PUBLIC HEI.F.l\SF. OF FHJi\L l\UDIT HF.POHT

ON AFr.-C'TO COPE pec

H~·l~. "IKIII " \\'

\\'·\"111'(, I< )',.1 Jl .'II·ltd

FEDERAl U ICTION COMMISSION

FRED EILl\ND

PRESS OFFICE

;June 8, 1979

cc: FRC Libr<:lry

nAD

Public Rc·corc1 V""

Sinco ;)11 p;lrtic~~~ c()ncol~n("cl h ..1VC been noUfi.ec1, the

1·C;JOl-t C.::ln be issu(~(l publicly.

i\ttachecl is the fill;11 ;1tlclit rt'port of the' l\FL-CIO COPP.

pee \\'h ich \'l<:lS <:lppro'!(~d by the COTllm Lssion in pub! i c scssj ('n

nn Llunc 7, 197~'.

SUB.TEeT

FH-mot

i'iEt-1 0 Hl\NDtm

'T'HROUGH

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11,", 1\ "11-:11 I " \\'

\\'\,..llI',(,!1 )",111 .'11·\1)\

rt DERAl. ELECTION COMMISSION

CF.J\1'U'IED il:\11.

RETURN REC~lPT RrQUESTED

,June R, 1979

cc: i1r. l.~liW 1\ i rl:l.:ll1d, 'T'rc"StlrCl-

~ttachm~nt as stated

If you have any questions concerning the report, please

contact Fred Eiland of the Press Office (523-406S) or

Joann r'cSor] (~y of the ~udi t Di vision at (523-4155) ." I

Sinccrelv, !/h[

F£?t( Hob lrl: ,1. Costa ('r :\s~~.i :;t:.-mt SLIfE Dl.l·f-ctor

for t·lt(~ l\udi t nivh;i on

Attached Ear your information is a copy of the final

audit report of ~FI~CIO COPE PCC which was approved hy the

Commission in pub]:i c session on ,lune 7, 1979.

Dear J\'1r. rieany:

Mr. George Me~ny, Ch~jrman

~FL-CIO COPE PCC

815 Sixteenth Street, N.\'1.

Washington, n.c. 20006

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FEDI'RAl. ELECTION COM.\\ISSION

H2';~, ,11-:111 ..... \\'

\\,\,111'.1,11)"00 11\ 211·lld

HEPOR'P OF TIlE AUDI'l' DIVISION

ON TIlE

l\FL-CIO COPE PCC

I. Background

A. OvervievJ

This report is based on an audit of the American

Fcc:eration of Labor and Congress of Industrial Organizations

Committee on Political Education Political contribution

Co:m:li ttec (AFL-C 10 COPE pee) (" the Committee"), undertaken by

the :\.udit Division of the Federal Election CO::lr:1ission in

accordance with the CUillmission's audit policy to determine

whether there has been compliance with the provisions of the

Feder.::ll Election Cm'lpa;.l,in ;'..ct of 1971, as amended (lithe Act").

The aULHt was condllct<:~o.l pursua:lt to Section 438(a) (8) of 'l'it1e 2

of t:l,-~ United States Code \·:hich directs the Conmission to make

fror.~ time to time <lULU b; and :- ie Id investigatio:1s \'Ii th respec t

to rc!)orts and st.::ltcllll:llt S fi1ecl under thr~ provisions of the Act.

'rhe Comllli t: ti.'l: rC<Jistered with the Ur.i ted States 1!00we

cf Repl~csentativcs on April 7, 1972. 'l'lw pril71ary function of th,~

CO::1mi t tee on Po1i tic.::ll Education's Po1i tical contribution Comm.L t l:l~L'

is that of contributin'; funds to candida h:s seeking federal 0 r f icc.

'rhe audi t covered the period J,,1l1uar::' 1, 1975 throuqh

June 30, 1977, the final cov0ra~:e c1ate of the latest report f.i.lr::d

by the Committee at the time of the audit. '.i'he Committee n'J101~tc~d

o~;ening caS:1 at .1anuary 1,1975 of $12,87.2.75, total rccc'ipt.~~ fOl'

tiw period of $2,08G,9·14.6l; total e:-:penditun~s for the p(:,riod

of $2,068,974.83; ~1nd a closing cnsh bal.:1I1ce on June 30, 1977

of $30,792.53.

