STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
TERRY SMITH,
Petitioner,
vs.
FLORIDA ELECTIONS COMMISSION,
Respondent.
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) Case No. 02-4902
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RECOMMENDED ORDER
Notice was provided, and a formal hearing was held on April 15, 2003, in Pensacola, Florida, and conducted by
Harry L. Hooper, Administrative Law Judge with the Division of Administrative Hearings.
APPEARANCES
For Petitioner: Robert R. Kimmel, Esquire
Kimmel & Batson
Post Office Box 12266 Pensacola, Florida 32581-2266
For Respondent: Eric M. Lipman, Esquire
Florida Elections Commission
107 West Gaines Street
The Collins Building, Suite 224 Tallahassee, Florida 32399-1050
STATEMENT OF THE ISSUE
Whether Petitioner violated the Florida Election Code as alleged in the Order of Probable Cause entered
November 25, 2002.
PRELIMINARY STATEMENT
Pursuant to a complaint received on September 7, 2001, the Florida Elections Commission (Commission) conducted an investigation into allegations concerning Petitioner Terry Smith (Mr. Smith). More than one year later, an Order of Probable Cause was filed on November 25, 2002.
The Order of Probable Cause alleged four separate counts of violating Section 106.021(3), Florida Statutes, which prohibits a candidate from making an expenditure except through the campaign treasurer; one count of violating Section 106.021(3), Florida Statutes, which prohibits a person from making contributions to or receiving contributions on behalf of a candidate except through the campaign treasurer; 24 counts of violating Section 106.05, Florida Statutes, which requires a treasurer to deposit all funds received by the treasurer within five business days of receipt; 50 counts of violating Section 106.07(5), Florida Statutes, which prohibits a candidate from certifying to the correctness of a campaign treasurer's report that is incorrect, false, or incomplete; and two counts of violating Section 106.11(4), Florida Statutes, which prohibits a candidate from incurring obligations without sufficient funds on deposit in the primary campaign depository to pay the full amount of the obligation.
The Order also charged Petitioner with two counts of violating Section 106.11(4), Florida Statutes, which condemns
the failure of a candidate to pay for previously incurred expenses for the purchase of goods or services upon delivery and acceptance of the goods or services; one count of violating Section 106.141(1), Florida Statutes, condemning the failure of a candidate to dispose of surplus campaign funds within 90 days of election; three counts of violating Section 106.141(1), Florida Statutes, which prohibits a candidate from accepting a contribution after the candidate has won the election; one count of violating Section 106.19(1)(a), Florida Statutes, condemning the acceptance of campaign contributions in excess of $500; one count of violating Section 106.19(1)(b), Florida Statutes, condemning the failure to report a contribution required to be reported; one count of violating Section 106.19(1)(c), Florida Statutes, condemning the failure of a person to report a contribution required by law or making a false report; and four counts of violating Section 106.19(1)(d), Florida Statutes, which prohibits a person from making or authorizing an expenditure prohibited by this chapter.
A Petition for Relief from Agency Action and Request for Formal Hearing was filed on December 23, 2002. The matter was forwarded to the Division of Administrative Hearings and filed December 30, 2002. The case was set for hearing on
February 10, 2003, in Pensacola, Florida. Pursuant to an Amended Notice of Hearing the date was moved to April 4, 2003.
In response to a Motion to Reschedule Hearing to New Date Other Than April 4, 2003, the case was set for April 15, 2003, and heard as scheduled.
Mr. Smith called two witnesses and offered seven exhibits, all of which were admitted. Counsel for the Commission presented the testimony of two witnesses and offered 64 exhibits, all of which were admitted. Counsel for the Commission also offered into evidence a Statement of Findings prepared by the commission. The Statement of Findings was accepted into evidence for the purpose of making more particular the allegations of the Order of Probable Cause, but was not considered as evidence. The Statement of Findings numbers the counts; however, they are not in the same sequence as in the Order of Probable Cause. Accordingly, the Administrative Law Judge has renumbered the counts for the purpose of this Recommended Order, to reflect the sequence provided in the Order of Probable Cause.
Immediately prior to the hearing Petitioner filed a First Amended Motion to Dismiss and Objection to Proceedings. The Motion averred that 46 of the 93 charges were barred by the limitation of actions set forth in Section 106.28, Florida Statutes. For reasons which are set forth more specifically in the Conclusions of Law, the Administrative Law Judge did not rule on the motion at the hearing.
A Transcript of the testimony of Lynn Kowalchyk, Deputy Supervisor of Elections for Escambia County, was filed on
June 4, 2003. Proposed Recommended Orders were timely filed by both parties and considered in the preparation of this Recommended Order.
All statutory references are to Florida Statutes (2000).
FINDINGS OF FACT
Chapters 97 through 106 comprise the Florida Election Code (Code). Pursuant to the Code, the Commission is specifically empowered to enforce the provisions of Chapters 104 and 106, Florida Statutes.
