The Issue Whether Freda Sherman Stevens (Respondent), a candidate in the 2008 primary for a seat in the Florida House of Representatives, willfully violated section 106.07(5), Florida Statutes (2008), by certifying that six of her campaign reports were true, correct, and complete when they were not. Whether Respondent willfully violated section 106.19(1)(c), Florida by falsely reporting, or deliberately failing to report information required to be reported by chapter 106, Florida Statutes (2008).1/
Findings Of Fact Respondent was a candidate for the House of Representatives, District 100, in the August 26, 2008, primary election. As a candidate for the Florida Legislature, the Division of Elections of the Florida Department of State (the Division), was Respondent's filing office, and Respondent was required to file all her reports electronically. On October 30, 2007, Respondent filed with the Division her Appointment of Campaign Treasurer and Designation of Campaign Depository form listing herself as treasurer for her 2008 campaign. On November 1, 2007, Ms. Bronson sent Respondent a letter acknowledging that Respondent had been placed on the 2008 active candidate list. The letter advised Respondent that all candidates filing reports with the Division were required to use the electronic filing system (EFS) and provided Respondent with a personal identification number (PIN) and initial password to grant access to the EFS. The user was expected to change the initial password after logging on for the first time. Ms. Bronson's letter included the following information: You, your campaign treasurer, and deputy treasurers are responsible for protecting these passwords from disclosure and are responsible for all filings using these credentials, unless the Division is notified that your credentials have been compromised. * * * Each campaign treasurer's report filed by means of the EFS is considered to be under oath by the candidate and campaign treasurer and such persons are subject to the provisions of Section 106.075(5), Florida Statutes. * * * An online guide is available to you on the EFS to assist with navigation, data entry, and submission of reports. The Division of Elections will also provide assistance to all users by contacting the EFS Help Desk at (850) 245-6240. All of the Division's publications and reporting forms are available on the Division of Election's web site at http://election.dos.state.fl.us. It is your responsibility to read, understand, and follow the requirements of Florida's election laws. Therefore, please print a copy of the following documents: Chapters 104 and 106, Florida Statutes; Candidate and Campaign Treasurer Handbook (September 2007 edition); 2007-2008 Calendar of Reporting Dates; and Rule 1S-2.017, Florida Administrative Code. When a campaign report is submitted electronically through the EFS, both the candidate and treasurer's PINs must be entered into the website. Though it is possible for either the candidate or the treasurer to give their PINs to another individual to enter the report on their behalf, the candidate remains responsible for the PINs and the filed reports. Respondent did little to educate herself as to her responsibilities as a candidate and as the treasurer for her campaign. She could not even remember whether she read Ms. Bronson's letter, and she did not remember whether she had read the handbook referred to by Ms. Bronson. Respondent did not attend any candidate trainings offered by the Broward County Supervisor of Elections Office. On November 21, 2007, Respondent resigned as treasurer and appointed her mother, Clementine Sherman, as her new treasurer. On December 5, 2007, Ms. Bronson sent a letter to Ms. Sherman, with a copy to Respondent, acknowledging Ms. Sherman's appointment as treasurer and providing the same information contained in Ms. Bronson's letter to Respondent dated November 1, 2007 (and discussed above). On January 29, 2008, the Division accepted Respondent's appointment of herself as her deputy treasurer. Respondent did not have a system for keeping track of campaign contributions or expenditures. Pursuant to section 106.07, Florida Statutes (2008), Respondent was required to file periodic reports listing "all contributions received, and all expenditures made, by or on behalf of her candidacy." At all times relevant to this proceeding, Respondent has been the owner of Prodigal S & D Corporation, which does business as Green Apple Association of Christian Schools (Green Apple). Respondent was authorized to issue and sign checks on the bank account owned by Green Apple. In August 2008, shortly before the primary election, Respondent placed an order with WPLG-TV for airtime to disseminate political advertisement for her campaign. The script used in the advertisement aired on WPLG included the following: "Please vote Freda Stevens for State Representative District 100 on August 26. Thank you."2/ On August 6, 2008, Respondent signed two checks made payable to WPLG. Both checks were drawn on the same bank account owned by Green Apple. Check 1050 was in the amount of $13,812.50. Check 1051 was in the amount of $680.00. Both checks were made payable to WPLG in payment for political advertising that Respondent had purchased from WPLG. When Respondent signed those checks to WPLG, she knew, or should have known, that there were insufficient funds in both the Green Apple account and her campaign account to cover the checks. On August 15, 2008, Respondent signed check number 1053 payable to WPLG that was drawn on the same bank account owned by Green Apple as checks 1050 and 1051. Check number 1053 was in the amount of $7,161.25 and was used to pay for political advertising that Respondent bought from WPLG prior to the primary election. When Respondent signed check numbered 1053 to WPLG, she knew, or should have known, that there were insufficient funds in both the Green Apple account and her campaign account to cover the check. Check numbered 1050 and 1051 were returned to WPLG for non-sufficient funds. WPLG did not deposit check numbered 1053. Respondent filed an original and five amended 2008 F3 Reports. Respondent certified that each report was true, correct, and complete. All reports were filed electronically utilizing the PIN number given to Respondent by Ms. Bronson. On August 22, 2008, Respondent filed her "Original Report." That report listed no campaign contribution from Green Apple, and it failed to list campaign expenditures to WPLG or other media. Because of those omissions, the report was not accurate, and it was not complete. On August 23, 2008, Respondent filed a first "Amended Report." That report listed five in-kind contributions from Respondent with the descriptor "media" under each contribution. The amounts of the in-kind contributions were $13,812.50; $680.00; $3,185.85; $7,161.25; and $3,187.00. That report was inaccurate because the in-kind contributor for three of the in- kind contributions ($13,812.50; $680.00; and $7,161.25) was Green Apple, not the Respondent.3/ Respondent lost the primary election. After the election, on August 30, 2008, Respondent filed a second "Amended Report." The five in-kind contributions from Respondent with the descriptor "media" that had been on the first "Amended Report" were deleted from the report and were replaced with the following four in-kind contributions with the reported date of the contribution in parentheses: $13,812.50 (August 6); $3,187.50 (August 20); $3,128.85 (August 18); and $680.00 (August 6). That report was inaccurate because the in-kind contributor was Green Apple, not the Respondent. That report also failed to report the check in the amount of $7,161.25 that Green Apple had issued to WPLG on August 15. On November 24, 2008, Respondent filed a third "Amended Report", a fourth "Amended Report", and a fifth "Amended Report." The third "Amended Report" deleted the in- kind contribution from Respondent dated August 6, in the amount of $13,812.50, and with the descriptor "media." The fourth "Amended Report" and the fifth "Amended Report" reflected no contributions, only expenditures, none of which was for media. These "Amended Reports" were incomplete and inaccurate. WPLG attempted to collect the monies owed by Respondent's campaign. Clementine Sherman remitted a payment (by cashier's check) in the amount of $6,000.00 on August 27, 2008.4/ Respondent remitted three money orders that were deposited September 28, October 15, and December 22, 2009, respectively. These money orders were in the amounts of $200.00, $200.00, and $680.00. These payments were not reflected on any report filed by Respondent.
The Issue The issues for determination are: (1) Whether Respondent, David M. Whitehead, a member of Escambia County Commission, violated Section 112.313(7)(a), Florida Statutes, by having or holding an employment or contractual relationship with B & W Productions of Pensacola, Inc. (B & W Productions) which created a continuing or frequently recurring conflict between his private interests and the performance of his public duties or which impeded the full and faithful discharge of his public duties; whether Respondent violated Section 112.3143(3)(a), Florida Statutes, by voting on measures that came before the Escambia County Commission regarding Carlan Killam Consulting Group, Inc. (Carlan Killam Consulting or Carlan Killam), Baskerville-Donovan, Inc. (Baskerville-Donovan), DelGallo-Morette Construction Company (DelGallo-Morette), and/or Champion International Corporation (Champion), all of whom were sponsors of a television show hosted by Respondent; and (3) if so, what penalty is appropriate.
Findings Of Fact Respondent, David M. Whitehead (Respondent), currently serves as county commissioner for Escambia County, Florida, and has continuously served in that capacity since taking office after his election in 1992. As a county commissioner for Escambia County, Respondent is subject to the requirements of Part III, Chapter 112, Florida Statutes, the Code of Ethics for Public Officers and Employees (Code of Ethics), and is a "public officer" as that term is defined in Sections 112.313(1) and 112.3143(1)(a), Florida Statutes. As a county commissioner for Escambia County, Respondent is subject to the provisions of Sections 112.313(7)(a) and 112.3143(3)(a), Florida Statutes. Respondent formed B & W Productions, a Subchapter S, for-profit corporation, for the purpose of producing a morning television show that was to be known as the "Lois and Mike Show" or the "Wake-Up with Lois and Mike Show" (the "Lois and Mike Show"). Respondent is "Mike" on the Lois and Mike Show and co- hosts the show with Lois Benson. B & W Productions was incorporated to shield the personal assets of Respondent and Benson in case of liability. B & W Productions was organized under the laws of the State of Florida, effective June 17, 1998. B & W Productions was active from June 17, 1998, through September 23, 1999. On September 24, 1999, B & W Productions was administratively dissolved for failure to file its annual report, as required by law. During its corporate existence, B & W Productions maintained a corporate bank account at SunTrust Bank, West Florida; produced periodic profit and loss statements of its activities; applied for a federal tax identification number as a Subchapter S corporation; filed a corporate tax return with the Internal Revenue Service; and entered into sponsorship agreements with specific sponsors of the Lois and Mike Show. However, during its corporate existence, the corporation failed to conduct meetings of its shareholders, to take minutes, and to file its annual report. Respondent served as chief executive officer of B & W Productions until approximately March of 1999. In March 1999, after Respondent stepped down as CEO, Benson took over the books and management of B & W Productions. Thereafter, Respondent was not involved in the active management of B & W Productions. In November of 1999, Respondent transferred to Benson "all ownership rights, rights to compensation in any form, and right to any benefits, accrued or accruing in the future, with regard to B & W Productions, Inc., and "Wake Up with Lois and Mike . . . ." Respondent transferred complete ownership of B & W Productions to Benson, free and clear of any obligation for repayment. The Lois and Mike Show began airing on a local cable station in Pensacola known as "BLAB TV" in September of 1998. Respondent and Benson have received no compensation for their efforts in connection with the Lois and Mike Show. Since the Lois and Mike Show first aired, over 200 guests, all local people, have appeared on the show. Daily rundowns of the show for the calendar year 1999 evidence a program highlighting local community events and personal information presented by local residents consistent with a weekly theme developed by Benson. As a political figure, Respondent receives an incidental benefit of appearing as local personality on the Lois and Mike Show. However, the show is not a political show. Rather, consistent with its mission, the show entertains and informs its audience on issues specific to the Pensacola area, highlighting local news and issues, local events, and local people. BLAB TV requires the payment of $1,250.00 for each week that the Lois and Mike Show is aired. Other costs incurred in the production of the show included contract labor and outside production companies used to produce a portion of the show. The primary source of income to pay for the Lois and Mike Show is money paid by sponsors or supporters of the Lois and Mike Show. Using a public broadcasting system model, Benson developed a market plan to secure sponsors for the Lois and Mike Show. The plan proposed different tiers of sponsorship: segment sponsors; traditional commercial sponsors; and friends and benefactors. Benson developed lists of potential sponsors which included a wide range of businesses in the Pensacola area. These businesses included but were not limited to Baskerville-Donovan, DelGallo-Morette and Champion. Various potential sponsors including Baskerville-Donovan, DelGallo-Morette and Champion, were targeted for a personal solicitation from either Benson and/or Respondent. Initially, B & W Productions was responsible for billing and collecting sponsorship fees. However, in December 1998, three months after the show was first aired, responsibility for billing and collection of sponsorship fees was assumed by BLAB TV. Since BLAB TV took over these responsibilities, all sponsors of the Lois and Mike Show are billed directly by BLAB TV. Both Respondent and Benson personally paid a portion of the costs for the airing and production of the Lois and Mike Show. Respondent paid approximately $16,000.00 of his personal funds for the production of the Lois and Mike Show. Benson expended approximately $30,000 of her personal funds for the production of the show. These payments have at various times been characterized as loans and capital contributions. In March of 1999, Respondent determined that he could not put anymore of his personal funds into B & W Productions and did not do so. Both before and after the airing of the first Lois and Mike Show, Respondent solicited funds from sponsors to help pay the amount charged by BLAB TV for airing the show. Sponsorships were solicited from over 200 individuals and entities in the Pensacola community by Respondent and Benson. Respondent solicited funds in 1998 for the sponsorship of the Lois and Mike Show from a number of sources, including Baskerville-Donovan, Carlan Killam Consulting, Champion, and DelGallo-Morette, all of whom gave money for the sponsorship of the Lois and Mike Show. There was never any discussion at the time the solicitations were made that any of these potential sponsors might have matters before the Escambia County Commission (County Commission or Commission). Respondent has not solicited sponsors for the show since March of 1999. Baskerville-Donovan, Carlan Killam Consulting, Champion, and DelGallo-Morette have all had matters come before the Escambia County Commission after giving money for the Lois and Mike Show. Respondent, as a county commissioner for Escambia County, has voted on matters that have come before the County Commission regarding Baskerville-Donovan, Carlan Killam Consulting, Champion, and DelGallo-Morette after those companies gave money to support the airing and/or production of the Lois and Mike Show. However, Respondent has never been employed by and has never owned property with or engaged in a business enterprise with Baskerville-Donovan, Carlan Killam Consulting, Champion, or DelGallo-Morette. Since July of 1998, Respondent has cast approximately 3,000 votes as a member of the County Commission. He has never abstained from a vote as a county commissioner or filed a conflict of interest disclosure form based upon payments that have been made by any entity to B & W Productions or for the Lois and Mike Show. Baskerville-Donovan provides architectural and engineering services to Escambia County. These services are provided pursuant to an on-going contract with the county. Respondent solicited a sponsorship from Baskerville- Donovan. Subsequently, Baskerville-Donovan became a regular sponsor of the Lois and Mike Show paying $200 a month, beginning September or October 1998, and continuing through April 2000. The following matters that came before the Escambia County Commission for a vote regarding Baskerville-Donovan just before and after it became a sponsor of the Lois and Mike Show: On June 23, 1998, the Commission approved issuance of a Task Order to Baskerville-Donovan on Contract PD 95- 96.74 in the amount of $394,568 to design several road projects to the 35 percent stage. This item was unanimously approved by the Commission upon motion made by Respondent. This vote occurred prior to any sponsorship funds being paid to B & W Productions by Baskerville- Donovan. On September 22, 1998, the Commissioner approved the extension of six contracts with various consultants, including Contract PD 95-96.74 