This llUC1i t rc~port is based on documents and \'Jorkinq

papers which SUl)Dort: each of the factual stater.1Gnts. 'l'hey form

pa~~t of the rec~i~c.1 upon whic:1 \:.:10 Commission based its dccisin.n~

on the mutters in the r('pol~t and \·:ere avai.lable to Commissioncl:fi

and appropriate staff [or rcvi0~.

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C. Scope --'-

:\. Commi ttee R('cc.~iyts.

II. Au~itor's Statement and Dr0cription of Findinqs

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H. !-\()y Personno 1

2) 'rhe Committee <"t'.l'.'ises unions of thl' ':lv.:lil.:lbility

():~ pee l!1l'111h:::orship ticket boo}:},:;!:s and buttons fOI- the corninq

Y(~;ll·IS pce ::unc1nd.sing drive. unions respond am1 re(!uest to be

pre''.' i ded ':'1. given number of boo}:lets. Solicitations unc1 collectio:1s

are made specifically for the AFL-CIO COPE PCC and the contributor

i fj pn'lvidcd \-lith the ticket as a receipt. ',T,'he contributions

r" i :-;.'d in this manner are acco"panied by receipt boo}:let stubs

ar; :;u!':,ortinq documentation, fon':;1nlec1 to the PCC, and then

rCi'()I·tl~d by the pee as uni tcmi Z(ld receipts•

l) l\FL-CIO headqu,l r ters stnff pc'rsonnel who "re

me11l1K'l's h.:lve authorized payroll deductions of volunt;:try

contributio:1s. ']'he pee l~eporl::; these recc-j pts as f'!.i ther

jt('m1.zec.1 or unitemi:~ed ;lS n('c(:~;sary.

During the course 01' Ull' ;lUdit, \Ve determined t-h;lt

tlw I\FT.-CIO COPE PCC c'mploy~; f',ur (:1) methods for the solicit;l \' i ()11, transrnitt;:tl and l-ecc~ i 1'1: of voluntary contri11u tions.

It is the opinion of the Audit staff, hased upon eXilmination

of the reports and st.:!t:'-'ffients fi led and records prese~tr'~, that

the l\FL-CIO COPE PCC h;l:; not c rmc1ucted its ;ld_:ivi tiC's i tl complianc,-'

with the Fc.'der;:tl Bluct-ion CamlFliqn l\ct and that the r'2!.Jorl:s and

st;:ttem..:nts filed by tlw Commitl:r~0. did not f<lirly pn:se:lt t-l10

fin':ll1ci.:ll ;lctivi ties () r the Cf1!lIrn.i. ttec for th.: peri od covc'n'd by

the .:mc1 i t.

']'he audit il\l:luded ~·;uch tests a~; ver1.fication of total

n~p()I' t , ,,j receipts and l'x!Kmd i tur.es Clnd individual transactions;

revi.'v; of: required supportinq documentation; analysis of Committee

debt:; 011\(1 obliqations; aml, such other audit procedures as deemed

nOCI':-;~-;ilry under the circumstances.

'I'he principal ()ffic(~rs of the Committee for the period

of the' ;Hld 1. t \vere Geonl<' r·1ean,/, Chairman and Lane Ki rklancl,

Sc'cn~ tilry-'I'reasurer.

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The member union may permissibly solicit contri-

},ill i (III:: in this manner antI the individual soliciting is considQrc'd

,til .I'l'·lll of the i\FL-CIO COPE PCC. However, in some cases (see

Findinq 13), the voluntary contributions received for the benefit

nit Ill' PCC were being deposited together with prohibited union

t n"l::ury funds in labor organization accounts, and being held

Ill' to one year prior to their transfer to the PCC. As noted

ion Findinq 13, LIds practice is not acc()plable.

'['Iv..! Commission determilll)c1 on AU9ust 3, 1978 that

lhe following !Jrocedures be employed when voluntary contributions

arc collected by members of the AFL-CIO and are transmitted to

the AFL-CIO.

Whcn a member or official of a reporting international, national or local union \,-,hich in turn is a member of

tl10 AFL-CIO solicits cont:ributions solely on behalf of the

AFL-CIO by usc of receipt booklets furnished by the AFL-CIO, the

solicitor must either 1) forward the funds irnmediatelv to the

i\FL-CIO COPE PCC; or 2) \.;i thin 10 days deposit the funds in a

transmittal account (either procedure must be in accordance with

the procedures outlined in Finding 13.). In either event, the

pec is requin..!G to include and report these rec:::dpts on its ne:·:t

d Lsclo:;ure report.