Mr. Smith is a principal in Smith Brothers Paint and Body Shop and runs the daily operations of the business. In addition to painting and repairing motor vehicles, he has a wrecker service. He ran for county commission in Escambia County in 1996 but was not elected. He ran again in 2000 and was successful. Allegations of impropriety surrounding the 2000 race caused the Commission to conduct an investigation into
Mr. Smith's campaign practices.
When Mr. Smith ran for the position of county commissioner in 1996, his campaign treasurer was Lance Simmons. Mr. Simmons was a certified public accountant and Mr. Smith's friend. Mr. Simmons provided this service at no charge. The campaign financing reports prepared by Mr. Simmons were correct
and professional. Lynn Kowalchyk, Assistant Supervisor of Elections in Escambia County, who has worked for the Supervisor of Elections in Escambia County for 25 years, opined that the submissions for that campaign were some of the best the Supervisor of Elections has received.
Because Mr. Smith lost the election, he felt too embarrassed to ask Mr. Simmons to serve as his campaign treasurer for the 2000 race. He decided that he would serve as his own treasurer.
Mr. Smith ran for county commissioner in District 5, which is the largest district in Escambia County, Florida. The district comprised the northern part of the county, which is more sparsely settled than the other districts in the county. In fact, District 5 comprises about 70 percent of the landmass of Escambia County. A great distance must be traveled to get from Mr. Smith's business to most places in the district and from place to place in the district.
Mr. Smith decided that it was more important to engage in person-to-person campaigning in his large district than to spend time doing the detailed work of learning the complexities of the election laws, complying with the laws, and submitting correct reports.
Mr. Smith received the 2000 edition of the "Candidate Handbook on Campaign Financing," which was published by the
Florida Department of State. He had previously received the 1996 handbook. He signed statements in 1995 and 1999 certifying that he had read and that he understood the material presented in the handbooks. His testimony that he did not read either of them is accepted as fact. Mr. Smith had worked on one of his own campaigns and on other campaigns and felt as though he already knew all he needed to know about election laws. He concluded that if he needed additional information, he could get it from staff in the Supervisor of Elections Office.
Mr. Smith first filed as a candidate for the 2000 election on October 20, 1999. Subsequent to filing he received at least ten notices from the Supervisor of Elections Office that members of the office staff were available to advise him with regard to the rules governing elections.
Mr. Smith's routine during the campaign was to work at his place of business in the morning and then to go to his district and conduct his campaign. He gave documentation recording contributions and expenditures to his elderly mother, a widow of 65 years. His mother kept notes on a legal pad and organized the documents so that they could be reported.
Mr. Smith's mother had cancer, heart problems, and arthritis and this may have affected her accuracy in preparing reports.
Mr. Smith was unaware of the serious nature of her illnesses
during the time she was working on the campaign. Mr. Smith's mother died December 11, 2002.
Mr. Smith's brother also helped with the campaign records. He was a schoolteacher, and each evening during the campaign he would help Mr. Smith. His brother died one week after Mr. Smith's electoral victory.
Counts 1-4. Allegations involving Section 106.021(3) prohibiting expenditures from other than the campaign treasury (Counts 1-4).
(Count 1). On October 10, 2000, Mr. Smith purchased stamps from the U. S. Post Office. A check in the amount of
$495 was presented in payment. The check was drawn on the checking account of a company titled Environmentally Friendly Chemicals (EFC), of which Mr. Smith is a part owner. This occurred because Mr. Smith inadvertently picked up the EFC checkbook instead of the campaign checkbook. Mr. Smith's inattention was the cause of the error. The campaign subsequently reimbursed EFC.
(Count 2). Campaign check 2088 was written to Frankie Peters in the amount of $50 to reimburse Ms. Peters who
had paid for a sign at the Tate High School ballpark. Mr. Smith permitted this because the sign could not have been timely purchased if it had been paid with a check from the campaign treasury.
(Count 3). Someone named Nacie Smith paid for postage in the amount of $150 on behalf of the campaign during
October 2000. Campaign check number 2115 was used to reimburse Ms. Smith, and Mr. Smith signed this check.
(Count 4). Mr. Smith had printing done for the campaign by a firm named Pengraphix pursuant to an order placed October 31, 2000. This order was placed immediately prior to the election. Part of the order was paid from the campaign account in the amount of $852.97. The balance was in dispute but was eventually compromised in the amount of $1,884.92. This amount was paid not from the campaign account, but rather, directly to Pengraphix by a friend named Donald "Mike" Murphy. The payment by Mr. Murphy was effected after the campaign had concluded. Mr. Murphy was a person to whom Mr. Smith had provided a loan several years prior to 2000.
These four transactions are expenditures that were not paid from the campaign treasury. However, as will be discussed in the Conclusions of Law in more detail below, the accidental use of the EFC checkbook in Count 1, did not demonstrate willfulness.
Count 5. Allegation involving Section 106.021(3) prohibiting a candidate from receiving contributions except through the
campaign treasurer.
This allegation is supported by the evidence recited above regarding Mr. Murphy, if one concludes that the money provided to Pengraphix represented a contribution as that term is defined in Chapter 106, Florida Statutes. Whether or not the facts support a finding that the cited statute prohibited this transaction is discussed in the Conclusions of Law, below. Counts 6-29. Allegations involving Section 106.05 requiring funds received to be deposited within five days of receipt.
