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FEDER;\l ELECTION COtv\.\1ISSION

1\2; 1\ SHU l r \V,

\\',\~t IIN(; JON.D.C. 204&J

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REPORT OF THE AUDIT DIVISION

ON THE

ANDERSON-SHACKELFORD C~lPAIGN COM!'1ITTEE

I. Buckground

A. Overview

This report is based upon an audit of the Anderson- 5huckcl~ord Campaign Committee ("the Committee") undertaken by

the Audit Division of the Federal Election Commission in accordance with the Co~mission's audit policy to determine whether

there h~s been compliance with the provisions of the Federal . Election C.:unpaign .;ct of 1971, as amended (lithe Act."). The

audit WJS conducted pursuant to Sec~ion 438(a) (8) of Title 2,

United States Code, which directs the Commission to make from

time to time audits and field investigations with ~espect to

reports and statements filed under the provisions of the Act.

The Comm~ttee registered with the Federal Election

Commission on July 12, 1976, in support of Tom Ande::-son, ca~c.i.d.J.~~

for th·~ O::i.ce of ?resiccnt. and Rt;':'...ls Shackelfo~d, candidate :0:-

the Office of Vice P::-esident. The Commit.tee \oJ.:lS desi':::lated !.J~.r

Mr. Anderson as his principal carn?aign committee on J~ne 2, 1~77.

The Conunittee maintained its headquarters in Pigeon Forge,

Tenness~e.

The audit covered the period July 1, 1976, the incep:'':'~l:

date 0: the COEThllittee, throul.Jh Decenber 31, 1976, the fin~l

coverage date of the termination report filed b~l the COIr::littee".

The Commit~ee reported a beginning cash balance at July 1, 19i6

of $-0-, total recei?ts :or the ~eriod of $160,733.21, total

expenditures for the period of $150,783.21 and a closing cash

balance at December 31', 197v·· of $-0-. l/

• This audit report is based on documents and \'v·ol:king

papers supporting C3C~ of its factual statements. Thay form

p:lrt of the record u:,on ~.;hicl\ the Commission based its .decisio:"'.s

on the r.l.:lt.tcrs in this report t3nd \o1CrC available to Commissicn~t.·.3

and upp~opri~tc st~ft for rcvi~w.

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D. Key Pcr~onncl

The princ:ipul officers of the Com:nittee during the

()f.·riod of the audit were Hr. George ~lelton, Campaign Director, ~/

Mr~~. rwt~rgc.1rct ~'1oodhead, Treasurer and rvtr. J. Milton Lent,

Coruptrollcr.

C. Scope

The audit included such tests as verification of

reported reccipt~ ~nd expenditures and individuul transactions;

review of requircJ supporting docuncntation; analysis of

ComInittc... debts ('1nd obligations; and, such other audit procedures

as deemed neccss~ry under the circumstances.

II. Auditor's St~tc~c~t a~d Description of Findings

It is the opi~ion of the Audit staff, based upon examination

of the report3 and st3tements filed and the records presented, th~t except fo~ the jaf~ciencies noted below, the reports a~d

st'.J.tements 0[ tr.·~ :"'n~e::son-Sh3.ckel::o::d Camr;aign COr.'.rnittee :ai..:-lv

present the f i~.)nc:..l':' 3ct:ivit.ies 0: the Corrurnitt.ee for the period cov~red b1 cr:c ,1U~:l.t. :'..lrther, -::-:ce?t as noted below, no nate:-i,;:

problem~; i:l camp 1::' ~:1'~ ".oil t~ t~e Federal Election Ca:npaign Act ~"ere

discovered juri~g ~hc cours~ of t~e audit .

Section 4';13. (,3.) (1) (A) 0: Title 2, United States Code,

prohibit~ a ~cr~,)~ ::"~~ ~~king co~~::i.butions to any ~a~dida~~ ~~d

his authori :~~"l PrJ':':' :,,::..l 1. c.:;r:'.~i t t.ees "..:i.. t.h r·:;s?ect to any election

for Federal of~i~e ~ni~~l, in the aggregate, exceed $1,000.

