STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF LEGAL AFFAIRS, ) FLORIDA ELECTIONS COMMISSION, )

)

Petitioner, )

vs. ) Case No. 99-4766

)

KATHERINE HARRIS, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Tallahassee, Florida, on September 18, 2000, before Arnold H. Pollock, an Administrative Law Judge with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Phyllis Hampton, Esquire

David F. Chester, Esquire Florida Elections Commission The Capitol, Room 2002

Tallahassee, Florida 32399-1050

For Respondent: Richard E. Coates, Esquire

Christopher B. Lunny, Esquire Katz, Kutter, Haigler, Alderman,

Bryant & Yon, P.A.

106 East College Avenue Post Office Box 1877

Tallahassee, Florida 32302-1877 STATEMENT OF THE ISSUE

The issue for consideration in this case is whether Respondent, Katherine Harris, violated the provisions of Section 106.08, Florida Statutes, by making payments of

organizational dues from her campaign account prior to the 1998 election.

PRELIMINARY MATTERS

On September 7, 1999, the Florida Elections Commission (Commission) entered an Order of Probable Cause in this matter alleging that Katherine Harris, then a candidate for Secretary of State, had willfully violated Section 106.08(5), Florida Statutes, by making contributions to specified prohibited organizations on 21 separate occasions. The Order of Probable Cause advised Ms. Harris of her entitlement to a hearing before the Commission or the Division of Administrative Hearings on the allegations. Thereafter, on October 5, 1999, Ms. Harris, through counsel, requested a formal administrative hearing on the allegations contained in the Order.

By letter dated October 19, 1999, the Executive Director of the Commission advised Ms. Harris of its denial of her request for formal hearing based on an alleged failure by Ms. Harris to identify a disputed issue of material fact, and granted her an informal hearing. The letter also advised Ms. Harris that if she were to identify a disputed material fact to the Commission within 14 days, a formal hearing might be granted. On October 28, 1999, Ms. Harris' counsel submitted her response to the Commission's denial of formal hearing and renewed a demand for formal hearing. This hearing ensued.

At the hearing, the Commission presented the testimony of David K. Smith, an investigator for the Commission; Connie Evans, bureau chief of election records for the Florida Department of State's Division of Elections; and, by deposition, Clifford M. King, Respondent's attorney and campaign treasurer. Petitioner also introduced Petitioner's Exhibits 1 through 16, which included the deposition of Mr. King. Respondent did not present any witnesses but introduced Respondent's Exhibits A through F.

A Transcript of the proceedings was furnished on October 5, 2000. Subsequent to the receipt thereof, both parties submitted matters in writing which were carefully considered in the preparation of this Recommended Order. Respondent also filed a Motion for Attorney's Fees alleging Petitioner had filed the action against Respondent for an improper purpose and, thereby, had violated Sections 120.569(2)(e) and 120.595, Florida Statutes.

FINDINGS OF FACT

As to the Merits:

1. At all times pertinent to the issues herein the Commission was the state agency responsible for the oversight of public elections in this state. Respondent was a candidate for public office whose activities were subject to scrutiny by the Commission. The Division of Elections (Division) was a branch of the office of the Secretary of State.

2. Respondent initially notified the Division on June 8, 1997 that she was seeking re-election to the Florida Senate seat she then held. However, on November 19, 1997, she filed the appropriate forms with the Division to signify her candidacy for the office of Florida Secretary of State. At or near each filing, Respondent filed with the Division a "Statement of Candidate" in which she stated she had received, read, and understood the requirements of Section 106, Florida Statutes.

3. From April 1997, through mid-March 1998, 21 separate checks were written by her campaign treasurer on Respondent's campaign account with the Barnett Bank for dues payments to organizations. This is the issue here. The organizations to which the checks were written are organizations established for the public good. The checks in issue are as follows:

   CH # DATE PAYEE AMT

   
   

   0101 04/03/97 Charlotte County 9.00

   Republican Club

   0102 04/03/97 Peace River Federated 5.00

   		Republican Women
   0103	04/03/97	Manasota Republican	11.00
   		Women's Club Fed.
   0104	04/03/97	Venice-Nokomis Fed.	11.00