Mr. Smith reported 20 contributions on his Campaign Treasurer's Report (CTR), which covered the period
October 20, 1999 through December 31, 1999. One of the contributions described by Mr. Smith as being a $500 check, was later reported, in an amended CTR, to be five separate $100 cash contributions. The campaign bank account was not opened until January 7, 2000, and the last contribution reported on the CTR was November 29, 1999. Therefore, 24 contributions were received but not deposited in the campaign account until more than five days subsequent to receipt.
Mr. Smith was unaware of the statutory requirement that contributions must be deposited in the campaign treasury within five days of receipt. However, his willful ignorance of the requirement translates into willful violations.
Counts 30-79. Allegations involving Section 106.07(5) prohibiting a candidate from certifying to the correctness of a
campaign treasurer's report that is incorrect, false, or incomplete.
Mr. Smith filed original CTRs for the following periods:
(Count 30) October 20, 2000 to December 31, 1999.
(Count 31) January 1, 2000 to March 31, 2000.
(Count 32) April 1, 2000 to June 30, 2000.
d. (Count 33) July 1, 2000 to July 31, 2000.
(Count 34) July 29, 2000 to August 11, 2000.
(Count 35) August 12, 2000 to August 31, 2000.
(Count 36) September 1, 2000 to September 8, 2000.
(Count 37) September 9, 2000 to September 28, 2000.
(Count 38) September 29, 2000 to October 13, 2000.
(Count 39) October 14, 2000 to November 2, 2000.
(Count 40) November 2, 2000 to December 31, 2000.
He filed amended CTR's on January 12, 2000 (Count 41), April 19, 2000 (Count 42), and August 16, 2000 (Count 43).
When a complaint that Mr. Smith had violated the laws governing campaign financing was filed against him in
September 2001, he became motivated to try to correct CTR's that he had filed. He filed amended CTRs on September 24, 2001, October 18, 2001, April 2, 2002, April 24, 2002, and
June 5, 2002 (Counts 44-79).
He filed a total of 11 CTRs and 39 amendments. The parties stipulated, and it is found as a fact, that all of the original CTRs he filed, and all of the amendments he filed, were incomplete or incorrect.
Mr. Smith worked diligently with Ms. Kowalchyk to correct the reports, once he discovered in September 2001, that he had been accused of wrongdoing. Ms. Kowalchyk worked on
Mr. Smith's CTRs on her own time. Even Bonnie Jones, the Supervisor of Elections, attempted to correct his CTRs, but all were frustrated in the attempt. His reports were in complete disarray. Ms. Jones suggested in a letter dated
October 8, 2001, that Mr. Smith refer this matter to his accountant, believing that an accountant might bring order to the chaotic records. He did not act on this advice.
As noted above, Mr. Smith relied on his mother and his brother, and perhaps other family members to prepare accurate reports. Nevertheless, he was the campaign treasurer and he personally signed each CTR beneath bold face type which recited, "It is a first degree misdemeanor for any person to falsify a public record (ss.839.13 F.S.)" and despite the words over the signature line, where he placed his signature, which stated, "I certify that I have examined this report and it is true, correct and complete."
It is specifically found that Mr. Smith's submission of incorrect CTRs was not motivated by an intention to hide any wrongdoing. His dereliction was due, rather, to a cavalier attitude with regard to complying with the technical aspects of the laws addressing campaign financing. This attitude continued until a complaint was filed. For reasons more fully explained in the Conclusions of Law, it is found as a fact that Mr. Smith is guilty of Counts 30-43, and not guilty of Counts 44-79. Counts 80-81. Allegations involving Section 106.11(3) prohibiting a candidate from incurring an expense for the
purchase of goods or services without sufficient funds on deposit in the primary campaign depository.
Although the Order of Probable Cause indicates that Mr. Smith was charged under Section 106.11(4), he should have been charged under Section 106.11(3) the Code in effect during the alleged misconduct. The wording of Section 106.11(4), Florida Statutes (2002), is identical to that found in Section 106.11(3). Because all parties understood the nature of the charge, the citation to a later version of the Florida Statutes does not mean that Mr. Smith may not be found to be in violation of it.
Reference to the Statement of Findings reveals that the two counts alleged refer to services provided by Pengraphix, which is a printing house.
The CTR for the period November 2, 2000 to
December 31, 2000, reported two expenditures made to Pengraphix. One was for $864.49 and the other was for $1844.19, and both were reported on the CTR to have been made December 1, 2000.
Subsequently, an amended CTR was filed September 24, 2001, which reported only an expenditure of $864.49 to Pengraphix. On
June 5, 2002, in the fifth amendment to the termination CTR, Mr. Smith reported an expenditure on December 1, 2000, of an additional $1844.19, to Pengraphix.
It is concluded from these reports that two obligations of $864.49 and $1844.19, for a total of $2708.68, were incurred in favor of Pengraphix. Because the bank records of the campaign account subsequent to December 1, 2000, reflect no expenditure in either individual amount, or in the aggregate amount, it may be concluded that the debt was not paid from the campaign account at all. The bank statement for the campaign treasury for the months of December 2000 and January 2001 never had a balance greater than $613.97 in it, so there was no money available from that source to pay the two expenditures.
