ilnd obligations; and such other audit procedures as deemed

neCC!1~;;1ry under the circumstances.

II. Audit Findings and Recomm0ndations

A. Contribution Solicitlilion In Non-Compliance

wi th Appropriate Requ ~_rements

I

,

Section l14.5(u) (2) of Title 11 of the Code of

Fcdcrul Rcqul~tions St3tc~, in part, that a guideline fer

contributions may be sugqcsted by a labor organization, or its

separate segregated fund, !Jrovidcd that the person soliciting

or the so~icitation inform~ th~ persons being solicited -

(i) th.:l t the CJll i (leI ines arc r.K:re 1.1

suggestions; and

(ii) that ~n individual is fl"=e ~_o contribute

marl' or less th3n the guidc1inC's suggest and th\.-:, labor org~nization

will not favor or disadv~nt~qc ilnyone by reason of the amount of

thl~ir contribution or their decision not to contribute.

In addition, Section 114.5(a) (3) requires that any

person soliciting an employee or member for a contribution to a

separate segregated fund mU3t iTlform the employee or member of the

political purposes of the fund at the time of the solicitation.

Furthl.~r, Section 114.5 (<.1) (4) requires that any persons soliciting

an cmr.1oyce or mcmbor for a contribution to a separate segregated

fund r.111St inform the cnlplo}'cc or member at the time of such

solil:it~tian of his or her right to refuse to so contribute without

any reprisal. Section l14.5(a) (5) further states that any written

solicit3tian for contributions to a separate segregated fund whicll

is addressed to an employc0 or m0mber must contain statements

\oJhich cornp 11' wi th the rcquiremen t~~ of par~CJraphs (a) (3) and (4) of

this section, an~ if a quide1ine is sugq0sted, statements which

compl~' with tht..~ requirements of p~rZ\gr~ph (a) (2) of this section.

-------_._-------- -- -------.--- ---- --------------------
,

-I

-3-

Our review of the solicit.,tion muteriL11s, such as

letters addressed to employees and ll\t'mbers soliciting contributions

in conjunction with Century Club Il\t'll\bership renewals and silver

card sales, disclosed that the mal0rials were apparently not in

compliance with the requirements out lined above. This is based

upon the fact that: a) the solicitl'l's were not informed, as

required by Section l14.5(a) (2), th~t the doll~r amounts specified

in the solicitation materials were merely a sU~Jgestion, and that

more or less than the stated amount may be qivcn. In additi.on, the

~)()l icitees were not informed that the labor orqanization will

not. favor or disadvantage anyone by reason of the amount of

llaf'ir contribution or their decision not to contribute at all;

b) t.ht' solicitation materials did not contain statements informing

thf.' ~;()licitees of the political purposes of the fund, as required

by :;c'l·tion 114. S (a) (3); and (c) the solicitation materials did not

cOllt .. in statements informing the solicitees of the right to refuse

to :;0 contribute without any reprisal, as required by Section

114.')(.1) (4).

With respect to the dollar amounts specified in

the ~iolicitation materials, we were informed by Active Ballot Club

officials that under the present system, solicitees cannot contribute

les~ than the st-,")tcd amolln t-, bnt. J.f thC'.F did not \'li:-h to ccnt.r'i~Gt~

at all, they were under no compulsion to do so.

Rccornmendaticn

Based upon the Audit staff's recon~endation, the Active

Ballot Club presented a copy of its newly adopted solicitation procedures on October 31, 1979 which appear to be in compliance with

the requirements olltlined auove. Additionally, the ABC agreed to

furnish copies of matcrial~i containing the required information prior

to making any further writl.t'll solicitations. Further, the Active

Ballot Club advised its per~;onnel and the local unions of these

rcquiremcnts. 1'here fore, lht.~ l\ulli t sta f f reconunends no further action

on the matter.

D. Required Notice not Included

On Solicitation Materials

Section 435(b) ol Title 2 of the United States

l·O"it· ~t.:ltc~~) th~t each committee' shall include on the face or

front paq~ o~ all literature and advertisc::lcnts soliciting

contl-jbutions the follo\vin<J notice:

,

EJ_.• _ ::e. : .' - .... .- ......csso.zz:c ··...1· ,....~4R 6 g. ; . C5
,

-4-

"A copy of our report is filed with the

Federal Election Commission and is

available' for purchase from the Federal

Election ('ommission, Washington, D.C."