3) The pee conducts what u:)pear to be joint fundri"lisinq effort::; \·;i t11 n:l'rnber unions. Our review of Commi t tl~C

n~cords indic':tted at least OlW (1) instance where the joint

funJraising efforts on the part of the pec and a national union

consisted solel'/ of 11. tcrature supplied by the nation.:ll union

to its Inembers incUc.:l tinq th<"1 t a tJercentaCJc of the monies

colh~ctcd for the union's politic.:l.l action committee \'JQuld

:Iltimately be ror\';artk:cl to the pec. In this instance, the union

h.:td not re(!ucsted nor rL~ceived rCl~ TIl()mbership ticket booklots

for distribution to its members. These funds wore renorted as

lInitL~l!li;~(~d contributions b~{ the pec, with no indicati~n on t:.lw

I'CC di.sclosure l~cports that joint fundraisllH:T efforts \vore

condllct')l1. I!O\·;eve1.- , since the tT~lns:nittal of thQ joint fundr<1.i~)i.nq proceeds represent tranSfl)rS of f.1..1nds from the politic;1 L

Co~nittees of the labor organization to tho pce, such transfers,

rcsardl.'lss of <1:-:101..1nt, should be itolnizcd by tlw PCC as requinxl

by Section 43·l(b) (4) of 'ritle 2, United States Code •
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Accordingly, on Auqust 3, 1978 the commission

d0l.l~rmine(i tila t the followin~J procl~clures be used when the

AFl..-CIO en(Jl\(jL!s in joint fundraising activities \vith a member

unioll.

Tn order for the solicitation to cOllstitute a

"joint fundl-it.1 sinq effort" on the part of the PCC and the member

union political cOlllmittee the person solicitin'J the' contribution

musL, among other requirements under Section 114.5 of the

Commission's Rcq\11 ations (11 CFR 114.5), inform the member at th(~

time of the solicitation of the purpose of the: fUl1l1 (Le., that

Ll portion of the funds will be sent to the l\FL-CIO COPE PCC).

Funds solici ted i.n this manr10r which are trans[erred from the

mem!Jer union politicLll committee to the PCC aro not subject to

the cont~:ibution limitations (sec 2 U.S.C. 44la(a) (5) (A)). Funds

whi c:', ,.lore not rais(;u unc!l!r the concU tions set forth nbove are not

jOillt fundraisinq efforls and are subject to the contribution

limitLlLions \Vh(~n tr.:lnSfl~r:; arc made. \'lhen using this manner of

~;oJjciLat:i.on illld collecti.l)n, 1) the political conunittee of the

membl~ I: un lon VlOU Ie: repo 1- L the'so funds as i temi z~~d or uni temi zed

contl·i.butions \~'hen r0cch:"di 2) the transfer out of funds from Uh::

w.)rn!.l'-' r union poli tical conllni Ltee to tlw PCC ','mulct be labeled as

il ioint funJraisin0 effort and reported as il transfer by the

pol i L ie':ll commi t tee 0 f the member u:lion on the ne:~t report i and

3) till.) pce would then n:port these funds as trLlnsfers-in from

tlll' l:ll'!;lbet" union politicill conm,itt-.::c on the ne:·:t rL~~)Ort ~nd lilb~l

L',lcll of thcsl..' tr.:tnsfcrs "joint fun(:::aisinu efforts."

-l) Till..' f i n'::ll ml._,thod of soli citation and collectiOI1

of volunt.:lry con td bu t.i Oil:; involvos the transmi t tal of funds

to the Pl~C wi th ilccompay i nq correspondence from the member union

indicLltill Cl l'hur th~~ fund:·; represent voluntary contributions. :~(')

other stlpportin'] documcnt.iltion '....as pl-ovided nor \,:as there any

i nciici.tion t.hat tlw PCC .mel member l..~nion had eW:Llged in joint

fund ralsinq (~f forts. '1'11(:170 fore, the t17Llnsfers froI:', the poli tical

committee ejf the member union to trw PCC \\'oI11d be lir.;ited to

:~3, 000 in an';, cnlencl.::lr ~'l~:ll~ u!l(l,~r \:::,e prov:i.~3ions of Section

441..:.(,,) (2) (C) of Ti.tle :~, l.iniV'(: St.l.tcs Code'.