to Baskerville- Donovan for the second consecutive one- year option period, October 1, 1998, through September 30, 1999, at the same price, terms, and conditions. The extensions applied to contracts that had been awarded on August 6, 1996. This item was unanimously approved as part of the Commission's Consent Agenda. This vote occurred after sponsorship funds were paid by Baskerville-Donovan to B & W Productions. On December 22, 1998, the Commission approved Addendum Number 7 to Contract 95-96.63 to Baskerville-Donovan in the amount of $316,775.60 to provide full- time inspection and contract administration for the University Parkway Widening and Realignment Projects. This item was unanimously approved by the Commission with Respondent seconding the motion for approval made by Commissioner Boss. This vote occurred after sponsorship funds were paid to B & W Productions by Baskerville-Donovan and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On January 21, 1999, the Commission approved issuance of a Task Order on Contract PD 95-96.74 to Baskerville- Donovan, in the amount of $490,729.00 to design various paving and drainage projects to the 30 percent stage. This item was unanimously approved as part of the Commission's Consent Agenda. This vote occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On January 21, 1999, the Commission approved extension of five current contracts with various consultants, including Contract PD 95-96.100 to Baskerville-Donovan, for the third consecutive one-year option period, March 14, 1999, through March 13, 2000, at the same prices, terms and conditions. The extensions applied to contracts that had been awarded March 14, 1998. The item was unanimously approved as part of the Commission's Consent Agenda. This vote occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On February 4, 1999, the Commission approved Amendment Number 4 to Contract PD 94-95.59 between Escambia County and Baskerville-Donovan, in the amount of $51,200, for architectural and engineering services for various projects. (The original contract was approved on April 25, 1995.) This item was unanimously approved as part of the Commission's Consent Agenda, with Respondent moving approval of the Consent Agenda. This vote occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On April 22, 1999, the Commission approved the expenditure of approximately $3,000 to Baskerville-Donovan to complete the design package for renovations to the Board Chambers located in the Old Courthouse. This item was approved by a vote of 4-0, with Commissioner Robertson absent. This vote occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On May 20, 1999 the Commission approved three items extending Contract PD 95- 96.83 to allow three consultants, including Baskerville-Donovan, to proceed with various tasks with respect to the extension of I-110. In the first vote, the Commission unanimously approved extension of the contract to allow consultants to proceed with the preparation of applications associated with the request for funds for the I-110 extension project. In the second vote, the Commission unanimously approved extension of the contract to allow the consultants to proceed with design and preparation of other documents required in connection with extension of I-110 to Nine Mile Road. In the third vote, the Commission approved, by a vote of 3-2, extension of the contract to allow consultants to proceed with design and preparation of related documents for further extension of I-110 using as much of the Gulf Power right-of-way as possible. With respect to each vote, Respondent seconded the motion for approval and voted in the affirmative on each item. These votes occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On October 7,1999, the Commission approved Contract PD 98-99.83 to Baskerville-Donovan, in the amount of $100,000 for a feasibility study for the Central Commerce Park. This item was approved unanimously by the Commission upon motion seconded by Respondent. This vote occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. With respect to each of the matters which were the subject of votes referenced in paragraph 25, neither Respondent nor B & W Productions provided any services to Baskerville- Donovan. Nor did Respondent or B & W Productions have any responsibility for evaluating or inspecting Baskerville-Donovan's performance under any of these contracts. Moreover, neither Respondent nor B & W Productions provided any services with respect to any of the projects which were the subject of the Commission votes. Finally, neither the Respondent nor B & W Productions benefited from the votes of the County Commission approving various items involving Baskerville-Donovan. Respondent has never been employed or retained by Baskerville-Donovan. Respondent has never been engaged in a business enterprise with Baskerville-Donovan as a partner, a joint venturer, a co-owner of property, or in a corporate entity whose shares are not listed on a national or regional stock exchange. Carlan Killam Consulting provides architectural services to Escambia County, and has done so since 1973. These services have been provided to the county through on-going contracts. Carlan Killam Consulting provided one payment of $1,500.00 to sponsor the Lois and Mike Show. That payment was made on or about July 29, 1998. Benson initially approached Charles Carlan, the president of Carlan Killam Consulting, about sponsoring the Lois and Mike Show. Subsequently, Carlan met with Respondent and decided to have his company sponsor the show because it showed the positive side of Pensacola, as opposed to the negative side shown in the regular media. Carlan Killam Consulting engaged in a similar sponsorship endeavor with respect to the Pensacola Independent Newspaper. The following matters came before the Escambia County Commission for a vote regarding Carlan Killam Consulting just before and after it became a sponsor of the Lois and Mike Show: On June 23, 1998, the Commission, upon motion by Respondent, unanimously approved the issuance of a Task Order on Contract PD 95-96.74 to Carlan Killam in the amount of $254,920 to design several road projects to 30 percent stage. This vote occurred before sponsorship funds were paid by Carlan Killam. On July 28, 1998, the Commission unanimously approved, as part of its Consent Agenda, a Task Order on Contract PD 95-96.74 to Carlan Killam in the amount of $379,618 for various road paving and draining design projects. This vote occurred before any sponsorship funds were paid by Carlan Killam. On September 22, 1998, the Commission approved extensions of six current contracts with various consultants, including Carlan Killam (Contract PD 95.96.74), for the second consecutive one-year option period, October 1, 1998, through September 30, 1999, at the same prices, terms and conditions. (The extensions applied to contracts that had been awarded August 6, 1996.) This item was unanimously approved as part of the Commission's Consent Agenda. The vote occurred after the one-time sponsorship payment was made to B & W Productions by Carlan Killam. On November 24, 1998, the Commission considered and unanimously approved the Proposal Review Committee's ranking of firms based on their letters of interest regarding providing professional architectural consulting services to prepare a 10-year master space plan. Carlan Killam ranked second. This vote occurred after Carlan Killam made a one- time sponsorship payment to B & W Productions. On December 3, 1998, the Commission approved issuance of a Task Order on Contract PD-96.74.3P to Carlan Killam in the amount of $134,748 for services on various waste water projects. This vote occurred after the one-time sponsorship payment was made by Carlan Killam to B & W Productions. On December 22, 1998, the Commission approved issuance of a Task Order on Contract 95-96.74 in the amount of $104,927 for design, engineering, and surveying services for storm-water and drainage projects. This item was unanimously approved as part of the Commission's Consent Agenda. This vote occurred after the one-time sponsorship payment was made by Carlan Killam to B & W Productions. On March 18, 1999, the Commission approved issuance of three task orders on Contract PD 95-96.74 to Carlan Killam in amounts of $136,476; $504,771; and $69,087. These items were unanimously approved as part of the Commission's Consent Agenda. Respondent was not present for this meeting. On April 22, 1999, the Commission approved issuance of a Task Order on Contract PD 95-96.74 to Carlan Killam in the amount of $110,666 for the design and engineering for various road projects. This item was unanimously approved as part of the Commission's Consent Agenda for this date. This vote occurred after the one-time sponsorship payment was made by Carlan Killam to B & W Production. On May 20, 1999, the Commission approved three items extending Contract PD 95-96.83 to direct named consultants, including Carlan Killam, to proceed with various tasks with respect to the extension of I-110. In the first vote, the Commission unanimously approved extension of the contract to allow consultants to proceed with the preparation of applications associated with the request for funds for the I-110 extension project. In the second vote, the Commission unanimously approved extension of the contract to allow the consultants to proceed with design and preparation of other documents required in connection with extension of I-110 to Nine Mile Road. In the third vote, the Commission approved, by a vote of 3-2, extension of the contract to allow consultants to proceed with design and preparation of documents for further extension of I-110 using as much of the Gulf Power right-of-way as possible. With respect to each item, Respondent seconded the motion for approval and voted in the affirmative. These votes occurred after the one-time sponsorship payment was made by Carlan Killam to B & W Productions. On October 21, 1999, the Commission approved issuance of Task Order on Contract PD 95-96.83 to Carlan Killam in an amount not to exceed $263,727.28, to provide the first phase of project development to study the I-110 extension to Nine Mile Road. This item was approved by the Commission, by a vote of 4-1, with Respondent voting in the affirmative. This vote occurred after the one-time sponsorship payment was made to B & W Productions. With respect to each of the matters which were the subject of votes referenced in paragraph 31, neither Respondent nor B & W Productions provided any services to Carlan Killam. Moreover, neither Respondent nor B & W Productions had any responsibility for evaluating or inspecting Carlan Killam's performance under the aforementioned contracts or for providing any services with respect to any of the projects which were the subjects of these votes. Finally, neither Respondent or B & W Productions benefited in any manner from the votes of the County Commission approving various items involving Carlan Killam. Respondent has never been employed or retained by Carlan Killam. Respondent has never been engaged in a business enterprise with Carlan Killam as a partner, a joint venturer, a co-owner of property, or in a corporate entity whose shares are not listed on a national or regional stock exchange. DelGallo-Morette provides construction services to Escambia County. Benson suggested that Respondent contact DelGallo- Morette as a potential sponsor. Both Respondent and Benson discussed sponsorship of the Lois and Mike Show with Steve DelGallo, the president of DelGallo-Morette. Subsequently, DelGallo-Morette provided a one-time payment of $2,500 to sponsor the Lois and Mike Show. That payment was made on or about August 21, 1998. Benson's credible testimony was that she and DelGallo are good friends and that if there was any reason for DelGallo-Morette to sponsor the show, it was because she had just recently drawn the house plans for DelGallo free of charge. Matters that came before the Escambia County Commission for a vote regarding DelGallo-Morette just before and after it became a sponsor of the Lois and Mike Show include the following: On June 23, 1998, the Commission approved the unanimous recommendation of the Bid Review Committee to award a lump sum contract to DelGallo-Morette, in the amount of $89,5000 as the lowest, most responsive, and most responsible bidder, for a renovation construction project. This item was unanimously approved by the Commission, upon motion made by Respondent. This vote occurred prior to any sponsorship funds being paid to B & W Productions by DelGallo-Morette. On June 30, 1998, upon motion by Respondent, the Commission approved an increase in maximum price, by a sum not to exceed $385,000, for telecommunication system improvements at the M.C. Blanchard Judicial Center pursuant to a contract approved by the Commission on November 19, 1996, with Brown and Root Building Company, in association with DelGallo-Morette. This vote occurred prior to any sponsorship funds being paid to B & W Productions by DelGallo-Morette. On November 24, 1998, upon motion by Respondent, the Commission unanimously approved a guaranteed maximum price on the Escambia County Control Booking and Detention Facility in the amount of $14,661,576 with Brown and Root Building Company, as the contractor, in association DelGallo-Morette and a total project cost of $16,054,682 relative to Contract PD 97-97.155. This vote occurred after the one-time sponsorship payment was made paid to B & W Productions by DelGallo-Morette. On March 18, 1999, the Commission approved amending Contract PD 95-96.113 with Brown and Root Building Company, in association with DelGallo-Morette, to increase the guaranteed maximum price of $900,000 to provide for additional costs for construction change orders and other items associated with renovation of the M.C. Blanchard Judicial Center Expansion Project. This item was unanimously approved as part of the Commission's Consent Agenda by a vote of 4-0. Respondent was absent and did not vote. With respect to each of the matters which were the subject of votes referenced in paragraph 37, neither Respondent nor B & W Productions provided any services to DelGallo-Morette. Nor did Respondent or B & W Productions have any responsibility for evaluating or inspecting DelGallo-Morette's performance under the contracts addressed by the votes. Neither Respondent nor B & W Productions provided any services with respect to any of the projects which were the subjects of those votes. Further, neither Respondent nor B & W Productions benefited in any manner from the votes of the Commission approving various items involving DelGallo-Morette. Respondent has never been employed or retained by DelGallo-Morette. Moreover, Respondent has never been engaged in a business enterprise with DelGallo-Morette as a partner, a joint venturer, a co-owner of property, or in a corporate entity whose shares are not listed on a national or regional stock exchange. Champion is a forest products company whose primary products are a variety of papers, lumber, and plywood. Champion has a contract with Escambia County for the disposal of ash at the landfill in exchange for natural gas. In August or September 1998, Respondent and Benson met with representatives of Champion to discuss sponsorship of the Lois and Mike Show. Benson made most of the presentation which focused on the negative public image of Champion in the community at that time. Champion's negative image resulted from Champion's planned wastewater discharge into Escambia Bay. The Escambia County Commission did not have regulatory jurisdiction over this issue. Rather, regulatory jurisdiction resided at the Department of Environmental Protection and the Environmental Protection Agency. Champion was a segment sponsor of the Lois and Mike Show for a year, beginning in September 1998 through September 1999, at a rate of $260 a month. As a segment sponsor, Champion paid $260 monthly. From October 1999 through December 1999, Champion paid $178.50 per month to sponsor the show and in December 1999, Champion paid $119 in sponsorship fees. After December 1999, Champion discontinued its sponsorship of the show. The following matters that came before the Escambia County Commission regarding Champion before and after it became a sponsor of the Lois and Mike Show: On July 28, 1999, the Commission approved retaining Chris H. Bentley, Esquire, to monitor and advise the Commission on Champion's permitting activities regarding discharge of treated wastewater into Escambia River. This item was unanimously approved by Commission upon motion seconded by Respondent. This vote occurred prior to any sponsorship funds being paid to B & W Productions by Champion and did not address any item which Champion had before the Commission. On September 22, 1998, the Commission amended its License Agreements with Champion for the period January 1, 1998, through December 31, 1998, to include installation of gas monitoring wells at various landfill sites which was inadvertently omitted from the prior approved agreements. This item was unanimously approved by the Commission, upon motion made by Respondent. This vote occurred prior to any sponsorship funds being paid to B & W Productions by Champion. On October 8, 1998, the Commission took two actions concerning Champion. First, it voted to accept, for filing in the minutes of the Commission, the "Escambia County Citizens' Executive Point Paper" regarding Champion's proposed discharge of wastewater into the Escambia River. This action was taken unanimously, upon motion seconded by Respondent. Second, the Commission voted to approve the staff's making a written request to Environmental Protection Agency's (EPA) "Technology Team" to evaluate the impact of Champion's proposed wastewater discharge into Escambia Bay relative to the request of the Escambia County Citizen's Coalition, Inc. This action was taken unanimously, upon motion made by Respondent. This vote occurred prior to any sponsorship funds being