Section 4413':.:1) (~) of ~i~le 2, united States Code,

states that no ~ul~i=3njidata political co~~it~ee shall make

contributions to lny c3ndiJate and his authorized political

cornmittees ~.·;i:h =CSPtJ~:' to an'! electi.on for =eder~l office which,

in the ~gg:"e·].)~~, Jxcc~o~'i $5,\)00. S~ct.i.cn ~~la(a) (4) of Title 2,

Uni ted S ta tes Code, I.~.~: :.~~~s t~e ~e::~ "~ul tic3.nd:i.da toe ?olitical.

ccrt.:7tittce" :lS .1 ~ol.:.:i.= ..~l ~Cr.l::li.:.:.;;:e ".·:hich ~3.S ;:,cen ::-egistered

under S~ction 433 o~ ~it:e 2 of tne ~nited Statos Code for a

pc·riod of not 1'':;:':;3 .._:... ~;~ r) :~lonths, ~·;r:.':'-=h :~-J3 received contribu~ior..s

fr0:H mar'c th.JIl SO F'~:.".3,::1~, and, ~:-:-=.:;~;t ~O:" ani' State political

partoy or(;.:ln i::.1 ': :'I.:n ~, :--.d s ~.:'.d·~ c ~:'. :.:: .:..:; ''; t i.:>n.3 to 5 or lnorc c.:u:d i.:l2.:'25

for Fcd~ral o::~~w. :'.. :':' o~h·~:.· ~:~::.:i.=~il cc~.:nit~ccs ~·.'ould rep::-~scn:

"rlc····on~1I t~ ~eJ';':» l~·......,.-..l·t,': •.-"-' ,.., \..,.,\- -·, ... ..............···\·I····:'~ ,,_ ..... ..: ~.... , "'vv "'."\." ,"'nt;~" ..... ~1·_;"\ct-;on ... .... Ul1der t-l""_O ,..,

provision S 0 2 U. .3. c. .\ .; 1~l (.l) (:. \.\) •
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Our review disclosed that the Comnlittee received

eight (8) transfers totalling $2,585.94 from the American Party

of t-tississippi, an unregistered state party t:ommittec. The

Committee r(!celvcd the transfers during the period September 28,

1976 (after the Candidate was nominated) through November 3, 1976.

However, the ~~rican Party of Mississippi was not qualified to

contribute in excess of $1,000 to the Conunittee under the

provisions of Section 441a(a) (1). The Committee only itemized

one (1) of these transfers for $318.03, which was rec~ived on

October 4, 1976 in the disclosure reports it initially filed.

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Reco!:'~en~-3.ticn

Since the Conmittee has properly disclosed the original rece~pt 0: the tr~nsfe=s, ~nd the excess~ve ~ortion 0: the tra~s:e=s ha.s 8cen r9f~:;.ded to the A.-r.e:- :'::an ?a=ty of ~1ississip?i,

the Audit sta:f rccc~~nds ~o f~rther ac~ion on this ~atter.

On April 7, 1978, the Co~mittee ~ns advised by the Audit

staff to ~~turn the excessive portion of the contribution and to

file an amendment properly itemizing the t=~nsfers as received

origi:1all:t, as <'-/011 as the refund. On r-1ay 18, 1978, the Committee

filed the ~rnendments itemizing the transfers originally received.

from the :;.·..:v~ric.:ln Party 0: Hississi?pi and it advised the Commission t~at $1,585.94 had been refunded to t~e American Party of

Mississir??i.

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B. Itemization of Transfers

Section 434(b) (4) of Title 2, U~i~ed States Code, in

part, =equi:-es 3 politiC31 co~~itt~e to reco=~ the icenti=ication

of each ~olitical co~~ittee from which t~e =~pcrti~g co~nittee

recei·Jed a transfer of funds in any amount along with the date

and amount of the trans:er.

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Our review of the Ccmmittee's receipt reco=ds revealed

that 25 ~ransfers (71.431) out of a total of 35 transfers requi=i~g

itemi:2.tion ~.;e::-e not ite~i:ed :'n t~1e disclc~~:l~·e reports. The

transfc~s tot~ll~d S6,944.57 (69.74~ 0: S?,J~7.60 in total t~al~s:0~3

rt!cei\"cc) and included sever. (7) of trle eigh~.: (S) transfers frcm

the Ar.lcrican Party of :-lississi?pi noted in (A) above .

