The Issue Whether Petitioners violated provisions of Chapter 106, Florida Statutes, as alleged in the Order of Probable Cause filed August 23, 2002.
Findings Of Fact Chapters 97 through 106, Florida Statutes, comprise the Florida Election Code (Code). Pursuant to the Code, the Commission is empowered specifically to enforce the provisions of Chapters 104 and 106, Florida Statutes. Mary McCarty was elected to the City Commission of Delray Beach, Florida in 1987. She was elected to the Palm Beach County Commission in 1990. She has been returned to that office in each subsequent election and she is currently a member of the Palm Beach County Commission. In November of 2002, she was elected to her fourth term as Chairman of the Palm Beach County Republican Executive Committee. The Committee to Take Back Our Judiciary was an unincorporated entity. It was a de facto committee, which, for reasons addressed herein, did not ever become a "political committee" as defined in Section 106.011(1), Florida Statutes. Ms. McCarty has run for public office six times and was successful on each occasion. Prior to each election she received from the Florida Secretary of State a handbook addressing campaign financing. She is familiar with the statutes and rules with regard to financing an individual campaign. Sometime before the Thanksgiving Holiday in 2000, Ms. McCarty received a telephone call from Roger Stone of Washington, D.C. Ms. McCarty knew Mr. Stone, who at various times had been a campaign operative for Senator Arlen Specter, had been involved in opposing the sugar tax amendment in Florida, and had been a consultant to Donald Trump, during his short-lived presidential campaign. Ms. McCarty was aware that Mr. Stone and Craig Snyder were principals of IKON Public Affairs, a business entity with offices in Washington, D.C., and Miami Beach, Florida. Roger Stone informed Ms. McCarty that he was forming a committee to raise funds for the purpose of taking action against the Florida Supreme Court. Mr. Stone stated that he had formed The Committee and that he wished for her to be the chairperson. She did not initially commit to undertake this responsibility. A few days after the conversation with Mr. Stone, Ms. McCarty received a facsimile draft of a fundraising letter that The Committee proposed to post. The facsimile was sent by Roger Stone from Washington. She made some suggested changes and returned it to the address in Washington from whence it came. Subsequently, she had a telephone conversation with Lora Lynn Jones of Unique Graphics and Design in Alexandria, Virginia. Ms. Jones was in the business of making mass mailings. Ms. McCarty told Ms. Jones that her name could be used on the fundraising letter although Ms. McCarty did not sign the fundraising letter. Nevertheless, the document was mailed to a large number of people and it bore the printed name, "Mary McCarty, Palm Beach County Commissioner." The first time Ms. McCarty saw The Committee's finished product it was in the form of a "Telepost, high priority communication." She first saw the "Telepost" when it arrived in her mailbox in early December 2000. The wording of the letter was different from the draft Ms. McCarty had seen earlier. Unlike the draft, it targeted specific justices on the Florida Supreme Court. It cannot be determined from the evidence the date the December "Telepost" was posted, but it was posted before Ms. McCarty determined that she had become Chairperson of The Committee. The "Telepost," dated December 2000, solicited funds so that The Committee could, ". . . send a clear message to the Florida Supreme Court that we will not tolerate their efforts to highjack the Presidential election for Al Gore." Later in December 2000, Mr. Stone called Ms. McCarthy and told her that she should be the chairman of The Committee. She agreed. Ms. McCarty signed a "Statement of Organization of Political Committee," which was dated December 19, 2000. This is a form provided by the Division of Elections, which, if properly completed and filed, officially establishes a political committee. She also signed a form entitled "Appointment of Campaign Treasurer and Designation of Campaign Depository for Political Committee." Mr. Stone, or his operatives, provided these forms to Ms. McCarty. She signed them and mailed them to Mr. Stone's address in Washington, D.C., which was the headquarters of the IKON Public Affairs Group. The "Statement of Organization of Political Committee," dated December 19, 2000, was received by the Division of Elections on December 26, 2000. It listed Amber McWhorter as Treasurer. Inez Williams, who works in the document section of the Division of Elections, processed the form. When Ms. Williams received it, she recognized that the form was incomplete because on the face of it the reader could not determine if the committee was an "issue" committee, or a "candidate" committee. Ms. Williams noted that the mailing address on the form dated December 19, 2000, was "c/o VisionMedia," 1680 Michigan Avenue, Suite 900, Miami Beach, Florida. Ms. Williams found a telephone number for that business and dialed it, on December 27, 2000. No one answered so she left a message on VisionMedia's answering machine. In addition to the telephone call, Ms. Williams prepared a letter with the address of, "Mary McCarty, Chairperson, The Committee to Take Back Our Judiciary, 1348 Washington Avenue, Suite 177, Miami Beach, Florida." This letter was dated December 27, 2000, and was signed by Connie A. Evans, Chief, Bureau of Election Records. This is the address found on the "Appointment of Campaign Treasurer and Designation of Campaign Depository for Political Committee," which had also been received by the Division of Elections on December 26, 2000. The letter signed by Ms. Evans on December 27, 2001, informed Ms. McCarty that items 3 and 7 needed to be "rephrased." It further informed Ms. McCarty, that upon receipt of the requested information the committee would be included on the "active" list. The message recorded on The Committee answering machine on December 27, 2001, generated a response from a person who identified himself as Mr. Snyder, on January 2, 2002. Mr. Snyder engaged in a telephone conversation with Ms. Williams. Ms. Williams explained to Mr. Snyder that items 3, 5, 7, and 8, would have to be completed properly as a condition of The Committee's being recognized. A letter dated January 4, 2001, bearing the letterhead of "The Committee to Take Back Our Judiciary," and signed by Amber Allman McWhorter, was faxed to the Division of Elections on January 4, 2001, and