Mr. Smith addressed the foregoing by stating that there was a disputed bill from Pengraphix in the amount of about
$2,600, and that he spent almost three months attempting to reach a settlement. The amount was compromised at $1,850.
Mr. Smith further stated that when the printing was ordered the
cost was not revealed. It must be concluded that until the amount was liquidated, Mr. Smith could not pay the bill.
However, Mr. Smith must have known by December 1, 2000, that the liquidated amounts for the two jobs were $864.49 and $1844.19.
At the time the jobs were ordered, which cannot be determined from the evidence, funds sufficient to pay the invoices may have been available. The evidence was insufficient to demonstrate with any certainty that the funds were not available.
Accordingly, is not found by clear and convincing evidence that the money due and owing Pengraphix was not available in the campaign treasury at the time the debt was incurred. Accordingly, Mr. Smith is not guilty of Counts 80 and 81.
Counts 82-83. Allegations involving Section 106.11(3),
requiring a candidate to pay for previously incurred expenses for the purchase of goods and services upon delivery and acceptance of the goods and services.
Reference to the Statement of Findings reveals that these two counts address the two orders for printed matter placed at Pengraphix. It is clear that these purchases were not paid at the time of delivery and acceptance. However, the proof adduced at the hearing failed to demonstrate when the amounts were liquidated. It is clear, however, that at some point prior to December 1, 2000, the amounts were known, or at least
discoverable, and therefore payable. It is found by clear and convincing evidence that Mr. Smith violated the charged portion of Section 106.11(3). Accordingly, he is guilty of Counts
82-83.
Count 84. Allegation involving Section 106.141(1) condemning the failure of a candidate to properly dispose of surplus
campaign funds subsequent to being elected.
The general election that resulted in Mr. White's victory was held November 7, 2000. The ending balance shown on the campaign treasury bank statement on November 30, 2000, was
$613.97. The ending balance shown on the campaign treasury bank statement on December 29, 2000, was $597.97. The ending balance shown on the campaign treasury bank statement on
January 31, 2001, was $4.78. The imposition of bank fees on February 9, 2001, resulted in a zero balance in the account that was reflected on the February 2001 statement.
The ninetieth day following Mr. Smith's election was February 5, 2001. Though de minimis, a violation of the statute occurred, and he is guilty of Count 84.
Counts 85-87. Allegations involving Section 106.141(1) prohibiting a candidate from accepting a contribution subsequent to being elected.
Bank records of the campaign treasury indicate that a deposit to the account was made on January 2, 2001, in the
amount of $187, and on January 3, 2001, in the amount of $100, almost two months after the election.
An amendment to the CTR for the period November 2, 2000 to December 31, 2000, which was filed
April 24, 2002, indicates that the candidate loaned the campaign
$287.
Mr. Smith explained that the two deposits were made so that a campaign debt could be paid. The sum of the two contributions plus the amount remaining in the account, $597.97, totaled $884.97 that was sufficient to cover a check for
$864.19, which was, in Mr. Smith's words, ". . .payment of the substantial debt, $864.19." To what substantial debt he refers cannot be determined from the evidence of record but it is within 30 cents of the amount of the smaller of the two Pengraphix amounts reported as expenditures on December 1, 2000.
In January 2001, a sum of money remained to be paid to Pengraphix. As noted above, this debt was compromised in the amount of $1,850. Mr. Smith did not have personal funds available to pay that amount, or money in the campaign treasury sufficient to pay that amount, so he prevailed upon his friend, Mr. Murphy, to pay the amount for him, and promised to repay Mr. Murphy with interest.
Mr. Murphy did in fact pay Pengraphix $1884.92 to settle the debt owed by Mr. Smith. The difference between $1850
and the $1884.92 actually paid, most likely represents accrued interest. This payment was made, according to the Stipulation, on January 11, 2001. Mr. Smith repaid Mr. Murphy, by check in February 2002 in the amount of $1990. The exact day in February was not written on the date line on the check, but it cleared the bank on February 25, 2002.
Whether or not these allegations of Counts 85-87 are supported by the cited statute, will be discussed in the Conclusions of Law, below.
Count 88. Allegation involving Section 106.19(1)(a),
prohibiting a candidate from accepting a contribution in excess of $500.
This count addresses the payment by Mr. Murphy to Pengraphix discussed above. Whether or not the cited statute supports these allegations will be discussed in the Conclusions of Law, below.
Count 89. Allegation involving Section 106.19(1)(b), condemning the failure of a candidate to report a contribution.
This count addresses the payment by Mr. Murphy to Pengraphix discussed above. The transaction was not reported on any CTR with Mr. Murphy's name connected to it. Whether or not
the cited statute supports these allegations will be discussed in the Conclusions of Law, below.
Count 90. Allegation involving Section 106.19(1)(c), condemning the failure of a candidate to report a contribution.
