Assistance on House and Senate Financial and Administrative Operations

We maintain a professional staff at the Capitol to audit the various revolving funds, other activities of the House and Senate, and private organizations doing business on the Capitol grounds. Our audits of private organizations which conduct activities on Capitol Hill are carried out pursuant to section 451 of the Legislative Reorganization Act of 1970.

Our staff also assists with management, financial, and administrative problems when requested by officers of the Congress. These requests are received virtually every day and require close cooperation with these officials on their immediate problems and on the development of long-range improvements in their operations.

At the request of these officials, we audited and reported on the following activities:

Senate Office Beauty Shop

Senate Recording Studio Revolving Fund House Recording Studio Revolving Fund House Finance Office

House Stationery Revolving Fund

House Office Equipment Service

We continued to assist the Committee on House Administration by making special studies of various operations of the House Restaurant which helped the Committee significantly reduce the operating deficit.

Recommendations for Legislation

One of the provisions of the Budget and Accounting Act of 1921, requires our Office to make recommendations to the Congress "looking to greater economy and efficiency in public expenditures." In cases where an audit reveals that legislation is required or desirable, our reports will include an appropriate proposal for legislative consideration. In other cases, we may recommend that the affected agency sponsor legislation. Furthermore, we bring proposals for legislative action. to the attention of the committees of jurisdiction.

Those reports issued during the past year containing legislative recommendations, together with certain. recommendations carried forward from prior years, are discussed in Section IV of the Appendix.

CHAPTER THREE

SUPERVISION OF POLITICAL
CAMPAIGN FINANCING
AND REPORTING

Since our last annual report, the Congress enacted two laws which make unique and significant additions to the Comptroller General's authority and responsibility the Presidential Election Campaign Fund Act (title VIII, Public Law 92-178, approved Dec. 10, 1971), and the Federal Election Campaign Act of 1971 (Public Law 92-225, approved Feb. 7, 1972).

The Presidential Election
Campaign Fund Act

This act does not become effective until January 1, 1973, and does not require any substantial action on our part until 1976.

Briefly, this act provides for a checkoff procedure for Federal income tax returns whereby a taxpayer can designate $1 of his tax payment ($2 for joint returns) to go to a political party of his choice. Under this law the Comptroller General is required to:

Certify to the Secretary of the Treasury for payment to presidential and vice presidential candidates amounts to which they are entitled under the checkoff procedure according to the formulas prescribed in the act.

News reporters examining campaign finance reports in the Office of Federal Elections Public Study Room.

Audit candidates' reports of campaign expenses. Report to the Congress on payments to political parties and their campaign expenses.

Recover funds from candidates on the basis of determinations of ineligible receipts or campaign

expenses.

In the Presidential Campaign Fund Act, the Congress has for the first time empowered the Comptroller General, through his own attorneys and counsel, to participate on behalf of the United States in litigation in Federal courts. Specifically, the act authorizes the Comptroller General:

To appear in and defend against any action brought against him on account of any certification, determination, or other action by him under that act.

To petition the courts of the United States for declaratory or injunctive relief concerning civil matters covered by that act.

On behalf of the United States, to appeal from and to petition the Supreme Court for certiorari to review judgments or decrees entered with respect to such actions.

The Federal Election Campaign Act of 1971

The Congress gave the Comptroller General responsibility for administering this act (which became effective on Apr. 7, 1972) as it relates to campaigns. for the offices of President and Vice President. In addition, title I of the act requires the Comptroller General to promulgate regulations implementing the provisions governing all Federal candidates' spending for media advertising (with the exception of certain provisions under jurisdiction of the Federal Communications Commission).

Title I of the act, known in its own right as the "Campaign Communications Reform Act":

Limits the amounts which candidates for Federal office may spend for using communications mediatelevision, radio, newspapers, magazines, outdoor advertising, and certain telephone usage.

Controls the rates which broadcasting stations, newspapers, and magazines may charge Federal candidates.