received that date. This letter referenced the telephone call between Ms. Williams and Craig Snyder, who was further identified as The Committee's attorney. The letter stated that a corrected Statement of Organization of Political Committee, and a designation of treasurer, would be forwarded to the Division of Elections within the next 72 hours. On January 8, 2001, a filing was received by the Division of Elections that was deemed by the Division to be complete. Subsequently, in a letter dated January 10, 2001, and signed by Connie Evans, informed Ms. McCarty and The Committee that the Statement of Organization and the Appointment of Campaign Treasurer and Designation of Campaign Depository for The Committee complied with the Division of Elections' requirements. The Committee was provided with Identification No. 34261. Posted with the letter was a copy of the "2000 Handbook for Committees," which is published by the Division of Elections. The letter and the handbook were sent to The Committee operation in Miami, not Ms. McCarty, and no one in the Miami Beach operation ever forwarded it to her. Connie Evans, Bureau Chief of Election Records, the entity that supervises the filing of the forms mentioned above, believes that due to a court ruling in Florida Right to Life v. Mortham, Case No. 98-770-Civ-Orl-19A, the language in Section 106.011, Florida Statutes, which defines a "political committee," has been found to be unconstitutional. She believes that a political committee is not required to register with the Division of Elections but that if a committee does register, it must abide by the statutes regulating political committees. Ms. Evans has informed numerous entities of this interpretation of the law in letters. The efficacy of that case, and Ms. Evans' interpretation of it, will be discussed further in the Conclusions of Law, below. Ms. McCarty signed a "Campaign Treasurer's Report Summary"(CTR-Q1) which was filed with the Division of Elections on April 10, 2001. This addressed the period January 1, 2001 until March 31, 2001. Under the certification section of the CTR-Q1 are the words, "It is a first degree misdemeanor for any person to falsify a public record (ss. 839.13, F.S.)." Immediately above her signature are the words, "I certify that I have examined this report and it is true, correct, and complete." The box found immediately above and to the right of her signature, was checked to signify that Ms. McCarty was the chairperson of The Committee. According to Ms. Evans, The Division of Elections regulates several kinds of committees. There are "issues" committees, "candidate" committees," "party executive" committees, and "committees of continuing existence." Depending on the nature of the committee, different rules apply. The Committee was a "candidate" committee so the contribution regulations of a political candidate applied to the committee. That meant that the maximum contribution per person was $500. The CTR-Q1 indicated in the "Itemized Contributions Section" that seven people contributed $1,000 and one person contributed $2,000. Walter Hunter, Neda Korich, Arthur Allen, William Shutze, Caroline Ireland, Henry Allen, and Honore Wansler, contributed $1,000, each. Robert Morgan contributed $2,000. The amounts in excess of $500 were eventually returned to the $1,000 contributors, except that in the case of Henry Allen, the refund was made to Allen Investment corporation. The sum of $1,500 was returned to Robert Morgan, the $2,000 contributor, but the CTR-Q1 listed only a $500 repayment. Therefore, the CTR-Q1 in its expenditures section was incorrect with regard to Mr. Morgan. The CTR-Q1 also listed in the "Itemized Contributions Section" the receipt, on January 2, 2001, of $150,000 for "LOA/INK extension of credit for direct mail services." These words may be interpreted to mean that a loan in the form of an "in kind" service had been provided. This was reported under the name of Creative Marketing, 2760 Eisenhower Avenue, Suite 250, Alexandria, Virginia. The Committee had a bank account at CityBank of Miami, Florida. The sole authorized signatory on the account was Diane Thorne. The Account No. was 3200015694. There was no entry in the bank account of the receipt of $150,000. This indicates that the item was not processed through the bank and it would not have been processed through the bank if it were really an "in kind" contribution. Because the beginning balance was zero on February 8, 2001, it is concluded that the inception date of Account No. 3200015694 was February 8, 2001. Lora Lynn Jones, is the principal of Unique Graphics and Design, which is located in Suite 253, at an address in Alexandria, Virginia, which is not further identified in the evidence of record. Ms. Jones prepared and posted the fundraising letter of December 2000, at the direction of Mr. Stone. Ms. Jones talked on the telephone with Ms. McCarty prior to mailing the fundraising letter and determined that the language in the letter was agreeable to Ms. McCarty. At the direction of Mr. Stone, Ms. Jones requested payment and received payment for her work, but from whom she cannot remember, except that she is sure that Creative Marketing did not pay it. The money for this production was paid in advance by wire transfer. There is no evidence in the record that this was paid from the account of The Committee. In fact, because the payment was made sometime in early December 2000, it could not have been paid from the account because it had not been opened. Ms. Jones is aware of an entity by the name of Creative Marketing Company and she believes it may be located in Northern Virginia, but she is not involved with it. It is found by clear and convincing evidence that the fundraising letter was not paid for by Creative Marketing, 2760 Eisenhower Avenue, Suite 250, Alexandria, Virginia. The bank records of The Committee reflect a $50,000 expenditure made to Unique Graphics and Design, paid with a check dated May 9, 2001. This represents a payment for something other than the fundraising letter dated December 2000. The $50,000 item was reported as an expenditure on the CTR-Q1 that was reported to have been made on March 12, 2001. It was reported as having been made to Creative Marketing as payee. The only check in the amount of $50,000, reflected in The Committee checking account for the period February 8, 2001, to June 30, 2001, was payable to Unique Graphics and Design and was dated May 9, 2001. Therefore, it is found that the CTR-Q1 is incorrect when it was reported as having been made on March 12, 2001, to Creative Marketing. Ms. Jones