During our review of the solicitation materials

outlined in paragraph (A) above we determined that the required

notice was not included thereon.

Reconunendation

Based upon the Audit staff's recommendation, the ABC included

the notice in the revised solicitation procedures outlined in

paragraph (A) above. Therefore, no further action is recommended

~. on the matter.

- C. Itemization of Individual Contributions

I

,

Section 434(h) (2) of Title 2 of the United States

Code requires that each report of receipts and expenditures shall

disclose the full nome and mailing address (occupation and the

principal place of business, if any) of each person who has made

one or more contributions to or for such committee within the

calendar year in an aggregate amount or value in excess of $100,

together with the amount and date of such contributions.

Our review of the re~eipts records disclosed 45

contr~butions, each in an aggregate amount or value in excess

of $100, totaling $6,912.00 not itemized by the Active Ballot

CI·jb. The majority of these contributions, according to the

Active Ballot Club officials, resulted from two (2) Century

Club collections made by a local during the same year representing $100.00 membership amounts for 1978 and an early collection

toward the 1979 membership. In addition, we determined, based

upon conversations with Active Ballot Club officials, that it is

customary for individuals who contribute $100.00 each year in

conjunction with the Century Club to also contribute $2.00

during the same year for the purchase of Silver Cards. As a

result, it is reasonable to conclude that indi~lidu3ls within

t~is cateqor'l m~de contributions, each totalinq $102.00 in the

a~0regatc amount or value, during a calendar y~~r, thus requiring

it0~i~~tion. However, no system was maintained in order to

p0~:0rm a cross-a~qr0Y3tion check between the records of Century

Club membcr~ and Silver Card sales, and vice versa, to determine

wht.:thcr any of the contributions did, in fact, exceed $100. 00

dur i:1q the YCdr.
,

-

I

-

'.."

,

-5-

The Active Ballot Club officials stated that since

the locals do not always provide Silver Card ticket stubs when

sending the proceeds of the sales to headquarters, combined with

the costs involved, it is virtually impossible to maintain an

~qgreqation system of this nature.

Hccommendation

Based upon the Audit staff's recommendation, the ABC filed

an amended report on October 31, 1979 itemizing the 45 contributions totalinq $6,912.00. ~hercfore, no further action is recommended on this portion of the m~ttcr. However, in response to

our recommendation that the ABC develop a system to perform a

cross-aggregation check of the contributions received throuqh its

two (2) receipts methods, the ABC proposed a system which the

Audit staff felt would not adequately fulfill the aggregation

function. Therefore, the Audit staff presented a counter

prolJOs.:ll to the ABC which recommended that s1nce the problem

is concentrated in thc' Century Club which contains fewer members

th~n there arc Silvpr Card purchasers, a procedure be instituted

l:'cquirin0 each Centtu-y Club member to report to the Active

Ballot Club the quantity and dollar amount of Silver Cards

purchased by the rncmlH~r durinq the periods coinciding with ABC

di:::L'l~)~~u::·..:: :-.,:;:.;ol.-tinCj r·c!-i f:1.1s. (":1 J:::~1:.J.~./ 10, 19S0/ the .7\ctivc

Ballot Club concurred with the counter proposal and provided a

draft letter which it intends to send to each of the Century

Cllb contributors informing them of the requirement. ~herefore,

tho Audit staff recommends no further ~ction on the matter.

D.

s(~C t ion 4 3 2 (c) (2) -:' f rr i t 1 (' 0 f t h (~ t1nited S t 3 t c s

Code st~t0S, in part, that it sh~ll b0 the duty of thp treasurer

of a po 1 i tic:11 commi t. tee to kec:; .:l dt'C)tc3 i led anl1 exact account of

th0 idcnti~ication of every person making a contribution in exces~

of $50, and the date and amount thereof and, if a person's

contributions agqrcq~tc more than S100, the account shall include

the occupZltion and principal place of businc~ss (if any).