   Women's Club

   0105 04/03/97 Sarasota Bay Republican 5.00

   Women's Club

   0106 04/03/97 West Charlotte 5.00

   Republican Club

   0108	06/05/97	Bernice Furrow		25.00
   0109	07/03/97	Venice Area C of C		50.00
   0110	08/06/97	Charlotte County C	of C	65.00
   0111	08/11/97	Republican Women's	Club	10.00

   of Sarasota

   0112 09/04/97 Sarasota Bay Republican 15.00

   Women's Club

   0114	10/29/97	Taxpayer's Association of Sarasota County	12.00
   0120	11/30/97	Sarasota Republican Club	15.00
   0162	02/11/98	Mid-County Republican	15.00
   0163	02/11/98	Club Venice-Nokomis Federated	7.50
   0164	02/11/98	Republican Club West County Republican	5.00
   0165	02/11/98	Club Siesta Key Republican	6.00
   0189	03/03/98	Club Sarasota County Young	30.00
   0199	03/09/98	Republicans Republican Women's Club	10.00
   		of Sarasota
   0204	03/16/98	Republican Women's Club	15.00
   0206	03/16/98	of Lakeland Federate Manasota Republican	10.00

   Women's Club Federate

   
   

4. All of the checks except number 0108 were for dues to the organization shown, and totaled $325.00. Check number 0108, in the amount of $25.00, was made to Bernice Furrow, and the memo space on the instrument indicates it was issued in reimbursement of dues to the Peace River Forum. These checks were written at the direction of Respondent.

5. Clifford M. King, the maker of the checks in question, is an attorney admitted to practice in Florida in 1988. He served as campaign treasurer for Respondent during her successful campaign for the Florida Senate in 1994, and was her attorney and campaign treasurer during her campaign for Secretary of State. His major areas of practice include business transactions, estate planning, and probate. He has not worked for any other candidate nor has he ever been employed by any other client to give advice on elections law. Nonetheless, he considered himself to be

   qualified to advise Respondent on the Florida Election Code during her campaigns. It is so found.

6. To prepare for giving that advice, Mr. King reviewed the Florida Statutes pertinent to elections and the campaign handbook prepared and issued by the Division of Elections. However, he did not read any opinions issued by the Division or opinions of the Attorney General dealing with elections law. When issues arose with which he did not feel comfortable, he would seek the advice of the Division of Elections.

7. Mr. King cannot recall whether it was Respondent or one of her campaign workers who asked him if it were permissible to spend campaign funds for dues, but he is sure the question was asked. In response, he advised that to do so was a permissible expenditure of the campaign.

8. Mr. King recalls that this same issue arose during the 1994 campaign at which time, based on his research of the statutes and the Division's campaign handbook, and after consultation with individuals involved in other campaigns, he concluded that expenditures for dues were permissible and he so advised Respondent.

9. Though Mr. King recalls having discussed with Respondent the issue of the permissibility of writing these checks, he did not advise her of the specific provisions of the elections statute in issue here. He was satisfied at the time he advised

   Respondent and wrote the checks in issue, that it was lawful and permissible to do so.

10. The Division's investigator, Mr. Smith, contacted representatives of most, if not all of the organizations to whom the checks in issue were written. All checks except the one to Ms. Furrow, were in payment of membership dues paid by all members. Mr. Young could find no instance where a specific benefit accrued to Respondent as a result of her payment of dues which was not received by every other member of the organization, candidate for public office or not. It is so found.

    As to the Motion for fees:

    
    

11. After the Order of Probable Cause involving Respondent was served on Respondent, she requested a formal hearing. This hearing was initially denied by the Commission on the grounds that Respondent had failed to identify issues of fact requiring formal hearing. However, this decision was subsequently reversed and the matter was referred for formal hearing before the Division of Administrative Hearings.

12. While the discovery process was being carried out, it became known that Respondent had twice been advised by Mr. King, her attorney, that the donations/dues payments from campaign funds in issue were permissible expenditures. When this information became known to the Commission's counsel, counsel prepared a Motion to Dismiss the Order of Probable Cause and recommended that action to the Commission. The basis for the

    recommendation was a lack of evidence to demonstrate that Respondent's actions were willfully illegal.