i:0\·;c\,(:r, our rc-':ie','; 0f Committee records ind.le;I:'·,\

th'-it elt le'-lst O:1(~ (1) trans;i:itt.:ll 0: $10,000 fro::l il political

fUllli ',';.1 thOllL sU:1Pol-L.i.nq clocumenti:!tion or indication of the SOll~:C~;

of t:·!(~ funds Il'-l~i' bCi.~n i-ec(~i'!e(:. b':- the PCC ~nl1 reDcrtec1 . as unitl'r.:i::~.'(:

recei~)t:s. As noted in (3) i1bo':·:) , t'.:1C' l:eCL~ Lpt. of funds by the pee

from th~: po.l.itic.:11 commil:tc'(~S o~~ th..:: 1 Ll])OI: unions should be i.t\.-'::~i::,:~(:

uS t 1- ~1 !1S f ... 1'" ~j 1."C· (: \.11.& -:.11 C'" ~3 () f ClI~10 t~:l t:. •
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Recor:T:,;nc:a

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i_on..-

'i'll(~ COll1mi.ssion fur.t.h;~ rv..:uestt.~d th:-,t Liw CommitU~(~

implerr,c'nt tile ]);"oc·..:1:111",·:; outlined i:. (2), (3) and (,1) "lDove and

ilnlonci its r.(~po1~tS fi.!,'d from J<lnu:lry 1, 1975 thl~OU~;;l t.he presl.-;nt

to it(!;:~i:!.l; all tr:m:.:fl'I"S includin<; t:hos(~ \':11ich ar.c the n.;sult oi.'

joint f;'ll1dr.(1.i.~;inq l:ffo!"ts.

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0:1 Oc~:cb(:!~ 10, ](.178, thl' Co::::::it'::c,,: sub:'.dttt'd to th'2 Audit

staff ,..:r.ittcn prOL:"'I::ll:I:'~~ to be i::\plc:::entcd by l!w C01:1r.littec in

order to comply \\'i:::i1 the' above ::~·_':luil"C!l:cnts. :\lso, the Co;maittl'c:

h,15 filc:d the rcque;tcd amended rCL-'0r'ts on OC't()b<"l~ 10, 1978 und

revised amenumcnts on J.:lnuury 16 and 18, 1979 ib)!:.izing all trans:',:,;"

incluc.1inq those tb..,i: resul ted f::~Ol:1 joint fundl-uisc:rs. Since the

Commi Ltee: has :u] 1~' complil;c1 '.>1i til the recommcndu tions of the

Commission, \-:0 l~ccor:1mcncl that no furt:-:cr action is necessury .

!';i:lch t.ransmittal m\l~·;t be reported as a transfer

out bv thl~ I uca], na Lionill or intc~rnaLional union and a transfer

in by' the I'C(~. SillCl~ "illl of the politiclll committees set up b'/

the l\FL-CIO .lIld all its State and local c('ntral bodies are

treated as a 5ingll: political committee" (House Heport 94-1057,

94th Conqress 2nd ~ji.~:.:;sion, page 58), the state and locnl l\FL-CIO

central bodies may collect monies and transfer unlimited amounts

to the pce. llowev(:r, since the House Report also states that

"all of tIle' political coromi ttees set up by a single international

union and its local unions are treated as a single political

committee" there is no per se affiliation between the PCC and the

separate SL'".Jroqilted f\lnds of the international unions which arc:

ml'rnbers of. the ,\FL-Cl\). 'l'here[or(~, if the intL'rniltional union

Rolici ts mOlle''!' for j l:; 0\'0/11 pol i tica 1 fund ~ll1d does not inform

the union llIl'I~1ber ilt t.he timl~ of solicitation thilt a portion of

the contribution 1:; fOI~ the pec, the transmittal from the intc'rnational po.li.ticnl committee to the pce will not DC viewed as the

product of joint fl.;ndl"aisinq or direct soliciL11..i.on, but rath~~r

it will. be dccnlL~d :'l t 1-.1ns fc'r from ono (1.) Illul ticundid,l to poli tical

committ,.~c to anotlll:1" :'lnd must be within tlw $:;,000 anll\l,ll linliL1-

tion c,s::al)lis!1l'd ;)',' 2 l:.S.C. 441:l(a) (2) (C).