paid to B & W Productions by Champion and did not address any item which Champion had before the Commission. On November 5, 1998, the Commission discussed a proposal from the Department of Environmental Protection that Escambia County form a partnership with Santa Rosa County and the EPA for a unified peer review approach to Champion's proposed relocation wastewater discharge point and to analyze the processing of wastewater discharge permitted for Champion and its impact on Escambia Bay and Perdido Bay. The Commission voted unanimously to refer to DEP's proposal to the County's Department of Neighborhood and Environmental Services for analysis and recommendation. This vote occurred after sponsorship funds were paid to B & W Productions by Champion and did not address any item which Champion had before the Commission. On November 24, 1998, the Commission approved the renewal of four License Agreements with Champion for the operation of water quality monitoring and gas wells located at various landfill sites, for the period January 1, 1999, through December 31, 1999. This item occurred after sponsorship funds were paid to B & W Productions by Champion. On February 2, 1999, the Commission adopted a resolution urging Champion to use monies encumbered for construction and permitting of its proposed pipeline to the Escambia River to fund improvements to the effluent being dumped into Eleven Mile Creek. This item was approved by the Commission, by a vote of 3-2, with Respondent voting in the affirmative. This vote occurred after sponsorship funds were paid to B & W Productions by Champion and did not address any item which Champion had before the Commission. On April 8, 1999, the Commission authorized staff to negotiate the purchase of a parcel of property from Champion to be used as a district park. This item was unanimously approved by the Commission, upon motion made by Respondent, with Commissioner Boss absent. This vote occurred after sponsorship funds were paid to B & W Productions by Champion and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On April 22, 1999, the Commission amended a previously approved Qualified Industry Tax Refund Incentive for Champion's dimensional lumber production facility. This item was unanimously approved by the Commission, upon motion made by Respondent, with Commissioner Robertson absent. This vote occurred after sponsorship funds were paid to B & W Productions by Champion and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On June 22, 1999, the Commission adopted an ordinance establishing an economic development ad valorem tax exemption for Champion for its expansion of its Pensacola Mill located in Cantonment and for its hiring of additional employees. (Champion had expended $40 million in improvements at the facility that resulted in increased production and employment.) An employee of Champion met individually with Respondent as well as other members of the Commission to discuss this issue. The value of the ad valorem tax exemption to Champion was $1.8 million spread over 6.9 years. This item was unanimously approved by the Commission. This vote occurred after sponsorship funds were paid to B & W Productions by Champion and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On July 15, 1999, the Commission approved the purchase of real property for a park from Champion for $375,000. This item was approved as part of the Commission's Consent Agenda by a vote of 4-0, with Respondent absent. With respect to each of the matters which were the subject of votes referenced in paragraph 43, neither Respondent nor B & W Productions provided any services to Champion. Nor did Respondent or B & W Productions have any responsibility for evaluating or inspecting Champion's performance under the items addressed by the votes. Neither Respondent nor B & W Productions provided any services with respect to any of the matters which were the subject of these votes. Neither Respondent nor B & W Productions benefited in any manner from the votes of the Commission on these items involving Champion. Respondent had no interest in the real property which the Commission directed staff to negotiate with Champion regarding purchase by the county. Respondent has never been employed or retained by Champion. Moreover, Respondent has never been engaged in a business enterprise with Champion as a partner, a joint venturer, a co-owner of property, or in a corporate entity whose shares are not listed on a national or regional stock exchange. Respondent was present and voted in favor of all of the issues involving sponsors as set forth in paragraphs 25, 31, 37, and 43 above, except as otherwise noted. All of the aforementioned sponsors paid for the sponsorship of the Lois and Mike Show. Furthermore, two of these sponsors, Baskerville-Donovan and Champion, continued to make monthly sponsorship payments in months just before, as well as after the votes, in the amounts of $200 and 260, respectively. Since the sponsorships reduced the personal contributions that had to be made by Respondent and his business associate, Benson, for the airing of the Lois and Mike Show, they directly benefited from money received from sponsors who did business with and regularly appeared before the Escambia County Commission. The facts show that all four of the above-mentioned sponsors were doing business with the Escambia County Commission and that both Baskerville-Donovan and Champion made sponsorship payments for the Lois and Mike Show during this interim period after dissolution but prior to the time that Respondent transferred his interest in the show to Lois Benson. Neither Respondent nor Benson believed that soliciting sponsorship from businesses that appear before the Escambia County Commission for a vote was a conflict. However, Respondent's contractual relationship with B & W Productions, and its interest in the Lois and Mike Show, his direct solicitation of sponsorships from businesses appearing before the County Commission, and Respondent's and B & W's dependence upon funds derived from those sponsors, constituted a continuing and frequently recurring conflict between Respondent's private interests and the performance of his public duties as a member of the Escambia County Commission.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Ethics Commission enter a final order and public report finding that Respondent, David Whitehead: (1) did not violate Section 112.3143(3)(a), Florida Statutes; and (2) violated Section 112.313(7)(a), Florida Statutes. It is further recommended that for the violation of Section 112.313(7)(a), Florida Statutes, the Commission impose a civil penalty of $2,000 against Respondent and issue a public censure and reprimand. DONE AND ENTERED this 15th day of August, 2000, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD 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 15th day of August, 2000. COPIES FURNISHED: James H. Peterson, III, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Mark Herron, Esquire Akerman, Senterfitt & Edison, P.A. 301 South Bronough Street, Suite 200 Tallahassee, Florida 32801 Sheri L. Gerety, Agency Clerk Florida Commission on Ethics 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Philip C. Claypool, General Counsel Florida Commission on Ethics 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Bonnie J. Williams, Executive Director Florida Commission on Ethics 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709
The Issue Whether or not Petitioner, James P. Appleman, "willfully" violated Subsections 106.021(3), 106.07(5), and Section 106.1405, Florida Statutes, as alleged by Respondent, Florida Elections Commission, in its Order of Probable Cause; and whether or not Petitioner, James P. Appleman, "knowingly and willfully" violated Subsections 106.19(1)(c) and (d), Florida Statutes, as alleged by Respondent, Florida Elections Commission, in its Order of Probable Cause.
Findings Of Fact Based on the testimony and demeanor of the witnesses, documentary evidence, record of proceedings, and the facts agreed to by the parties in the Joint Pre-hearing Stipulation, the following Findings of Fact are made: In 2000, Petitioner was reelected to the office of State Attorney, Fourteenth Judicial Circuit. Prior to his reelection in 2000, Petitioner had been elected to the same office in 1980, 1984, 1988, 1992, and 1996. Petitioner, on February 1, 1999, signed a Statement of Candidate indicating that he had received, read, and understood Chapter 106, Florida Statutes. During the 2000 campaign, Petitioner made the following purchases using his personal funds in the form of cash, check or charge upon his personal credit card: a. Purchase 1: 7/12/99 Down payment/purchase of vehicle- $525.00 b. Purchase 2: 7/12/99 Purchase of vehicle/tax and title-$602.85 c. Purchase 3: 1/07/00 Bay Pointe Properties-$100.35 d. Purchase 4: 1/13/00 Delchamps Liquors-$58.50 e. Purchase 5: 1/22/00 Delchamps Liquors-$135.10 f. Purchase 6: 1/22/00 Cafe? Thirty A-$144.11 g. Purchase 7: 1/30/00 Pineapple Willy's-$17.45 h. Purchase 8: 5/05/00 Skirt/Jones of New York-$104.00- blouse/Jones of New York-$63.00 i. Purchase 9: 5/09/00 Tie/Dillards-$30.00-tie/Dillards- $40.00-misc. Big & Tall/Dillards- $8.75 j. Purchase 10: 5/23/00 Blazer/Polo Store-$199.99-short sleeve shirt/Polo Store-$39.99- short sleeve shirt/Polo Store- $39.99-short sleeve shirt/Polo Store-$39.99-shorts/Polo Store- $29.99 k. Purchase 11: 5/05/00 Casual bottoms/Brooks Brothers- $34.90-casual bottoms/Brooks Brothers-$34.90 casual bottoms/Brooks Brothers-$34.90 l. Purchase 12: 5/05/00 Shorts/Geoffrey Beene-$24.99- shorts/Geoffrey Beene-$24.99 m. Purchase 13: 5/05/00 Sport coat/Dillards-$195.00 n. Purchase 14: Telephone expense-$23.49 o. Purchase 15: 8/11/00 Tie down/Wal-Mart-$19.96-security chain/Wal-Mart-$19.26 p. Purchase 16: 8/11/00 Trailer hitch ball-$16.99 q. Purchase 17: 8/12/00 Event admission-$60.00 r. Purchase 18: 8/23/00 Liquor purchase/Delchamps-$37.41 s. Purchase 19: 8/30/00 Gas purchase/Shop a Snack-$20.00 t. Purchase 20: 8/30/00 Event admission-$40.00 u. Purchase 21: 8/30/00 Event admission/DEC-$15.00 v. Purchase 22: 8/26/00 Sign charge-$20.64 w. Purchase 23: 8/30/00 Auto insurance charge-$100.00 x. Purchase 24: 9/02/00 Gas purchase/Happy Stores-$34.00 y. Purchase 25: 9/02/00 Campaign staff/meal/food-$140.00 z. Purchase 26: 9/04/00 Ice purchase/Winn Dixie-$6.36 aa. Purchase 27: 9/05/00 Gas purchase/Swifty Store-$25.00 bb. Purchase 28: 9/06/00 Meal purchase/ St. Andrews Seafood House-$27.52 cc. Purchase 29: 9/08/00 Posthole digger-$42.90 dd. Purchase 30: 9/08/00 Lunch for sign crew-$20.14 None of these purchases were individually listed on Petitioner's Campaign Treasurer's Reports. Petitioner was reimbursed for each of the above- referenced expenditures by a check written on the campaign account, which was listed as an expenditure on Petitioner's Campaign Treasurer's Reports filed with the Division of Elections as follows: Date Name and Address of Person Receiving Reimbursement Purpose Amount 07-17-99 Appleman, Jim PO Box 28116 Panama City, FL 32411 02-11-00 Appleman, Jim PO Box 28116 Panama City, FL 32411 Reimb. Cmpgn. Vehicle Expenses Reimb. Cmpgn. Expenses $1,127.85 $830.81 06-10-00 Appleman, Jim PO Box 28116 Panama City, FL 32411 08-07-00 Appleman, Jim PO Box 28116 Panama City, FL 32411 Reimb. Cmpgn. Expenses Reimburse vehicle & Phone exp. $1,000.00 $400.00 08-30-00 Appleman, Jim PO Box 28116 Panama City, FL 32411 09-08-00 Appleman, Jim PO Box 28116 Panama City, FL 32411 Reimbursement/ Campaign Expense Reimbursement Camp. Expense $670.51 $295.92 On July 18, 2000, a campaign check for $140.99 was written to Winn Dixie. This check was reported on Petitioner's Campaign Treasurer's Report with the purpose listed as being "Campaign Social Supplies." The Winn Dixie purchase included the following items: A cat pan liner. 4 cans of cat food. A box of dryer sheets. A package of kitty litter. f. A jug of laundry detergent. The total cost of these items was $33.88. Petitioner signed all of his Campaign Treasurer's Reports, certifying as to their accuracy. The July 18, 2000, purchases at Winn Dixie were made by Mrs. Appleman, Petitioner's wife, and were a result of an inadvertent error. Immediately realizing that she had purchased personal items with campaign funds, she brought the matter to Petitioner's attention. Petitioner took possession of the Winn Dixie cash register receipt for the purchases; on the receipt he circled the inappropriate purchases with a pen, noted the total amount of inappropriate purchases on the receipt adding his initials, submitted the cash register receipt to his campaign treasurer, and several days later wrote a check reimbursing the campaign for the inappropriate purchases. During the campaign, Petitioner made 30 purchases listed in paragraph 3, supra, with personal funds, i.e., cash, personal check, or personal credit card, for which he provided receipts, and sought and received reimbursement from campaign funds by campaign check. These 30 purchases were not individually reported as expenditures on Campaign Treasurer's Reports during the reporting periods during which the purchases were made, but were reported as reimbursements as reflected in paragraph 4, supra. No evidence was presented that suggested that Purchases 3-7, Purchase 14, Purchases 17-22, or Purchases 24-30 listed in paragraph 3, supra, were not for campaign-related purposes. During the April 1 through June 30, 2000, campaign reporting period, Petitioner purchased 16 items of clothing (listed in paragraph 3, supra, as Purchases 8-13) for which he received reimbursement from campaign funds by campaign check. Petitioner and his wife testified that these items of clothing were used exclusively for campaign functions and purposes. Admittedly, each of the items of clothing could be used for non- campaign functions and purposes. However, the Campaign Treasurer's Reports reflect that in excess of $1,100 of "campaign shirts" were purchased during the campaign, supporting Petitioner's contention that he, his wife and campaign workers were all attired, while campaigning, in a color-coordinated "uniform of the day": red shirts, and tan/khaki trousers or walking shorts. This is further supported by photographs admitted into evidence. I find credible and accept the testimony of Petitioner and his wife that the items of clothing in the questioned purchases were used exclusively for campaign functions and purposes and not to "defray normal living expenses." During the August 12 through August 31, 2000, campaign reporting period, Petitioner purchased the following items for which he received reimbursement from campaign funds by campaign check: trailer hitch ball, trailer security chain, and sign tie-downs (listed in paragraph 3, supra, as Purchases 15 and 16). These three items were clearly used for campaign purposes and not to "defray normal living expenses." On August 30, 2001, Petitioner received a campaign check from the campaign treasurer reimbursing him for several campaign expenses he had paid. Among these campaign expenses, Petitioner sought reimbursement for $100 for "auto insurance" (listed in paragraph 3, supra, as Purchase 23). From the onset of his campaign, Petitioner had consistently either paid his automobile liability insurer, United Services Automobile Association, directly with a campaign check or sought reimbursement for payments he personally made for liability insurance on his personal vehicle or the "campaign Jeep" for automobile liability insurance cost attributable to the use of the motor vehicles in the campaign. Automobile liability insurance expense is a legitimate campaign expense and can reasonably be considered an actual transportation expense exempt from the statutory prohibition against payments made to "defray normal living expenses." On July 12, 1999, Petitioner purchased a 1997 Jeep to be used as a campaign vehicle (the down payment, tax and tag are listed in paragraph 3, supra, as Purchases 1 and 2); thereafter, loan payments to Tyndall Federal Credit Union and automobile liability insurance payments to United Services Automobile Association for the campaign vehicle were paid by the campaign treasury. On December 7, 1999, the 1997 Jeep was sold/traded to a third party for a 1999 Honda which was not used as a campaign vehicle. The Tyndall Federal Credit Union lien was transferred to the 1999 Honda. After December 7, 1999, the 1999 Honda was driven by Petitioner's adult stepdaughter. At the time of the transfer of the vehicles, Petitioner and his wife agreed that she would reimburse the campaign $800 which was determined to be the value lost by the campaign when the 1997 Jeep was traded. Petitioner later determined that he should reimburse the campaign an additional $525, the amount of the down payment paid when the 1997 Jeep was purchased in July 1999. On June 2, 2000, Petitioner's wife tendered a personal check drawn on her personal account to the campaign account for $800, which was reported under an entry date of June 5, 2000, on the Campaign Treasurer's Report for the period ending June 30, 2000, as a "REF" made by Petitioner. On March 14, 2001, Petitioner tendered a personal check to the campaign account for $617. This included $525 for the 1999 Jeep down payment reimbursement and an automobile liability insurance refund. Prior to the June 5, 2000, "REF" entry on the Campaign Treasurer's Report, there had been no report reflecting the sale of the campaign vehicle. The sale of the 1999 Jeep should have been reported on the Campaign Treasurer's Report for the period ending December 31, 1999; it was not. Petitioner certified that he had examined the subject Campaign Treasurer's Report and that it was "true, correct and complete" when, in fact, it was not as it did not reflect the sale of the campaign vehicle or the failure of Petitioner to pay the campaign treasury either $800 or $1,325, the amount Petitioner ultimately determined the campaign treasury should have been reimbursed as reflected by his late reimbursements.