This count addresses the payment by Mr. Murphy to Pengraphix discussed above. The transaction was not reported on any CTR. Whether or not these allegations are supported by the cited statute will be discussed in the Conclusions of Law, below.
Counts 91-94. Allegations involving Section 106.19(1)(d),
prohibiting a candidate from making an expenditure prohibited by Chapter 106.
These counts address the same facts pertinent to the events discussed in paragraphs 11-15, above. These facts support three violations of Section 106.021(3), as well as the three violations of Section 106.19(1)(d), as alleged. They are, however, multiplicious with three of the allegations recited as Counts 2-4.
Mr. Smith's assets.
Mr. Smith reported a net worth of $707,609, on his "Full and Public Disclosure of Financial Interests 1999." He testified that as a result of criminal charges and the current litigation, his net worth has decreased since 1999. He
currently owns two parcels of real property worth more than
$200,000 that is subject to mortgages in an unknown amount. He owns several vehicles including a 1995 Chevrolet Tahoe that he drives, and a new Chevrolet Yukon that his wife drives. He also owns a tow truck that is used in his business. His net worth cannot be determined by the evidence before the Administrative Law Judge. However, it is determined that he is not impecunious.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Sections 106.25(5) and 120.57(1).
The burden of proof, absent a statutory directive to the contrary, is on the party asserting the affirmative of the issue in the proceeding. Department of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981); and Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977). In this proceeding, it is the Commission
that is asserting the affirmative and, therefore, the Commission has the burden of proof.
The Commission seeks to impose a civil penalty on Petitioner, pursuant to Section 106.265, in the form of a fine not to exceed $1,000 per count. The imposition of an administrative fine or a civil penalty, is punitive and penal in nature. Therefore, the Commission must prove its case by clear and convincing evidence. Department of Banking and Finance v. Osborne Stern & Company, 670 So. 2d 932, 935 (Fla. 1996).
Statutes which authorize the imposition of a penal sanction must be strictly construed and any ambiguity must be construed in favor of Petitioner. Elmariah v. Department of Professional Regulation, 574 So. 2d 164, 165 (Fla. 1st DCA 1990). Moreover, Section 775.021(1) provides that "offenses" defined by any Florida Statute must be construed most favorably to the offender if the language is susceptible to different meanings.
Section 106.25 provides as follows:
106.25 Reports of alleged violations to Florida Elections Commission; disposition of findings.--
Jurisdiction to investigate and determine violations of this chapter and chapter 104 is vested in the Florida Elections Commission; however, nothing in this section limits the jurisdiction of any other officers or agencies of government
empowered by law to investigate, act upon, or dispose of alleged violations of this code.
The commission shall investigate all violations of this chapter and chapter 104, but only after having received either a sworn complaint or information reported to it by the Division of Elections. Any person, other than the division, having information of any violation of this chapter or chapter 104 shall file a sworn complaint with the commission. Such sworn complaint shall state whether a complaint of the same violation has been made to any state attorney. Within 5 days after receipt of a sworn complaint, the commission shall transmit a copy of the complaint to the alleged violator. All sworn complaints alleging violations of the Florida Election Code over which the commission has jurisdiction shall be filed with the commission within 2 years of the alleged violations. The period of limitations is tolled on the day a sworn complaint is filed with the commission.
For the purposes of commission jurisdiction, a violation shall mean the willful performance of an act prohibited by this chapter or chapter 104 or the willful failure to perform an act required by this chapter or chapter 104.
Section 106.37 defines willfully, as follows:
106.37 Willful violations.--A person willfully violates a provision of this chapter if the person commits an act while knowing that, or showing reckless disregard for whether, the act is prohibited under this chapter, or does not commit an act while knowing that, or showing reckless disregard for whether, the act is required 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.
Section 106.265 provides as follows:
The Commission is authorized upon the finding of a violation of this chapter or chapter 104 to impose civil penalties in the form of fines not to exceed $1,000 per count. In determining the amount of such civil penalties, the commission shall consider, among other mitigating and aggravating circumstances:
The gravity of the act or omission;
Any previous history of similar acts or omissions;
The appropriateness of such penalty to the financial resources of the person, political committee, committee of continuous existence, or political party; and
Whether the person, political committee, committee of continuous existence, or political party has shown good faith in attempting to comply with the provisions of this chapter or chapter 104.
Section 106.021(3) addressing Counts 1-4, provides as follows:
106.021 Campaign treasurers; deputies; primary and secondary depositories.--
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(3) Except for independent expenditures, no contribution or expenditure, including contributions or expenditures of a candidate or of the candidate's family, shall be directly or indirectly made or received in furtherance of the candidacy of any person for nomination or election to political
office in the state or on behalf of any political committee except through the duly appointed campaign treasurer of the candidate or political committee; however, a candidate or any other individual may be reimbursed for expenses incurred for travel, food and beverage, office supplies, and mementos expressing gratitude to campaign supporters by a check drawn upon the campaign account and reported pursuant to s. 106.07(4). In addition, expenditures may be made directly by any political committee or political party regulated by chapter 103 for obtaining time, space, or services in or by any communications medium for the purpose of jointly endorsing three or more candidates, and any such expenditure shall not be considered a contribution or expenditure to or on behalf of any such candidates for the purposes of this chapter.
