02-004672 The Committee To Take Back Our Judiciary vs. Florida Elections Commission Status: Closed Recommended Order on Monday, April 21, 2003.

Summary: Petitioners found not to have violated the Florida Election Code.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARY MCCARTY, )

)

Petitioner, )

)

vs. ) Case No. 02 - 3613

)

FLORIDA ELECTIONS COMMISSION, )

)

Respondent. )

)

THE COMMITTEE TO TAKE BACK )

OUR JUDICIARY, )

)

Petitioner, )

)

vs. ) Case No. 02 - 4672

)

FLORIDA ELECTIO NS COMMISSION, )

)

Respondent. )

)

AMENDED RECOMMENDED ORDER

Notice was provided, and a formal hearing was held on

December 10, 2002, and Fe bruary 18, 2003, in West Palm Beach,

Florida, and on February 25, 2003, in Tallahassee, Florida, and

conducted by Harry L. Hooper, Administrative Law Judge with the

Division of Administrative Hearings.

APPEARANCES

For Petitioner Mary McCarty:

Mark Herron, Esquire

Messer, Caparello & Self, P.A.

Post Office Box 1876

Tallahassee, Florida 32302 - 1876

and

J. Reeve Bright, Esquire

Bright & Chimera

135 Southeast 5th Avenue, Suite 2

Delray Beach, Florida 33483 - 5256

For Respondent Florida Elections Commission:

Eric M. Lipman, Esquire

Florida Elections Commission

107 West Gaines Street

Collins Building, Suite 224

Tallahassee, Florida 32399 - 1050

STATEMENT OF THE ISSUE

Whether Petitioner s violated provisions of Chapter 106,

Florida Statutes, as alleged in the Order of Probable Cause

filed August 23, 2002.

PRELIMINARY STATEMENT

Pursuant to a complaint, the Florida Elections Commission

(Commission) investigated Petitioner Mary McCarty (Ms. McCarty)

and Petitioner The Committee to Take Back Our Judiciary (The

Committee). An Order of Probable Cause was filed with the

Commission on August 23, 2002.

The Order of Probable Cause charged Mary McCarty and The

Committee to Take Back our Judiciary with: (1) one count of

violating Section 106.07(5), Florida Statutes, which prohibits a

political committee chair from willfully certifying to the

correctness of a campaign treasurer's report that is incorrect,

false or incomplete; (2) one count of violating Section

106.11(3), Florida Statutes, which prohibits an officer or agent

of a political committee from incurring an expense for the

purchase of goods or services without sufficient funds on

deposit in the primary campaign depository to pay th e full

amount of the authorized expenses, to honor all outstanding

checks, and to pay all previously authorized but unpaid

expenses; (3) nine counts of violating Section 106.19(1)(a),

Florida Statutes; (4) one count of violating Section

106.19(1)(b), Flori da Statutes, which prohibits a person or

organization from failing to report a contribution required to

be reported by Chapter 106, Florida Statutes; and (5) one count

of violating Section 106.19(1)(d), Florida Statutes, which

prohibits a person or organiz ation from making or authorizing an

expenditure prohibited by Section 106.11(3), Florida Statutes,

or otherwise prohibited by Chapter 106, Florida Statutes.

A Petition for Formal Administrative Proceeding was filed

in both cases on September 13, 2002. A request for a hearing

before the Division of Administrative Hearings (Division), dated

September 17, 2002, was filed with the Division on September 18,

2002, in the Mary McCarty case. A request for a hearing before

the Division, dated December 2, 2002 , was filed with the

Division on December 3, 2002, in the case of The Committee.

The Mary McCarty case was set for hearing on November 26

and 27, 2002. Pursuant to a Joint Motion to Schedule Hearing,

the cause was moved to December 10 and 12, 2002. A Joint Motion

to Consolidate Cases was filed on December 3, 2002, and the

Mary McCarty case was consolidated with The Committee to Take

Back Our Judiciary, in an Order of Consolidation filed on

December 4, 2002.

The hearing convened on December 10 , 2002; however, due to

the emergence of a question with regard to appropriate

representation, the cause was continued on an ore tenus motion

that resulted in a written Order Granting Continuance.

Thereafter, in an Amended Notice of Hearing, the case was set

for February 18, 2003, in West Palm Beach, Florida, to be

subsequently heard on February 25, 2003, in Tallahassee,

Florida. The hearing was conducted as scheduled.