believes there is a company by the name of Creative Marketing Company, which she believes may be located in Northern Virginia, but she is not involved with it. Contributions remitted in response to the fundraising letter were forwarded to one of Mr. Stone's two addresses. Because the address of 1348 Washington Avenue, Suite 177, in Miami Beach, Florida, is the address listed on the fundraising letter, it is likely that contributions in response to the fundraising letter went to Mr. Stone's Miami Beach operation. In any event, it is found as a fact that Ms. McCarty did not personally receive or have any contact with any of the contributions remitted to The Committee. The people handling the receipt of funds and the deposits were Roger Stone and people paid by his organization, including Diane Thorne, the secretary; Amber McWhorter, the treasurer; and Craig Snyder. Just as Ms. McCarty was not involved in the receipt of income to The Committee, she was also not involved in the disbursement of funds. The CTR-Q1 was completed by The Committee's staff in either Miami Beach or Washington, D.C., but Ms. McCarty had no input into its preparation. When Ms. McCarty signed the CTR-Q1 she was without knowledge as to whether the report was truthful, correct, or complete. It is further found that she made no effort to ascertain whether the report was truthful, correct, or complete. She believed it to be true and correct because she trusted Mr. Stone's operatives to accurately prepare the report. Ms. McCarty, excepting the current litigation, has never been the subject of a Commission action. Ms. McCarty has an income of approximately $80,000. She owns a residence jointly with her husband which is valued at approximately $300,000 and which is subject to a mortgage of approximately $200,000. She owns a vacation home in Maine jointly with her husband that is valued at approximately $25,000. She and her husband own three automobiles. She owns stocks, annuities, mutual funds or certificates of deposit of an indeterminate value.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered dismissing the Orders of Probable Cause entered in the case of both Mary McCarty and The Committee to Take Back Our Judiciary. DONE AND ENTERED this 21st day of April, 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 21st day of April, 2003. COPIES FURNISHED: Kendall Coffey, Esquire Coffey & Wright, LLP 2665 South Bayshore Drive Grand Bay Plaza, Penthouse 2B Miami, Florida 33133 J. Reeve Bright, Esquire Bright & Chimera 135 Southeast 5th Avenue, Suite 2 Delray Beach, Florida 33483-5256 Mark Herron, Esquire Messer, Caparello & Self, P.A. Post Office Box 1876 Tallahassee, Florida 32302-1876 Eric M. Lipman, Esquire Florida Elections Commission 107 West Gaines Street Collins Building, Suite 224 Tallahassee, Florida 32399-1050 Barbara M. Linthicum, Executive Director Florida Elections Commission 107 West Gaines Street 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
The Issue The issue in this case is whether the Respondent is guilty of using or attempting to use his position as mayor of the City of South Pasadena for his benefit or the benefit of candidates that he supported in the 2014 city commission election, in violation of section 112.313(6), Florida Statutes (2013).
Findings Of Fact In March 2014, the Respondent was the mayor of the City of South Pasadena, having been elected the year before. City commission elections were scheduled for Tuesday, March 11. There were two contested slots. The incumbents were Max Elson and Arthur Penny. The challengers were Harris Blair and Robert Small. The Respondent supported the challengers and donated to their campaigns to unseat the incumbents, who had been voting against the Respondent's positions since his election as mayor. Of the two elections, the Respondent was more interested in unseating Penny, who regularly opposed the mayor. Pasadena Liquors is a retail business operating in the City of South Pasadena. It was operated by Jimmy Valenty, whose family trust owned the business. Although not a resident and not eligible to vote in the city commission elections, Valenty supported Elson, who was a personal friend. A few weeks before the election, Elson mentioned to Valenty that the campaign signs Valenty allowed him to place outside Pasadena Liquors kept disappearing. Elson asked if Valenty would let him use the marquee inside the front window. Valenty agreed. Elson then asked if Valenty also would let Penny use it. Valenty had no personal interest in Penny's campaign but agreed to his friend's request. Valenty arranged the letters on the marquee to read: "VOTE ELSON AND PENNY CITY COMMISSIONER." During the week before the election, the Respondent received telephone calls regarding the marquee from several constituents who were supporting Blair and Small. They did not recall the marquee being used to solicit votes for city commission elections in the past and questioned whether it was legal. The Respondent was not aware of the sign before receiving the telephone calls and told his constituents that he would look into it. On Friday, March 7, the Respondent went to Pasadena Liquors to talk to Valenty and tell him about the telephone calls he had received. Valenty asked if the Respondent was there as mayor, and the Respondent said, no, he was there as a concerned customer or concerned citizen. During the discussion about the propriety and legality of the sign, Valenty asked to see the city's sign ordinance. The Respondent offered to get a copy of it for Valenty. Normally, the mayor would not be involved in enforcement of the city's sign ordinance. The city's government is run by the mayor and five commissioners, all elected positions. The city has five departments. The mayor oversees the administration department. Each commissioner oversees one of the other four departments. Code enforcement, which includes enforcement of the sign ordinance, is part of the community improvement department (CID). Code violations usually would come to the attention of the city through either a code enforcement inspection or a citizen complaint, which would be referred to code enforcement for investigation. It was the CID director's job to interpret, as necessary, the ordinances being enforced. His interpretation would stand unless the city commission overruled him. In March 2014, Commissioner Elson was in charge of and oversaw the CID. The CID's director, Neal Schwartz, reported directly to Commissioner Elson. After talking to Valenty, the Respondent went to Schwartz's office, told him about his conversation with