. The Connecticut Republican Federal Campaign Committee ~8sistered with the Federal Election Commission on January 22,

1970. The Committee maintains its headquarters in Hartford,

Com1ecticut.

This report is based on documents and working papers

supporting each of its factual statements. They form part 0=

the record upon which the Commission based its decisions on

the matters in the reoort and were available to Commissioners

and appropriate staff-for review.

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13.25 K STREET N.W.

WASHINGTON.D.c. 204&3

FEDERAL ELECTION COMMISSION

REPORT OF THE AUDIT DIVISION

ON THE

CONNECTICUT REPUBLICAN FEDERAL CAMPAIGN COMMITTEE

A. Overview

Background

The audit covered the period January 1, 1976 through

October 23, 1978, the final coverage date of the most recent

report filed at the time of the audit. The Committee reported

a beginning cash balance at January 1, 1976 of $-0-, total

receipts for the period of $460,452.23, total expenditures for

the period of $456,682.22, and a closing cash balance on October

23, 1978 of $3,770.01.

This report is based on an audit of the Connecticut

Republican Federal Campaign 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 (" the Act'I ). The audit was conducted pursuant to Sectic~ 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.

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II. Audit Findi~gs and Recommendations

A. Allocation of Expenditures between

Federal and Non-Federal Accounts

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12/31/77 - 10/23/78

Committee's - 12/31/77

Inception

6/21/77 - 10/1/78

Committee's - 6/21/77

Inception

1/1/77 - 10/23/78

Committee's - 12/31/76

Inception

Period in Office

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Assistant

Treasurer

Assistant

Treasurer

Chairman

Office

Chairman

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April 13, 1977, the date the notice of promulga~ion of the

Commission's RegUlations was published in the Federal •

Regis~er is the effective date of 11 CFR 106.1(e).

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Section 106.l(e) of Title 11, Code of Federal

Regulations, states that Party committees and other political

committees which have established Federal campaign committees

nursuant to 11 CFR 102.6 shall allocate administrative exnenses

~n a reasonable basis between their Federal and non-Federal

accounts and in proportion to the amount of funds expended on

Federal and non-Federal elections, or on another reasonable

basis. !/

Scope •

The audit included such tests as 'lerification of tt:tal

reported receipts and expenditures and individual transactions:

review of required supporting documentation and ana17sis of

Committee debts and obligations: and such other audit procedures

as deemed necessary under the circumstances.

Mr. Donald J. Schmidt

Ms. Marlene Bakewell

Mr. William H. T. Bush Treasurer

Mr. Kendrick F. Bellows, Jr. Treasurer

Mr. Frederick K. Biebel

Mr. Joseph B. Burns

B. Key Personnel

The principal officers of the Committee during the

period covered by the audit were as follows: _....:~:

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Section ~41a(a) (1) (C) and 44la(f) of Title 2, United Sta~es Code, in part, provides that no 9~rson shall make cont.rib~ticns to a political ,::o::'l:i.::':.tee ':':1 any calendar:rear

o..;hich, in the aggregate, e,xceec. :35,000 and that no political

cC::'..":'oi t tee shall knowingly accept any contributions in any ca~er.dary~ar Nhich, in ~he aqgrcgate, exceed $5,000 .

B. Excessi'le Loan Endorsements

Recommendation

On Sepcember 7, 1979, the Committee filed a statement containi~g a basis for allocati~g administrative expenses based

on the percentage of,staff ti~e related to Federal election ac~ivitY.The supporting doc~mentation submitted shows the.

application of this percentage to the admiriistiative e~pens~s~

~or each of the three (3) calendar ?ears covered bv the audit

period. Based on these calculations, the Federal account paid,

its proportionate share of admi~istrati'le expense~.

In the June 25, 1979 letter of audit findings, the'

Audit. .. s'taff. recommended that the CommJ..ttee develop a basis for

allocating the administrative expenses according to the method

prescribed in il CFR 106.1(e) or some other reasonable method

and submit such basis with'supoorting documentation to the

Audit staff for review. . ,. , .

As a result 0f the above facts and th~ Audit staff's

opir.ion thatt:1G :':lethod for allocati~g ad:ninistrati~le expenses

is r~asonable, t~': Audit sta=~ recorr.menr::.> no turther action

on ~:tis ma~tQr.

