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FEDERAL ELECTION COMMISSION

1325 k STREET N.W.

WASHINCTON.D.C.204&3

REPORT OF THE COMPLIANCE REVIEW SECTION

OFFICE OF DISCLOSURE AND COMPLIANCE

FEDERAL ELECTION COMMISSION

ON

VOICE OF TEACHERS FOR EDUCATION

COMMITTEE ON POLITICAL EDUCATION (VOTE/COPE)

I. Background

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This report covers an audit of the New York State united

Teachers COPE undertaken by the Compliance Review staff of the

Federal Election Commission to determine whether there has been

compliance with the provisions of the Federal Election Campaign

Act, as amended ("the Act"). The audit was conducted pursuant

to Section 438(a) of the Act which directs the Commission to conduct audits and field investigations with respect to reports and

statements filed under the Act.

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~. VOTE/COPE was established as the political arm of the New

York State United Teachers (NYSUT). The Committee began operations on January 25, 1974, with its headquarters in Albany, New

York.

VOTE/COPE, managed by the Officers of NYSUT and three other

individuals appointed by the President of NYSUT, is financed by

voluntary contributions solicited in an annual drive. Funds are

disbursed only upon majority approval of the managing committee

and all finances are audited annually by an independent agent.

During the period audited, January 1, 1975, through February 16, 1976, VOTE/COPE reported total receipts of $295,848.05 and

total expenditures of $149,558.85. Based on the report of their

independent auditor, $563.66 of the total 1975 expenditures was

paid out to Federal campaigns during 1975. However, an additional

$79,010.00 was transferred to other qualified multicandidate committees registered with the Commission.

(a) Section 432(c)(2) of Title 2, United States Code,.requires a political co~mittee to maintain the id,ntification, occupation, and ?rincipal place of business, if any, of each person

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contributing in excess of $100 during a calendar year. Fur- 4It1 thermore, Section 434(b)(2) requires the committee to disclose

such information.

Our review disclosed that the Committee apparently had not been maintaining records of th~ aggregate amount

of contributions received from an individual during a calendar

year. A Committee representative explained that no such records had been maintained since the Committee normally receives

only one contribution averaging $10 or less from each contributor during a given calendar year. However, the representative was advised that in the future, a record of the aggregate

contributions received from each contributor should be maintained to ensure compliance with 2 U.S.C. 432(c)(2) and 434

(b)(2).

(b) Section 432(b) of Title 2, united States Code

(2 U.S.C. 432(b)] reouires that all funds of a political committee must be segregated from, and not commingled with, personal funds of officers, members, or associates of the committee.

Committee solicitation material provided to the

Commission staff auvised individuals collecting contributions

on behalf of the Committee to deoosit all cash collected in

their personal accounts. In turn, such individuals were to

forward such funds to the Committee by check drawn on these

accounts.

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The Committee reoresentative was informed that

such procedures may constitute commingling of Committee funds

with personal funds of associates of the Committee. Accordingly, we advised their representative to avoid the inclusion

of. such instructi0ns on future solicitation material.

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

[2 U.S.C. 434(b){9)] requires a political committee to disclose the identification of each payment to persons to whom

expenditures have been made within the calendar year in an aggregate amount in excess of $100.

In several instances, Committee records showed expenditures of $100 or less which were not itemized on pUblic

reports, even though the aggregate expenditures to such payees

exceeded $100 during 1975. Their representative was advised

that in the future such expenditures should be disclosed as

required by 2 U.S.C. 434(b)(9). No amendment was re~uested

to disclose these 1975 expenditures. I
•. (d) Sections 434(b)(8) and (b)(ll) of Title 2, United

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states Code (2 U.S.C. 434(b)(8) and (b)(ll)] rpquire disclo- ~ure of the total sum of all receipts and expenditures made

oy the committee.

A review of Committee records and reports showed

that all refunds of contributions and all contributions resulting in "non-sufficient funds" were treated as reductions

of unitemized contributions during the reporting p~riod in

which they were returned or determined to represent "nonsufficient funds," regardless of when they were originally

reported as receipts.

Their representative was advised that the Committee should have reported the return of contributions or "nonsufficient funds" ~ontributions as expenditures when the period of original receipt preceded the period in which they were

returned or determined as not receivable. Since the value of

such items in 1975 was minimal, no amended report was requested.

III. Committee Response -----------=-----

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The Committee advised the Commission in a letter dated

September 30, 1976, that it has revised its procedures to comply with the Compliance Review staff's r~commendations regarding each matter noted above.

Recommendation

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The Compliance Review staff recom~ends that the Commission accept the findings and conclusions of this report. It

is further recommended that the Commission advise the Committee

that it has accepted the staff's recommendations regarding each

matter noted in the report, Including the Commission's determination that the collection procedures Eillployed by the Committee

constitute commingling of Committee funds with personal funds

of associates in that the union members collecting such funds

are associates of the Committee.

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