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On April 7, 1978, the Co~\ittcc w~s requested to file

a comprchcnsivo ~mcndment itemizing the transfers. The Committee"

filed the requested amendment on May 18, 1978.

ReconuncndcJtion

Since the Committee has filed a comprehensive amendment

iternizinc; the transfers described above, the Audit staff rccorrunends

no further action on this matter.

c. Unrcnorted Receipts and Expenditures

ana-UI1l t.t::miz·2d Receipt

Sections 434 (b) (2), (3), (8), (9), and (11) of Title 2,

United States Code, in part, require the Committee to file reports

disclosing: (i) identification of every contributor making a

contribution i~ excess of $100 or aggregating in excess of S100

during a calcnJ'1r year along with date and amount, and occupation

.and princi?al ~l~cc of business, i: any, (ii) total sum of

individual co~t~ibutions, (iii) total surn of all receipts, (iv) identifica~i.o:1 ot every EJerson to ,..,hom expenditures have been

ffiade in excess of S100 or aggregati~g i~ excess of S100 in a

calendar y~~at'" .3.1ong '~vi th the a.~ount, d.:l te and purpose of the

expenditures, ~nd (y) the total sum of all expenditures .

Our =evicw of the Commitcec'~ records revealed the

follo\·/ing:

1. Receipts

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The Co~mittee~did not report (2) contribution3 3~

all, each. i~ t!:e 3rJCU:"l c. of $1, 000, and did not itemize a tnird contribu~ion in the a~ount of $1,000.

2. Expenditures

The Coromittee did not report three (3) expenditures

for contribution refunds, each in the ~~ount of $1, 000. . - On April 7, 1978, the Audit staff requested that

the Com:ni t tee :: iie a comprehens i v'e a!l1cnc!:nen t to disc lose the t1n·repor~cJ =ec~ipts c3nc ~xp~ndi tu:-es. The aluendmen t \"a~ filed

as requested en May 18, 1978 .

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Recommcnd ..1 t ion

Since the Committee filed a comprehensive mncndmcnt to

disclose the items described in 1 and 2 above, the Audit staff recomrncnd~; no further action on this matter.

D. Consoliduted Reporting

Section l04.2(c) of Title 11, Code of Federal Regulations, in part, requires the principul cZlmpaign com.'nittce to

conzoli(Llt.. in its rer ll~t the reports submitted to it by any

authoriz(;rl committ~.... ;H1<l its o\vn report. The consolidation shall -

be made 0:l a "t'Jorkshcet for Consolidation of Receipts and

Expend:t~~~s by a Princip~l C~mpaign Co~~ittcc" (FEe Form 3b)

and submi~ted with the reports of the principal cumpaign co~nittce

and the r0ports or applicable portions of the reports of the cornrnitte~~ shown on the consolidation. Section l04.1(c) (4)

requires all of the candidat~'s authorized committees to file

reports ~:ith the princi?~l campaign corr~ittee when the financial

activity 0: all the au~hc~i~ed co~~ittees, including the p~incipal

campaign committee, attai~ the prescribed threshold for quarterly . reports.

Section 100.!.4 (~) (1) of Title 11, Code of Federal

Regula ti:':1s, de fines "~'~ :':-:'.: r" i=ed ccmmi t ~ee" as a ~oli tical

commi t :C:~~ ·..;hich is ernr;C\·:e :-ed i:1 W~ i t ing by candida te t.o sol i.e i-:.

or rect2:'·/e cont:-Lbu·ticns or ::1d~:e c:~t~cnditu=es on behal: of the

candi·::a :.'~, or ~·as not tee:1 d.i..5avo~""cd pu:-suar:. t to Section

lOO.2(c) of the Regulations.

Section 441a(a) (7) (C) of Title 2, United States Cod~,

in part, s~a~~s that ccntr:'~utions mJd~ ~c or for the benefi~ a

ilnyca nc r.i ..1 t e : are1e c i. 0 :1 :"0 the 0 t :: i (;co: '"J ice P::e s :. d ~:1 to 3h a.:-

Le consi~~~ed to be cont~:'~utions m~dc ~o or for th~ benefi~ of

the candi~ate for ~lection to the Office of ?resident.

