FRED EILAND

PRESS OFFICE

BOB COSTA ~.

JUDY HANKINS'~//"'L.

PUBLIC ISSUANCE OF AUDIT REPORT - NATIONAL CONSERVATIVE POLTICAL

ACTION COMMITTEE

.,

FEDERAL ELECTION COMMISSIU~

FEe Library

RAD

Public Pecords

cc:

March 10, 1980

Attachment as stated

Informational copies of the reoort have been received

by all ~arties involved and this report may be released

to the public.

. Attached please find a c-,py of thl' ::i~al al1dit r?!-'\-.rt

of the National Conservative P,.,litical Action Committee,

which was approved by the Commi3sion on ~arch 3, 1980.

SUBJECT:

FROM:

THROUGH:

TO:

l-lF.HORANDUM

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FEDERAL ELECTIO~ COMMISSION I •

WAo;HINC10N. D C ~llolld ,

1/ En~li:1g cash-on-hand is misst.:lted bl-' $144. G7 due to an

arithmetical error.

This audit report is based on documents and working

p,'lllcrs which support each of the factual statements. They form

p:ll:t of the record upon which the Commission based its decisions

on the m:'1tters in the report and were aV.:lilable to Commissioners

and .:tppropriate staff for revie\v.

REPORT QF THE AUDIT DIVISION . ON THE·

NATIONAL CONSERVATIVE POL~TICAL ACTION COMMITTEE

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A. Overview

The audit covered the period from March 27, 1915 through

August 31, 1977, the final coverage date of the most recent report

filed by the Committee at the time of the audit. Th~ Committee

reported a beginning cash balance of $-0-, total receipts for the

period of $4,021,112.34, total expenditures for the period of

$4,010,618.27 and a closing cash balance on August 31, 1977 of

$10,638.74 •.!/

'0

This report is based on an audit of the National

Conservative Political Action committee (lithe Committee"),

undertaken by the Audit Division of the Federal Election Commission

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 (lithe 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 Com."littc~ re~rh;tered ~'1ith the Office ()f tr.e .3,~c~·etC'.:y

of the Senate and the uff~ce of the Clerk, U.S. House of Representatives on L1arch 2·/ 1975. The Committee mainta:ns its headquarters

in Arlington, Virgir.ia.

I. Backgr.~:>und

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II. Finc1in<Js antl Recommendations

Our review of contributor records ~nd FEe discl~sure

reports reve.::ilcc1 th.::it the occu;;ation and/or principal pLJ.ce of

business was not reported .::is follows:

'1'he principal officers of the Committee during the

IH'I'jOei i1utlitcLi were Mr. Charles ~. Black, Jr., Chairman and Mr.

HO,/(!l~ ,J. Stone, Jr., Treasurer.

51.52%

79.3%

46.3%

57.6%

% of Itemized

Contributions

Without Required

Information

13-1

809

415

1358

Number of Itemized

Contributions

Without

~e9uired Infonn.:l tion

-~ .

263G

169

1747

720

~umbL:r of

Itc:mizec1

Contributio:1s

li. Key P(:!rsonnel

'I'oLI1 for Period

Aliciitcd: 3/27/'76-

8/3L/77

3/~7 /7 5-L!/3i/7 S

1/L/7G-L2/3l/7G

1/1/77-8/31/17

Period

Secti.:m 102.9(9). of tLe Comm:ssiQl":, h~Cju.i.aticns 3ta\-,e":

in relevant part, tl.r.lt when Committee tl'easurers and candidates

show that best efforts have been used to'obtain and submit the

information required, they shall be deemed to be in compli~nce.

A. Reporting Individual Contributor Information

Section 434(b) (2) of Title 2, United States Code

requires that the occupation and principal place of business,

if any, of each person who has made one or more contributions

within the calendar year in an aggreuate amount or value in

excess of $100 be disclosed on reports filed with the Commission.

C. Scope

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.

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Hccommend.:ltion

The Audi~ staff reco~ncnds thut no further action be taken

since the apE;ropr i.:3. te amendments were filed with the Commission.

B. Reporting of Loans and Guarantors

Our review of NCPAC records reve"'lh~d two (2) loans

wt~ch were ~e~u~ted inacc~r~t8ly with r~sr-~ct to guarantors. In

thE first case, five (5) guarantorL of $2,000.00 each ($lO,OOO)

wer( identified by NCPAC. Our examlnation disclosed that eleven

guarantors for $910.00 each ($10,010.00) s~lould have been reported.

It was noted that the principal amount of the loan was $10,000,

Llnd the date of the 10un ,'las August 6, 1~·75. The second loan,

reported as being received on June 9, 1977, in the amount of

$20,000.00 was guuranteed by four (4) individuals. These four (4)

individuals were not disclosed on reports filed by NCPAC •

These mutters were brought to the attention of Committee

~ersonnel at the conclusion of the audit fieldwork. They agree& ,.

to file the necessary amendments to correct these irregularities~

On ~;o'lember 5, 1979, an amcndm(.:"'nt substuntially correctin(j

the public record \...us filed by the Commi ttee.