13. Notwithstanding its counsel's advice, the Commission determined to proceed with the action on the basis that a majority of the Commissioners considered Respondent's counsel/campaign treasurer, the individual who had given the advice to Respondent, a "straw man" whose testimony by deposition was for the sole purpose of exonerating Respondent. That conclusion is not supported by the evidence of record, however.

    CONCLUSIONS OF LAW

    
    

    As to the Merits:

    
    

14. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.

15. Petitioner seeks to discipline Respondent for an alleged violation of Section 106.08(5), Florida Statutes. Petitioner claims that Respondent's direction to her campaign treasurer and attorney, Mr. King, to issue the 21 small checks totaling $350.00 to various political organizations within Manatee/Sarasota County area was improper. It contends her willful direction to issue those checks is prohibited by the statute. Petitioner has the burden to prove its charges in this case by clear and convincing evidence. Latham vs. Commission on Ethics, 694 So. 2d 83 (Fla 1st DCA 1997; Department of Banking and Finance vs. Osborne-Stern, 670 So. 2d 935 (Fla. 1996).

16. The evidence in this case is clear that Respondent caused the checks in issue to be written. In fact, the parties stipulated to that fact and also stipulated that the candidate candidly and openly disclosed these payments and reimbursed her campaign fund for them when the issue of their impropriety was raised. What is not clear, however, is evidence regarding whether Respondent knew the payments were illegal at the time they were made and nonetheless directed them.

17. Section 106.08(5), Florida Statutes, provides in pertinent part:

    A person may not make any contribution through or in the name of another, directly or indirectly, in any election. Candidates, political committees, and political parties may not solicit contributions from or make contributions to any religious, charitable, civic, or other causes or organizations established primarily for the public good.

18. On the face of that statute, the checks written on Respondent's campaign account by Mr. King, on behalf of and at the behest of Respondent, were prohibited and if Respondent's direction to Mr. King to write the checks was willfully given with knowledge of their illegality, her actions would constitute a violation within the jurisdiction of Petitioner. See also Section 106.25(3), Florida Statutes.

19. Section 106.37, Florida Statutes, defines "willfulness" as occurring:

    . . . if the person commits an act while knowing that [the act is prohibited], or showing reckless disregard for whether the act

    is prohibited under this chapter, A

    person knows that an act is prohibited or required if the person is aware of the provision of this chapter which prohibits or requires the act, understands the meaning of that provision, and performs the act that is prohibited or fails to perform the act that is required. A person shows reckless disregard for whether an act is prohibited or required under this chapter if the person wholly disregards the law without making any reasonable effort to determine whether the act would constitute a violation of this chapter.

20. In this case, Respondent filed a certificate with the Division that she had received, read, and understood the provisions of Chapter 106. This fact, standing alone, is not dispositive of the issue of willfulness. It is one thing to be aware of and understand what a statutory provision says, and quite another to be aware of and understand what that same provision means. Here, it is clear that Respondent understood what the provision said, but it is equally clear she did not clearly understand what it meant. Ultimately, the United States District Court in Florida Right to Life v. Mortham, 98-770-CIV- ORL-19A, (M.D. Fla. 1998 and 1999) concluded that campaign funds could be given to organizations established primarily for the public good (as were those to whom Respondent contributed), so long as there is no political quid pro quo involved. That is exactly the case here. Not only has such not been shown, it is also obvious Petitioner has failed to clearly show Respondent's actions were willful or reckless.

21. In other words, Respondent may have committed a prohibited act, (although if Mortham is dispositive, she did not), but even if the law was broken, under the circumstances of this case, her reliance upon the advice of her attorney who, it has been found, was qualified to give such advice, would clearly exonerate her of any willfulness or recklessness. This was, it should be noted, the advice given the Commission by its own counsel at the Probable Cause Panel meeting. That advice went unheeded.

    As to the Motion for fees:

    
    

22. Respondent has submitted a Motion for Attorney's Fees and Costs on the basis that the "uncontroverted evidence in this case" demonstrates the Commission needlessly prosecuted this action for an improper purpose and against the advice of its counsel. Respondent cites as authority for her motion

    Sections 120.569(2)(e) and 120.595, Florida Statutes.