On i\l.Iqust 3, 1978, the commission determined

that the following pr.ocedures should be used when the member

union. collects on behalf of its political committee and forwards

the funds to the l\Fl.-Cr.O COPE PCC.

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of'Funcls'on linicm Accounts

Section 441b of Ti ~l~ '2' o~ .t1w United States Code

providcs'for the establishr.lent;admi.nlstriltion, and sol i~.itation

of con,tribLILions to a separate Sl.'ql-l.~qLlteu fund to be uti I lzed

fOI:" polit.ical purposes by a labor orqanization. Section 437b(a) (2)

requires, in part, 'that the trC'asun~r of each political 'committL'~('

designate ,one or more national or Stilte banks as campai0n depositories of $uch committee, \'lhile section 433(b) (9) of 'ritle 20£.

the~ United States Code requi~-cs. that a listing of all banks and

rcposi tories used by the eom:-:~it tce must be disclosed.

Our review of eon:n;itt'2c's record!; indicated that a

substantial numbci of th6 ~cluntarvcontributions received by

'various labororqLlnizations. for th~. bt~nefit of the pce apparentl';'

\:/er8 bl.~ind .cie~)ositcd ,in UniO!1 Llccoun L:.; .Llnd subsc(~u(.'n tly transfcr~·:·,:

to th,.' 'PCC~' . It should P(.' no'.:cd t.ililt due to' the v:;')C of documc;ntation mu i.nt:1ined by:.the eor:l;::ittel:~fol- rcccipts,i't\.:as not a 1'..:.:,,;,:';

possibl,~ t(). doternd nl~tlw SO'..lrcc of fLinc1s· as ·ci tlK·r· a politicLll

,contl:ibl1ti.olr::und or lini6n trcasunr."ful1d.· ... !iO\';c'!(;:~, at. lcast l-.!O

'l' t,~;·\S ....... 1.. l.)""0I. t·'lll·''': •..;,:) ;1... c.", ... tll·I"L·"· _. 1..... (...1. 11· I,.J"'1"~J..\'.:', .J.. ~;... .L ,1,)]"1~1" ~4\ • L<I - , .'11'\0 ....1 1"1': .. I.- "-0":" ... J. •••\ .........<::? 00 ' to

$l.~~lH)O~OO ''':l:!~~C~ 116tl.~d di.li~in~: tll ..~I>..;I~iod ,~llditccl. . " ~~, , • "' '" <. F. 0

'l'h,~ Coimll.i:; ~;ion cle· ~- ':'IT:i 11(~d oil t\L1': 11 S t 3, 1978 thLl t thc

COI:liili t:~L.~C Ztdv.i~~d· 1:0;:;.11 Lit.:)r ')I·\l:lnL:Ll.tion~t.:c) 1) .. 'Ion':anl' the fU:-''':3

i.r.1ll1c,i .i:~1 tc' 1Y.. ·(by I1\('hll ~~ atiw r U-,:l ". throuc:r 11 6. P('; r 50n:.11 ; . union or

()thci; pi~ohibrt0d :.1Cl:"-'lI11t) .totlw .i\FL~CTO 'COPl-: !'eC·\·:h.i.ch'mu~;t:· . dcpo·si t . the fllllC1s. \d.I:11in 10 c:<\'::-s or 2) ,..Ii.thin.lO. c.1LlYS dcpo~; i. L

,volun t:il~::'" con:-.ribu L.i nns in .":-.rall:~:liittal-" acc()~ll1ts '.;ihlch shal:1

be: uS0d ~;01c1<: for l!1";:'lii-:'"'C',3(: of transnlltU IHT-~!ol\.liltar\'contri- . btlt,i.O:1S .t<')tii~ l\F L-C to 'COi-';'; ;'"'Cc. l\cc oi.i11 ts f t<)m\·:11i.ch (":~p(mc1i tu:'.. ~; .arc m.:ldc for any }Jul:pose (.lth0r than thc~ tr<:I:i:~.f0r of funllsto Lh.::.

-'PCCc:1Ill1ot1::.:.' tr<Il':;mittal. :'CCOU!lts. F'ur.t:H:r, t.l10 l'CCis rcmiil··:·~: ':"-O"'il1C'lu(~c' L._ • • _ ., _....!-;-.c!se .'l:'''Cl'i·'"'t<~ - • '. l-" '_i c', ..J 4 a'.'i····· .......') 11C··-t .. .. l'j· to _ • --

.. C·]r'···up • , ...'.l.. .... ~:~':>;o;-f" 0_: ,,.;' • c' .