Section 434(b} (S) of Title i, U~ite~ States Code requires

the disclosure of each loan to or from any person within the

calendar year in an aggregate amount or value in excess of $100.00,

together with the full names and addresses (occupations and the

principal places of business, if.any) of the lender, endorser,'and

guarantors, if any, and the date and amount of such'loans. .

In our opinion, NCPAC hus made best efforts. to obtain and

submit the information required, and therefore, the Audit staff:!.

recommends no further action.

. . NCPI\C )nade, an' attelilpt ;to oly , ..' ~!1e req'uired contributor

'infor~ation for:the period 3/27/75-8/.;: --. These efforts culmina~ed

with the filin'.J of amendme'nts. The fir:.:;:: amendment, f;iled in Ju~'Y,

1977, contailll!d the occupation and pri l1cipal place of business for

72 cor.tribut iO!ls receiveC'. from 1/1/77 thru 6/30/77. The second i

amendment, fill!d i.n May, ·1~78, contailll'd' the occupation and

principal pl.:lce of. business of 7~1 ·conLribution!.- J _~ceived Jrom

JUly 1, 1977 thi'u ..~anuary 31, 1978

Rccommendution

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c.. R~porting 9£ Debts·and Obligations

. Section l04.8(a)· and (b) of Title 11, Code of Federal

Regulations states, in part, that debt~ and obligations which

remain outstanding after the election shall be cpntinuously

reported until extinguished. A debt, obligation, or other promise

to make an expenditure of $500.00 or less, shall be rer:_'~: ted as of

the time payment is made, or no later than 60 days .aftt::- (,ccurrence,

whichever comes first. A loan of money in the ordinary '.ourse of

busiIlc!sS and any debt or' obligation over $500.00 shall be reported

as of the time of the transaction.

Our examination of NCPAC documents and disclosure reports,

and a comparison thereof revealed that NCPAC had been improperly

reporting debts and obligations during the period April 1, 1975

through March 31, 1977. .

Our tests indicated that the liquidation of debts and

obligations was not properly disclosed on Schedule C. However,

it was noted that the reported debts and obligations were reported ~s having been paid as evidenced by entries in expenditure

schedules on subsequent reports.

Since testing has given assurance that all reported

debts ap-d obligations were liquid.:=t.ted, no amendin'] action is

believed to hE; nec~ssc.ry on aT1 i te.1; b:z' i te:n 0ac:;is. Ii':)\!('" er, WE.:

recommend(.d that N~Pl\C submit "'l statement for the puLlic record,

signed by ..he Treasurer, indic~lting that all rep0l: ~ed debts and

obligations have been liquidated as of a given re~orting date

and that commencing with the May 10, 1977 report. debts and

obligations will be reported as required by the Act. This statement was received on November 5, 1979. .

Recommendation

The Audit staff recommends no further action on this matter.

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II.lJERAl. ELECTION CO,,,,'\ISSIOi\; ,

I\~·.~..... 110:111 ....w

\\ \"'HI~,C 10".1 H' ~(I~h I

ADDITIONAL INFORMATION REGARDING 'lHIS ORGANIZATION

MAY BE LOCATED IN A OOMPLETED CXMPLIANCE AcrION

FILE RELEASED BY 'mE CXM1ISSION AND MADE PUBLIC IN

'mE PUBLIC RECX>RDS OmCE. FUR 'lHIS PARTICULAR

ORGANIZATION'S OOMPLETED CDMPLIANCE ACTION 'FILE

SIMPLY }SK FUR 'mE PRESS StI+1ARY OF MUR 41 ?.JJ--- •

'mE PRESS stMo1ARY WILL PROVIDE A BRIEF HISroRY OF

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

Audit ~! .2Zr
-

FEDERAL ElECTION COMMISSION

II.!"> I\. 'H:lt I"\\

\\'·\'HI"C; 10".1 H.. .!1l4td

AlDITIONAL INroRMATION REGARDING 'lHIS ORGANIZATION

MAY BE IDCATED IN A CDMPLETED cn1PLIANCE AcrION

FILE RELEASED BY THE CXM1ISSION AND MADE PUBLIC IN

'!HE PUBLIC RECX>RDS OFFICE. FUR 'llIIS PARTICUU\R

ORGANIZATION'S CDMPLETED CDMPLIANCE ACrION FILE

SIMPLY }SK FUR THE PRESS SlM-1ARY OF MUR 11 .l? 7

'!HE PRESS st.JroM\RY WILL PROVIDE A BRIEF HIS'roRY OF

'mE CASE AND A StM1ARY OF 'mE ACl'IONS TAKEN, IF ;.m.

Audit· 4ft ';,2