Final Audit Report of the

Commission on Communications

Workers of America - COPE PCC

January 1, 2005 - December 31, 2006

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

requirements for

substantial compliance

with the Act.1 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 in this

report.

About the Committee (p. 2)

Communications Workers of America - COPE Political

Contributions Committee is a separate segregated fund

headquartered in Washington, DC. For more information, see

chart on the Committee Organization, p. 2.

Financial Activity (p. 2)

• Receipts

o From Individuals $ 6,720,647

o Refunds from Federal Candidates 69,225

& Other Political Committees

o Other Receipts 4,014

o Total Receipts $ 6,793,886

• Disbursements

o Contributions to Federal & Non- $ 5,654,187

Federal Candidates and

Committees

o Operating Expenditures 1,029,491

o Transfers to Affiliated Committee: 300,000

o Other Disbursements 15,800

o Total Disbursements $ 6,999,478

Commission Finding (p. 3)

• Transfers Made to AFL-CIO COPE PCC (Findingl)

2U.S.C.§438(b).
Final Audit Report

of the Commission on

Communications Workers of

America - COPE PCC

January 1, 2005 - December 31, 2006
Table of Contents

Page

Part I. Background

Authority for Audit 1

Scope of Audit 1

Part II. Overview of Committee

Committee Organization 2

Overview of Financial Activity 2

Part III. Summary

Commission Finding 3

Part IV. Commission Finding

Finding 1. Transfers Made to AFL-CIO COPE PCC 4
Parti

Background

Authority for Audit

This report is based on an audit of Communications Workers of America - COPE

Political Contributions Committee (CWA-COPE PCC), 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 investigations 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 committees 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

Following Commission approved procedures, the Audit staff evaluated various risk

factors and as a result, the scope of this audit was limited to the following:

1. The receipt and transfer of certain contributions.

2. The disclosure of certain disbursements, debts and obligations.

3. The consistency between reported figures and bank records.

4. The completeness of records.

5. Other committee operations necessary to the review.
Part II

Overview of Committee

Committee Organization

Important Dates

• Date of Registration

• Audit Coverage

Headquarters

Bank Information

• Bank Depositories

• Bank Accounts

Treasurer

• Treasurer When Audit Was Conducted

• Treasurer During Period Covered by Audit

Management Information

• Attended FEC Campaign Finance Seminar

• Used Commonly Available Campaign Management

Software Package

• Who Handled Accounting and Recordkeeping Tasks

Communications Workers of

America - COPE PCC

March 20, 1975

January 1, 2005 - December 31,2006

Washington, DC

One

One Checking

Barbara J. Easterling

Barbara J. Easterling

Yes

Yes

Paid Staff

Overview of Financial Activity

(Audited Amounts)

Cash on hand @ January 1, 2005

o From Individuals

o Refunds from Candidates & Political Committees

o Other Receipts

Total Receipts

o Contributions to Federal & Non-Federal Candidates

and Committees

o Operating Expenditures

o Transfers to Affiliated

o Other Disbursements

Total Disbursements

Cash on hand @ December 31, 2006

$ 1,555,818

6,720,647

69,225

4,014

$ 6,793,886

5,654,187

1,029,491

300,000

15,800

$ 6,999,478

$ 1,350,226
Part III

Summary

Commission Finding

Finding 1. Transfers Made to AFL-CIO COPE PCC

CWA-COPE PCC made transfers totaling $300,000 to AFL-CIO COPE PCC in 2005 and

2006. The interim audit report questioned whether CWA-COPE PCC was required to

meet the transmittal and recordkeeping requirements of a collecting agent for these

transfers. In conjunction with a hearing before the Commission requested by AFL-CIO

COPE PCC, a 1979 Report of the Audit Division on AFL-CIO COPE PCC was

submitted that included recommendations that were consistent with the longstanding

reporting practices for the transfers. Because CWA-COPE PCC and AFL-CIO COPE

PCC are both reporting committees in their own right, contributions received under this

practice are reported to the Commission, and the Commission has a means of assuring

itself that the contributions do not exceed the limits prescribed by the Act. Moreover,

due consideration must be given to the approval of this arrangement in the 1979 audit

report and CWA-COPE PCC's longstanding history of this practice. Under these

circumstances, the Commission accepts CWA-COPE PCC's current reporting practice.

(For more detail, see p. 4)
Part IV

Commission Finding

Finding 1. Transfers Made to AFL-CIO COPE PCC |

Summary

CWA-COPE PCC made transfers totaling $300,000 to AFL-CIO COPE PCC in 2005 and

2006. The interim audit report questioned whether CWA-COPE PCC was required to

meet the transmittal and recordkeeping requirements of a collecting agent for these

transfers. In conjunction with a hearing before the Commission requested by AFL-CIO

COPE PCC, a 1979 Report of the Audit Division on AFL-CIO COPE PCC was

submitted that included recommendations that were consistent with the longstanding

reporting practices for the transfers. Because CWA-COPE PCC and AFL-CIO COPE

PCC are both reporting committees in their own right, contributions received under this

practice are reported to the Commission, and the Commission has a means of assuring

itself that the contributions do not exceed the limits prescribed by the Act. Moreover,

due consideration must be given to the approval of this arrangement in the 1979 audit

report and CWA-COPE PCC's longstanding history of this practice. Under these

circumstances, the Commission accepts CWA-COPE PCC's current reporting practice.