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Oil ,Octob0r 10, 1978, t::c Committ.ec suL:::.i.ttcd \'lrittcn' proc.:::(:·.:;-:;~=;

advisinu l6b:.11 laboror~ani~.:ltL~~~·of this llrovision :.1nd CUiti01i~0S

forimDlcm;cn:-.ation: 'fhcrc;::01.'':.;, it isthc, o!)ii1ion~f ·thc::,\Udit 5::':'::::

th<:l t .n~ ::l:r.:::Wr i:tC.tiOl~ in L,.i S i:1a t: loris n(~c(~ss::lry.
On ,June 12, 1978, the u.s. District court for the District

(If' Columbia i.sSUGcl a juc']lHent in fnvor of the Commission ns

:- () 11.0'.-;5 :

'section 4L11b of '1'itle 2 of the united States Code

prohibits a union qc~/ll~ral treasury fr.om making transfers to a

separate scyreqatell I'und such as the AFL-CIO COPE Political

COI,ltributions CommiLu,e (PCC).

After exanlination of the Committee's records and reports,

and conveY-"sations \..d th the Committee's Counsel and Accountant, we

verified that the AFL-CIO COPE PCC, a separate segregated fund,

trans£crre~ monies to the AFL-CIO COPE Educational Fund, a genernl

treasury fund, when the PCC had excess funds.

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C. Transfer of Funds from AFL-CIO COPE Educational Account

As n result of the iJ.uJit, on October 20, 1977, the

l~u:tlmission found l:c.:lsonc:~Dlc cu.U~;Q to believe tha t the Committee:

::0.d viol~te(l Section -i-iib. sub:~eljuently, tllL~ COI~mission un-

:;:"CCl~S:~ t:ulJ.'! a t tom:.' ted to ('nter in to fl. coneil iation .:1Clreement

,,::,:, .:1S iJ. r~:sult., "t'1.:!.j.:(: suit atJC1inst the i\FL-CIO eOPE~on

j)'.'c,-,mbcr 16, 1977.

i\J.thou,~;h th~"'l tr<1nsrc~rs of funds fro!n the pee to the

El::1C':1 tional i\ccoun t "Jore not in violation of the Act, the' transf ," 1';-,

~com the: Educ.:1tional Account to the PCC did constitute a violation.

;;.Lncl~ the Educ.:1tion:<l Fund is comprised of viJ.rious sources of

:::onief;, a transfer fro:n this aeeoun t \\'ould be comprised in \.;hol e c:-

in part of other than \"oluntary contributions, becal1:"e m0111.C::; i'll-"

funq ib le once tlh;y a 1.'(1 c1cposi tell in the sume account.

Also, there were occasions when the Educational Fund

transfarred funds to the pee. We verified that during the period

fror.l ,lallu':lry 1., 197J, throw;h ,fune 30, 1977, the PCC transferred

~~J22,OOO to the Educ;ll:io'lal Fund, while $185,000 from the

Educational Fund was transferred to the pce account. Committee

0::fic1..:11s advised thi:1~ the Ec1ucational Fund contains union tre:tSt:~~':'

fl::lds.:18 woll as voluntary contributions. (However, this statel,:'~'::::':

was noL verified since the audit of the Educational Fund was not

v:ithil1 thc~ scoix~ of our audit as directed by 1.:he Commh;sion).

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1) 'l'll'~ transfers of money from AFL-CIO COPE Eductional

Fund to tIl,· /\FL-CIO COPE pec, a separate segregated fund,

\'Loluted 2 Il.::.C. 441b;

2) ']'11l~ l\FL-CIO was enjoined at any time in the future

t'ro:n transft.:rr.ing any money from gene1'ul treasury funds or from

the :\FL-CIU COPE Educutional Fund to the separate Se9regated

funci of the pee, exc(!pt as set forth in the single transfer

ord~r below;

3) 'l'lw defendcnt was ordered to pay a civil penalty in

the amount of :;;10,000 pursuant to 2 U.S.C. 437g(a) (1) (7) and

i t \~'as furl!lf.1r. ordered that the AFL-CIO COPE Educational Fund

should transfer $312,000 to the AI"L-CIO COPE PCC forthwith.

