..

FEDERAL ELECTION COMMISSION

WASHINCTON. D.C. *U

Kev Personnel 3. .

r.

The Treasurer of the Committee from inception to ~:e=r~ary 16, 1981 was Mr. Stanley Weiss. For the period :e=r~ar: 16, 1981 to the ?rese~t, the Treasurer is Mr. Jim

:·:·==:e ::a~.

. This report is based on documen~s and working papers ~u??ortinq each of its factual statemen~s. They form part of

the record upon which the Commission based its decisions on

the ~atters in this report and were available to Commissioners a~~ a??ro?riate staff for review.

REPORT or THE AUDIT DIVISION

ON

TBB CITIZENS PARTY

I. Background

A. OVerview

This repor~ is based upon an audi~ of The Ci~izens

Par~y ("~heCommi~tee") under~aken by the Audi~ Division of

the Federal Elec~ion Commission in accordance wi~ ~e

Commission's audi~ policy ~o determine whether there has been co~pliance with the provisions of the Federal Election Campaign Act of 1971, as amended ("the Ac~"). The audit was conducted

pursuant to Section 438(b).of Ti~le 2 of the United Sta~e.

Code which states that the ~ommission may conduct audits and ,~, field i~vestigations of any political comnd~te. required to

..... file a report under Section 434 of this ~itle. Prior ~o

conductinq any audit under this sec~ion, ~he Commission .hall '~erfor.m an in~ernal review of reports filed by selected ~o~~ittees to dete~ine if the repor~s filed by a par~icular

.0' cor.~ittee meet the threshold requirements for substantial r"~ compliance with the Act.

" The Commi~teereqistered with the Commi.sion on

r" Dece.-nber 20, 1979 and mainUins its headquar~ers in

Kashinqton, D.C.

The audit covered~he period January 1, 1980, through December 31, 1980. The Committee repor~ed a beginning cash

balance at January 1, 1980 of $890.00J total receipts for.~e

period of $632,709.03J total expenditures for the period of

$627,578.51J and an ending cash balance a~ December 31, 1980

of $6,020.52.
c. Scope

-2-

The audit included such te.ts as verification',of

total reported receipt. and expenditures and individual·

transactions, review of required .upporting documentation,

analysis of Committee debt. and obligation., and, such other'

audit procedure. as deemed necessary under the circumstance••

II. Audit Findinq and Recommendation

A. Di.closure of Financial Actiyl~Y

Sections 434 (b) (2) and (4) of Title 2, Uni~ed state.

code, require that a committee repor~ the total sum of all

receipts and expenditures made during a reporting period and

the calendar year. Sections 434 (b) (3) and (5) of Title 2,

United States Code provide for disclosure of receip~s and

expenditures with aggregate values in excess of $200.00.

.... (1) During the A:udit staff's review of Committee

records, it was ascertained that activity associated with an

.'. escrow savings account was not reported. on Com:nittee disclosure '~ reports. This omission caused. an understatement of both receipt. , and expenditures for ~ereporting period and the calendar year ,~y $20,000~00. Activity in the account consisted of a $20,000.00

"'individual' contribution received on January 9, 1980 and the _.. subsequent refund to the contributor on February 28, 1980. The ~' escrow savings account was closed on May 6, 1980.

The Committee bookkeeper explained that, at the

time of the contribution, the Committee felt that National Party

status and hence, the ability to accept up to $20,000 per year from an individual, had not yet been achieved•. The Committee

deposited the monies into the e~crow savings account until ~e

acceptability of the contribution could be established. Subsequently, the contributor requested a refund upon advice of hi.

attorney and the Committee complied. The Committee agreed to

file. amended reports.

(2) The Audit staff's, review of Committee disclosure

reports and supporting documentation indicated that the Committee

had incorrectly reported the conversion of eight (8) outstanding loans, in part or in total, to contributions, thereby overstating receipts and expenditures for the reporting period and the calendar

year by $21,000.00.