The Commission offered seven exhibits that were received

into evidence. The Commi ssion presented the testimony of

Ms. McCarty, Investigator Aidan Brainard, and Connie Evans.

Ms. McCarty offered 20 exhibits and 19 were admitted. The

exhibit, which was not admitted, Exhibit S, was the deposition

of Dianne Thorne. It was not admit ted because it was hearsay,

which was not within any exception. The case was set for

hearing in West Palm Beach so that the situs of the hearing

would be located within 100 miles of Ms. Thorne. Although

Ms. McCarty attempted to subpoena Ms. Thorne, and a certificate

of nonservice was filed, it is found that Ms. McCarty was not

"unable" to procure the attendance of the witness by subpoena.

Counsel for Ms. McCarty made an offer of proof stating that

Ms. Thorne would testify as follows: Ms. Thorne was associated

with The Committee to Take Back Our Judiciary; she was retained

by Mr. Roger Stone; she maintained the office of The Committee

in Miami Beach, Florida; she received all correspondence that

came to The Committee; she made The Committee's bank de posits;

she performed at the direction of an office in Washington, D.C.,

which is associated with Mr. Snyder; all records of the

contributions and expenditures of The Committee were sent to an

office in Washington, D.C.; she was directed by the office in

W ashington, D.C. as to what bills to pay; all of the checks of

The Committee were written by her but she was not the treasurer

of The Committee; another person was treasurer of The Committee;

and all of the operations of her office were directed by persons

in Washington, D.C.

Ms. McCarty testified in her own behalf and presented the

testimony of Inez Williams.

Counsel for Respondent requested that the record remain

open and it was agreed that the record would remain open until

March 4, 2003. Durin g that time no additional pleadings or

evidence was received. Accordingly the record was closed on

March 4, 2003.

The parties both requested at the conclusion of the hearing

that they have 30 days subsequent to the filing of the

transcript to submit their Proposed Recommended Orders. The

request was granted. The Transcript was filed on March 6, 2003.

Proposed Recommended Orders were timely filed by both parties

and were considered in the preparation of this Recommended

Order.

Statutory referen ces used herein are to Florida Statutes

(2000), unless otherwise stated.

FINDINGS OF FACT

1. Chapters 97 through 106, Florida Statutes, comprise the

Florida Election Code (Code). Pursuant to the Code, the

Commission is empowered specifically to enfo rce the provisions

of Chapters 104 and 106, Florida Statutes.

2. 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 i n 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.

3. 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.

4. Ms. McCarty has run for public office si x 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.

5. 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 involve d 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.

6. 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 Co mmittee and that he wished for her to be the

chairperson. She did not initially commit to undertake this

responsibility.

7. A few days after the conversation with Mr. Stone,

Ms. McCarty received a facsimile draft of a fundraising letter

that The Co mmittee 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.

8. Subsequently, she had a telephone conversation with

Lora Lynn Jo nes 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."

9. The first time Ms. McCarty saw The Committee's finished

product it was in the form of a "Telepost, hi gh 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 F lorida

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.

10. The "Telepost," dated December 2000, s olicited 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."

11. Later in December 2000, Mr. Stone called Ms. McCarthy

and told her that she should be the chairman of The Committee.

She agreed.

12. 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

the se 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.

13. The "Statement of Organization of Political

Committee," dated December 19, 2000, wa s 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 t he

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.

14. Ms. Williams noted that the mailing address on the

form dated December 19, 2000, was "c/o Visio nMedia," 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.

15. 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 si gned 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 D ecember 26, 2000.

16. 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 inclu ded on

the "active" list.

17. 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.

18. A letter dated January 4, 2001, bearing the letterhead

of "The Committee t o 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 identifie d 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.

19. On January 8, 2001, a f iling 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

Ha ndbook 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.

20. 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, w hich 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.

21. Ms. McCa rty 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 abov e and to the right of

her signature, was checked to signify that Ms. McCarty was the

chairperson of The Committee.

22. 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 app lied to the committee.

That meant that the maximum contribution per person was $500.

23. 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.

24. The amounts in excess of $500 were eventually returned

to the $1,000 contributors, except that in th e 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 incorr ect

with regard to Mr. Morgan.

25. 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.

26. The Committee had a bank account at CityBank of Miami,

Florida. The s ole 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 proc essed 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.

27. Lora Lynn Jones, is the princ ipal 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.

28. 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 f rom 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.