On i\uqust 15, 1978, the l\I:'L-CIO filed notice of

a::'peul from t1w portion of the order which directed the defend;:ml:

to ~ay a civil penalty in the amount of $10,000. This action

is c ....:.:-~cn tJ '/ pL~ndinq in the Uni tCl:' S t<l tos Court of Appeals for

the: District of columbia Circuit.

D. 'i'r;llls[er of Funds

As stated in e above, Section 441b of Titlc 2 of the

i.::, i tee: S t<:l tr:::.; Code prohibits a union flcnl}ral treasury from makinc;

::~:;:1::sf,:·rs Lo u separate se~Jreq.:1tcd fund.

III ac.:L1i tion to the fU1ll1s discussed in C above, a nomin<:11

~:'::lount of: funds ($8,031) that represents voluntary contributions

i'r~\'iously dcposi tod in the Eeluca tional Fund has been trans ferrc~d

i'ro::l t:1e I:cluc<:ltional Fund to the pee. This situation is a result:

of the pee n.!ceivinq contributions from local labor organizations

Dt.:t :1u.vin,-, no indication of the source! of the! funds. Since the

~CC ~u.s not certain that the funds represented voluntary contributio:ls, t.he funds \.;ere deposite!cl in the Educational Fund account

t:ntil inrormiJtion was received showin~l that they represented

~ol~~t<:lry contributions to thc pec which for convenience were

t~·u.:lsf:,"}rr,!c1 through the local labor or~J.:tnizi:1tion accounts. UFon

~<:1king that dGtcrmini:1tion, the exact amounts in question were

::rans:'"errc!d from the El~uc<:1tion.:1l Fund t:o the pec.

On l\ugust 3, 1973, the commission determined th<:1t in Uk

:'\.::::.lrc th,' Committee should c1L:posit questionable contributions

:':.:'0 the pet.: account pursuant to Part l03.3(b) (2) of the Cor:':'liss-Lc:;':,

:':I.:.o,,~ul;::.tioll:; v:hich allo\'/s the COI,mli tteo a reasonable period of t i I::.

~o cie' ;:.cn•.i Ill:: the lc~rjality of tIll: contributions•
•

....

•

.'.

-9-

l~ecornmendation

'l'he Committee submitted to the Audit staff on October 10,

1978, a written directive to Committee personnel advisinq of

this procedure. Therefore, it is the opinion of the Audit staff

that no further action in this matter is necessary •
FEDERAL ElECTION COl\\,\\ISSION

1\2; to- ~,J RH 1 ".\\

\\'.\..,HIM; 10".1 ) , ~11·lh \

ADDITIONAL INFURMATION REGARDmG '1lI1S ORGANIZATION

MAY BE WCATED m A CDMPLETED COMPLIANCE ACIION

FILE RELEASED BY TIlE aM1ISSION AND MADE PUBLIC rn

'mE PUBLIC REroRDS OFFICE. FOR 'lHIS PARTICULAR

ORGANIZATION'S CDMPLETED OOMPLIANCE ACTION FILE

SIMPLY FUR ntE PRESS SlM-fARY OF MUR 11 (, J-2--. •

'mE PRESS SlM1ARY lmL PROVIDE A BRIEF HISIDRY OF

'mE CASE AND A stM1ARY OF 'mE ACI'IONS TAKEN, IF Mfi.

Audit d.! I.r?
FEDERAL ELECTION COMMISSION

1\2'; " .,IRH 1 \\.

\;\:·\SHI'-C ro~.() (. 21l4td

AIDl'l'IONAL INFURMATION REGARDING 'lHIS ORGANIZATION

MAY BE 1OCA'1'ED IN A CDMPLETED OOMPLIANCE ACIION

FILE RELEASED BY THE aM1ISSION AND MADE PUBLIC IN

THE PUBLIC RECORDS OFFICE. FOR 'lHIS PAlUICULAR

ORGANIZATION'S COMPI.El'ED OOMPLIANCE ACIION FlLE

SIMPLY ASK FOR 'mE PRESS SlM1ARY OF MUR f~ :;{ ,S- y

THE PRESS SlM1ARY wm. PROVlDE A BRIEF HIS'lORY OF

THE CASE AND A SUM1ARY OF THE ACrIONS TAKEN, IF ft.Nf.

Audit 4,1: I 'i}