Recommendation Based upon the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Florida Elections Commission enter a final order finding that Petitioner, James P. Appleman, violated Subsection 106.07(5), Florida Statutes, on one occasion and Subsection 106.19(1)(c), Florida Statutes, on one occasion and assess a civil penalty of $1,000 for the violation of Subsection 106.07(5), Florida Statutes, and a civil penalty of $2,400 for violation of Subsection 106.19(1)(c), Florida Statutes; and dismissing the remaining alleged violations of Chapter 106, Florida Statutes, against him as asserted in the Order of Probable Cause. DONE AND ENTERED this 15th day of April, 2002, in Tallahassee, Leon County, Florida. JEFF B. CLARK 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 15th day of April, 2002. COPIES FURNISHED: David F. Chester, Esquire Florida Elections Commission 107 West Gaines Street Collins Building, Suite 224 Tallahassee, Florida 32399-1050 Mark Herron, Esquire Messer, Caparello and Self, P.A. Post Office Box 1876 Tallahassee, Florida 32302-1876 Barbara M. Linthicum, Executive Director Florida Elections Commission The Collins Building, Suite 224 107 West Gaines Street Tallahassee, Florida 32399-1050 Patsy Rushing, Clerk Florida Elections Commission The Collins Building, Suite 224 107 West Gaines Street Tallahassee, Florida 32399-1050
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 issues are whether either Respondent committed violations of Chapter 106, Florida Statutes, and, if so, what penalties should be imposed.
Findings Of Fact Ms. Valliere is a county commissioner for Martin County. She was first elected in the fall of 2002 and re- elected in the fall of 2006. The case against her involves the primary campaign for the 2006 election, which was held on September 5, 2006. She won this race and faced no opposition in the general election. Mr. Valliere is the husband of Ms. Valliere. He has a law degree from the University of Chicago. After graduating from law school, he worked as a patent lawyer in Chicago for 15-20 years before joining a private company in Iowa engaged in the manufacture of computer products. Mr. Valliere served for several years as vice-president and general counsel of this small company. He is not a member of The Florida Bar and no longer practices law. In 1988, Mr. and Ms. Valliere, who had been working as a paralegal for the same Iowa computer-product manufacturer, moved to Stuart, combining their families from previous marriages. Mr. Valliere essentially retired, although he attended to some personal litigation after arriving in Florida. Ms. Valliere raised the children and assisted Mr. Valliere in the litigation with which he was involved. As the children aged, Ms. Valliere set up a small business, with which Mr. Valliere assisted. After the children had grown, Ms. Valliere entered local politics, running for a seat on the county commission in 2002. She and her husband had no prior experience in these matters, but Ms. Valliere drew on community support to aid in her effort, and she successfully unseated the incumbent. For two months during the summer of 2002, Ms. Valliere served as the treasurer of her campaign, but she eventually found someone else to assume these duties, although their official roles remained, respectively, treasurer and deputy treasurer. In October 2002, due to problems with their relationship, Ms. Valliere began to live apart from Mr. Valliere, although they are still married. After this separation, persons initiated litigation concerning Ms. Valliere's actual residence, and she formed a trust to fund her legal costs in defending the litigation. In connection with this defense, Ms. Valliere retained local attorneys, Virginia Sherlock and Howard Heims. Approximately 250 supporters contributed $20,000 to $25,000 to Ms. Valliere's legal-defense fund, which was administered by three trustees, none of whom was Mr. Valliere. During the course of the litigation, Mr. Valliere voluntarily performed legal research for use by Ms. Sherlock, with whom he met frequently to discuss the case. Ms. Valliere prevailed in the residency litigation, and she later prevailed in an abuse-of-process action against the persons who had initiated the earlier litigation. This resulted in a cash settlement in May 2005. Ms. Valliere was prepared to return the funds to the 250 contributors to the legal-defense fund, but Mr. Valliere saw this as an opportunity to fund Ms. Valliere's re-election campaign. Ms. Valliere was unsure whether she would run for re- election, but did not stop Mr. Valliere from soliciting the contributors to her legal-defense fund. However, she secured his promise that, if she did not run for re-election, Mr. Valliere would return all of the money. In May 2005, Mr. Valliere formed the political committee, CCMC. Mr. Valliere then contacted the contributors to the legal-defense fund, and 150 of them agreed to allow their contributions to be transferred to CCMC. After this, CCMC received small amounts of money until Mr. Valliere actively solicited funds. Overall, CCMC raised and spent about $34,000, as compared to about $86,000 raised and spent by Ms. Valliere's political campaign. Mr. Valliere appointed himself as the chair and treasurer of CCMC, whose sole purpose was to promote the re- election of Ms. Valliere in the 2006 election. He also named a finance committee, which never met. For all purposes, Mr. Valliere was the sole means through which CCMC acted; he raised funds, completed and filed reports, and made arrangements with vendors for the production of campaign products. About the only thing that Mr. Valliere did not do for CCMC was computer design work. Count 83 against Mr. Valliere alleges that, in May 2005, he falsely reported in the CCMC organizational paperwork that Robert Lennon was a member of the committee when he was not. This allegation is true. It is unlikely that Mr. Valliere incorrectly thought that Mr. Lennon was on the committee when he was not, at least where Mr. Valliere offers no plausible explanation of how the error arose. Moreover, Mr. Valliere's disturbing references to "we" and "I" (Tr., pp. 72-73), which refer to the legal-defense fund, of which he was not even one of the trustees, suggest a disregard for the substance of the entities with which Mr. Valliere was dealing at the time of the formation of CCMC. It is thus clear that the requisite of naming a finance committee was mere paperwork that Mr. Valliere dutifully completed, and the misstatement of the name of an acquaintance as a member of the committee was wilful or, were it not wilful, an act of conscious culpability. In September 2005, tension emerged between Mr. and Ms. Valliere concerning CCMC and Ms. Valliere's plans. As Ms. Valliere explained, she did not finally decide to run until she filed the papers the following April. The tension arose from two sources: her feeling that Mr. Valliere's efforts were premature and his attempt to force her to run and her concern that, if she did run, her campaign and Mr. Valliere's political committee would be competing for the same funds. The latter point proved an issue, as potential contributors felt that they had already contributed to Ms. Valliere's campaign if they had already given to Mr. Valliere's political committee. At this time, Ms. Valliere wrote Mr. Valliere a note that complained that he was pressuring her to run, and she wanted the CCMC money, which had been obtained from the legal defense fund contributors, returned to the contributors. Shortly after delivering this note, Ms. Valliere had an argument with Mr. Valliere about this matter and did not speak to him for at least three weeks, although they agreed at least that CCMC would return the money if Ms. Valliere chose not to run. In October 2005, Mr. and Ms. Valliere had lunch, and she told him he could do what he wanted with CCMC, and she would do what she wanted to do with her political campaign. Mr. Valliere admits to being controlling and manipulative. These admissions are accepted and will largely suffice for purposes of this Final Order. The relationship between Mr. and Ms. Valliere from April through August 2006 is the pivotal issue for the myriad campaign finance violations alleged in these cases. Mr. Valliere obviously tries to control and manipulate, prompting persons dealing with him to document discussions with him. He is intense, hyperactive, apparently accustomed to getting his own way, and likely relentless in bending exchanges or transactions to conform to his will or understanding. In general, the likelihood of a firewall between a husband and wife, so as to preclude attributing the acts and omissions of the husband to the wife, may be low, but the determination depends on the facts of a given case. Here, it is a particularly complex determination because the period in question may not be representative of the longer relationship that has existed between Mr. and Ms. Valliere. It is also a complex determination because, as Mr. Sorenson described the Vallieres' relationship during the campaign, it was "weird," a "love-hate thing." However, two credible, independent witnesses confirm that, in April and late June, Ms. Valliere was upset to the point of tears with her husband about relationship issues that transcended mere differences in whether or how she would run for re-election to a seat on the county commission. Nothing in the record suggests a reconciliation in the ensuing two months, so as to provide a firmer basis on which to infer coordination between the political campaign and the political committee. To the contrary, from Ms. Valliere's perspective, as she testified during her deposition, she decided to go it alone and handle her campaign pretty much herself. After spending many hours in hearing with Mr. Valliere, the Administrative Law Judge finds it highly likely that, at various times during the campaign, Ms. Valliere was fed up with him, aggravated with him, and estranged from him. It is equally unlikely that Mr. Valliere would be deterred by Ms. Valliere's feelings about his actions, ostensibly on his wife's behalf. It is impossible to say on this record that it is likely, but it certainly is plausible, that, except where directly prohibited or ordered to act, as noted in the few instances below, Mr. Valliere was obstinately going to attend to the myriad, detailed tasks that he had set for himself in his political committee, regardless of his wife's desire, consent, or even knowledge. In November 2005, Mr. Valliere entered into a contract with his son, Jonathan, a young adult, who spent considerable time with Mr. and Ms. Valliere separately, but did most of his computer design work at Ms. Valliere's condominium, at least after April 2006. The contract called for Mr. Valliere's son to perform certain computer design work, for which he has a recognized talent, on behalf of CCMC, but prohibited him, under pain of nonpayment, from disclosing any of his work to Ms. Valliere. The work was for large signs, yard signs, vehicle banners, and billboard banners. Over the next couple of months, Jonathan completed the design work, by the agreed-upon deadlines, for all of the items. In February and March 2006, Jonathan completed design work for large campaign signs. Ms. Valliere remained ambivalent about running, but she attended a candidate training session during this period. In March 2006, Jonathan completed design work on small yard signs. In the first week of April, he completed the design work on a sign proclaiming that Ms. Valliere supported a controversial local bridge project, but not advocating the election of Ms. Valliere or defeat of her opponent. April proved to an eventful month for Mr. and Ms. Valliere. On April 23, Ms. Valliere filed the materials necessary to run for re-election, and she designated Kirk Sorenson as her campaign manager or, with her, co-manager. About ten days earlier, Ms. Valliere hosted Mr. Valliere and attorneys Sherlock and Heims for a pizza dinner at her condominium. The purpose of the meeting was mostly to try to enlist the support of Ms. Sherlock and Mr. Heims for Ms. Valliere's re-election. During the course of the meeting, Mr. Valliere showed Ms. Sherlock and Mr. Heims a sign that he and Jonathan had prepared for the campaign and discussed the other signs for which Mr. Valliere had assumed responsibility. Mr. Valliere prided himself in his sign work. He was the first in Martin County to use a sign on material that stretched over an entire motor vehicle. It does not appear that his conversation about the signs established coordination between CCMC and the campaign concerning signs. Design work was complete, although it could still be changed and little production had taken place. However, nothing suggests that the role of Ms. Valliere, while Mr. Valliere proudly described his work to her guests, was any more than that of a dutiful wife listening to her husband extol his own virtues at a party. While it is true that Mr. Valliere's conversation would have communicated to Ms. Valliere that CCMC's efforts would be focused on signs, this hardly qualifies as meaningful coordination for three reasons: first, Mr. Valliere would likely emphasize signs because he viewed them as his specialty; second, Mr. Valliere had already begun posting signs around town and would very soon post many more; and third, Mr. Valliere's emphasis on signs would have been apparent to Ms. Valliere, regardless of the pizza party, because Ms. Valliere was taking a more measured approach to the campaign and had reasonably chosen to start up promotional activities closer to the primary, while Mr. Valliere had hit the ground running. It is as likely as not that the sign in her condominium was actually a point of irritation for Ms. Valliere. Two or three days before the pizza dinner, Mr. Valliere and Jonathan had placed 6-12 campaign signs in various locations, such as a local Wal-Mart, where they could be seen by voters. They placed one against some bushes in the parking lot of Ms. Valliere's condominium. When she saw it, she called Mr. Valliere and, learning of his placement of the other signs, ordered him, ”Get the damn signs down." Within a few days, Mr. Valliere and Jonathan removed all of the signs--Jonathan taking the one by Ms. Valliere's parking spot upstairs into her condominium where Ms. Sherlock and Mr. Heims later saw it. There is no reason to doubt the Vallieres' version of this event. Ms. Valliere believed that local voters would resent a candidate whose signs came out too early, and she was not fully decided about running again, so she viewed the signs as an attempt to manipulate her by Mr. Valliere. Starting in mid to late April, Ms. Valliere and Mr. Sorenson met to discuss her campaign. Her 2002 campaign had involved many volunteers. Although grateful for their efforts, Ms. Valliere wished to avoid the organizational challenges that such a grassroots effort presented, so she did not wish to involve nearly as many volunteers in 2006. In their early meetings at least, Ms. Valliere expressed her frustration that Mr. Valliere's involvement with CCMC prevented his participation with her campaign directly. However, unable to obtain as her treasurer the woman who had served in that role in the 2002 campaign, and evidently unwilling to assume the duties again herself, Ms. Valliere approached Mr. Valliere about serving as the campaign treasurer, after discussing this matter with Mr. Sorenson. Ms. Valliere felt that she had no one else available for the position, and she showed Mr. Sorenson a copy of the statute, discussed below, that permits one person to serve in the campaign and a political committee. After initially expressing reluctance about his ability to serve both entities, Mr. Valliere studied the statute that expressly permits such dual service and agreed to do so, limiting himself, at least initially, to checking the post office box daily for checks, making deposits, writing checks, preparing reports, and similar administrative tasks. As he had done with his son, so he did with his wife: Mr. Valliere drew up a contract for him and his wife that would confirm that his campaign duties would be ministerial. Mr. Valliere agreed with Ms. Valliere and Mr. Sorenson that the statute would allow him to serve as the campaign treasurer as long as he did not get involved in substantive decisionmaking for the campaign. Ms. Valliere and Mr. Sorenson discussed campaign issues, particularly how to raise money. They concentrated on direct mailing with some newspaper ads to solicit funds. Much of the work of Ms. Valliere and Mr. Sorenson involved his review of her ideas, presented in the form of sketches and text for various types of campaign literature and ads. Mr. Sorenson would make suggestions about language and graphics, such as photographs, to be used in ads or campaign literature. They then used Jonathan to produce on his computer finished ad copy, which Ms. Valliere and Mr. Sorenson would then revise, until they agreed upon the final form. When discussing signs, in June, Ms. Valliere and Mr. Sorenson agreed that yard signs would not be needed until about one month prior to the primary election. They worked on a sign design, which featured a yellow background, which contrasted with the blue background on the signs produced by CCMC. However, by early July, Ms. Valliere and Mr. Sorenson saw the CCMC signs that were appearing all over the county, so they decided not to produce any signs. CCMC enlisted the aid of local firefighters who had volunteered their time to place about 150 of the large signs and 500 of the yard signs throughout the county. Although the brunt of their effort resulting in sign deployment in mid to late July, signs were placed in the county prior to that time. Because Mr. Valliere focused his efforts almost exclusively on signs, this clear allocation of tasks--the political committee handling the signs, and the political campaign not using signs--requires close consideration of whether there was coordination between the political committee and political campaign. Obviously, Jonathan would have been a convenient vehicle for communications between the two camps concerning signs. However, two factors militate against coordination on this issue. First, Ms. Valliere and Mr. Sorenson agreed that, as an incumbent, she had name recognition and did not need to rely as much on yard signs. Second, according to the testimony of another local political candidate, who did not use yard signs, local campaigns sometimes do not use yard signs at all. Overall, Ms. Valliere disapproved of the number of signs that Mr. Valliere placed throughout the county. In her discussions with Mr. Sorenson, she consistently stated her desire to emphasize television and newspapers, rather than yard signs. The difficulty in describing the relationship of Mr. and Ms. Valliere, as noted above, extends to trying to determine the extent to which she could control his actions during the campaign, which spanned only the months of May, June, July, and August. As noted above, in early April, before she filed her papers, she could, and did, order him to remove signs that he had already placed in public places. At that time, she had the leverage with Mr. Valliere of possibly deciding not to run. Two other transactions cast additional light on the extent to which Ms. Valliere could cause Mr. Valliere to act. One involves the firefighters, who supported Ms. Valliere due to her support of firefighting issues during her first term. The firefighter who testified stated that they decided to support Ms. Valliere in early June. He then called Ms. Valliere and offered their customary help in assembling and placing signs. One to two weeks later, Mr. Valliere called the firefighter and told them his political committee was handling the signs, and they must not communicate anything about the signs with Ms. Valliere. Working with Mr. Valliere, the firefighters deployed the signs in July. The most likely inference is that Ms. Valliere told Mr. Valliere to call the firefighters due to their offer to help with signs. As in the next transaction, Ms. Valliere could have handled this matter better, such as by telling the firefighters that her campaign was not going to use signs, but they might contact CCMC to see if it was. However, for the reasons noted above in connection with the pizza party, Ms. Valliere already knew, by means not suggestive of unlawful coordination, that CCMC was going to do signs, so a mere mention of the firefighters' offer to her husband, while suggestive of coordination, does not establish the level of coordination that robs the political committee's expenditures of their independent status. The other transaction arises from a home meeting on July 24, 2006, of political candidates and persons traditionally involved in local politics and community issues. Someone asked Ms. Valliere about the placement of her signs in proximity to the signs of another candidate--evidently, given the politics of the other candidate, the physical proximity implied a philosophical proximity with which Ms. Valliere would be uncomfortable. Rather than answer the criticism by saying merely that a political committee had arranged for the placement of those signs and the questioner could take it up with Mr. Valliere, Ms. Valliere replied by saying that the firefighters had erected the signs, but she would speak to Mr. Valliere and Jonathan about separating them. Ms. Valliere's handling of the sign-proximity issue suggests, but it remains necessary to analyze the entire transaction in context. She evidently had the authority to contact Mr. Valliere and tell him to ensure a minimum spacing of her signs from the signs of other candidates. Her leverage in this transaction is harder to find than in the initial transaction, in which she told her husband to take the "damn" signs down with the implied threat of not filing to run, or in the next transaction, in which she called to her husband's attention a potentially serious mistake that he had made with the design of the signs. However, if a firefighter had placed a sign in front of a strip club or abortion clinic, Ms. Valliere could have "coordinated" with Mr. Valliere (i.e., told him to get those "damn" signs down too) without jeopardizing the independence of the expenditures of the political committee in producing and deploying the signs. All of these transactions describe elements of coordination, but not of such an extent as to cause the CCMC expenditures to fail the test of independence. The final transaction between Ms. and Mr. Valliere concerning signs arose in mid to late August. At this time, Ms. Valliere testified that she first noticed that the CCMC signs bore the following disclaimer: "Paid Political Advertisement by Citizens Committee of MC; approved by Susan Valliere, Republican, District #2." She ordered Mr. Valliere to fix the signs because she had not approved them. Jonathan seems to have designed a label that could be placed over the offending disclaimer, and Mr. Valliere, with the help of local firefighters, was able to have about 90 percent of the offending signs, according to Mr. Sorenson, altered to cover up the disclaimer. Jonathan plausibly claims responsibility for adding the disclaimer, borrowing it from the signs used in the 2002 campaign, although Mr. Valliere certainly read the sign language in its entirety prior to production. No evidence suggests that Ms. Valliere approved the signs, although she had read the signs once they were placed in the community. They involved her. They were produced by her husband, with whom she had had sharp differences over his approach to her campaign. They had been out in the community for over two months before she voiced her displeasure with the disclaimer. Ms. Valliere never disapproved of the disclaimer because, as a matter of fact, she did approve of the signs--not in advance of their production and placement, but after they were placed in the community. What changed a couple of weeks before the election is that, as a matter of law, she realized that she risked linking her campaign with Mr. Valliere's political committee by allowing the signs to contain the offending disclaimer. But accepting the benefits of the products of the political committee is not coordinating with it. Any candidate accepts the benefits of the political committee working, independently, to promote the candidate. On occasion, Ms. Valliere would wave a sign produced by CCMC or appear at an event wearing a CCMC-produced T-shirt. Similarly, she could, without establishing coordination, accept the fruits of the unrelated labors of her husband and stepson, as she did at the Stuart's Women's Club in late August 2006, when Mr. Valliere actively campaigned among the crowd and Jonathan photographed the event, presumably for promotional purposes. Neither of these acts, from the perspective of the husband and stepson, had anything to do with CCMC. In its name, CCMC placed orders with vendors for all of the political products, such as signs and T-shirts; vendors invoiced CCMC for all of these items, and CCMC paid these invoices with CCMC checks. All of these transactions were completed without the advance knowledge or approval of Ms. Valliere, directly or indirectly, such as through Jonathan or Mr. Sorenson. Nor did CCMC pay for any of the obligations of the political campaign. As campaign treasurer, Mr. Valliere obtained quotes for the campaign from various vendors, if instructed to do so by Ms. Valliere. He sometimes served as a communications intermediary between vendor representatives and Ms. Valliere or Mr. Sorenson. He even signed off on some proofs of flyers and direct mailings and became intimately involved in the scheduling of some promotional products. Although, in such acts, Mr. Valliere was exercising more than the ministerial authority of a campaign treasurer, he was not coordinating between the political committee and the political campaign; he was only ensuring that the campaign received good value for its expenditures. Likely to the relief of many, CCMC disbanded on October 12, 2006. Ms. Valliere wilfully failed to sign and certify as correct the two campaign treasurer's reports cited in Counts 1 and 2. As noted below in the Conclusions of Law, the wilfulness requirement applies to certifying an incorrect report. From the language of the statute, the failure to sign and certify a report is strict liability, but, in an abundance of caution, the findings address whether the failure to sign and certify was wilful. The campaign treasurer report for 2006 Q2 was due on July 10, 2006, and covered April 1 through June 30, 2006. Due to a problem in the original report, Mr. Valliere had to file an amended campaign treasurer's report and did so on July 26, 2006--without Ms. Valliere's signature because the amended report was prepared in the office of the Supervisor of Elections. Mr. Valliere testified that he never informed Ms. Valliere about the amended report and the requirement that she sign it. This is untrue. First, Ms. Valliere had served as her own treasurer in the previous election and is well-versed in the requirements of Chapter 106, Florida Statutes, so she knew that she had reports due when they were due. Also, a failure to report the amended report would be out of character for Mr. Valliere, who takes obvious pride in his attention to details. He had very little in the way of responsibilities in the political campaign, and the inference is inescapable that he informed Ms. Valliere about this problem. In fact, exactly what he told her is probably revealed by the situation surrounding the other campaign treasurer's report that is missing Ms. Valliere's signature. The campaign treasurer's report for 2006 F3 was due on September 1, 2006. Hurrying out of town on personal business, Mr. Valliere filed this report, again without Ms. Valliere's signature. On his trip, he realized that the filed report had an error in it, so he called Ms. Valliere and instructed her not to sign the report filed on August 31, but to wait for a three- day letter from the Supervisor of Elections, as provided by Section 106.07(2)(b)1, Florida Statutes, which is discussed in the Conclusions of Law. In the meantime, by regular mail, Mr. Valliere mailed a corrected report on August 31, but Ms. Valliere did not sign that one either. On several occasions, the Assistant Supervisor of Elections for Martin County asked Mr. Valliere to have Ms. Valliere come in and sign the reports, but Ms. Valliere never did so until March 2007, after a complaint had been filed. Ms. Valliere testified that she did not sign and certify the reports because her husband said she did not have to, but, on his advice, waited for the three-day letter. Ms. Valliere admitted that she never asked for this letter until after the complaint had been filed against her; by then, the Supervisor of Elections declined to issue the letter. However, this record offers no support for a finding that Ms. Valliere relied on her husband's advice, but instead wilfully declined to sign and certify these two reports. By the time of the second incorrect report that required amendment, Ms. Valliere had discovered that her husband had made a serious error in the preparation of the disclaimer on the signs, as well as two errors that required amending campaign treasurer's reports. Even without this knowledge, Ms. Valliere would not have accepted the advice of her husband because she had cut the strings from her husband during this campaign and was herself handling the campaign responsibilities. As this fact shields her from responsibility for dozens of campaign expenditures, so it exposes her to liability for the two reports that she refused to sign and certify in an act of wilful disobedience to the law and, were it not, an act of conscious culpability (again, assuming that a complete failure to sign and certify a campaign treasurer's reports, as distinguished from certifying incorrect reports, even requires a finding of wilfulness). The sole remaining filing count against Mr. Valliere is Count 1. The 2006 F3 campaign treasurer's report certified by Mr. Valliere to be correct omitted $2014 in two expenditures made during the covered period. Mr. Valliere filed a handwritten amended report, ostensibly to correct a math error, but actually intended to conceal the material omission from the original report, which Mr. Valliere certified was correct when it was not. Mr. Valliere knew that the items were missing when he filed the original report. His certification of correctness of the original 2006 F3 campaign treasurer's report was wilful and, were it not, would have been an act of conscious culpability. Additional evidence of wilfulness and conscious culpability in connection with this transaction are based on Mr. Valliere's attempt to conceal the original omission by claiming a mathematical error, when the actual error was one of omission of these two items. Among aggravating and mitigating circumstances, the Administrative Law Judge accepted the parties' stipulation that findings of the Valliere's finances would present neither aggravating nor mitigating circumstances. Also, neither Mr. nor Ms. Valliere has ever violated any campaign finance law prior to these cases. The violations involving campaign treasurer's reports are serious, as they undermine the reporting obligations that are the cornerstone of Chapter 106, Florida Statutes. Mr. Valliere's violation involving the misnaming of a person who was supposed to serve on the committee that never met was inconsequential, except, of course, that it violates the law. Ms. Valliere's refusal, over one and one-half years, to sign the two campaign treasurer's reports is remarkably contumacious, as is Mr. Valliere's role in this refusal to conform to the requirements of law. Lastly, neither party exhibited good faith in trying to comply with the laws that they have been proved to have violated.
The Issue The issue in this case is whether Respondent, the Department of Revenue, should grant Petitioner's application for a consumer's certificate of exemption from sales and use tax.