29. Ms. Jones is aware of an entity by the name of

Creative Marketi ng 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, Alexan dria, Virginia.

30. 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 20 00.

31. 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.

32. 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.

33. Contributions remitted in respons e 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.

34. The people handl ing 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.

35. 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.

36. 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 th e 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.

37. Ms. McCarty, excepting the current litigation, has

never been the subject of a Commission action.

38. Ms. McCarty has an income of approximately $80,000.

She owns a resi dence 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.

CONCLUSIONS OF LAW

39. The Division of Administrative Hearings has

jurisdiction over the subject matter of and the parties to this

proc eeding. Sections 106.25(5) and 120.57(1), Florida Statutes.

40. The burden of proof, absent a statutory directive to

the contrary, is on the party asserting the affirmative of the

issue in the proceeding. Department of Transportation v. J.W.C.

Company, Inc. , 396 So. 2d 778 (Fla. 1st DCA 1981); and Balino v.

Department of Health and Rehabilitative Services , 348 So. 2d 349

(Fla. 1st DCA 1977). In this proceeding, it is the Commission

that is asserting the affirmative and, therefore, the Commission

has th e burden of proof.

41. The Commission seeks to impose a civil penalty on

Petitioner, pursuant to Section 106.265, Florida Statutes, in

the form of a fine not to exceed $1,000 per count. The

imposition of an administrative fine or a civil penalty, is

punitive and penal in nature. Therefore, the Commission must

prove its case by clear and convincing evidence. Department of

Banking and Finance v. Osborne Stern & Company , 670 So. 2d 932,

935 (Fla. 1996).

42. Statutes which authorize the imposition of a penal

sanction must be strictly construed and any ambiguity must be

construed in favor of Petitioner. Elmariah v. Department of

Professional Regulation , 574 So. 2d 164, 165 (Fla. 1st DCA

1990). Moreover, Section 775.021(1), Florida Statutes, provides

t hat "offenses" defined by any Florida Statutes must be

construed most favorably to the offender if the language is

susceptible to different meanings.

43. Section 106.011(1), Florida Statutes, defines

"political committee" as follows:

106.011 Definitions. As used in this

chapter, the following terms have the

following meanings unless the context

clearly indicates otherwise:

(1) "Political committee" means a

combination of two or more individuals, or a

person other than an individual, the primary

or incid ental purpose of which is to support

or oppose any candidate, issue, or political

party, which accepts contributions or makes

expenditures during a calendar year in an

aggregate amount in excess of $500;

"political committee" also means the sponsor

of a pr oposed constitutional amendment by

initiative who intends to seek the

signatures of registered electors.

Organizations which are certified by the

Department of State as committees of

continuous existence pursuant to s. 106.04,

national political parties, and the state

and county executive committees of political

parties regulated by chapter 103 shall not

be considered political committees for the

purposes of this chapter. Corporations

regulated by chapter 607 or 617 or other

business entities formed for p urposes other

than to support or oppose issues or

candidates are not political committees if

their political activities are limited to

contributions to candidates, political

parties, or political committees or

expenditures in support of or opposition to

an issue from corporate or business funds

and if no contributions are received by such

corporations or business entities.

44. In an order entered on December 15, 1999, the U.S.

District Court for the Middle District of Florida declared

Section 106.011(1), Florida Statutes, to be "overly broad in

violation of the First and Fourteenth Amendments to the United

States Constitution" and enjoined the Commission, "from

enforcing or taking any action to enforce Section 106.011(1),

Florida Statutes." Florida Right to Life, Inc. v. Mortham , 1999

WL 33204523 (M.D. Fla. 1999), at page 7. On appeal, the U.S.

Court of Appeals for the 11th Circuit, upheld the district

court, stating that, "we find no error in the district court's

enjoining the enforcement of Florida Stat utes Section 106.011(1)

because it is unconstitutionally overbroad under the First

Amendment. Florida Right to Life, Inc. v. Lamar , 238 F2d. 1288

(11th Cir. 2001).

45. Chapter 2002 - 197, Laws of Florida, enacted in 2002,

provided a new definition for "pol itical committee." See

Section 106.011(1)(a), Florida Statutes (2002).

46. A committee is commonly defined as a group of persons

formed for a particular purpose. Its scope may be narrow or

broad. A committee must consist of two or more persons.