Legal Standard

A. Affiliated Definition. Established, financed, maintained or controlled by the same

organization. Affiliated political committees are considered one political committee for

purposes of contribution limits. Committees presumed to be affiliated include those

established, financed, maintained or controlled by a single national or international union

and/or its local unions or other subordinate organizations. Also committees established

by an organization of national or international unions and/or all its State or local central

bodies are presumed to be affiliated. Affiliation is not presumed between unions and

organizations of national or international unions. 11 CFR §§100.5(g) and 110.3(a).

B. Collecting Agent Definition. A collecting agent is an organization or committee that

collects and transmits contributions to one or more separate segregated funds to which

the collecting agent is related. A collecting agent may be the separate segregated fund's

connected organization, an organization or committee affiliated with the SSF, or a local,

national, or international union collecting contributions on behalf of the separate

segregated fund of any federation with which the local, national, or international union is

affiliated. 11 CFR §102.6(b)(l).

C. Requirements of Collecting Agent. The separate segregated fund is responsible for

ensuring that the recordkeeping, reporting, and transmittal requirements are met.

1. Collecting agent may solicit only those individuals who are eligible for

solicitation under the law, and pay the expenses of soliciting.

2. Collecting agent may include a solicitation for contributions to an SSF in a bill for

another payment.
3. Collecting agent may establish a separate transmittal account solely for the SSF's

contributions or use its own account for the temporary deposit and transmittal of

contributions to the SSF. The agent must keep separate records of all receipts and

deposits that represent contributions to the SSF.

4. Collecting agent must transfer the funds within 10 days for all contributions over

$50 and within 30 days for contributions $50 or less.

5. Collecting agent must forward the required recordkeeping information to the SSF

along with the collected contributions, and maintain records of SSF contribution

deposits and transmittals for three years.

6. The SSF is responsible for reporting the contributions collected through the

collecting agent as contributions from the original donors rather than as a transfer

from the collecting agent. 11 CFR §§102.6(c) and 102.8(b).

Facts and Analysis

CWA-COPE PCC is the separate segregated fund of the international union

Communications Workers of America (CWA). CWA-COPE PCC collects contributions

for itself and for AFL-CIO COPE PCC, the separate segregated fund of the federation of

unions AFL-CIO. CWA-COPE PCC and AFL-CIO COPE PCC are not considered

"affiliated" within the meaning of 11 CFR §110.3 and, therefore, are subject to separate

contribution limitations and reporting.

CWA-COPE PCC received and deposited contributions for both organizations via

contributor checks and payroll deduction. Based on available solicitation material,

contributors were informed that an unspecified portion of their contribution would go to

AFL-CIO COPE PCC. CWA-COPE PCC reported the receipt of the contributions

primarily as unitemized contributions. CWA-COPE PCC and AFL-CIO COPE PCC

periodically agreed on an amount to be transferred to AFL-CIO COPE PCC. AFL-CIO

COPE PCC reported this lump sum transfer without information regarding the

individuals contributing the funds.

During the period covered by the audit, CWA-COPE PCC made four transfers to AFLCIO COPE PCC totaling $300,000 ($100,000 in 2005 and $200,000 in 2006).

At the audit exit conference and in the interim audit report, the Audit staff questioned

whether CWA-COPE PCC and the AFL-CIO COPE had a collecting agent relationship

and was thus required to follow the reporting and recordkeeping procedures.

In response to recommendations in the interim audit report, CWA-COPE PCC amended

reports for the period covered by the audit to include all amounts that have been

forwarded to AFL-CIO COPE on Line 29, (Other Disbursements) instead of on Line 22

(Transfers to Affiliated/Other Party Committees). CWA-COPE PCC also argued that 11

C.F.R. §§102.6(c)(4) and 102.8(b) are not applicable to funds transferred to AFL-CIO

COPE PCC. CWA-COPE PCC believed the procedures "utilized for many years in both

undertaking its joint fundraising program with AFL-CIO COPE PCC and in reporting the

associated transactions to the Commission" complies fully with the Federal Election

Campaign Act and the Commission's regulations.
On March 4,2010, these transfers were discussed at an Commission hearing requested by

counsel for the AFL-CIO COPE PCC. In conjunction with the hearing, a 1979 Report of

the Audit Division on AFL-CIO COPE PCC was submitted which included

recommendations that were consistent with the longstanding reporting practices for the

transfers. Because CWA-COPE PCC and AFL-CIO COPE PCC are both reporting

committees in their own right, contributions received under this practice are reported to

the Commission, and the Commission has a means of assuring itself that the contributions

do not exceed the limits prescribed by the Act. Moreover, due consideration must be

given to the approval of this arrangement in the 1979 audit report and CWA-COPE

PCC's longstanding history of this practice. Under these circumstances, the Commission

accepts CWA-COPE PCC's current reporting practice.