Counts 91-94, based on the same facts as Counts 1-4, charge a violation of Section 106.19(1)(c). Section 106.19.19 provides as follows:
106.19 Violations by candidates, persons connected with campaigns, and political committees.--
Any candidate; campaign manager, campaign treasurer, or deputy treasurer of any candidate; committee chair, vice chair, campaign treasurer, deputy treasurer, or other officer of any political committee; agent or person acting on behalf of any candidate or political committee; or other person who knowingly and willfully:
Accepts a contribution in excess of the limits prescribed by s. 106.08;
Fails to report any contribution required to be reported by this chapter;
Falsely reports or deliberately fails to include any information required by this chapter; or
Makes or authorizes any expenditure in violation of s. 106.11(4) or any other expenditure prohibited by this chapter;
is guilty of a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.
Section 106.19(1)(d) because it addresses "expenditures prohibited by this chapter," provides for a sanction for a violation of Section 106.021(3) if the violation was made knowingly and willfully. A finding of a violation of Section 106.021(3) only requires evidence of willfulness. The evidence in this case demonstrates both a knowing and willful violation, except in the case of Count 1, so it is concluded that Mr. Smith is guilty of Counts 2-4 and Counts 92-94, but because they are multiplicious, the penalty should only be assessed as a violation of Counts 92-94.
Section 106.021(3) which is recited at paragraph 53 above, addresses Count 5, and prohibits a candidate from receiving contributions except through the campaign treasurer. The Statement of Findings charitably notified Mr. Smith that only the incident involving the loan of Mr. Murphy, in connection with the Pengraphix invoice, would be considered in Count 5, and Count 90. It is clear that Mr. Smith accepted a loan from his friend Mr. Murphy, and that no part of this
transaction moved through the campaign treasury. The loan provided by Mr. Murphy, which paid off the debt to Pengraphix, was made well after Mr. Smith won his election.
The term "contribution" is defined by Section 106.011(2) as follows:
106.011 Definitions.--As used in this
chapter, the following terms have the following meanings unless the context clearly indicates otherwise:
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"Contribution" means:
A gift, subscription, conveyance, deposit, loan, payment, or distribution of money or anything of value, including contributions in kind having an attributable monetary value in any form, made for the purpose of influencing the results of an election.
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(c) The payment, by any person other than a candidate or political committee, of compensation for the personal services of another person which are rendered to a candidate or political committee without charge to the candidate or committee for such services.
Section 106.011(3)(a) provides that in order for a gift or a loan to be a contribution, it must be given in order to influence the result of an election. The loan precipitating these charges could not have been made to influence an election which had been concluded at the time the loan was made. The loan might be brought under the ambit of Section 106.011(3)(c)
if the work done by Pengraphix was a personal service. However, it is found that printing is the production of merchandise, not a mere personal service.
Because Mr. Murphy's loan was not a contribution as defined by Section 106.011(3) no violation of Section 106.021(3) as set forth in Count 5 is found. For the same reason, there was no violation of Section 106.19(1)(a) as set forth as Count 90.
Section 106.05 addressing Counts 6-29, provides as follows:
106.05 Deposit of contributions; statement of campaign treasurer.--All funds received by the campaign treasurer of any candidate or political committee shall, prior to the end of the 5th business day following the receipt thereof, Saturdays, Sundays, and legal holidays excluded, be deposited in a campaign depository designated pursuant to s. 106.021, in an account designated " (name of candidate or committee) Campaign Account." Except for contributions to political committees made by payroll deduction, all deposits shall be accompanied by a bank deposit slip containing the name of each contributor and the amount contributed by each. If a contribution is deposited in a secondary campaign depository, the depository shall forward the full amount of the deposit, along with a copy of the deposit slip accompanying the deposit, to the primary campaign depository prior to the end of the 1st business day following the deposit.
The failure of Mr. Smith to deposit campaign contributions within five days of receipt, on 24 occasions is
found to be willful because he demonstrated a reckless disregard for whether, the act, timely depositing the contributions, was required under Chapter 106. The allegations of Counts 6-29 are therefore proven.
Section 106.07(5) provides as follows:
106.07 Reports; certification and filing.--
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(5) The candidate and his or her campaign treasurer, in the case of a candidate, or the political committee chair and campaign treasurer of the committee, in the case of a political committee, shall certify as to the correctness of each report; and each person so certifying shall bear the responsibility for the accuracy and veracity of each report. Any campaign treasurer, candidate, or political committee chair who willfully certifies the correctness of any report while knowing that such report is incorrect, false, or incomplete commits a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.
Mr. Smith, on 50 occasions, filed CTRs that were incorrect. Although he eventually enlisted the help of the Supervisor of Elections in an effort to file correct reports, he was unable to file even a single correct report. Reports filed prior to September 24, 2001, when considered in light of Section
106.37 are found to have been filed willfully while knowing that such report is incorrect. Therefore, Mr. Smith violated Section
106.07 on 14 occasions, and thus is found guilty of Counts 30-
With regard to subsequent reports, addressed as Counts 44-79, Mr. Smith attempted to ameliorate his cavalier attitude toward filing correct reports. It is not proven by clear and
convincing evidence that he knew the reports were incorrect, and in any event they were filed with assistance from the Supervisor of Elections, and with the hope, however unwarranted, that they were correct.