For the period covered by the audit, the Connecticut

Republican State Central Committee maintained separate accounts

for Federal and non-Federal activity disclosing only the Federal

account's activity in its reports to the Commission. During the

entrance conference, Committee officials stated that they were

unfamiliar with the requirements of 11 CFR lOG.l(e) and did not

allocate administrative expenses between their rederal and nonFederal accounts. Our review of the Committee's (the Federal .. account 's) 'expenditure records revealed that the Federal account

did make expenditures that were ,administrative in nature but

that no formal ~ethod was used to determine the type or amount

of the expenditures to be:paid from the Federal account. As a

result, our preliminary review indicated that the Federal account

may have paid less than its proportionace share of administrative

expenses .•' . " .

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This matter ~as includ~d in the ~ay 10, 1979 referral

to the Office of General Counsel where ~atter Under Review

U·1UR) #998 (79) was initiated.

On August l~, 1979, the Commission found reason to

believe that the Com.'1\it~ee had violated 2 C.S.C. Sec~~on

~~la(:), voted to close the file and take no further action

on this matter. ~he Cc~~ittee was subsequently noti:ied of

the Ccrnmissior.' s deter:r.i~a tion.

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The Com.'1\ittee Treasurer informed us that during the

period of time the loan ~as outstanding, although aware of the

$5,000 individual con~ribution limitation, Commit~ee officials nI

did not realize that an endorsement of a loan was, by defin~tio

a contribution. The Treasurer also stac~d that since the

Com.'1\ittee has never considered defaulti~~ on a loan, the logic

of endorsements as contributions had never occurred to Committee

officials. .

As a result of our review of the Committee records,

it was determined that the Committee received a $30,000 loan

which was endorsed bv two (2) individuals in amounts in excess

of their $5,000 contribution limitation. When combined with

other contributions made, one (1) individual exceeded his

limitation by $12,006.36 and the other by $11,906.36. The

loan was outstanding for a ?eriod of 26 days.

Section ~3l(e) of Title 2, United States Code, and

Section 100.4(a) (1) and (b) (13) of Title 11, Code of Federal

Regulations, in part, defines lI contributionll as a loan of

money made for the purpose of influencing the election of any

person to Federal office. In addition, a lIloan" is defined as

a contribution to the extent that the obligation remains

outstanding ·and includes an endorsement where the risk of

non-payment rests with the endorser in that proportion to the

unpaid balance that each endorser bears ~o the total number

of endorsers.

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Recommendation

D. Allocation of. Polling Expenses

. The Audit staff recommends no further action be taken

on this matter.

C. Unitemized Expenditures

Section 434(b) (9) of Title 2, United States Code,

in part, requires a committee to reoort the identi'fication

of each person to whom expendh:u::::e s- ~ave. been made bv such '.

committee or on behalf of such co~mittee or.candidatewithin

the calendar year aggregating in excess 6f $100, the amount,

date, and purpose of each such expenditure and the name and

address of, and office.sought by, each candidate on whose

behalf such expenditure was made .

Section l06.4(b) of Title 11, Code of Federal

Regulations, in part, requires a committee to report the

purchase of opinion poll results by a political co~~ittee

not authorized bv a candidate to make expenditures and

the subsequent a~ceptance of th~ ,coll results bv a candidate

or his authorized co~mittee asa.contribution in-kind by the

purchaser to the candidate or his authorized committee. The

poll results are accepted by a candidate or his authorized

committee if the candidate or his authorized committee: (1)

requested the poll results before their receipt; (2) uses

the poll results; or" (3) does not notify the contributor

that the results a::::e re=used. .

Section 434(b} (9) of Title 2, United States Code,

in part",' requires a conunittee to. report the identification of

each person to whom expenditures have been made by such

committee within the calendar year.aggregating in excess of $100. .. .. . " .

. Our review of .the Committee's expenditure' records·

revealed that the Committee did not itemize 28 expenditures

aggregating in excess of $100 and totaling $1,199.42. This

represents 16.97% of the total items and.60% of the total

'dollar amounts of expenditures requiring itemization. Committee

.officials could not explain the omission: '.

On August 27, 1979, the Committee filed a comprehensive

amendment correctly. itemizing .• the expenditures•.

