05-004399 Florida Elections Commission vs. Mikel Lee Perry Status: Closed Recommended Order on Friday, June 30, 2006.

Summary: Respondent violated Section 106.07(5), Florida Statutes, by certifying to the correctness of five campaign treasurer`s reports, which did not disclose payments that Respondent`s media consultant made to two television stations on Respondent`s behalf.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA ELECTIONS COMMISSION, )

)

Petitioner, )

)

vs. ) Case No. 05 - 4399

)

MIKEL LEE PERRY, )

)

Respondent. )

)

RECOMMENDED ORDER

A formal hearin g was held in this case on April 24, 2006,

in Defuniak Springs, Florida, before Suzanne F. Hood,

Administrative Law Judge with the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Eric M. Lipman, Esquire

Florida Ele ctions Commission

Collins Building, Suite 224

107 West Gaines Street

Tallahassee, Florida 32399 - 1050

For Respondent: Albert T. Gimbel, Esquire

Gary Early, Esquire

Messer, Caparello & Self, P.A.

Post Office Box 1876

Tallahassee, Florida 32302

STATEMENT OF THE ISSUE

The issue is whether Respondent willfully violated Section

106.07(5), Florida Statutes (2004), by certifying to the

correctness of five campaign treasurer's reports (CTRs), which

did not disclose payments that Respondent's media consultant

made to two television stations on Respondent's behalf.

PRELIMINARY STATEMENT

On August 23, 2005, P etitioner Florida Elections Commission

(Petitioner) received a sworn complaint alleging that Respondent

Mikel Lee Perry (Respondent) had violated Section 106.07,

Florida Statutes (2004). Specifically, the complaint alleged

that Respondent purchased televi sion campaign advertising time,

requiring cash in advance, without reporting the expenditures

until after the air dates.

On August 26, 2005, Petitioner found probable cause to

believe that, on six occasions, Respondent violated Section

106.07(5), Florida Statutes (2004). Prior to hearing,

Petitioner withdrew the sixth count in the Order of Probable

Cause. The remaining five counts allege that Respondent

willfully failed to properly report payments made to two

television stations by Respondent's media co nsultant.

On September 26, 2005, Respondent filed a Petition for

Informal Administrative Hearing. At an informal hearing on

November 18, 2005, Respondent denied that he willfully filed

inaccurate or incomplete CTRs. On December 2, 2005, Petitioner

refe rred the case to the Division of Administrative Hearings.

On December 27, 2005, the undersigned issued a Notice of

Hearing, scheduling the hearing for February 27, 2006.

On February 14, 2006, Respondent filed an unopposed Motion

for Continuance. On Fe bruary 16, 2006, the undersigned issued

an Order Granting Continuance and Re - scheduling Hearing for

April 24, 2006.

Prior to the hearing, Respondent filed a Motion in Limine.

The motion sought to exclude evidence regarding certain actions

by Respondent th at may have constituted a violation of Chapter

106, Florida Statutes (2004), but which were not specifically

charged in Petitioner's Order of Probable Cause. The

undersigned reserved ruling on the motion, which is hereby

granted in part and denied in part . 1/

During the hearing, the parties offered two joint exhibits,

J1 and J2. Exhibit No. J1 was accepted as a deposition in lieu

of the trial testimony of Robert Beasley, Supervisor of

Elections, Walton County, Florida. Exhibit No. J2 was accepted

as the 2 004 Candidate and Campaign Treasurer Handbook as

published in November 2003.

Petitioner presented the testimony of five witnesses.

Petitioner offered 42 exhibits, Exhibit Nos. A through PP, which

were accepted as evidence.

Respondent testified on his own behalf and presented the

testimony of two additional witnesses. Respondent offered 39

exhibits, Exhibit Nos. 1 - 39, which were accepted as evidence.

FINDINGS OF FACT

1. Petitioner has jurisdiction to investigate and enforce

Chapter 106, Florida Sta tutes.

2. Respondent was an unsuccessful candidate for the Walton

County Commission in 2004. Respondent was defeated in the

August 31, 2004, primary election.

3. Respondent is not an experienced politician. The 2004

campaign was his first and only at tempt to run for public

office. Respondent's campaign was entirely self - funded.

