Part II

Overview of Committee

Committee Organization

Important Dates

National Italian American Political
Action Committee

* Date of Registration

March 14, 2000

s Audit Coverage

January 1, 2001 — December 31, 2002

Headquarters

Philadeiphia, PA

Bank Information

« Bank Depository

1

e Bank Account

1 Federal Checking Account

Treasurer

¢ Treasurer When Audit Was Conducted

Mr. Anthony Mallace

¢ Treasurer During Period Covered by Audit

Mr. Vincent Lasorsa

Management Information

¢ Attended FEC Campaign Finance Seminar | No

¢ Used Commonly Available Campaign Yes
Management Software Package

° Who Handled Accounting and Volunteers

Recordkeeping Tasks

Overview of Financial Activity
(Audited Amounts)

Cash on hand @ January 1, 2001 | $ 2.959
Receipts I

o_ Contributions from individuals | 146.429
o__Loans Received | 10.000
9 Contributions from Other Political Comminees { 4.100
© _ Interest Received l 207
Total Receipts ' 160,736
Disbursements t

© Operating Expenditures i 125.510
© Contributions to Nonfederat Political 31.500

Committees

Total Disbursements 157,010
Cash on hand @ December 31, 2002 $ 6,685



Facts and Analysis
The Audit staff reviewed all receipts and identified two individuals whose aggregate
contributions exceeded the contribution limits by $15,350.

In 2001, NIAPAC received $10,100 from an indrvidual as follows: a loan of $2.500
(January 2001); a contribution of $100 (March 2001): and, a loan of $7,500 (June 2001).
The two loans were itemized on Schedules A when received and Properly disclosed on
Schedules C until repaid in March 2004. However. since a toan is defined as a
contribution and is therefore subyect to contribution limitations, this individual exceeded
the $5,000 limit by $5,100 ($10,100 - 35.000) from June 2001 until March 2004

NIAPAC received contributions in 2002 from another individual totaling $15,250 as
fotiows: $10,000 (June 2002), $5,000 (September 2002): and $250 (October 2002). The
aggregate amount of these contributions, $1 5.250. exceeded the contribution Iimit by
$10,250 ($15,250 - $5,000).

At the exit conference, the Audit staff brought these matters to the attention of the
NIAPAC representatives who explained that the first individual was the founder of
NIAPAC and that he made the loans when funds coming in to NIAPAC were not
sufficient to pay its obligations. They added that he wanted to ensure that the local
businesses were paid what they were owed by NIAPAC. Officials provided no additional
information relative to the second individual. At the exit conference, NIAPAC
Tepresentatives agreed to refund the remaining excessive portion to the second individual.

No separate account was maintained by NIAPAC for questionable contributions and
NIAPAC did not consistently maintain a sufficient balance to cover the refund of these
contributions during the period in question.

Interim Audit Report Recommendation and Committee Response
In the interim audit report, the Audit staff recommended that NIAPAC:
* Provide evidence demonstrating thut the contributions tn Question were not
excessive; or
* Refund $10,250 to the second individual discussed above. providing evidence of
such refund (copy of the front and back of the negottated refund check): und
* If funds were not available to make the necessary refund, 1t was further
tecommended that the refund due be disclosed on Schedule D (Debts and
Obligations) until funds became available to make the refund

In response, a letter was submitted from the first individual confirming repayment of the
loans he had made to NIAPAC. No action was taken with regard to the second
individual.


Part I
Background
Authority for Audit

This report is based on an audit of the National Italian American Political Action
Committee (NIAPAC), 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 invesugations
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 commuttees 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

This audit examined:

The receipt of excessive contributions and loans.

The receipt of contributions from prohibited sources.

The disclosure of contributions received.

The disclosure of disbursements. debts and obligations.
The consistency between reported figures and bank records.
The completeness of records.

Other committee operations necessary to the review.

NOME WR

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 the period November 7. 2002, through December 31, 2002, the penod 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 pnor to November
7, 2002.