Valenty, and asked for a copy of the sign ordinance pertaining to the Pasadena Liquors marquee. Schwartz copied the sign ordinance, which was long and convoluted, and highlighted the pertinent provisions. It was the CID director's opinion that the sign was legal, in part because the marquee was a "reader board" with changeable letters. The CID director offered to check with the county election supervisor to verify his opinion and was told that the city clerk, who directed the administration department overseen by the Respondent, was in charge of city elections. It was not clear from the evidence whether the Respondent was still present in the office of the CID director when he telephoned the county elections supervisor. It was clear that the Respondent had left the CID director's office before the CID director talked to the city clerk. When the clerk was asked, she was of the opinion that the sign was legal because it was not paid political advertising. She was prepared to tell the Respondent her opinion if he contacted her. The Respondent did not contact the city clerk for her opinion. After meeting with the CID director, the Respondent returned to Pasadena Liquors to show Valenty the sign ordinance. Valenty saw nothing in the highlighted portions of the sign ordinance that made it clear to him that the sign was illegal, but there appeared to him to be a size limitation. Valenty got a tape measure and concluded that the sign exceeded the size requirements. Valenty asked if the Respondent was requiring him to remove the signage from the marquee. The Respondent said no, it was up to Valenty to decide what to do with the sign. Valenty was planning to remove the sign the next day anyway to replace it with advertising for St. Patrick's Day, so he decided to go ahead and switch the signage on the marquee that day. At the election on March 11, the incumbents won. After information was reported to him about the Respondent's actions regarding the Pasadena Liquors marquee, Commissioner Penny swore out an Ethics Commission complaint alleging that the Respondent went to Pasadena Liquors and demanded that the owner remove the "vote-for-the-incumbents" sign by falsely telling him that he was in violation of the political advertisement laws, after insisting that the CID director call the supervisor of elections and not waiting for the opinion of the city clerk as to the sign's legality. After receiving and reading the ethics complaint, the Respondent brought a copy to Valenty because his name was mentioned, and the Respondent thought he should know about it. Valenty read it and said there was nothing negative in it about him, so he was not concerned about it. The Respondent did not try to influence Valenty's reaction to the complaint, and there was no evidence that there was anything else to this encounter. A few months later, the Respondent asked the city clerk to begin the process of recognizing the lounge at Pasadena Liquors for being open for 25 years and to be sure to say that it was at his request. When the city clerk broached the subject with Valenty, he declined the honor because the timing suggested to him that the recognition was to "make up for" any hard feelings that arose from the issue regarding the business's election sign. In fact, the timing was a coincidence. The city had recognized Pasadena Liquors for the 10th anniversary of its lounge being open, and other businesses in the city were recognized similarly when they reached landmark anniversaries. It was not proven by clear and convincing evidence that the Respondent's actions with respect to the Pasadena Liquors marquee were taken for the purpose of influencing the election, and it is unlikely that they had any influence on the election. In part for these reasons, it was not proven by clear and convincing evidence that the Respondent's actions with respect to the Pasadena Liquors marquee were taken for the purpose of securing a special privilege, benefit, or exemption for himself or the unsuccessful candidates. It also was not proven by clear and convincing evidence that the Respondent's actions with respect to the Pasadena Liquors marquee were taken with corrupt intent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Ethics Commission enter a final order dismissing the charges against the Respondent. DONE AND ENTERED this 12th day of May, 2015, in Tallahassee, Leon County, Florida. S J. LAWRENCE JOHNSTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 2015. COPIES FURNISHED: Virlindia Doss, Executive Director Florida Commission on Ethics Post Office Drawer 15709 Tallahassee, Florida 32317-5709 (eServed) C. Christopher Anderson, III, General Counsel Florida Commission on Ethics Post Office Drawer 15709 Tallahassee, Florida 32317-5709 (eServed) Millie Wells Fulford, Agency Clerk Florida Commission on Ethics Post Office Drawer 15709 Tallahassee, Florida 32317-5709 (eServed) Melody A. Hadley, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 (eServed) Joseph A. Corsmeier, Esquire Law Office of Joseph A. Corsmeier, P.A. Building B, Suite 431 2454 McMullen Booth Road Clearwater, Florida 33759-1339 (eServed)
Findings Of Fact On February 27, 1984, Respondent, Department of Transportation, (DOT), advertised for letters of submittals by pre-qualified surveying firms interested in bidding on the project in question. This project was for miscellaneous survey work in the amount of $100,000.00 to be performed at the will of the DOT District II Engineer throughout the District II area. The work was to be done as need for it arose rather than on projects already existing and specifically identified. It was to be primarily for overflow surveying work that could not be handled by regular state survey crews. DOT District II covers North Central Florida from the Georgia border on the North to a line extending from just south of Jacksonville on the East, toward the West below Gainesville, and ending just at Yankeetown on the West. The Western boundary is a line extending from Georgia to the Gulf of Mexico approximately twenty five miles East of Tallahassee. The District is headquartered in Lake City. Four letters of intent were received from prospective bidders of which one was disqualified immediately because it had not been pre-qualified. The remaining three bidders were: Petitioner (Hale) L. L. Lee & Associates (Lee), and Bennett R. Wattles & Associates (Wattles). Thereafter, these three prospective bidders were evaluated according to a selection process which is multi-stepped. The first step involves an evaluation of the submitted letters of intent to determine the