According to Section 100.10, 100.11, ,1nd 100.12

of Titlt.... 11 (~f th0 Code of Fcdt:r~l Pl.... (nl13tinn~~, "identification"

Ph'\,lIl~~, i:: t:1(~ CZlse of un indiviau.:ll, hi.s or hl'r full name,

includir:,: the first num0, middl~"\ namt~ or initidl, if aV.:l.ilable,

1,,15 t n:n::t.-"\, 3:1d. full ud\.l rl-'SS 0 f his or her pri nc ipa 1 place of

rcsid~:)ncc. "Occupation" means princip~11 job title and whether

or no t Sl-"\1.:- -cmp loyed. "Princ i !,.:11 P1,1e""\ of busi n~ss" means the

full r1.~l~'·~"\ u:;-:ler \vhich tht" busi~css is c("\n<1urt.l'l! and the city and

~~t·.l~ ,\ i:; \·:~':'ch th(:~ pprson is c~:;loYI~d "r conducts business.
,

-

-()-

nuring the audit, we dpLerrninc'd t.hat the contribution

record~ d i (1 not contain the addr(\~:;ses of i nd ividuals who

contrihut-pd amounts in excess of $50, and tlddresscs and oc~upations

of inc1 i v i dlla Is who contributed ilC"}qreqat<? ~lmnunts in excess of S100.

We notpd t h.,t it was the usual prilctice fnt- written commun i cations

to bt' ,ltldr-f'~)~f"<l to individuals in care of t h0ir assigned union loc.:ll~;.

B,l~;(·d upon the Audit staff's recommendation, the Active

Ballot C 1Ill> agreed to obtain th(~ contribution information

_and incol tInrate it into their r0cords. Additionally, pl·Ocedures hdVP been developed to ensure that contribution records

arc ffiClint .. ined in consonance with the requirements set forth

above. 'l'h.· l\ctive Ballot Club hd~-i informed the local unions

of the rt· f lllirements. Therefore, the Audit staff recommends

no furth(\l ,)~tion on the matter.

E. _' r_l.• H~cquate Disclosure of Reimbursements

I

-

-'

•

~(!ction 434 (b) (7) of Tit10 2 of the United States

Co(ic rQquirf~~~ the disclosure' of c~H~h contribution, rebate, or

other receipt in excess of 5100 not otherwise listed on the

reports of receipts and expendi tur(·~).

Our review of the rCC0 i pt~; acti'.ri ty on the 1978

yc~r end report revc310d that six (h) rcimburs~ments totaling

$4,100.00 rf~c(\ivcd from four (4) (~f)mmittccs were disclosed as

tr;lns f(~rs. l\ total of $ 2, 800 of t hp <Jmoun t was received from

t\vO (2) unl-eqistercd comJnitteps C:;1,300 from one and SI,500 from

the othpr). Had the above itcmf; }/f-,pn bonafide transfers in excess

of $1,000 mZldc by each of the t\Vf ) (2) unrcqistcred committees, the

5i tua t i on \-Jould have ordinari 1y r p (l\l ired them to register and fiIe

rpport·~~ of ree\.~ipts Clnd cxpcndi turps with the Commission. However,

our fur tbt:,r review rcvca led tha t n:.:nendi turcs had been made which

bc>nc~- i t0c1 the four (4) committ.ce~·~ a~d they reimbursed the Active

Rallot Club in an amount equivalent to the expenditures.

ReCOi1ffiCl1':.-l tion

B;ls ,.:,,_1 upon t h (' Aud itst.-:\ f f 's r c comrnenda t ion, the Ac t i ve

B~llot Club filed 3n amended r0port on October 31, 1979 reclassifyinn tho r0ceipls [rom tr3nsfcrs to reimbursements. ~herefore, no

fUl·t:~(.>l.- action is rccoITuTlcndcd on the matter •
· ,

F.

-7-

Matters Referred to the Office

General Counsel

Prespnted below are matters noted durinq the audit

which were refprrcd to the Commission's Office of ~eneral

Counsel on July 10, 1979 for consideration.

(1) 'f'ransmittal of funds on a timely basis;

(2) Solicitation procedures; and,

(3) Transfer of fun(ls from non-Federal to Federal

accounts.
':'~. "

..,

1