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The Committee reported an expenditure on September 6,

1978 in the amount of $12,000 stating the purpose as "polling" •

The supporting documentation related to this expenditure was

six (6) invoices (numbered sequentially for each of the state's

six (6) congressional districts), each dated July 26, 1978 in

the amount of $2,000. The invoices contained the description

"a study of voter attitudes toward candidates identified with

the 1978 congressional race in the ••. lst, 2nd, 3rd, etc ••• district:. "

A review of the principal campaign committee's

report:; of the six (6) candidates disclosed that one (1)

of the l;andidates reported an in-kind contribution from

the Conn!~cticut Republicans of $2,000 on September 30, 1978

for "the study of voter attitudes toward candidates"

designating the expenditure as for the general election.

At the time of the audit, the Committee bookkeeper

could not remember if the poll results were ~ade available

to any or all of the candidates or whether the poll was t~~en

with respect to the primary or general election.

On August 27, 1979, the Committee filed an amendment

disclosing that che poll was taken with respect to the general

election, and also disclosing the amount, date and purpose of

expenditure together.with the name and address of,. and office

sought by each of the six (6) cancictates on whose behalf the

e::penditure was made.

Recommendation

The Audit staff recommends no :ur~he= ~c~ion be taken

on this :natter.

Adjustments co Calendar Year-~o-Date

Receipt and ::::~pend1tu=e 'I'o~.:ll.5

Section 434(b) (8) and (11) of ~~tle 2, ~nited States

Code, and 3ection 104.2(b) (8) and (10) of Title 11, Code of

Federal Regulations, in part, requires a committee to report

the total 5lli~ 0: all receipts of and expenditures by such

committee or candidate during the repor~ing period and the

calendar year.

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Recommendation

. Recommendation

G. Failure ~o Disclose Depository

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Reporting the Total Amount of

Proceeds from Fundra~sing Events

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Section 434(b) (6) of Title 2, United States Code,

in part, requires the ~otal amount of proceeds from fundraising

events to be reported.wi~h the Commission.

Section 433(:::) (9)" and (c) of Title 2, United States

Code, in part, requires a committee to disclose on their

statement of organiza~icn a listing of all banks or other

repositories used and to report any changes in previously

submitted information wi~hin a 10-dayperiod following the

change. "

The Audit staff recorrmends no further action be taken

on this matter•

Our examination of the Committee's records revealed

that the Committee hac ~~=ee (3) fundraising events for"which

the total proceeds of S~74,019.20 during 1976 and $16,077.50

during 1977 were not disclosed as fundraising events on a

ScheduleD as" requirec, al~hough reported as Committee receipts.

On August ·27, '1979, the Co!"C'.mittee· filed··comprehensive

amendments correctly d~sclosing the total proceeds from ~hese"

events.

The Audit staf= recommends no further action be taken

on this matter.

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During our review of the Committee records, it was

noted that the Committee reported four (4) interbank transfers

resulting in an overstatement of reported total receipts and

expenditures by $31,480.63 in 1976 and by $6,562.71 in 1978.

On April 18, 1979 and August 27, 1979, the Committee

filed amendments correcting the receipt and expenditure totals•

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The Audi t s ta f:: recommends no furthe r action be taken ... on. this matter •..

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H. Failure to Disclose Changes in the Off~ces of Chairman and Treasurer

Recommendation

The Audit staff recommends no further action be taken

on this matter.

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On August 27i'1979, the' Committee filed an amendment

to their statement of organization disclosing the changes in

the offices of chairman and treasurer.

During the course of the audit it was determined that

the Committee had one (1) bank depository that was not listed

on their statement of organization or amendments thereto.

On August 27, 1979, the Committee filed an amendment

to their statement of organization listing the previously

undisclosed depository.

Section 433(b) (5) and (c) of Title 2, United States

Code, in part, requires a committee to disclose on their

statement or organization the name, address, and position of

principal officers and to report any changes in previously

submitted information within a lO-day period following the • change •. '. . .

During the course of· the audit,' it'was determined ··th~t the Committee failed to, report a change in the offices

.•.. of chairman andtreasurero.within a lO-day~period. fol1:owing ..the change.

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P~esented below is a matter noted during the course

of the audit for which the Audit staff feels no action is

warranted.

The Committee failed to disclose two (2) accounts

payable in the amount of $6,299.04 and $200.00 as debts during

1976 as required by 11 CFR 104.2(b) (11) and 104.8(b). However,

these debts were repaid and the expenditures properly disclosed

by the Committee.

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I. Other Matters

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