4. Guy Davidson was the political consultant for

Respondent's opponent. On or about August 22, 2004,

Mr. Davidson filed a sworn complaint with Petitioner against

Responden t. The complaint alleged that Respondent was running

television ads (requiring cash in advance) although no

expenditures to stations for airtime appeared on Respondent's

CTRs.

5. On March 10, 2004, Respondent signed a Statement of

Candidate form as req uired by Section 106.023, Florida Statutes

(2003). The statement indicates that Respondent had received,

read, and understood the requirements of Chapter 106, Florida

Statute (2003).

6. On March 10, 2004, Respondent filed his Appointment of

Campaign Tr easurer and Designation of Campaign Depository for

Candidates. Respondent appointed his personal and business

bookkeeper, Iris Schipper, to serve as his campaign treasurer.

Respondent had confidence in Ms. Schipper, who had accounting

experience, but no experience with political campaigns. On

July 15, 2004, Respondent appointed himself as his deputy

campaign treasurer.

7. In the spring of 2004, Respondent hired Steven

Petermann, the owner of Petermann Corporation, as his campaign

media consultant for the purpose of creating, producing,

distributing and disseminating political advertisements for

Respondent's campaign. Mr. Petermann was in charge of all media

aspects concerning Respondent's campaign.

8. Respondent had known Mr. Petermann for years. Prior to

the 2004 campaign, Respondent employed Mr. Petermann for

advertising services concerning business ventures unrelated to

Respondent's campaign.

9. Mr. Petermann was experienced in providing campaign

advertising for local political races. He ha d done so for

approximately 30 campaigns. Mr. Petermann provided Respondent

with advertising services which were similar to the services

that Mr. Petermann provided to other political candidates.

10. Respondent never specified to Mr. Petermann what

adv ertising to buy or how much to spend. Respondent and

Mr. Petermann had no specific payment or billing terms in mind

when Mr. Petermann agreed to act as Respondent's media

consultant or at anytime during the campaign.

11. Generally, Mr. Petermann did no t expect his political

clients to pay him until the end of their campaigns. However,

Respondent attempted to pay Mr. Petermann in full in accordance

with the balance due on Petermann Corporation statements or in

advance on those occasions when Respondent knew about projected

campaign costs. In other words, Respondent tried to make sure

that Mr. Petermann was paid in advance or promptly reimbursed

for campaign expenses. In this regard, Respondent acted

consistently with his prior private business relation ship with

Mr. Petermann.

12. With regard to Respondent's campaign advertising

budget, Respondent told Mr. Petermann to do "whatever it took to

run a successful campaign." Respondent trusted Mr. Petermann's

professional judgment as to how much advertisi ng was needed and

in which mediums the advertising was to run.

13. Respondent knew Mr. Petermann was making expenditures

on behalf of the campaign. Respondent was aware of each and

every expenditure his campaign made to Mr. Petermann because he

was ver y involved in his campaign finances.

14. Mr. Petermann wrote the following checks on his

business account directly to WJHG - TV and WBBM - TV for advertising

time on behalf of Respondent's campaign:

Date of Check Check Number Payee Amount of

Television Petermann

Station Expenditure

for Perry

06 - 11 - 04 025246 WMBB - TV $442.00

06 - 14 - 04 025247 WJHG - TV $450.50

06 - 29 - 04 025294 WJHG - TV $450.50

06 - 29 - 04 025297 WMBB - TV $446.25

07 - 26 - 04 025405 WJHG - TV $743.75

07 - 26 - 04 025406 WMBB - TV $956.25

08 - 12 - 04 025491 WJHG - TV $743.75

08 - 12 - 04 025492 WMBB - TV $956.25

08 - 30 - 04 025548 WJHG - TV $331.50

15. Respondent made no expenditures from his campaign

account directly to a television station. Additionally, no

expenditures to television stations were listed on Respondent' s

CTRs. Mr. Petermann purchased all of the television airtime on

behalf of Respondent's campaign.

16. Mr. Petermann periodically sent Respondent statements

for campaign services and expenses. The statements did not

itemize each expenditure for televis ion airtime. The statements

did list television advertising and various other advertising

purchases in general.