The followi~g Ccr~ittees eit~e~ ~egistered wit~ th~

Fedc::al :l.t~ction COr:'u'niS3i':;:1 a:ld/or ~epor-=.ed r~~ceiving cont~ibuticns ~~d making ex?endit~r~s on beha:~ of the Candidate:

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REPon'rEO \

RECEI[>TS-EXi'ENDITU~ \\ I. $63,390.99 $63,390.99

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corll·t I T'I'EE

Cormnittce to Elect Anderson &

Shackelford, Lakeland, Florida

Gcorgi\.lBfi for Anderson

Atlanta, Georgia

Tom Anderson Campaign ., Beaumont, Te:<as

Andcrson-Sh~lC~:C1ford Campa ign

in Mississippi, Jackson, Missis~ippi

4,699.15

1,799.50

952.06

$70,841.70

4,709.15

2,351.09

952.06

$71,403.29

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The candidate did not disavow any of the committees

.until July 12, 1977. On this date, the candidate stated in a

letter to t~1e \:C~~i0::3ion that the committees were u~aut~ori:ed

and "I was un3wa~e of their existence until well into the

campaign." F~r-ther, the Conunittee did not file consolidated

reports with t~e Corrmission for the four (~) committe8s lited

above.

Howeve~, our review of the Conwittee's activity reve~10J

the follow~~g 3~t~ations which would indicate k~owledge of, and

affiliation =:" :'h~ Cor.unittee with :'he oth~r =egist~::~d politi'::.:ll

cormni t tees S~:?:J'') r: ti:1g t~1C candidacy of Anderscn-Shacke 1 for':' f"r

President and Vice-P~esident which are not authorized by the Presidcnt~al C~~di~ate on FEt For~ 2a (Candidate Authori=.:ltion o~

a Politic~l CC~~Lttee other than a Principal Campaign Committe~)

or by letter.

1. Expenditures •

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The Committee paid an invoice dated October 19,

1976, for vi~eo tape. reproduction that was forwarded by the

vendor to Cde:':' St~:11cy (C~~lrm-:ln and T=easur~r of the Tom

Anderson C~~~ai;n 3/). Also, the Committee paid a second invoice d~ted October 31, 1976, for voter lists and labels that were

fprwarded by t~C vendo~ to Paul ~csolowski (C~mpaign ~anager

and Pr i::lary T::e.:lsurcr of the ComI':1i t t.ee to Elect .~nde:..·sC?n &

ShcJ. eke 1 for d;. J i s c ussin9 the r e 1a t. ions ~~ :. ? be t t·:e c nthc CC'~'.nl ittc I~

and the c:lpp.:lr~~:: a:filiated org3ni~a:'ions ·.·;ith the Trc:lsurcr, sb·;

St,,1 ted th~ t, a l':ho'..lgh the Conuni t tee \V.J.~ ..1\.;~re th.J. t:. t~1C indi v idud 1 s

identified ::1 :'~lcir records '.o/ere ~SSCCi ..1t8d \·:ith the s~atc

org~ni::.:l.tion3 ~~ t;~8 1~~\8ric~n Pa::t~·, t~H.~ C~r.ul\ittce \vuS not a\"'~1.·0

th,,1t the ir~di·/:'~~~:\ls \.JC:-C ~s50ci.:lt~c.! ·.vi~:l the sC~')t·.:l~~ rcportin'j

cammi t t~es s~~:::cr:'in~ the Andcrscn-Sh.:lck~1::ot·d c~mpai-.Jn •
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Dcsiqn~\tion of C.J:11paign n'~ro~itori:

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On February 7, 1977, in a Statement of Candid~cy,

the Candidate for Vice President designated a depository. to be u~cd by the Committee to Elect Anderson and Sh~ckclford, Lakeland,

Florida.