Findings Of Fact Petitioner is a nonprofit organization incorporated under the laws of the State of Florida on or about August 27, 1997. Petitioner applied to Respondent for a consumer's certificate of exemption from sales and use tax. While the application indicates that it is based on exemption status as an "enterprise zone," Petitioner clarified at final hearing that it actually was basing its application on exemption status as a "charitable institution." ("Enterprise zone" is not an exemption category under the applicable statutes. See Conclusions of Law, infra.) The IRS has determined that Petitioner is exempt from federal income tax under IRC Section 501(a) as an organization described in IRC Section 501(c)(3). A letter dated February 2, 1999, stated that Petitioner: was formed in 1997 to plan and implement redevelopment efforts in the Greater Newtown Community which lead to overall improvement in the quality of life of its residents. In the short time since our inception, we have responded to community needs by implementing a broad range of programs that will have a positive impact on our community. But from the evidence presented (which included no testimony from either party), it is difficult to ascertain factual detail about Petitioner, its activities, or its finances. In addition to grant application and fund-raising activities, it appears that Petitioner has been involved in informational and participation-recruitment meetings and information-gathering surveys for planning purposes (called the Business Retention and Expansion Survey). Petitioner also appears to have been involved in a Storefront Renovation Program and several community celebrations. Petitioner has plans for other economic and community redevelopment activities. But it cannot be ascertained from the evidence which of the other economic development activities have taken place and which are still in grant application or planning stages. For example, documentation regarding Petitioner's involvement in one activity refers to the activity as the "proposed WAGES Employment Challenge." Petitioner obtained $128,000 of funding from the City of Sarasota for seed money for its economic redevelopment and other activities. Petitioner budgeted to spend the $128,000 in 1998. The entire budget consists of salaries, fringe benefits, and overhead expenses. According to a "Profit and Loss" statement for January through October 1998, Petitioner spent $30,581.49 during that time period. All of those expenditures were in the category of payroll and overhead expenses. One activity referenced in Petitioner's documentation is Petitioner's "partnering" with financial institutions and mortgage brokers to process mortgage loans for affordable housing. In that case, the expenditures would be by the other institutions, not by Petitioner. There is no information as to any other expenditures made by Petitioner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order denying Petitioner's application for a consumer's certificate of exemption from sales and use tax. DONE AND ENTERED this 5th day of November, 1999, in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON 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 5th day of November, 1999. COPIES FURNISHED: Bill Nickell, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Cynthia E. Porter, Executive Director Greater Newtown Community Redevelopment Corporation 1751 Dr. Martin Luther King, Jr., Way Sarasota, Florida 34234 Joseph C. Mellichamp, III, Esquire Office of Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
The Issue The issues are whether Respondent accepted campaign contributions and made expenditures before designating a campaign treasurer and campaign depository, signed a check without sufficient funds written on a campaign account with insufficient funds to cover the check, and accepted a campaign contribution in excess of the legal limit in violation of Subsections 106.021(1)(a), 106.11(4), and 106.19(1)(a), Florida Statutes (2005).1
Findings Of Fact Petitioner is the state agency responsible for enforcing the campaign laws of the state. During 2006, Respondent attempted, unsuccessfully, to qualify as a candidate for the United States Congress and then campaigned for election to the state Legislature. Sometime in 2006, Respondent attempted to qualify as a candidate for the United States House of Representatives, District 12. On May 15, 2006, Respondent accepted two checks from Mr. Kent Lilly, an attorney in Bartow, Florida. One check was a campaign contribution of $500.00. Mr. Lilly intended the other check to be a loan of $5,000.00. Although the loan from Mr. Lilly satisfied the definition of a campaign contribution in Subsection 106.011(3)(a), Mr. Lilly and Respondent understood that Respondent was to repay the loan from subsequent campaign contributions. Respondent learned by letter dated May 18, 2006, that he did not qualify as a candidate for federal office because the qualifying papers he filed did not contain an original signature. Respondent decided to campaign as a candidate for the Florida House of Representatives, District 63. Respondent retained the campaign funds contributed by Mr. Lilly in a bank account divided into two sub-accounts. The two sub-accounts are identified in the record as the Sub 1 and Sub 2 accounts. The Sub 1 account contained funds collected for the Congressional campaign, and the Sub 2 account contained funds collected for the state legislative campaign. Respondent did not designate a campaign treasurer and depository for the state legislative campaign until July 19, 2006. Respondent signed the Appointment of Campaign Treasurer and Designation of Campaign Depository for Candidates (the DS-DE 9) form on July 5, 2006. The DS-DE 9 form designated Ms. Shirley Goodwine as the campaign treasurer. Respondent filed the DS-DE 9 form with the state’s Division of Elections on July 13, 2006. The original DS-DE 9 form was insufficient. The original form did not include the name of the political office sought and the date of Ms. Goodwine’s signature. Respondent filed an amended DS-DE 9 form on July 19, 2006. The amended form corrected the errors in the original form and was sufficient to designate a campaign treasurer and depository for state office. On July 6, 2006, Respondent accepted a contribution to his Sub 2 account before designating a campaign treasurer and depository. Respondent transferred $2,000.00 from the Sub 1 account to his Sub 2 account. The funds came from the loan from Mr. Lilly. The $2,000.00 contribution was excessive, within the meaning of Subsection 106.19(1)(a). It exceeded the maximum allowable contribution of $500.00 by $1,500.00. On July 12, 2006, Respondent expended $16.80 from his Sub 2 account before designating a campaign treasurer and depository. The charge to his account in the amount $16.80 was for checks to be used on the account. On July 18, 2006, Respondent signed a check in the amount of $1,859.76, which was drawn on the Sub 2 account. Insufficient funds were available to cover the check. The check was payable to the state Division of Elections and was intended to pay the qualifying fee to run for state office. On July 22, 2006, Respondent signed a check drawn on the Sub 2 account without sufficient funds. The check was payable to Publix Supermarket for $100.00. Respondent has a prior disciplinary history. Petitioner previously fined Respondent for filing campaign treasurer reports late. Respondent has not paid the previous fines. Respondent reports his net worth to be $103,000.00. Respondent has not repaid the loan from Mr. Lilly. Respondent submitted no evidence of mitigating factors that may have reduced the fine proposed by Petitioner. Respondent committed the foregoing acts willfully within the meaning of former Section 106.37, which was in effect at the time Respondent committed the acts. Respondent committed the acts with reckless disregard for whether the acts were prohibited by relevant campaign laws of the state.
Conclusions The sole main issue raised by the Division's charges against Morgentaler is whether Morgentaler offered or disposed of lots in Pinecrest without a valid order of registration or disposed of lots in Pinecrest without delivering to the purchaser a current public offering statement, in violation of Section 498.023, Florida Statutes (1983). Section 498.023 provides, in pertinent part: Unless the subdivided lands are exempt or the transaction is exempt pursuant to s. 498.025: No person may offer or dispose of, or participate in an offer or disposition of, any interest in subdivided lands located in this state, nor may any person offer or dispose of, or participate in an offer or disposition of, any interest in subdivided lands located without this state to persons in this state, nor may any person within this state offer or dispose of, or participate within this state in an offer or disposition of, any interest in subdivided lands located without this state to persons located without this state, unless such person has a valid order of registration therefor. No person may dispose of, or participate in the disposition of, any interest in subdivided lands unless a current public offering statement is delivered to the purchaser prior to the disposition, the purchaser is afforded a reasonable opportunity to examine the public offering statement prior to the disposition, and the contract and public offering statement used contain a provision which authorizes the purchaser to cancel the agreement without cause until midnight of the seventh day after execution by the purchaser. Section 498.023 must be read together with the definitions in Section 498.005(5) and (9): 6/ (5) "Disposition" means any transaction involving any interest in subdivided lands which is entered into for profit, including any sale, resale, lease for more than 5 years, assignment, or award by lottery of any interest in subdivided lands. . . . . (9) "Offer" includes every inducement, solicitation, or attempt to encourage a person to acquire any interest in subdivided lands, if undertaken for gain or profit. The answer to the issue at hand comes from an application of the peculiar facts of this case to those statutory provisions. The evidence is sufficient to prove that the client entered into at least some of the transactions for profit and undertook to offer the property for gain or profit. Therefore, Morgentaler's client disposed of or offered interests in subdivided lands. The second, and more difficult, step in the analysis is whether Morgentaler "participated in" the offers and dispositions of his client under 498.023. In the broad sense, it certainly could be said that Morgentaler participated in the dispositions (and perhaps even offers) as lawyer for the client. It is doubtful that the Legislature intended "participate in," as used in 498.023, to be construed so broadly. Such an interpretation would require all persons having any connection with the disposition or offer--including all accountants, lawyers, sales personnel, and clerical assistants--to have a valid order of registration. But nor should "participate in" be construed in its narrowest sense to mean only financial participation in the profit or gain from the offer or disposition. Instead, the proper construction of "participate in" an offer or disposition would include participation as holder and grantor, as trustee for an undisclosed beneficiary, of the property in question. Under this construction, Morgentaler was subject to Section 498.023(1) and (2). Alternatively, if Morgentaler did not "participate in" the offers and dispositions, consideration must be given to the question whether, as a matter of law, Morgentaler stands in the shoes of his client when he acts as trustee for an undisclosed client who is attempting to offer and dispose of subdivided lands without complying with the requirements of Section 423.023. Neither Section 689.07, Florida Statutes (1983), nor the decisions in Arundel Debentures Corp. v. LeBlond, 190 So. 765 (Fla. 1939), and Glusman v. Warren, 413 So. 2d 857 (Fla. 4th DCA 1982), directly answer this question. Those authorities only address situations in which either one of the parties to the trust relationship or a bona fide purchaser attempts to void the trust. But they do help frame the proper inquiry in this, case: whether, under the circumstances, Morgentaler is estopped to deny that he offered and disposed of the Pinecrest lots. It is concluded that Morgentaler, by holding, and conveying legal title for an undisclosed beneficiary who is subject to the requirements of 498.023(1) and (2), is estopped to deny that he, too, is subject to those requirements. In his posthearing brief, Morgentaler attempted to claim an exemption from 498.023 under Section 498.025(1)(d), Florida Statutes (1983): Unless the method of offer, disposition, or transfer is adopted for the purpose of evasion of this chapter, the provisions of this chapter do not apply to: . . . . (d) A subdivision as to which the plan of disposition is to dispose to 45 or fewer persons. But Morgentaler never before claimed an exemption and explicitly waived any claim of exemption at final hearing. In addition, even if he had properly claimed the exemption, Morgentaler presented no evidence to prove any "plan of disposition," and the exemption would not have been proven. Section 498.051 Florida Statutes (1983), provides in pertinent part: The division may issue an order requiring a person to cease and desist, and to take such affirmative action as in the judgment of the division will carry out the purpose of this chapter, if the division determines that the person has: Violated any provision of this chapter; Directly or through an agent or employee knowingly engaged in any false, deceptive, or misleading advertising, promotional, or sales methods to offer or dispose of any interest in subdivided lands. . . . . The affirmative action to be taken by a person pursuant to an order authorized by subsection (1) may include, but is not limited to: Notifying any purchaser of subdivided land who has a rescission right pursuant to contract or pursuant to other provisions of this chapter that the purchaser may elect to rescind the purchase transaction as provided by contract or by other provisions of this chapter . . . . Section 498.049(4), Florida Statutes (1983), provides: The division may, by order, impose civil penalties against any persons for violations of this chapter or rules relating hereto. Such imposition of a civil penalty shall not preclude the division from invoking any other appropriate remedy authorized by this chapter . . . No civil penalty so imposed shall exceed $10,000 for each offense . . . .
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that the Division enter a Final Order: That respondent Richard Morgentaler cease and desist from offering or disposing, as trustee for undisclosed beneficiaries, and from participating, as trustee for undisclosed beneficiaries, in the offer or disposition of interests in Pinecrest Estates or any other subdivided lands until he has a valid order of registration, delivers a current public offering statement, and otherwise complies with Charter 498, Florida Statutes; That respondent Richard Morgentaler give Shirley Arthur a right of rescission and refund as to her purchase of Lots 4-9 in Block 18 and 30-32 in Block 17 of Pinecrest Estates. Respondent shall give Arthur notice of her right of rescission and refund within 30 days from entry of the Final Order, notifying Arthur that the right of rescission and refund, if exercised, would be for a refund of $21,860, with interest at 9 percent per annum from August 29, 1980, plus all real estate taxes paid by Arthur on the property. The notice also shall state that, to exercise the right of rescission and refund, Arthur would have to request the refund in writing within 30 days from receipt of the notice and, on receipt of the refund, give respondent a quit claim deed to the property; and That respondent Richard Morgentaler shall pay o the Division, within 30 days from entry of the Final Order, a civil penalty in the amount of $5,000 for violation of Section 498.023(1) and (2), Florida Statutes (1983). RECOMMENDED this 7th day of May, 1984, in Tallahassee, Florida. J. LAWRENCE JOHNSON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 FILED with the Clerk of the Division of Administrative Hearings this 7th day of May, 1984.
The Issue Whether respondents unlawfully (1) discriminated against petitioner on the basis of her sex, and (2) retaliated against her for opposing sexually discriminatory practices.