prospect's capability to meet schedules and do the anticipated work. These evaluations, made at the District headquarters and received in Tallahassee on March 20, 1984 resulted in the following scores assessed: (1) Hale 33 (2) Lee 37 (3) Wattles 33. To those scores, numbers are added for work load and location by the Contractual Services Office on an objective basis which resulted in new scores of: (1) Hale 58 (2) Lee 62 (3) Wattles 56. Since at this point there were only three prospective bidders left, DOT requested proposals from all three. Proposals were submitted by all three concerns on or about June 18, 1984. When received, they were sent to District II central officer personnel for evaluation by a three man committee convened there and consisting of the Deputy District Engineer, the District Location Engineer, and the Assistant District Design Engineer. At this point, Lee withdrew from the competition due to outside considerations leaving only Hale and Wattles. These two firms were rated by the committee as follows: Technical Plan Management Plan Project Schedule Other Total Hale 35 25 18 8 86 Wattles 35 25 18 6 84 The two point edge awarded to Hale by the committee was due to the fact that its office was located in the center of the district at Lake City whereas Wattles' office being on the edge of the district in Jacksonville would be inconvenient. At this point, though fee schedules had been received, they were not viewed by the District Committee. The proposals once evaluated by the District Committee are then evaluated by the Technical Committee in Tallahassee which consists of the Chief of Pre-Construction and Design, the Bureau Chief of Aerial Photography (for survey work), and the District Design Engineer. When this evaluation was completed, the combined score of the District and Technical Committees averaged: Hale 75, and Wattles 82. At this point, the complete evaluation report is furnished to Mr. Berry and the preference for Wattles was based on the facts that over 50 percent of the projected work under the contract would exist in Duval County and there are already three DOT survey crews located permanently in Lake City. When this committee report was published, the committee did not know of the price proposals submitted by the parties. This information, in its pertinent particulars, shows that the average 5-man party rate proposed by Hale was $619.83 and by Wattles was $650.00. The analysis of price proposals submitted by all three original bidders, completed in July, 1984, reflected that Hale was low bidder in every category of crew and mileage criteria. When this analysis was furnished to the Technical Committee, it came back with a recommendation that the best cost value would be furnished by Petitioner, Hale. Thereafter, the proposal was submitted to the Selection Committee which consisted of the Secretary, the Assistant Secretary, and the Deputy Assistant Secretary, all of DOT, and Mr. Berry, for final selection. The selection is made considering all the evaluation committee work and the price quotation. The Selection Committee met on August 29, 1984. It considered the evaluation report sheet of the Technical Committee along with all other relevant information and the selection is made based on the answers to questions asked by the committee members. Here, Wattles was selected based on the conclusion that more than 50 percent of the prospective work under this contract was to be done in Duval County and that there were already three DOT survey teams located in Lake City. No DOT survey teams are located in Duval County. On this basis, Wattles would be under 30 miles for the majority of the trips and would charge $600.00 per day for a 5-man party. On the other hand, for more than 50 percent of the work, Hale would have to come from Lake City, a trip within the 51-75 mile range and his fee for a 5-man party for that distance is $661.00 per trip. Therefore, even though Hale's fees are uniformly lower for equivalent trips, because his trips would be longer for a majority of the work, his overall cost to the DOT would be greater. Utilizing the expected trip distances and numbers, a weighted average was computed to demonstrate the relative costs. These figures showed that for all work under the contract, Hale's price would be $630.12 and Wattles' would be $618.75 per trip. On the basis of this information and, inter alia, the fact that DOT survey teams have until now done most of the work outside of Duval County, the Selection Committee decided to award the contract to Wattles and the parties were so notified. The weighted cost figures were calculated by Mr. Berry on a hand-held calculator during the Selection Committee meeting at the request of the Secretary. All other calculations and analyses of costs were done by Mr. Alligood, a professional statistician. Information to the fact that in excess of 50 percent of the work would be done in the Duval County area was not communicated to the prospective bidders at the time the proposals were solicited. While the terms of the advertisement are not in evidence, it may be presumed that the advertisement either expressly or impliedly indicated the work was to be done throughout District II. No indication was given to the bidders that weighted consideration would be given to the historical information on prior activity as to the location of most of the work. This factor was inserted into the framework of the consideration only after the evaluation and selection process had progressed to the Selection Committee level, the last step in the process before award.
The Issue Whether the Respondent committed the violations alleged in the Order of Probable Cause entered August 26, 2009, and, if so, the penalty that should be imposed.
Findings Of Fact Because Ms. Fresen failed to respond to the Petitioner's First Request for Admissions, the matters of which admissions were requested are deemed conclusively established for purposes of this administrative proceeding. See Fla. R. Civ. P. 1.370. The Petitioner's First Request for Admissions is attached to this Final Order, and the matters of which admissions were requested are adopted herein as findings of fact.
The Issue The issues to be resolved in this proceeding concern whether the Petitioner's Decedent, Joanne Eddy, validly effected a transfer from the pension plan to the Investment Plan of the Florida Retirement System (FRS), and whether the Respondent agency is estopped from invalidating that transfer. It must also be determined whether the Petitioner is entitled to an award of reasonable attorney's fees and costs.