Title III (Disclosure of Federal Campaign Funds) of the act requires Federal candidates and their supporting political committees to:

Keep detailed accounts of contributions received and expenditures made.

Report to a designated supervisory officer at specified intervals (at least four times a year) complete accounts of all receipts and expenditures.

The act designates as supervisory officers:

The Clerk of the House of Representatives for House candidates.

The Secretary of the Senate for Senate candidates.

The Comptroller General for presidential and vice presidential candidates.

The duties of the supervisory officers are set out in section 308 of the act as follows:

Sec. 308. (a) It shall be the duty of the supervisory officer

(1) to develop and furnish to the person required by the provisions of this Act prescribed forms for the making of the reports and statements required to be filed with him under this title;

(2) to prepare, publish, and furnish to the person required to file such reports and statements a manual setting forth recommended uniform methods of bookkeeping and reporting;

(3) to develop a filing, coding, and cross-indexing system consonant with the purposes of this title;

(4) to make the reports and statements filed with him available for public inspection and copying, commencing as soon as practicable but not later than the end of the second day following the day during which it was received, and to permit copying of any such report or statement by hand or by duplicating machine, as requested by any person, at the expense of such person: Provided, That any information copied from such reports and statements shall not be sold or utilized by any person for the purpose of soliciting contributions or for any commercial purpose;

(5) to preserve such reports and statements for a period of ten years from date of receipt, except that reports and statements relating solely to candidates for the House of Representatives shall be preserved for only five years from the date of receipt;

(6) to compile and maintain a current list of all statements or parts of statements pertaining to each candidate; (7) to prepare and publish an annual report including compilations of (A) total reported contributions and expenditures for all candidates, political committees, and other persons during the year; (B) total amounts expended according to such categories as he shall determine and broken down into candidate, party, and nonparty expenditures on the National, State, and local levels; (C) total amounts expended for influencing nominations and elections stated separately; (D) total amounts contributed according to such categories of amounts as he shall determine and broken down into contributions on the national, State, and local levels for candidates and political committees; and (E) aggregate amounts contributed by any contributor shown to have contributed in excess of $100;

(8) to prepare and publish from time to time special reports comparing the various totals and categories of contributions and expenditures made with respect to preceding elections;

(9) to prepare and publish such other reports as he may deem appropriate;

(10) to assure wide dissemination of statistics, summaries, and reports prepared under this title;

(11) to make from time to time audits and field investigations with respect to reports and statements filed under the provisions of this title, and with respect to alleged failures to file any report or statement required under the provisions of this title;

(12) to report apparent violations of law to the appropriate law enforcement authorities; and

(13) to prescribe suitable rules and regulations to carry out the provisions of this title.

(b) The supervisory officer shall encourage, and cooperate with, the election officials in the several States to develop procedures which will eliminate the necessity of multiple filings by permitting the filing of copies of Federal reports to satisfy the State requirements.

During the consideration of the legislation, the Comptroller General recommended establishment of an independent, bipartisan commission to administer the act. Senate bill 382, which became Public Law 92225, as passed by the Senate, contained a provision for an independent Federal Elections Commission. The House-passed bill, however, contained the provision for three supervisory officers and it was this version that prevailed in conference.

Office of Federal Elections

Because of the unique character of the duties and responsibilities assigned to the Comptroller General by these two statutes, a new office in GAO was established the Office of Federal Elections-to perform these new functions.

The Comptroller General appointed as Director of that office Phillip S. Hughes, former Deputy Director of the Bureau of the Budget and widely known as an outstanding career Government official. L. Fred Thompson, a long-time career attorney in GAO, was named Deputy Director.

During the planning and preparation for assuming the responsibilities under the new law, we obtained. the services of Dr. Herbert E. Alexander as a consultant. Dr. Alexander is Executive Director of the Citizens Research Foundation and has authored several books on political campaign financing. His advice and counsel during this period were invaluable.

The Office of Federal Elections and the planning task force which preceded it worked closely with the