Commit tee's typically make collegial decisions. A political

committee is a committee that has a political purpose. Prior to

the appointment of Ms. McCarty, the evidence indicates that

there was no committee. Instead, an entity controlled by

Mr. Stone, IKON P ublic Affairs Group, a business, was conducting

business as promoters of a committee.

47. Once Ms. McCarty became chair, on or about

December 19, 2000, a de facto committee political committee came

into existence. However, because of the rulings in the Mortham

and Lamar cases, it could not become a committee as defined in

Section 106.011(1), Florida Statutes. Because The Committee

could not become a committee as defined by Chapter 106, it could

not be subject to regulation by the Division of Elections, even

though The Committee voluntarily registered with the Division of

Elections.

48. Section 106.03, Florida Statutes, provides as follows:

106.03. Registration of political

committees.

(1) Each political committee which

anticipates receiving contributi ons or

making expenditures during a calendar year

in an aggregate amount exceeding $500 or

which is seeking the signatures of

registered electors in support of an

initiative shall file a statement of

organization as provided in subsection (3)

within 10 day s after its organization or, if

later, within 10 days after the date on

which it has information which causes the

committee to anticipate that it will receive

contributions or make expenditures in excess

of $500. If a political committee is

organized with in 10 days of any election, it

shall immediately file the statement of

organization required by this section.

(2) The statement of organization shall

include:

(a) The name and address of the committee;

(d) The name, address, and position of the

custodia n of books and accounts;

(e) The name, address, and position of

other principal officers, including officers

and members of the finance committee, if

any;

(f) The name, address, office sought, and

party affiliation of:

1. Each candidate whom the committ ee is

supporting;

2. Any other individual, if any, whom the

committee is supporting for nomination for

election, or election, to any public office

whatever;

(g) Any issue or issues such organization

is supporting or opposing;

(h) If the committee is sup porting the

entire ticket of any party, a statement to

that effect and the name of the party;

(i) A statement of whether the committee is

a continuing one;

(j) Plans for the disposition of residual

funds which will be made in the event of

dissolution;

(k ) A listing of all banks, safe - deposit

boxes, or other depositories used for

committee funds; and

(l) A statement of the reports required to

be filed by the committee with federal

officials, if any, and the names, addresses,

and positions of such officia ls.

49. The Committee did not comply with Section 106.03,

Florida Statutes, until on or about January 8, 2001. Therefore

it was not properly registered with the Division of Elections

until that date.

50. Despite the fact The Committee was not registe red, it

was in existence from at least December 19, 2000, because

Section 106.03, Florida Statutes, contemplates a committee being

in existence prior to the time it is required to register, and

on that date it took a clear action indicating its existence

w hen the chairperson, Ms. McCarty, signed the "Statement of

Organization of Political Committee" and the "Appointment of

Campaign Treasurer and Designation of campaign Depository for

Political Committee."

51. It is the policy of the Division of Elections, to

treat a committee that has not been registered, as a free form

entity that is not subject to Chapter 106, Florida Statutes.

For purposes of these proceedings it is not necessary to

determine if that rationale is correct. In addressing the

various cou nts, The Committee will be deemed to have come into

existence on December 19, 2000, and to have become a registered

committee subject to Chapter 106, Florida Statutes, on

January 8, 2001.

The First Count

52. The Order of Probable Cause, in the First Coun t,

charged both The Committee and Ms. McCarthy with violating

Section 106.07(5), Florida Statutes, which provides as follows:

106.07. Reports; certification and filing

* * *

(5) The candidate and his or her campaign

treasurer, in the case of a candidat e, or

the political committee chair and campaign

treasurer of the committee, in the case of a

political committee, shall certify as to the

correctness of each report; and each person

so certifying shall bear the responsibility

for the accuracy and veracity of each

report. Any campaign treasurer, candidate,

or political committee chair who willfully

certifies the correctness of any report

while knowing that such report is incorrect,

false, or incomplete commits a misdemeanor

of the first degree, punishable as provided

in s. 775.082 or s. 775.083.

53. Section 106.07(5), Florida Statutes, does not address

actions by committees. Therefore, The Committee did not violate

the statute.

54. The first sentence in Section 106.07(5), Florida

Statutes is directive i n nature. It provides that a committee

chair must submit a report and provides that a committee chair

shall bear the responsibility for the accuracy and veracity of

each report. In other words, this charges the chairperson with

accomplishing specific dut ies.