Findings Of Fact The following facts have been stipulated by the parties in the Joint Pre-hearing Statement or Stipulation: Joanne Eddy was employed as a Paramedic by Hillsborough County, Florida, from 1989 until 2004. Hillsborough County is now and for all periods relevant to this case has been a participating employer in the Florida Retirement System (FRS). As a Hillsborough County employee, Ms. Eddy participated in the FRS pension plan from her date of hire in September of 1989 until April of 2004. Ms. Eddy was fully vested in the FRS pension plan. Ms. Eddy was diagnosed with cancer (metastatic melanoma) in August 2003. In that month Ms. Eddy was placed on approved medical leave. Ms. Eddy remained on approved medical leave of absence until her resignation in April 2004 (April 8, 2004). In March 2004, Ms. Eddy submitted a "Second Election Retirement Plan Enrollment Form" to the FRS Plan Choice Administrator (Citi-Street). Ms. Eddy indicated on this form that she wished to change from the FRS pension plan to the FRS Investment Plan. The second election retirement plan enrollment form was signed by Ms. Eddy on March 1, 2004, and received by the FRS Plan Choice Administrator, Citi-Street on March 8, 2004. Citi-Street is a private entity which is an agent of the FRS, Division of Retirement (DOR) and the SBA. On April 1, 2004, Joanne Eddy participated in a grievance hearing involving another Hillsborough County employee. Hillsborough County paid Ms. Eddy for the time that she attended the grievance hearing on April 1, 2004. Ms. Eddy resigned from her FRS employment with Hillsborough County on April 8, 2004. Ms. Eddy called the FRS financial guidance line on April 29, 2004, to inquire about the status of her transfer to the FRS Investment Plan. In May 2004, Ms. Eddy received a written statement from FRS confirming an opening balance of her FRS Investment Plan account, in the amount of $60,345.86. The transaction date on the statement is April 29, 2004. Ms. Eddy died of cancer on June 20, 2004. Prior to her death, Ms. Eddy designated her two sisters, Petitioner Julie Lambrou and Lynda Wood, as beneficiaries on her FRS Investment Plan account. Ms. Eddy's beneficiary designation form allocates 60 percent to Ms. Lambrou and 40 percent to Ms. Wood. As beneficiaries, Ms. Lambrou and Ms. Wood are entitled to the value of Ms. Eddy's FRS Investment Plan assets, if a transfer to the FRS Investment Plan is determined to be valid. On September 3, 2004, an employee of the Division of Retirement within the Department of Management Services wrote a letter to Joanne Eddy's mother, Kathleen Dickey. In part, the September 3, 2004, letter states: Ms. Eddy elected to transfer to the Investment Plan effective April 1, 2004. However, since she did not work in the month of April and therefore did not receive a salary payment under the Investment Plan, her election is null and void. Ms. Lambrou followed all legally required procedures to contest the denial of her sister's election to transfer to the FRS Investment Plan. On September 30, 2005, SBA Director of Policy, Risk Management and Compliance wrote a "Final Action" letter to Ms. Lambrou advising her that SBA had concluded that Ms. Eddy's election to transfer to the FRS Investment Plan was invalid. Petitioner, Julie Lambrou, filed a Petition for Hearing in this matter on November 1, 2005, after receiving an extension from the SBA. Ms. Lambrou's attorney sent SBA a letter on February 22, 2006, enclosing a copy of the Hillsborough County payroll check for the work performed by Ms. Eddy on April 1, 2004. As of the date of the Joint Pre-hearing Statement, th[e] Division of Retirement ha[d] made no determination as to whether the information contained in the February 22, 2006, letter constitutes creditable service. Ms. Eddy was very positive and very active regarding her chances for recovery from the effects of melanoma and embarked on an active treatment, surgery and therapy program to try to effect a cure. This included chemical therapy as well as brain surgery, which was apparently successful. She even participated in the trial of a new therapy, interleukin therapy and a new and aggressive type of chemical therapy. She was initially optimistic about her chances for recovery. In early 2004, however, she begin to decline in health. She thus began to focus very strongly on setting her personal affairs, including her financial affairs, in order. She then learned that, because she was not married and had no children, under the FRS pension plan (defined contribution) there would be no beneficiary eligible to receive her retirement benefits upon her death. She learned at the same time, however, that if she transferred to the Investment Plan, that she could designate beneficiaries to receive the full value of her Investment Plan account upon her death. Consequently, she decided to do so and submitted the necessary forms to make an election (her "second election") to transfer from the pension plan to the Investment Plan with the FRS, in March 2004. She named her two sisters as beneficiaries in a 60 percent, 40 percent proportion because she really wished the money to be for the use of her nephews and nieces. One sister had three children, the other two children. Eligibility to Transfer to Investment Plan Members of the pension plan who did not elect to transfer to the FRS Investment Plan when the plan was established in 2002, as of March of 2004, were permitted to make a one-time election known as the "second election" to transfer to the Investment Plan in accordance with Section 121.4501(4)(e), Florida Statutes (2003). This is distinguished from the first election period which ended in August of 2003. § 121.4501(4)(a), Fla. Stat. (2003). No rules had been enacted in March 2004 governing the second election to transfer to the Investment Plan. In the absence of rules, the official policy statement concerning transfer eligibility to the Investment Plan is the official "Summary Plan Description" of the FRS Investment Plan, promulgated by the DOR, which was in effect in March and April of 2004. It is to this document to which employees, intent on transferring to the Investment Plan, are referred by a notation or instruction on the face of the enrollment form those employees must use to enroll in the Investment Plan. The Summary Plan Description contains the following guidance for employees considering a second election: If you wish to use your Second Election, note that the plan change is effective the first day of the month following the receipt and processing of your second Election Retirement Plan Enrollment Form by the FRS Plan Choice Administrator. To finalize the plan change you must work or be covered by approved leave for at least one day in the month of your effective date. If you submit your Second Election Retirement Plan Enrollment Form in December and it is received and processed by the Plan Choice Administrator on December 15, your plan change will be effective on January 1. To finalize the change you must work or be covered by approved leave for at least one day in the month of January. If you do not work or are not on approved leave in January, your plan change will be reversed and you will remain in your original plan. (emphasis supplied) (See Exhibit O in evidence.) Applying the foregoing provision in the Summary Plan Description, Ms. Eddy's election thus became effective on April 1, 2004. She was on approved leave in April through the date of her resignation which was April 8, 2004. Moreover, she was paid for