Section 106.11(3) provides as follows:
106.11 Expenses of and expenditures by candidates and political committees.--Each candidate and each political committee which designates a primary campaign depository pursuant to s. 106.021(1) shall make expenditures from funds on deposit in such primary campaign depository only in the following manner, with the exception of expenditures made from petty cash funds provided by s. 106.12:
* * *
(3) No candidate, campaign manager, treasurer, deputy treasurer, or political committee or any officer or agent thereof, or any person acting on behalf of any of the foregoing, shall authorize any expenses, nor shall any campaign treasurer or deputy treasurer sign a check drawn on the primary campaign account for any purpose, unless there are sufficient funds on deposit in the primary depository account of the candidate or political committee to pay the full amount of the authorized expense, to honor all other checks drawn on such account, which checks are outstanding, and to meet all expenses previously authorized but not yet paid. However, an expense may be incurred for the purchase of goods or services if there are sufficient funds on
deposit in the primary depository account to pay the full amount of the incurred expense, to honor all checks drawn on such account, which checks are outstanding, and to meet all other expenses previously authorized but not yet paid, provided that payment for such goods or services is made upon final delivery and acceptance of the goods or services; and an expenditure from petty cash pursuant to the provisions of s. 106.12 may be authorized, if there is a sufficient amount of money in the petty cash fund to pay for such expenditure. Payment for credit card purchases shall be made pursuant to s. 106.125. Any expense incurred or authorized in excess of such funds on deposit shall, in addition to other penalties provided by law, constitute a violation of this chapter.
The part of the aforesaid statute, which supports the allegations of Counts 80 and 81, addresses the requirement to have "sufficient funds on deposit in the primary depository account to pay the full amount of the incurred expense." As noted in the discussion involving the two obligations incurred to Pengraphix, it is not possible to determine from the evidence whether there was or was not a sufficient balance. Accordingly, if is found that Mr. Smith did not violate this section and therefore the allegations listed as Counts 80 and 81 are not proven.
Counts 82 and 83 involve allegations that Mr. Smith failed to pay for previously incurred expenses for the purchase of goods or services upon delivery and acceptance of the goods or services, which would also be a violation of Section
106.11(3). As noted in the Findings of Fact, the amounts owed to Pengraphix were known well before payment was made.
Therefore it is found by clear and convincing evidence that violations of Section 106.11(3) as charged in Counts 82 and 83, occurred.
Section 106.141 provides as follows:
106.141 Disposition of surplus funds by candidates.--
(1) Each candidate who withdraws his or her candidacy, becomes an unopposed candidate, or is eliminated as a candidate or elected to office shall, within 90 days, dispose of the funds on deposit in his or her campaign account and file a report reflecting the disposition of all remaining funds. Such candidate shall not accept any contributions, nor shall any person accept contributions on behalf of such candidate, after the candidate withdraws his or her candidacy, becomes unopposed, or is eliminated or elected. However, if a candidate receives a refund check after all surplus funds have been disposed of, the check may be endorsed by the candidate and the refund disposed of under this section. An amended report must be filed showing the refund and subsequent disposition.
* * *
(4)(a) Except as provided in paragraph (b), any candidate required to dispose of funds pursuant to this section shall, at the option of the candidate, dispose of such funds by any of the following means, or any combination thereof:
Return pro rata to each contributor the funds that have not been spent or obligated.
Donate the funds that have not been spent or obligated to a charitable organization or
organizations that meet the qualifications of
s. 501(c)(3) of the Internal Revenue Code.
Give not more than $10,000 of the funds that have not been spent or obligated to the political party of which such candidate is a member.
Give the funds that have not been spent or obligated:
In the case of a candidate for state office, to the state, to be deposited in either the Election Campaign Financing Trust Fund or the General Revenue Fund, as designated by the candidate; or
In the case of a candidate for an office of a political subdivision, to such political subdivision, to be deposited in the general fund thereof.
Any candidate required to dispose of funds pursuant to this section who has received contributions from the Election Campaign Financing Trust Fund shall return all surplus campaign funds to the Election Campaign Financing Trust Fund.
It is clear that Mr. Smith did not dispose of the funds on deposit in the campaign treasury within 90 days in accordance with Section 106.141(4) and he did not file a report, as Section 106.141(1). Therefore the allegation contained in Count 84 is proven.
Counts 85-87, refer to Section 106.141(1) which is recited above. These counts refer to allegations that he accepted campaign contributions from himself on two occasions, and once from Mr. Murphy. Section 106.011(2) defines contributions to include only monies provided to influence an election. At the time the events occurred described by these allegations, the election was over.
Perhaps Section 106.141(1) condemning campaign contributions made after an election, can be reconciled with Section 106.011(2) which suggests that once an election is over, it can't be influenced by campaign contributions. If so, it can't be within the context of the allegations of this case.