55. The second sentence sets forth a substantive offense.

It condemns signing a campaign report willfully while knowing

that is "incorrect, false, or incomplete."

56. The CTR - Q1 signed by Ms. McCarty was incorrect in the

following instances:

a. The expenditure section reported that Robert Morgan

was refunded $500 when in fact he was refunded $1,500.

b. The $150,000 item for direct mail services indicated

that an "in kind" contribution, or loan, had been made, when in

fact someone other than The Committee paid for the fundraising

letter and because this sum was not disbursed to Creative

Marketing as reported.

c. A $50,000 item was listed as a payment to Creative

Marketing on March 12, 2001, when in fact no payment was made on

that date and the payment was made instead to Unique Graphics

and Design. The payment to Unique Graphics and Design was made

via a check dated May 9, 2001.

57. Having found that the CTR - Q1 signed by Ms. McCarty was

incorrect, it is next necessary to determine i f her actions were

willful, and accomplished while knowing that the report was

incorrect.

58. Section 106.37, Florida Statutes, provides as follows:

106.37. Willful violations.

A person willfully violates a provision of

this chapter if the person c ommits an act

while knowing that, or showing reckless

disregard for whether, the act is prohibited

under this chapter, or does not commit an

act while knowing that, or showing reckless

disregard for whether, the act is required

under this chapter. A perso n knows that an

act is prohibited or required if the person

is aware of the provision of this chapter

that prohibits or requires the act,

understands the meaning of that provision,

and performs the act that is prohibited or

fails to perform the act that is required.

A person shows reckless disregard for

whether an act is prohibited or required

under this chapter if the person wholly

disregards the law without making any

reasonable effort to determine whether the

act would constitute a violation of this

cha pter.

59. Ms. McCarthy willfully violated Section 106.07(5),

Florida Statutes, because, having been duly warned by the

language appearing above the signature block of the CTR - Q1, and

having had experience in requirements surrounding the

preparation and s ubmission of campaign treasurer's reports, she

showed a reckless disregard for whether or not the report was

correct. Ms. McCarthy knowingly violated Section 106.07(5),

Florida Statutes, because she knew of the requirements

surrounding the preparation of campaign treasurer reports, even

though she may not have been entirely familiar with the law

surrounding political committees. Despite warnings on the face

of the document she signed, she nevertheless made no attempt to

determine if the report she submitt ed was correct.

60. Accordingly, the First Count would be proven as to

Ms. McCarty, except that The Committee was not subject to

regulation by the Division of Elections because there was at the

time, no statutory definition of "political committee."

Ms. McCarty could not have been a "political committee chair,"

as would be required for her to have violated the statute,

because Mortham and Lamar , have made the term "political

committee" inoperative.

61. The Committee cannot be found to have violated this

section as alleged because the statute does not proscribe any

action of or by The Committee, nor does it penalize The

Committee for the actions of any of its officers that violate

the statute.

The Second Count

62. The Second Count in the Order of Pr obable Cause

charged The Committee and Ms. McCarthy with violating Section

106.11(3), Florida Statutes. The Statement of Findings of the

Commission alleges the violation occurred when The Committee or

Ms. McCarthy incurred an expense for the purchase of g oods or

services, to wit, the fundraising letter, when there were

insufficient funds on deposit in the primary campaign depository

to pay the full amount of the incurred expense.

63. Section 106.11(3), Florida Statutes, provides as

follows:

106.11. Expen ses of and expenditures by

candidates and political committees

Each candidate and each political committee

which designates a primary campaign

depository pursuant to s. 106.021(1) shall

make expenditures from funds on deposit in

such primary campaign d epository only in the

following manner, with the exception of

expenditures made from petty cash funds

provided by s. 106.12:

* * *

(3) No candidate, campaign manager,

treasurer, deputy treasurer, or political

committee or any officer or agent thereof,

o r any person acting on behalf of any of the

foregoing, shall authorize any expenses, nor

shall any campaign treasurer or deputy

treasurer sign a check drawn on the primary

campaign account for any purpose, unless

there are sufficient funds on deposit in th e

primary depository account of the candidate

or political committee to pay the full

amount of the authorized expense, to honor

all other checks drawn on such account,

which checks are outstanding, and to meet

all expenses previously authorized but not

yet paid. However, an expense may be

incurred for the purchase of goods or

services if there are sufficient funds on

deposit in the primary depository account to

pay the full amount of the incurred expense,

to honor all checks drawn on such account,

which ch ecks are outstanding, and to meet

all other expenses previously authorized but

not yet paid, provided that payment for such

goods or services is made upon final

delivery and acceptance of the goods or

services; and an expenditure from petty cash

pursuant t o the provisions of s 106.132 may

be authorized, if there is a sufficient

amount of money in the petty cash fund to

pay for such expenditure. Payment for

credit card purchases shall be made pursuant

to s. 106.125. Any expense incurred or

authorized in ex cess of such funds on

deposit shall, in addition to other

penalties provided by law, constitute a

violation of this chapter.