work performed on April 1, 2004, for attending a grievance hearing as a union representative. This was a regular, compensable part of her employment duties because she was a designated union representative and her duties required her to attend such grievance hearings and related meetings. Indeed, she attended a formal meeting on March 11, 2004, concerning the same grievance claim proceeding, in which the grievance claim of Linda Wood was discussed with Ms. Joni Taylor. This was done through her official duties as an employee union representative designated by her employer to attend such meetings by her employer's adherence to the collective bargaining agreement with the union. If Ms. Eddy was entitled to payment for the April 1, 2004, attendance at the grievance hearing, as indeed she was, then she also should have been paid for the meeting on March 11, 2004, on the same basis or theory as she was paid for the April 1, 2004, grievance hearing by her employer, Hillsborough County. Ms. Eddy was aware in March 2004 that changing retirement plans was the only effective means of passing her vested retirement benefits on to other members of her family. She thus filled out the Second Election Retirement Plan Enrollment Form supplied by the FRS in March 2004. That form indicates that enrollment is effective on the first day of the month following the month in which the election form is received by FRS. It is undisputed that her election form was received by the FRS administrator on March 8, 2004. The information provided Ms. Eddy in the Summary Plan Description indicated that she was eligible to elect the FRS Investment Plan if she worked or was on approved leave in the month of April 2004. As a union representative Ms. Eddy knew that her presence at the grievance hearing on April 1, 2004, was compensable under the terms of the Collective Bargaining Agreement between the county, her employer, and her union. The March 11, 2004, meeting should have been compensable as well on the same basis, and Ms. Eddy, no doubt, could have called that to her employer's attention and to the attention of the DOR, if she had known of any requirement, intent or position by the DOR or the SBA that she had to have been paid for employment during the month of March, in order for her March 2004 election to be valid. Ms. Eddy also was aware that she was on approved leave during all of 2004 until her resignation on April 8, 2004. Ms. Eddy received an initial written confirmation from the DOR of her election to transfer to the Investment Plan in March 2004, in the form of a "Second Election Plan Choice Confirmation." The confirmation, which bears a transaction date of March 8, 2004, states in relevant part: This statement confirms your recent FRS Plan Choice utilizing your one time, second election. You have elected to change to the FRS Investment Plan effective 04/01/2004 and transfer the present value of your FRS Pension Plan benefit. Ms. Eddy called the FRS Financial Guidance Line on April 29, 2004, and in a lengthy conversation with persons responsible for fielding inquiries and giving financial planning information (Ernst and Young and Citi-Street), she discussed her account and various options that might be available to beneficiaries, including tax ramifications. During this phone conversation, a Citisreet representative confirmed that her transfer to the Investment Plan became effective in April 2004, and her investment account balance would be transferred to the FRS Investment Plan by the end of April 2004. Before her death, Ms. Eddy received a second written confirmation from FRS that her transfer to the FRS Investment Plan was effective, in the form of an "Investment Plan Opening Balance Confirmation Statement." This confirmation, which bears a transaction date of April 29, 2004, the date of her phone conversation, states: This statement confirms the opening balance of your FRS Investment Plan account. On 04/29/2004, the amount of $60,345.86, which represents the present value of your FRS Pension Plan benefit will be allocated to the investment options listed below. Ms. Eddy died on June 20, 2004. At the time of her death she had 2.44 hours of unused sick leave and 6.52 hours of unused annual leave or vacation leave, for which payment was made following her death. On June 9, 2004, Dan Beard, a Benefits Administrator with the DOR, in an e-mail with the subject "Election Reversals," noted the following with respect to Ms. Eddy's election: "Per agency, member was on some type of leave and finally resigned. Second election to IP is not valid since member did not work in IP effective month." Ms. Lambrou first learned that the DOR had determined Ms. Eddy's election to be "null and void" from a letter sent to Kathleen Dickey, her mother, dated September 3, 2005, which was in response to an inquiry made by Ms. Dickey. She learned also of this position by the DOR in conversations with Paul Dane, an employee of the DOR. The September 3, 2005, letter states that Ms. Eddy's election was void because "she did not work in the month of April and therefore did not receive a salary payment under the Investment Plan . . . ." (See Exhibit H in evidence.) Ms. Lambrou thereafter made many inquiries into the reasons for the reversal, chronicled in Attachment 1 of the SBA final decision letter. (Exhibit J in evidence.) The SBA conducted a review in response to Ms. Lambrou's Request for Intervention, which was submitted on November 4, 2004. In every written communication from and between SBA and the DOR, from June 2004 through April 2005, the asserted reason for reversing Ms. Eddy's election was that she did not work or earn salary in the month following the month of her election which was therefore her effective month of April 2004. In its final decision letter of September 30, 2005, the SBA repeated the position that Ms. Eddy's election was invalid because she was not actively employed and did not earn a salary during April 2004. In response to the final decision letter, Ms. Lambrou filed a request for formal hearing and hired counsel to represent her. A later examination of Ms. Eddy's work record revealed that Ms. Eddy had in fact worked on April 1, 2004, for which her employer, Hillsborough County, issued a delayed salary paycheck. This information was revealed in a letter of February 22, 2006, from Ms. Lambrou's attorney to the SBA, to the effect that Hillsborough County had issued a paycheck for Ms. Eddy's work on April 1, 2004. Despite the policy position communicated to members of the retirement system in the official Summary Plan Description, that an effective election required working or being on approved leave in the month the election became effective, following receipt of the information concerning Ms. Eddy's work on April 1, 2004, the SBA took the additional position that not only must the employee seeking to transfer from the pension plan to the Investment Plan receive a salary payment in the effective month (April 2004), but must also have been working and getting paid on the day the election form was submitted. Moreover, at the hearing, Dan Beard, the Benefits Administrator for the DOR, testified that in order to be eligible to transfer to the Investment Plan, a member must be on paid status on the day the FRS administrator receives the member's election form. When asked how a member would be able to know that they had to be on paid status on the day the election form is received in order to be eligible to transfer to the FRS Investment Plan, Mr. Beard could only respond that