Accordingly, Counts 85-87 are not proven.
Section 106.19(1)(a) recited at paragraph 54, and addressing Count 88, condemns accepting campaign contributions in excess of the amount specified by Section 106.08. The latter section prohibits expenditures in excess of $500. Reference to the Statement of Facts reveals that this refers to the Mike Murphy loan. For reasons noted above, the loan was not a campaign contribution. Consequently, the allegations of Count
88 are not proven.
Section 106.19(1)(b) recited at paragraph 54, and addressing Count 89, condemns failing to report a contribution. This also refers to the Mike Murphy loan. For reasons noted above, the loan was not a campaign contribution. Consequently, the allegations of Count 89 are not proven.
A summary of the Counts follows: Count 1 Not proven
Counts 2, 3, and 4 Proven
Count 5 Not proven
Counts 6-29(24) Proven
Counts 30-43(14) Proven
Counts 44-79 Not Proven
Counts | 80 | and | 81(2) | Not Proven | |
Counts | 82 | and | 83(2) | Proven | |
Count | 84 | Proven | |||
Count | 85, | 86, | and 87(3) | Not Proven | |
Count | 88 | Not Proven | |||
Count | 89 | Not Proven | |||
Count | 90 | Not Proven | |||
Count | 91 | Not Proven | |||
Count | 92, | 93, | and 94 | Proven, but | multiplicious |
For purposes of sanctions.
Prior to the commencement of the hearing Mr. Smith moved to have the allegations dismissed asserting that many of the counts were barred by Section 106.28 entitled, "Limitations of actions." The section reads, "Actions for violation of this chapter must be commenced before 2 years have elapsed from the date of the violation."
Section 106.25(2), recited at paragraph 50, provides that all sworn complaints alleging violations of the Florida Election Code over which the commission has jurisdiction shall be filed with the commission within 2 years of the alleged violations. The period of limitations is tolled on the day a sworn complaint is filed with the commission.
The complaint was filed on September 7, 2001. This tolled the period of limitations. Accordingly, nothing contained in the Order of Probable Cause is barred from prosecution.
As noted in paragraph 52, above, Section 106.265 sets forth several factors that should be considered in assessing a penalty.
The gravity of the act in this case is serious in that neither Mr. Smith's opponents nor the public could discern the nature of Mr. Smith's campaign finances.
Because there is no evidence of previous violations, the lack of a past history of noncompliance with the rules is in Mr. Smith's favor.
Although the evidence failed to demonstrate with specificity the financial resources of Mr. Smith, the facts adduced are adequate to demonstrate that he has the resources to pay a reasonable penalty.
Mr. Smith did not show good faith in complying with Chapter 106. It is somewhat ameliorative that he relied on his mother and brother to keep track of his finances. He was unaware of the poor state of health that each of them was experiencing. Furthermore, he made a substantial attempt to remedy the errors.
Mr. Smith committed 44 of the violations alleged in the Order of Probable Cause. Counsel for Mr. Smith suggested
that a $1,500 fine was an appropriate. Counsel for the Commission suggested a fine of $119,184.60 in his recommended order. There is no indication that Counsel for the Commission considered Section 106.265 in arriving at his recommendation and the amount suggested strikes the Administrative Law Judge as being inappropriately severe. Upon consideration of the factors enumerated in Section 106.265 and upon consideration of the lack of evidence indicating that Mr. Smith's actions were in furtherance of an intent to conceal wrong-doing, it is the opinion of the Administrative Law Judge that a civil penalty in the amount of $5,000, would sufficiently serve the purposes of remediation.
Based upon the Findings of Fact and Conclusions of Law, it
is
RECOMMENDED:
That a final order be entered which finds that Mr. Smith
committed 44 of the violations alleged in the Order of Probable Cause and that he should be assessed a civil penalty of $5,000.
DONE AND ENTERED this 25th day of June, 2003, in Tallahassee, Leon County, Florida.
HARRY L. HOOPER
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) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 25th day of June, 2003.
COPIES FURNISHED:
Robert R. Kimmel, Esquire Kimmel & Batson
Post Office Box 12266 Pensacola, Florida 32581-2266
Eric M. Lipman, Esquire Florida Elections Commission
107 West Gaines Street
The Collins Building, Suite 224 Tallahassee, Florida 32399-1050
Barbara M. Linthicum, Executive Director Florida Elections Commission
107 West Gaines Street
The Collins Building, Suite 224 Tallahassee, Florida 32399-1050
Patsy Ruching, Clerk
Florida Elections Commission
107 West Gaines Street Collins Building, Suite 224
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.
| Issue Date | Document | Summary |
|---|---|---|
| Jun. 25, 2003 | Recommended Order | Former county commissioner charged with numerous campaign finance violations: held, charges proven, $5000 civil penalty recommended. |
ALAN SCHREIBER vs FLORIDA ELECTIONS COMMISSION, 02-004902 (2002)
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FLORIDA ELECTIONS COMMISSION vs RANDY SCOTT, 02-004902 (2002)
BILL MCBRIDE vs FLORIDA ELECTIONS COMMISSION, 02-004902 (2002)