64. The Committee cannot be found to have violated this

section as alleged because the statute does not proscribe any

action of o r by The Committee, nor does it penalize the

Committee for the actions of any of its officers that violate

the statute.

65. The expenditure addressed in the Second Count refers

to the mailing of the letter of December 2000, sent out under

Ms. McCarty's na me as Palm Beach County Commissioner.

Ms. McCarty was not the chairperson of The Committee when the

expense was incurred. This expense was incurred at the

direction of Mr. Stone and his operatives, not by Ms. McCarty.

Moreover, Ms. McCarty could not ha ve been a "political committee

chair," as would be required for her to have violated the

statute, because Mortham and Lamar , have made the term

"political committee" inoperative.

Counts Three through Eleven

66. The Order of Probable Cause alleges nin e separate

counts of violating Section 106.19(1)(a), Florida Statutes,

addressing the receipt of contributions in excess of $500, as

follows:

a. Count Three, referring to Creative Marketing.

b. Count Four, referring to Walter Hunter.

c. Count Five, referring to Neda Korich.

d. Count Six, referring to Arthur Allen.

e. Count Seven, referring to Robert Morgan.

f. Count Eight, referring to William Shutze.

g. Count Nine, referring to Caroline Ireland.

h. Count Ten, referring to Henry Allen.

i. Count Eleven, referring to Honore Wamsler.

67. Section 106.19(1)(a), Florida Statutes, provides as

follows:

106.19. Violations by candidates, persons

connected with campaigns, and political

comm ittees

(1) Any candidate; campaign manager,

campaign treasurer, or deputy treasurer of

any candidate; committee chair, vice chair,

campaign treasurer, deputy treasurer, or

other officer of any political committee;

agent or person acting on behalf of any

candidate or political committee; or other

person who knowingly and willfully:

(a) Accepts a contribution in excess of the

limits prescribed by s. 106.08;

* * *

. . . is guilty of a misdemeanor of the

first degree, punishable as provided in s.

775.082 or s. 775.083.

68. The contribution limit set by Section 106.08(1)(a),

Florida Statutes, is $500. On eight occasions, The Committee

received contributions of greater than $500. On another

occasion, a campaign contribution was accepted which was $1 ,500,

more than the allowable amount. The statute addresses persons

acting on behalf of committees; therefore, The Committee cannot

violate this statute.

69. During the time Ms. McCarty served as Chairperson, she

was unaware of the amount of the c ontributions received or the

identity of the contributors. The "Telepost" requested that

contributions be sent to The Committee address on Washington

Avenue in Miami Beach. The contributions were received in the

Miami Beach office and were deposited in a bank located in Miami

by people who worked for Mr. Stone. Accordingly, it would be

incorrect to say that Ms. McCarty accepted contributions.

70. With regard to whether Ms. McCarty knowingly and

willfully violated the statute as alleged, it is

incon trovertible that Ms. McCarty was completely unaware of the

amount of the contributions or the identity of the contributors

until she received the CTR - Q1 which had been prepared by

Mr. Stone's operatives. She relied entirely on Mr. Stone and

his operative s and relied on his knowledge of the law

surrounding contribution limits as it applied to committees.

71. The CTR - Q1, in its expenditure section, reflected the

return of excess contributions except in the case of Creative

Marketing and Robert Morga n. In the case of the latter a return

of the excess contribution was reflected, but in an incorrect

amount. Accepting a contribution in excess of the permissible

amount and returning it in the same reporting cycle is

inconsistent with knowingly and willf ully committing an offense.

Taken as a whole, the evidence fails to demonstrate that

Ms. McCarty accepted contributions, and even if it were to be

concluded that she accepted contributions, the evidence fails to

demonstrate that she knew that The Committ ee had accepted

contributions in excess of lawful amounts. If she didn't know

that the excess contributions had been accepted, a fortiori , she

couldn't have willfully accepted them.