3. Committee Comptroller

The Committe(~ Comptroller stated that several

state organizations T.-Jere affiliat8d with the COt~Jnittce, although

their level of activit1 was not significant. Tha comptrollf~r

further advis~d that he was in contact on a day to day basi~

with several pt.~r~>ons at the COIT.r.1ission on the subject of reporting

by aff i1 ia ted ':;()1:~11~ t tees. He s ta t~d th~ t the last comrnunica tion

with the Co~~is~ion indic~ted a::iliat8d co~~ittees tvere to file

directly. wi t:1 the Commission. .~lso, in a memorandum to .;Ii1erican

Party Board ~·1·~=~b8rs, the ~,;~tion3.1 Convc:1 4;icn Cownittee and others,

the comptrolle= statod "An ~f~idavit from t~e ~ational Candidates

is neCCSSc:lr:t :or lccal cOffir.litte-2s :'0 rec~i'le contributions and

spend money on behalf of these ca:1c:.cates."

On April 7, 1975, t.~c Audi~ 3ta.~: recc:r.I7le~c.!·_'l.l th~t

the C0r.1rnitte~2 (1) :il·.~ an authc:-':':at:':'cn st.~:er."\e:1t (FEe ?orm 2a) ,

(2) am~nd its ~t~~~ment o~ orga~i~~tl~n (F:C For~ 1) and (3) ~ile

consolid~t.ed r0~)Qr:.s ..1S r~q'_l':'r~~i ~y St~ct.i.on 1:)~.:2 (c) of thc~

Commission 1.5 :).·2(:iU~..1 cions for t:-.~ i inane i~ll act.i·,l i ty of the Committees noted ~bove.

The Com;ni t tee =-.:. :~d -::.n .::un,::r:~::'~~d 5 t:l te~en t 0 f

organization on ~ay l8, 1978, =~ ~et18ct t~e ~our (4) cornmit~eQs

disclosej 3boV0 ~s af~ilia~es, 35 ~ell as ccnsolid~~e~ ~e~crt

of activity bl t:-4e Cormnit.t;;e .:l::d tha ~ou!.'" (4) af~iliates. HCt·4·evf~~,

the CQ~ittee did not file a 5~a~ement (2SC For~ 2a) signed by

the Candidate authorizing the :cur (4) corr~ittees.

Althou9h tht3 ?residen~i:: .J.:lc/Cq: Vice P:::-esidcnti.J.l c.:lndid<1:'cs

did not file a tvritten scater,·....::... = ·.·4·ith =l~e Corr.mission authorizi::~

the four (~) corr.mittees, in o~::· op:':~ion, tlh~ eandic.:ltcs had tacit.i~·

authoriz'cd +:hc committees. Hot·;evc!"' r si~c~ the Commi.t.tce has

ackno\·:10L~c;c·i :l:fili.:ltion ·.-:it:: :':1G ':our (.~) cCfrr.ittces I' a:1c filed

consolid~t~~~ rc~orts, the Audi~ st.~:f rcco~~ends no further actiuD

on this mat~':'8r •
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The c:\udit did not cover fOl.lr (4) committees that either

registered with the Federal Election Commission or reported

receiving contributions and making expenditures on behalf

of the Candidate (see Finding 0).

The Committee did not designate a campaign chairman on its

statement of organization as required by Section 432(a) of

the Act.

We note this is an apparent violation of Section l02.7(a)

of the Commission's Regulations which requires separate

persons to hold such offices.

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FEDERAL ELECTION CO~1.\\lSSION

H.!') 1\ ~lKH T '- \\'

\\'!\~HI'C10'.1)( .!04h\

ADDITIONAL INFURMATION REGARDlNG nus ORGANIZATION

MAY BE lDCATED IN A CDMPLETED COMPLIANCE ACI'ION

FILE RELEASED BY '!HE CXl+1ISSION AND MADE PUBLIC m

'!BE PUBLIC RECORDS OFFICE. FUR mIS PARTICUlAR

ORGANIZATIONt S COMPLETED OOMPLIANCE ACI'ION FlLE

SlM'LY JSK FUR 'lHE PRESS sm+tARY OF MIJR fl s-rc,,

'!HE PRESS sm+tARY WIIL PROVIDE A BRIEF HIS'1ORY OF

mE CASE AND A SUI+1ARY OF mE ACl'IONS TAKEN, IF •

Audit # II~
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