member education was "not part of his job." If Ms. Eddy's election to transfer to the Investment Plan were determined to be valid her beneficiaries would be entitled to receive her full investment account balance. If her election is determined to be invalid then no benefits will be paid to any beneficiary, relative or to her estate, and the funds accrued in her retirement account or accounts through her working life will be forfeited to the state. The SBA was aware in June 2004 that Ms. Eddy was on approved leave when she submitted her election to transfer to the FRS Investment Plan, and was on approved leave through the date of her resignation on April 8, 2004. Notwithstanding the clear language in the Summary Plan Description, the SBA took the position after Ms. Eddy's death that her election was invalid because she had not worked and had not received a salary in April 2004. This was the position the SBA communicated on a number of occasions in writing thereafter, until a formal proceeding was initiated by Ms. Lambrou on November 1, 2005. After the formal proceeding was initiated and after counsel for the Petitioner informed the SBA in February 2006 that Ms. Eddy had in fact worked and been paid by Hillsborough County for work performed in April 2004, the SBA altered its position so that it also contended that the transfer to the Investment Plan was invalid because Ms. Eddy had allegedly not worked and not received a salary on the day the election to enroll in the Investment Plan and the enrollment form was filed (March 1, 2004) or, alternatively, that she had not worked or been paid on the date the Investment Plan election enrollment form was received by the FRS plan administrator.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED: That a final order be entered by the State Board of Administration finding that the election of Ms. Eddy, the Petitioner's decedent and testatrix, to transfer her retirement benefits and credits to the FRS Investment Plan was valid and that the benefits thereof be paid over, in the proportions designated by Ms. Eddy, to Ms. Eddy's designated beneficiaries, the Petitioner, Julie Lambrou, and her sister, Lynda Wood. The request for attorney's fees and costs is denied. DONE AND ENTERED this 28th day of September, 2006 Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 28th day of September, 2006. COPIES FURNISHED: James W. Linn, Esquire Lewis, Longman & Walker, P.A. Post Office Box 10788 Tallahassee, Florida 32302 Ruth L. Gokel, Esquire Office of the General Counsel State Board of Administration 1801 Hermitage Boulevard Tallahassee, Florida 32308 Brian A. Newman, Esquire Pennington, Moore, Wilkinson, Bell & Dunbar, P.A. Post Office Box 10095 Tallahassee, Florida 32302-2095 Coleman Stipanovich Executive Director State Board of Administration of Florida Post Office Box 13300 Tallahassee, Florida 32317-3300 Bruce Meeks Inspector General State Board of Administration of Florida Post Office Box 13300 Tallahassee, Florida 32317-3300
Findings Of Fact On May 30, 2008, FEC entered an Order of Probable Cause charging Respondent with the following violations: Count 1: On or about January 10, 2007, Respondent violated Section 106.07(1), Florida Statutes, when he failed to file with the filing office his 2006 Q4 CTR due on that date, listing all contributions received and all expenditures made, by or on behalf of the candidate. Count 2: On or about May 7, 2007, Respondent violated Section 106.141(1), Florida Statutes, by failing to properly dispose of surplus campaign funds within 90 days after he was eliminated and to file a report reflecting the disposition of those funds, when Respondent failed to qualify between January 30, 2007 and February 6, 2007, and failed to dispose of funds in his campaign account and file a report reflecting the disposition of the funds on or before May 7, 2007. On or about December 16, 2008, Respondent was personally served with the Order of Probable Cause by process server. Because Respondent neither elected to have a formal or informal hearing conducted before FEC nor elected to resolve the complaint by consent order within 30 days after the date of the filing of FEC's allegations, on January 30, 2009, FEC referred the case to the Division of Administrative Hearings (DOAH), pursuant to Section 106.25(5), Florida Statutes (2007). The case was filed at DOAH on February 2, 2009. On February 6, 2009, Petitioner filed and served its First Requests for Admission upon Respondent. Respondent had 35 days, including time for mailing, to either admit or deny each of the Requests for Admission. Rule 1.370(a), Florida Rules of Civil Procedure provides: Each matter of which an admission is requested shall be separately set forth. The matter is admitted unless the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter within 30 days after service of the request . . Thirty-five days from February 6, 2009, was March 13, 2009. Respondent failed to file a response to FEC's Requests for Admission by March 13, 2009. Additionally, Rule 1.370(b), Florida Rules of Civil Procedure, provides: Any matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission. On March 17, 2009, Petitioner filed its Motion for Summary Final Order, based on the unanswered Requests for Admission, and, therefore, based upon the conclusively established admissions of fact. Respondent filed no response in opposition to the Motion for Summary Final Order, as permitted by Florida Administrative Code Rule 28-106.204. On April 3, 2009, an Order to Show Cause was entered, requiring Respondent to show cause by April 10, 2009, why a Summary Final Order should not be entered against Respondent. Respondent did not file any response. The April 3, 2009, Order to Show Cause gave Respondent a final opportunity to dispute any or all facts, to set aside the Requests for Admission, or to otherwise show cause why the Motion for Summary Final Order should not be granted. Respondent has not shown good cause. Respondent's failure to provide a written answer or objection to FEC's Requests for Admission conclusively establishes the following determinative facts, which prove the charges herein:1/ Respondent signed a Statement of Candidate form for Jacksonville City Council, District 7, on June 8, 2005. Respondent filed an Appointment of Campaign Treasurer and Designation of Campaign Depository for Candidates (DS-DE-9) on or about June 8, 2005, designating himself as the treasurer of his campaign. Respondent did not file his 2006 Q4 Campaign Treasurer's report by January 10, 2007. Respondent received a Memorandum from Beth Fleet, Director of Candidate Administration, dated January 12, 2007, notifying him that he failed to file his 2006 Q4 Campaign Treasurer's Report that was due on January 10, 2007. Respondent received an April 27, 2007, Memorandum from Jerry Holland, Duval County Supervisor of Elections, notifying Respondent that he failed to file his 2006 Q4 Campaign Treasurer's Report that was due on January 10, 2007. Respondent's failure to file his 2006 Q4 Campaign Treasurer's Report is a violation of Section 106.07(1), Florida Statutes. Respondent's Termination Report (TR) was due on May 7, 2007. Respondent received a letter dated April 27, 2007, from Jerry Holland, Duval County Supervisor of Elections, notifying him that his TR was due on May 7, 2007. Respondent did not file his TR with the Duval County Supervisor of Elections by May 7, 2007. Respondent's failure to file his TR by May 7, 2007, is a violation of Section 106.141(1), Florida Statutes.