72. For the foregoing reasons, neither The Committee nor

Ms. McCart y violated Section 106.19(1)(a), Florida Statutes, as

alleged in Counts Three through Eleven. Moreover, Ms. McCarty

could not have been a "political committee chair," as would be

required for her to have violated the statute, because Mortham

and Lamar , ha ve made the term "political committee" inoperative.

Count Twelve

73. The Commission alleged in its Order of Probable Cause

that The Committee and Ms. McCarthy violated Section

106.19(1)(b), Florida Statutes, by failing to report a

contribution requir ed to be reported by Chapter 106, Florida

Statutes. Resort to the Statement of Findings reveals that this

charge addresses the $150,000 contribution reported as "LOA/INK

extension of credit for direct mail services."

74. Section 106.19(1)(b), Flor ida Statutes, provides as

follows:

106.19. Violations by candidates, persons

connected with campaigns, and political

committees

(1) Any candidate; campaign manager,

campaign treasurer, or deputy treasurer of

any candidate; committee chair, vice chair,

c ampaign treasurer, deputy treasurer, or

other officer of any political committee;

agent or person acting on behalf of any

candidate or political committee; or other

person who knowingly and willfully:

* * *

(b) Fails to report any contribution

required to be reported by this chapter;

* * *

. . . is guilty of a misdemeanor of the

first degree, punishable as provided in s.

775.082 or s. 775.083.

75. The Committee cannot be found to have violated this

section as alleged because the statute does not proscribe any

action of or by The Committee, nor does it penalize The

Committee for the actions of any of its officers that violate

the statute.

76. The Committee and Ms. McCarty reported the $150,000 on

the CTR - Q1. The receipt of the $150,000 was r eported. It was

reported, however, in such an ambiguous manner, that it cannot

be determined from the entry whether an in kind contribution was

received, or whether a loan was extended. This is incorrect,

false or incomplete information because the $150, 000 came from

Mr. Stone or his organization, not from Creative Marketing as

reported. But it is not a failure to report a contribution.

This expenditure was made prior to the formation of The

Committee. This count is not proved in the case of The

Commit tee, or in the case of Ms. McCarty. Moreover, Ms. McCarty

could not have been a "political committee chair," as would be

required for her to have violated the statute, because Mortham

and Lamar , have made the term "political committee" inoperative.

Count Thirteen

77. The final count in the Order of Probable Cause alleges

a violation of Section 106.19(1)(d), Florida Statutes, in that

The Committee or Ms. McCarty made or authorized an expenditure

prohibited by Chapter 106.

78. Section 106.19(1)(d ), Florida Statutes, provides as

follows:

106.19. Violations by candidates, persons

connected with campaigns, and political

committees

(1) Any candidate; campaign manager,

campaign treasurer, or deputy treasurer of

any candidate; committee chair, vice c hair,

campaign treasurer, deputy treasurer, or

other officer of any political committee;

agent or person acting on behalf of any

candidate or political committee; or other

person who knowingly and willfully:

* * *

(d) Makes or authorizes any expenditure in

violation of s. 106.11(3) or any other

expenditure prohibited by this chapter;

* * *

. . . is guilty of a misdemeanor of the

first degree, punishable as provided in s.

775.082 or s. 775.083.

79. In order to determine if a violation of this sec tion

has occurred, reference must be made to Section 106.11(3),

Florida Statutes, which is quoted in its entirety at paragraph

57, above, and which provides generally that a committee may not

incur obligations without having money to meet those

obligations .

80. Reference must be made also to "any other expenditure

prohibited by" Chapter 106. The Findings of Fact state that

this Count refers to the $150,000 expense to print and

distribute the fund - raising letter. The violation is alleged to

have occurred because the expense was incurred when there were

no funds in the committee's campaign account. The Commission

failed to prove that The Committee was extant when this

occurred. Moreover, Ms. McCarty could not have been a

"political committee chair," as wo uld be required for her to

have violated the statute, because Mortham and Lamar , have made

the term "political committee" inoperative. Accordingly,

neither The Committee nor Ms. McCarty committed the violation

alleged as Count 13.

81. Ms. McCarty ha s no previous history of election law

violations. She has a substantial income.

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 1st day of May, 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 1st d ay of May, 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, Flor ida 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, Su ite 224

Tallahassee, Florida 32399 - 1050

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.