Part Ili
Summary

Finding and Recommendation

Receipt of Contributions that Exceed Limits

The Audit staff identified two individuals whose aggregate contributions (including
loans) exceeded the contribution limits by $15,350. In March 2004, NIAPAC repaid
loans to untimely resolve a portion of the excessive contributions, but has taken no action
with respect to the rest. In the intenm audit report the Audit staff recommended that
NIAPAC submit documentation to show that the contributions were not excessive or
refund the remaining amount. In response, a letter was submitted from the first
individual confirming repayment of the loans he had made to NIAPAC. No action was
taken with regard to the second individual. (For more detail, see p.4}


FEDERAL ELECTION COMMISSION
Washington, DC 20463

January 13, 2005

MEMORANDUM

TO:

FROM:

SUBJECT:

ROBERT W. BIERSACK
PRESS OFFICER
PRESS OFFICE

JOSEPH F. STOLTZ Ve
ASSISTANT STAFFIFHRECTOR
AUDIT DIVISION

PUBLIC [SSUANCE OF THE AUDIT REPORT ON
THE NATIONAL ITALIAN AMERICAN POLITICAL ACTION
COMMITTEE

Attached please find a copy of the audit report and related documents on the
National Italian American Political Action Committee, which was approved by the
Commission on
January 5, 2005.

The report may be released to the public on January 13, 2005.

Attachment as stated

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



Part IV
Finding and Recommendation

| Receipt of Contributions that Exceed Limits

Summary

The Audit staff identified two individuals whose aggregate contributions (including
loans) exceeded the contribution limits by $15,350. In March 2004, NIAPAC repaid
loans to untimely resolve a portion of the excessive contributions, but has taken no action
with respect to the rest. In the interm audit report the Audit staff recommended that
NIAPAC submit documentation to show that the contributions were not excessive or
refund the remaining amount. In response, a letter was submitted from the first
individual confirming repayment of the loans he had made to NIAPAC. No action was
taken with regard to the second individual.

Legal Standard

A. Non-Connected Committee Limits. A non-connected committee may not receive
more than a total of $5,000 per year from any one contributor. 2 U.S.C. §§441a(a)(1)(C).
(2)(C) and (f); 11 CFR §§110.1(a) and (d) and 110,9(a).

B. Contribution. The term contribution includes any loans (excluding a bank Joan), a
guarantee, endorsement, and any other form of security. A loan which exceeds the
contribution limitations of 2 U.S.C. §441a and I! CFR §110 shall be unlawful whether or
Not itis repaid. A loan is a contribution at the time it is made and is a contribution to the
extent that if remains unpaid. 11 CFR §100.7(a)(1)(iMA)B).

C. Handling Contributions That Appear Excessive If a committee receives a
contribution that appears to be excessive, the committee must either:
* Return the questionable check to the donor: or
* Deposit the check into its federal account and:
o Keep enough money im the account to cover all potential refunds:
0 Keep a written record explaining why the contribution may be illegal:
© Include this explanation on schedule A if the contribution has to be
itemized before its legality is established:

D. Revised Regulations Applied. The Commission recently adopted new regulations
that allow committees greater latitude to reattnbute contributions To joint account holders
and has decided to apply these regulations to current matters, The Audit staff has
evaluated the excessive contributions discussed below using the new regulations.


Report of the
Audit Division on the
National Italian American

Political Action 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
Tequirements 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 1n this
report.

" 2US.C. §438(b)

About the Committee (p. 2)

The National Italian American Political Action Committee is a
non-connected committee headquanered in Philadelphia.
Pennsylvama. For more information, see chart on the Commuttee
Organization, p. 2

Financial Activity (p. 2)

e Receipts
© Contributions from Individuats $ 146,429
© Loans Received 10.000
o Contributions from Other 4.100
Political Committees
o Interest Received 207
o Total Receipts $ 160,736
¢ Disbursements
© Operating Expenditures $ 125,510
© Contributions to Nonfederal 31,500
Political Committees
o Total Disbursements $ 157,010

Finding and Recommendation (p. 3)
° Receipt of Contnbutions that Exceed Limits


Table of Contents

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

Part Il. Overview of Committee
Committee Organization
Overview of Financial Activity

Part II. Summary

Finding and Recommendation

Part IV. Finding and Recommendation
Receipt of Contributions that Exceed Limits

Page

tote