    
    

23. Section 120.569(2)(e), Florida Statutes, provides:

    
    

    All pleadings, motions, or other papers filed in the proceeding must be signed by the party, the party's attorney, or the party's qualified representative. The signature constitutes a certificate that the person has read the pleading, motion, or other paper and that, based upon reasonable inquiry, it is not interposed for any improper purposes, such as to harass or cause unnecessary delay, or for frivolous purpose or needless increase in the cost of litigation. If a pleading, motion, or other paper is signed in violation of these requirements, the presiding officer shall impose upon the person who signed it, the represented party, or both, an appropriate sanction, which may include an

    order to pay the other party of parties the amount of reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney's fee.

    
    

24. Section 120.595(2)(d) and (e), Florida Statutes, provides:

    1. In any proceeding in which the administrative law judge determines that a party participated in the proceedings, for an improper purpose. The recommended order shall so designate and shall determine the award of costs and attorney's fees.

       
       

    2. For the purpose of this subsection:

       
       

       1. "Improper purpose" means participation in a proceeding pursuant to s. 120.57(1) primarily to harass or cause unnecessary delay or for frivolous purpose or to needlessly increase the cost of licensing or securing the approval of an activity.

       
       

25. Respondent contends that the prosecution of this matter and the entry of an Order of Probable Cause in this case in the face of evidence that Respondent was advised that her actions were permissible, and even after a recommendation from its counsel that the matter be dropped in the absence of a showing of probable cause, constitute prosecution for a frivolous purpose.

26. The fact that Respondent was advised by counsel that the payments in issue were permissible, standing alone, is not dispositive of the issue of their permissibility or the culpability of Respondent. Issues of fact existed which required resolution at formal hearing. Included in these were the legality of the payments themselves, an issue resolved by the

    court in Mortham after many, if not all, of the payments had been made. Also included was the issue of the willfulness or recklessness of Respondent's decision to make the payments. It is in this area that the effect of the advice by counsel comes into play. Under the circumstances of this case, even though the evidence of record may show commission of a prohibited act on the part of Respondent, justiciable issues of culpability existed for which formal hearing was the appropriate forum for resolution.

    Therefore, the Commission's decision to go forward with formal hearing was not made for an improper or frivolous purpose.

27. Respondent also suggests that the urging by the Commission's counsel of a "preponderance of the evidence" standard at hearing is further evidence of improper purpose. Clearly this allegation is without merit. The undersigned chose to apply a "clear and convincing" standard because his research convinced him it was the appropriate evidentiary standard to apply in this case. There is, however slight, legal suggestion to the contrary, however, and it cannot be said that the Commission's counsel's urging reliance on an incorrect standard is evidence of an improper purpose.

28. Respondent also cites the Commission's failure to interview or solicit testimony from Respondent during the entire course of the proceeding as evidence of an improper purpose. Perhaps, as Respondent argues, interviewing her earlier in the proceeding might have developed evidence pertinent to the issues

    here. However, the Commission utilized a qualified investigator to examine the actions of Respondent. The investigator did not seek to question her and the failure to take evidence from her directly is no more than a judgment of the Commission which is not probative of ill motive by it.

29. Taken together, the evidence presented fails to establish that Respondent committed misconduct to support action by the Commission. By the same token, the evidence also fails to show that the Commission's decision to proceed, though subsequently determined to be unsuccessful, was made for any improper or frivolous purpose so as to support an award of costs and attorney's fees.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Elections Commission enter a final order dismissing its Order of Probable Cause in this matter. An award of attorney's fees and costs to Respondent is unwarranted and rejected.

DONE AND ENTERED this 30th day of October, 2000, in Tallahassee, Leon County, Florida.

ARNOLD H. POLLOCK

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6947 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 2000.

COPIES FURNISHED:

Phyllis Hampton, Esquire David F. Chester, Esquire Florida Elections Commission The Capitol, Room 2002

Tallahassee, Florida 32399-1050

Richard E. Coates, Esquire Christopher B. Lunny, Esquire Katz, Kutter, Alderman,

Bryant & Yon, P.A.

106 East College Avenue Post Office Box 1877

Tallahassee, Florida 32302-1877

Barbara M. Linthicum, Executive Director Florida Elections Commission

The Capitol, Room 2002 Tallahassee, Florida 32399-1050

Steven K. Christensen, Clerk Florida Elections Commission The Capitol, Room 2002

Tallahassee, Florida 32399-1050

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 99-004766

Orders for Case No: 99-004766