Findings Of Fact Petitioner's discrimination claim is two-fold. First, she contends that respondent sexually discriminated against her by paying her less salary and excluding her from participating in the managerial bonus plan and weekly managerial staff meetings when male employees, performing equal or comparable work, were paid more and participated in the bonus plan and staff meetings. Second, she contends that respondent retaliated against her--by firing her-- because she complained of its sexually discriminatory policies. As alleged, both unlawful employment practices occurred between January, 1978, and November, 1979, during which time petitioner was respondent's Personnel Manager, both in title and in fact. Petitioner, now 47, graduated from the University of Michigan in 1958 with a Bachelor of Arts Degree. She majored in journalism, minored in psychology and sociology, attended on scholarship, and maintained a B average. After graduation, she became a policewoman with the Detroit Police Department, where she counseled and referred juvenile offenders. She then retired and raised her children during the next 10 years, after which she obtained a real estate license and sold residential real estate. On March 4, 1974, she was hired by the Detroit Free Press as an "Executive Secretary and Administrative Assistant to the Personnel Director." At that time she had no formal training or prior employment in personnel. The Detroit Free Press and respondent Bradenton Herald, Inc., both newspapers in the Knight-Ridder Newspapers, Inc. group, are separate and distinct entities. There is no evidence of record that employees of Knight-Ridder Newspapers, Inc. directed or participated in any of the alleged unlawful employment practices complained of by petitioner. In September, 1975, after one and one-half years with the Detroit Free Press, petitioner wrote respondent, (Bradenton Herald, Inc.) about possible future openings in its Personnel Department, stating that she would like to move to the Gulf Coast area of Florida within the next year. She stated that she wished to relocate because she had two dependent school age children and wished to live near her parents in Clearwater, Florida rather than contending with the bad weather and drawbacks that she was experiencing in Detroit. (P-33) She also indicated that she did not plan to start "job hunting" until early the next year. She described her current position, stating that she had responsibility for handling the day-to-day personnel operation of the Detroit Free Press, which had 2,000 employees. She listed her duties as testing and supervising employees; maintaining personnel files; handling stock purchase plans, unemployment claims, interviewing; handling correspondence and secretarial work for the personnel section; writing letters to all employees; informing labor and corporate officials on a regular basis of all personnel changes; maintaining accurate address information on all employees; preparing monthly personnel reports, quarterly employee reports, monthly reports to the Knight-Ridder Newspaper headquarters in Miami, Florida, and quarterly reports to the National Alliance of Businessmen regarding the hiring of Vietnam veterans and the disadvantaged; verifying employment, credit and employee references; distributing performance appraisal reports including the compilation of delinquency lists and records; researching personnel files and making appropriate responses; handing out applications to prospective employees and answering employee questions regarding insurance, stock purchase and other employee benefits; answering the telephone and handling all calls; scheduling the conference room; maintaining contact with functional and department heads as well as employees at all levels of the newspaper; and, making extensive contact with the general public, as well as most applicants for positions of employment. (P-33) In August, 1975, petitioner's work at the Detroit Free Press was becoming increasingly clerical and a source of frustration to her. She felt clerical work no longer challenged her. Her supervisor agreed with her assessment, observing that she was "becoming super at the [personnel] testing situation." He discerned no way out of her dilemma but recommended that a raise in her salary be considered "because of her ability and work." (P-33) At the time of her job inquiry, respondent was a small newspaper, acquired in 1973 by Knight-Ridder Newspapers, Inc., and in the process of organizing various departments and functions. It had no openings in Personnel but, in October, 1975, offered her a position as secretary to William LaMee, the Publisher. She rejected the job offer because, as she explained, her training had advanced to the point where she believed she could handle a personnel management position. Subsequently, in March, 1976, respondent offered and petitioner accepted a position as "Personnel Assistant" to Byron Callahan, both Personnel Director and Promotion Manager at the Bradenton newspaper. Petitioner replaced Doris Hiscox, the former Personnel Assistant. At that time, the paper had no Business Manager. II. Petitioner began work at her new job in April, 1976. Respondent paid her travel and moving expenses from Detroit, Michigan to Bradenton, Florida, which indicates that it perceived her as being more than a clerical employee. It was respondent's practice to pay travel and moving expenses of managerial and professional employees. Petitioner performed the functions of the newly created Personnel Section, functions formerly handled by the Accounting Department. Byron Callahan, the new Promotions Personnel Director, was responsible for these functions, in addition to various promotional or public relations activities of the newspaper. These included such things as preparing the newspaper's Manatee County Fair Booth; establishing a safety committee; preparing special section promotions; running newsroom personnel promotions; handling promotions for the DeSoto Celebration; handling a special promotion performance of "Up With People"; preparing a "supervisory manual"; negotiating for the acquisition of equipment and reduction of service costs; becoming involved with minority organizations and community action groups; auditing and reporting hiring and promotion patterns to assure compatibility with the affirmative action program; conducting career counseling for minority employees; implementing training programs; initiating drug awareness programs; handling United Way representation, including "loaned executive" program; initiating special promotion publications; implementing radio advertisements in the newspaper; establishing a speakers' bureau; establishing public tours through the newspaper; reducing building maintenance staff; procuring estimates for demolition of one of respondent's properties; completing the maintenance and restriping of the employee's parking lot; and initiating training of all personnel concerning Occupational Safety and Health Act safety programs. (R-4 through R-7) Within a month after petitioner's arrival at her new job, Mr. Callahan was fired and replaced by Donald Heath, who was hired as the new Business Manager. His responsibilities included the Advertising Department as well as Personnel and Promotions, the two areas for which Mr. Callahan had been responsible. Although petitioner's functions remained relatively unchanged, her responsibilities as the Personnel Assistant increased as Mr. Heath--who had no personnel experience--relied on her to carry out the newspaper's personnel functions. Unlike Mr. Callahan, he did not assist in performing these functions. After three months at her new job, petitioner wrote the Personnel Manager of the Detroit Free Press, asserting that she was fully and completely responsible for personnel functions at the Bradenton newspaper. During her first five months at the newspaper, she was happy with her work and, by all reports, performing her duties well. She had received two pay increases and was then earning $200.00 per week. The quantity and pace of her work, however, began to trouble her. She was almost single-handedly performing, with some part-time clerical assistance, all of the personnel work for the newspaper. Yet she did not hold the title of Personnel Manager. In January, 1977, she wrote the Detroit Free Press asking to be considered for its Personnel Manager position, should it become available. In September, 1977, when the position became available, she applied to he the personnel Manager of the Detroit newspaper, stating that she was ready to move into a personnel management position on a large metro paper. She wrote that she wanted to move back to Detroit, because of, among other things, personal family reasons. After receiving no response, she renewed her request in October, 1977, and enclosed another resume. (P-33) On January 10, 1978, petitioner was promoted, both in title and fact, to the position of Personnel Manager by William Appleby, respondent's then General Manager. (She had, in fact, been performing the duties of a personnel manager for almost two years.) As Personnel Manager, her duties required her to: Interview, test, and recruit prospective job applicants; Pre-screen all applications and resumes received from job applicants; Interpret prospective job applicants' test scores for department heads, General Manager and Publisher. Test management applicants for employment. Test applicants for positions at other Knight- Ridder Newspapers, at the request of those papers; Administer and prepare all unemployment, workers compensation, OSHA (Occupational Safety and Health Act) and EEO (Equal Employment Opportunity) reports; Represent the newspaper at unemployment hearings. Supervise the switchboard employees and the operation of the switchboard; Supervise the in-house print shop, including approval of all in-house printing orders. Write, supervise and edit the employee handbook; Maintain the newspaper's personnel records in "KRIS," Knight-Ridder's computerized central data bank; Set up periodic performance evaluation and salary review programs for all employees; Prepare regular quarterly reports to the Publisher regarding activities of the Personnel Department; Write regular memoranda to employees regarding personnel matters of interest; Assist General Manager and Controller in setting up Personnel Department budget; Write, edit and produce the monthly employee newsletter, Headliners; Write, employment ads for the newspaper; Devise a new job application for the newspaper; Represent the newspaper at Knight-Kidder Personnel Directors' meetings in Miami. Attend management training seminars; Become a member of NPRA - Newspaper Personnel Relations Association and SPA - Sarasota Personnel Association. She was also responsible for employee of the month and year programs, employee service awards, press releases on managerial appointments, employee tours and orientation programs, employee bulletin board, employee Christmas luncheon and employee open house. She also supervised the print shop, which was operated by one person. She had no authority to hire or fire him, but--within three months of her employment--had cleared up a workload backlog of several months and had the shop running smoothly. She approved all printing orders. She also supervised the switchboard, which had one full-time and one part-time employee. They sometimes helped her type and score test results. (P-33) The secretary to the Publisher and General Manager also provided petitioner with 15 hours per week of clerical assistance and maintained all personnel records. This secretary also helped petitioner with basic interviewing and correspondence; answering inquiries concerning employment positions; preparing ads for positions of employment; administering of tests; and processing of insurance claims. As in the past, petitioner was expected to, and did, perform many of the clerical duties associated with Personnel. The Publisher and General Manager expected that petitioner would initiate training and employee counseling programs in addition to performing her other duties, although they made no specific request for such programs. Because of the rapid turnover of employees, and her lack of adequate clerical and administrative assistance, she was unable to initiate these programs although she did some informal counseling of employees. As the newspaper's new Personnel Manager, one of her duties was to edit and re-write the Employee Handbook. She organized and substantially revised it, and was praised for her accomplishment by the Vice-President for Personnel at Knight-Ridder: "It is a very vast improvement over what you [respondent Bradenton Herald, Inc.] had in the past and better than most of our other companies." (P-33) She also programmed required personnel statistical information in the newspaper's new computer system. In regard to her other duties, she acknowledges that the training of the switchboard operators was performed by the telephone company and that she handled only three contested unemployment claims and no worker's compensation hearings. During the last three months of her employment at the newspaper, she assumed responsibility for preparing the monthly newsletter, which she admits was a professional, not a managerial, function. She had no dealings with employee unions since there were no unions at the Bradenton newspaper. During the time petitioner was Personnel Manager, respondent published an internal organizational chart indicating that six employees reported to the General Manager: Personnel Manager Promotion Manager Advertising Director Circulation Director Production Manager Controller. Petitioner contends that her functions, duties, and responsibilities were comparable to or equal to those of the Advertising Director, Circulation Director, Production Manager and Classified Manager, who reported to the Advertising Director. These positions were filled by males. Unlike petitioner, these four male employees participated in the managerial compensation bonus plan and weekly managerial staff meetings. They also were paid more than petitioner. Her predecessor, Mr. Callahan, had participated in the managerial bonus plan and weekly managerial staff meetings. Of six positions reporting to the General Manager, two (Personnel Manager and Promotion Manager) were filled by female employees. Neither participated in the bonus plan or weekly managerial staff meetings. Contrary to petitioner's contention, the four employees to which she compares herself had greater responsibilities than she had, and a higher level of skill and effort were required of them. The four positions were not equal, or virtually equal, or even comparable to that of the Personnel Manager, which required less skill and effort, and had less responsibility. The only significant similarity among these positions was that most reported directly to the General Manager. The real and substantial differences between them, however, far outweigh this similarity. The major functions of the newspaper were in the advertising, production, circulation and accounting department. These were the "on-line" departments, in contrast to an administrative support department, such as Personnel. These departments exercised substantially more responsibility for the operation of the newspaper than did the Personnel Department. The most important departmental head (excluding the Publisher/President and General Manager) was the Advertising Director. The functions of the Advertising Director included establishment of revenue goals, budgets and adjustments to budgets; management of personnel and internal organizations; preparation and implementation of sales strategy and marketing practices; establishment of rates for advertising; and coordination of special advertising projects. The Advertising Director accounted for 70-80 percent of the total revenue of the newspaper, which approached twelve million dollars annually. He was directly accountable for a staff of approximately forty persons, whom he had sole authority to hire and fire. He was responsible for his staff's training, coordination, and development, and the expenditure of budgeted funds, including the implementation and constant adjustment of the budget throughout the year. Within the Advertising Department, three lower level management personnel reported to the Advertising Director: the Retail Ad Manager, who was accountable for approximately 80 percent of the revenue generated within that department; the Classified Ad Manager, who was responsible for approximately 20 percent of the revenue, and the National Advertising Manager. These managers were interviewed and hired by the Advertising Director; petitioner did not interview them before they were hired. The Retail Ad Manager was responsible for special sections, real estate ads and television ads. He had a sales staff of eight persons. His duties included preparing training programs, advertising booklets and brochures, and recommending purchases and redesign of equipment. The Classified Ad Manager was responsible for the hiring, firing, training and performance of the ten people on his staff. The Advertising Department trained its staff without assistance from the personnel section. Petitioner's successor, aided by a newly hired second employee in Personnel, took over these functions, including recruitment, interviews, screening, scheduling and training. After the departure of petitioner's immediate successor, these functions continued to be carried out with only one individual in the Personnel Section, Donna Campbell. The next major department of the newspaper was the Circulation Department, which was responsible for 20 percent to 30 percent (approximately $3 million) of the total revenue of the newspaper. This department had the largest departmental staff and distributed papers to almost 20,000 customers. It employed district managers, who were responsible for over 60 newspaper carriers. The Circulation Manager had direct responsibility and authority for the hiring and firing of his employees, the transportation and delivery of the newspapers, and the coordination of all circulation and collection functions, including sales promotions. Budgeting and adjustments to the budget was required throughout the year in coordination with the Advertising Director, and the Controller. The Production Director headed the third major department of the newspaper and was responsible for 50 employees in five operational departments: composing, camera, plate making, press and pressroom. Each department had a supervisor and two had assistant supervisors or foremen. For example, the Supervisor of the Pressroom had responsibility for ordering supplies and supervising the press operators. The Mail Room Foreman supervised 15-20 employees, whose responsibilities included the bundling of newspapers for dissemination through circulation. The Production Director was responsible for the printing of the newspaper, the training of his staff, and the preparation of his department budget. The annual budget for this department was $1.5 million, which included purchasing and maintaining equipment. He was also responsible for ordering and maintaining adequate inventory and supplies, including the purchasing of newsprint. The value of the inventory exceeded $1 million. His operational decisions were not subject to the prior approval of the Publisher or General Manager. The Controller was the fourth major operational department. He was the chief financial officer and responsible for the fiscal operation of the newspaper. He supervised a staff of approximately 15 people, including a Credit Manager, who supervised two employees, and an Accounting Manager, who supervised fifteen employees. The annual accounts receivable for the newspaper approached $8 million. He monitored the other three departments to ensure they remained within their budgets. In contrast, petitioner's duties as Personnel Manager can only be described as administrative or clerical in nature. One expert witness, who testified on her behalf, acknowledged that the personnel department in a newspaper the size of respondent's could be handled by a clerical staff rather than a Personnel Manager. Her supervisory and budgeting responsibilities were limited and circumscribed. She supervised one full time switchboard operator and one print-shop employee, whom she could neither hire nor fire. Her main role was to provide administrative support to the operational "on-line" departments of the newspaper. Her pay was within the range of, or even exceeded, the pay of male employees holding similar mid-management positions, such as Mail Room Supervisor, National Co-op Manager, Home Delivery Manager, Single Copy Manager, Credit Manager and Building Maintenance Supervisor. Petitioner was ineligible to participate in the managerial bonus compensation program, which was limited to department heads who exercised substantially greater responsibilities than she. Many managerial positions, with substantially greater responsibilities than those of the Personnel Manager, were also ineligible. These included the Pressroom Foreman, Composing Room Foreman, District Managers, Sub-editors, Accounting Manager and Credit Manager. In the newspaper industry, executive or management bonus programs are not normally made available to Personnel Managers. Moreover, it is a generally accepted practice in the industry to pay more compensation to the heads of production, editorial, advertising, and circulation than to the head of personnel. This is because the former are generally regarded as exercising greater responsibilities. The basis for establishing the relative importance of the respective managers was neither by their title or position on the newspaper's organizational chart, nor the rank of the position to whom they reported. For example, the Building Superintendent reported to the General Manager, supervised employees and had authority to expend funds without prior approval. But he was not equal to the Advertising Director in responsibility or managerial importance. The organizational chart merely depicted the various sections of the newspaper and to whom these sections were accountable. During the period of petitioner's employment as Personnel Manager, she was excluded from weekly staff meetings and the annual Christmas party, which was primarily for the newspapers' customers. Her exclusion was consistent with the newspaper's policy to exclude mid-management personnel, whether male or female. The weekly staff meetings were intended to include only managers having primary responsibility for "on-line" functions of the newspaper. As Personnel Manager, petitioner had no "on-line" functions. III. In October, 1978, after returning from an equal employment opportunity seminar, petitioner became convinced that she was the victim of sex discrimination. She complained to General Manager Appleby, asserting that her exclusion from the managerial bonus plan and weekly managerial staff meeting was evidence of sex discrimination. In January, 1979, she repeated her complaint to General Manager Appleby, who attributed her exclusion from the bonus plan and staff meetings to the policies of Publisher LaMee and promised to discuss her complaints with him. Her complaint of sex discrimination was, under the circumstances, reasonable, and made in good faith. Although the newspaper had many female employees, none were included in its top-management or the important "on-line" positions. 2/ These were occupied, exclusively, by males. No females participated in the managerial bonus system or attended the weekly managerial staff meetings. Petitioner was excluded from the staff meetings, although her predecessor--who had been responsible for personnel, in addition to his other duties--was a regular participant. Because they occupied lower ranking positions, females, as a group, were paid less than on-line or executive male managers. Finally, Publisher LaMee's style of relating to and supervising female employees was perceived to be overbearing, condescending, and demeaning. In fact, he treated both male and female subordinates, alike, with abruptness and brooked no dissent. He sometimes abused and intimidated employees and was viewed, by some, as a "tyrant." An employee who crossed his policies could expect recrimination or retaliation. Although Publisher LaMee denied any knowledge of petitioner's complaints of sex discrimination, his denial is rejected as unworthy of belief. General Manager Appleby told him of her two complaints after each was made. Soon after petitioner complained to Mr. Appleby, and during the ensuing year, Publisher LaMee wrote notes to himself and left them on his desk. Those noted contained short phrases such as, "Fire Ann," "Fire A.M.," and "Can Ann." His attitude toward her became increasingly critical. On November 30, 1979, Publisher LaMee fired her for writing a personal letter during working hours and leaving the office prior to the close of business hours. He fired her abruptly and summarily, without first talking to the General Manager, her immediate supervisor. On the day in question, petitioner left work 15 minutes before 5:00 P.M., after other managers, including the Publisher and General Manager, had already left for the day. Indeed, the Ad Manager was, at that time, playing golf, though not on leave. Before leaving work, she notified the switchboard operator and left a number where she could be reached. Respondent supplies a third reason why petitioner was fired, though that reason was not expressed to her at the time. She was, according to respondent, lazy and had demonstrated a deteriorating work performance. Respondent asserts that petitioner was fired for these three reasons and denies that her prior complaints of sex discrimination were a factor in her dismissal. This assertion, and denial, are rejected as pretextual and unworthy of belief. The allegation that petitioner was lazy and her work deteriorating is inconsistent with her individual personnel record. Throughout her employment, she consistently, and repeatedly, received merit pay increases and positive comments about her performance. The only negative written comment is contained in a personnel extract compiled in late 1978 and early 1979. The extract, at least in part, is based on Publisher LaMee's derogatory comments about her. His credibility is already suspect so little weight is given the extract. Testimony by two of respondent's witnesses that she was frequently orally reprimanded is rejected as vague and inconsistent with her regular meritorious reviews and salary increases. Moreover, in petitioner's unemployment compensation hearing occurring after her dismissal, respondent did not express the view that she was fired, even in part, because of laziness or deteriorating job performance. Failure to express the view then detracts from its credibility now. As for her writing a personal letter during office hours, this was a practice engaged in by other managerial employees without disciplinary action. Petitioner was not paid an hourly wage and did not "punch a time clock." Because she and other managers worked overtime and on weekends without additional pay, they were given latitude during business hours, so long as they performed their work properly,. As for leaving 15 minutes early, this was also a common practice among managers at or above petitioner's level. Publisher LaMee had never before fired any employee for either of these reasons. The firing of petitioner for either or both of these reasons, is inconsistent with respondent's past treatment of its other employees, both male and female. In summary, the evidence convincingly supports an inference, now drawn, that petitioner was terminated from her employment, at least in part, because she opposed, and twice complained of, sexual discriminatory practices of her employer. There was a causal link between her complaints of sex discrimination and her dismissal. Her complaints were a substantial or motivating factor in respondent's decision to fire her. The three nondiscriminatory reasons given as grounds for her dismissal are unworthy of belief and rejected as pretextual, or a cover-up, for a discriminatory motive. IV. In 1978, respondent paid petitioner an annual salary of $12,140.80. She worked only 11 months in 1979--since she was fired on November 30, 1979--and earned $13,216.00--$1,201.45 per month. If she had not been fired in November, she would have earned $14,417.40 in 1979. In 1980, she worked at two jobs and earned a total of $7,239.87. In 1981, she earned $10,209.68; in 1982, $12,911.11; and in 1983, approximately $12,000.00. Since the hearing in this case occurred in November, 1983, evidence of her subsequent earnings should be supplied the Commission on Human Relations by supplemental evidence. Her salary at respondent's newspaper increased 8.85 percent between 1978 and 1979, from $12,140.80 to $13,216.00. If it is assumed that this rate of increase would have continued through 1984, but for her termination, she would have earned $15,693.34 in 1980; $17,082.20 in 1981; $18,593.97 in 1982; $20,239.53 in 1983; and $22,030.73 in 1984. A comparison of what she earned from other employment, and what is reasonable to expect she would have earned if she had remained in respondent's employ after November 30, Earnings From Other Employment 1979, are depicted below: Expected Earnings If She Had Not Been Fired Difference 1979 (Dec.) -0- 1,201.45 1,201.45 1980 7,239.87 15,693.34 8,453.47 1981 10,209.69 17,082.20 6,872.52 1982 12,911.11 18,593.97 5,682.86 1983 12,000.00 22,239.53 8,239.53 1984 * 22,030.73 * Total 30,449.83 To be calculated based on submittal of supplemental evidence before the Commission on Human Relations. Must be adjusted based on submittal of supplemental evidence. It follows that petitioner's salary loss due to her termination in November 30, 1979, totals $30,449.83, subject to adjustment for earnings during 1984. Petitioner is also obligated to pay her attorney a reasonable attorney's fee for his representation. Both parties agreed that the amount of any attorney's fee to be awarded should be determined by the Commission on Human Relations when it takes final action in this case, so no evidence was presented on this issue.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Commission on Human Relations enter an order finding that: Respondent is not guilty of committing an unlawful employment practice against petitioner in terms of her salary or her exclusion from the managerial bonus plain and weekly staff meeting; Respondent is guilty of engaging in an unlawful employment practice forbidden by Section 760.10(7), since it fired her because of, at least in part, her past complaints of and opposition to respondent's alleged sexually discriminatory practices; and Further, the order should prohibit respondent from engaging in further sexually discriminatory practices; and require that respondent (1) reinstate petitioner, with restoration of all job benefits; (2) pay her $30,449.83 in back pay, subject to adjustment for 1984 earnings; and (3) pay her a reasonable attorney's fee, as determined by the Commission. That Knight-Ridder Newspapers, Inc. be dropped as a party-respondent. DONE and ENTERED this30th day of August, 1984, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of August, 1984.
Findings Of Fact Coulter Electronics, Inc., Petitioner, is a manufacturer of machinery and instruments used primarily by medical and related professions. During fiscal years 1973 and 1974 the Department included in Coulter's apportionment formula certain inter-company sales of two of its subsidiary corporations, Coulter Diagnostics, Inc., (C.D.I.), and Blood Services, Inc., (B.S.I.). C.D.I. produces products which are used with the machinery and instruments to perform certain tests and B.S.I. produces certain materials which are used by C.D.I. to manufacture its products. Coulter is the parent corporation with C.D.I. being a 100 percent wholly-owned subsidiary and B.S.I. being an approximately 92 percent owned subsidiary. The central management group of Coulter selects and appoints management of both C.D.I. and B.S.I. with some overlap between the top management of the three corporations. During Petitioner's corporate fiscal years ending March 31, 1973, and March 31, 1974, Coulter, as the parent of an affiliated group of corporations, filed consolidated income tax returns for federal income tax purposes. Petitioner's subsidiaries also filed consolidated corporate income tax returns with the State for the fiscal years in question. As reflected on Petitioner's books, sales made to it in this State by its subsidiaries for the 1973 fiscal year total $13,875,153 and for the fiscal year ending 1974, the company sales total $13,961,516 (see Exhibit B to Petitioner's Complaint P.7). These inter- company sales were not included in either the denumerator or denominator of the Petitioner's apportionment formula in the original returns which are filed with the State of Florida. The department, pursuant to an audit by its corporate income tax bureau, included these, resulting in deficiencies of $39,436.00 for the 1973 tax year and $324.00 for the 1974 tax year. The Petitioner takes the position that the transactions in question do not constitute sales which are to be included in the sales factor of the apportionment formula, Section 214.71(3), F.S., because ownership, possession, control and right to direct the products in question at all times rested with the parent corporation and the operations of the subsidiary corporations were at all times totally under the direction and control of the parent corporation. Florida Statutes, Section 214.71(3), generally provides that: "The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in this state during the taxable year period and the denom- inator of which is the total sales of the taxpayer everywhere during the taxable year or period." The Petitioner urges that its inter-company transactions do not constitute "sales" because they do not include elements traditionally associated with the legal concept of a sale such as passage of title from the vendor to the vendee in payment of a direct consideration from the vendee to the vendor. However, the statutorily defined concept of a sale is very broad in Section 220.15(1), Florida Statutes. That section provides in pertinent part that: "The term 'sales' in paragraph 214.71(3)(a) shall mean all gross receipts of the tax- payer except interest, dividends, rents, royalties, and gross receipts from the sale, exchange, maturity, redemption, or other disposition of securities; except that: (a) Rental income shall be in- cluded in the term 'sales' whenever a significant portion of the taxpayer's business consists of leasing or renting real or tangible personal property; (b) Royalty income shall be included in the term 'sales' whenever a significant portion of the taxpayer's business con- sists of dealing in or with the production, exploration, or development of minerals." (Emphasis supplied) Therein the legislature extended the term "sales" to much more than is traditionally associated with the legal concept of sales for purpose of defining the sales factor or corporate income tax apportionment formula. It thus appears that the presence or absence of title and the method of payment, necessary elements of the traditional concept of the "sale", would not necessarily prevent these inter-company transactions as reflected on the Petitioner's books, from being considered "sales" within the contemplation of the sales factor in the apportionment formula when consideration is given to the above section. Petitioner's Comptroller specifically testified that the inter-company sales formed a part of its gross receipts. None of the transactions involved here fall within any of the statutory exceptions. Evidence also reveals that the inter-company transactions reflected a percentage of profits for the various subsidiaries. Case law in this state has previously recognized that book transactions between members of an affiliated group could be considered as transactions for Florida's tax purposes even where there was no actual transfer of funds. See for example Zero Food Storage Division of American Consumer Industries, Inc. v. Department of Revenue, 337 2d 765(1st DCA Florida 1976). Other state courts have also construed the "sales" factor in their apportionment formula broadly so as to include receipts by the taxpayer that clearly fall without the traditional concept of a sale. See Twentieth Century Fox Film Corporation v. Phillips, 47 S.E. 2d 183 (1948). The Petitioner raises, for the first time, in its brief that the inclusion of inter-company sales in the sales factor of the apportionment formula as originally enacted related only to financial organizations. Petitioner based this argument on its contention that the original legislative enactment of the tax administration act as embodied in Chapter 71-359, Law of Florida, contained the language relating to inter-company sales as part of a subsection pertaining only to financial organization. It argues further that when the State Laws were codified in the Florida Statutes from 1971, and all succeeding years, it was placed as a separate subsection applicable to all corporations. This codification was made by the Division of Statutory Revision. That division receives its authority from Florida Statutes, Section 11.242. My consideration of the various paragraphs of Section 11.242(5), F.S., persuades me to conclude that the change which was made clearly fell within the power of the division and that the legislature has met continuously, at least on an annual basis, since 1971 when the above referenced arrangement was enacted in Section 214.71(3), F.S., by the Division of Statutory Revision, and it is that branch which should have addressed any alleged erroneous placement by the Division of Statutory Revision so as to conform to legislative intent. In any event, argument in this regard should be addressed to this legislature. For these reasons, I conclude that the inter-company sales as evidenced by the testimony constituting a part of Petitioner's gross receipts are therefore a proper item for inclusion in the sales factor of the apportionment formula, as provided in Chapter 214.71(3), Florida Statutes. As such, to the extent that the Florida sales here in question include a profit element, they are includable in the denominator and in the numerator.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, I hereby recommend: That the Petitioner's challenge of the Department's determination of corporation tax due pursuant to Chapter 220, Florida Statutes, be denied, and that the Respondent's proposed corporate income tax deficiencies for Petitioner's corporate fiscal years ending March 31, 1973 and 1974 be sustained. DONE and ENTERED this 27th day of December, 1977, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: James R. McCachren, Jr., Esquire Ervin, Varn, Jacobs & Odom, Law Offices 305 South Gadsden Street Tallahassee, Florida E. Wilson Crump, II Assistant Attorney General Department of Legal Affairs Fletcher Building Tallahassee, Florida 32304