17. Respondent did not list the checks that Mr. Petermann

paid directly to WJHG - TV and WMBB - TY for Respondent's television

airtime on any CT R during his 2004 campaign. A member of the

public could not look at Respondent's CTRs and determine the

following: (a) which television stations Respondent paid for

campaign advertising; (b) how much Respondent paid for

television advertising; and (c) h ow much Respondent paid for

Mr. Petermann's professional services.

18. During the course of the campaign, Respondent reported

making several payments to Petermann Advertising or Petermann

Corporation. Respondent listed each payment made to

Mr. Peterman n on his CTRs. Respondent did not break down the

expenditures and itemize the components of the expenditures on

his CRTs, including how much was paid to Mr. Petermann for his

professional services.

19. In a letter dated June 24, 2004, Mr. Beasley, Walt on

County Supervisor of Elections, advised all candidates,

including Respondent, to read an enclosed memorandum from

Phyllis Hampton, Chief of the Bureau of Election Records for the

Department of State, Division of Elections. Mr. Beasley

requested all can didates to sign an enclosed statement and

return the statement to his office in the enclosed stamped and

addressed envelope.

20. Ms. Hampton's memorandum was dated June 17, 2004. It

specifically referred to "2004 Campaign Finance Legislative

Changes." The memorandum discussed the disclaimer that

candidates were required to use on campaign advertising

effective July 1, 2004. The last two paragraphs of

Ms. Hampton's memorandum stated as follows:

Enclosed is a copy of Chapter Law 2004 -

252 (CS/SB 2346 &516). Section 5 of this

law amends Section 106.143, Florida

Statutes. We are also enclosing a handout

that contains Section 106.143, Florida

Statutes, as amended, as well as examples of

political disclaimers under the new law.

There are other chan ges in this law that

affect campaign financing for candidates and

a summary of those changes is enclosed.

The Division of Elections of the

Department of State has posted all enacted

legislation that affect The Florida Election

Code, Chapters 97 - 106 , Florida Statutes, on

its web site. That web site is

http://election.dos.state. fl.us. If you

have any questions, please feel free to call

us at 850 - 245 - 6240.

21. When Mr. Beasley received Ms. Hampton's memorandum, it

included a copy of Public Law 2 004 - 252. Mr. Beasley did not

duplicate the law when he sent Ms. Hampton's memorandum to

candidates in Walton County. If any candidate had requested a

copy of the new law, Mr. Beasley would have obtained a copy for

the candidate or referred the candidate to the Internet.

22. Respondent received Ms. Hampton's memorandum regarding

the changes in the law, but he did not read it over in detail.

Instead, Respondent continued to direct his attention to

campaign issues.

23. There is no evidence that Respon dent took any

affirmative steps to inquire which sections of the law were

amended in addition to the requirements for political

disclaimers. Respondent did not go to the Department of State,

Division of Elections' website to review the law or a copy of

th e updated candidate's handbook. All Respondent did was to

send a copy of the letter to Mr. Petermann.

24. Respondent did not give Ms. Schipper a copy of

Ms. Hampton's June 17, 2004, memorandum during the campaign.

Ms. Schipper received the memorandum and filed it in one of

Respondent's campaign files after the campaign ended.

25. Respondent wrote a personal check dated June 30, 2004,

made payable to Peterman Corp. in the amount of $7,500. The

check does not state its purpose. Mr. Petermann deposit ed this

check in his business account on July 1, 2004.

26. Respondent wrote the June 30, 2004, personal check to

Petermann Corp. because he was in Mr. Petermann's office and

wanted to make sure Mr. Petermann was paid promptly for his

services and expenses on Respondent's behalf. On June 30, 2004,

Respondent had not yet appointed himself as his deputy campaign

treasurer and did not have a campaign check signed by

Ms. Schipper.

27. Respondent's Q2 CTR, which covered the period from

April 1, 2004, to June 30, 2004, was due to be filed on July 12,

2004. The report listed no expenditure to Mr. Petermann. The

report did not disclose that Mr. Petermann had spent $1,789.25

on behalf of Respondent's campaign to pay for advertisements on

two television stations during the reporting period.

28. On July 24, 2004, Respondent, as deputy campaign

treasurer, wrote a check on his campaign account. The check was

payable to Petermann Advertising in the amount of $10,000. The

check did not state its purpose.

29. On August 5, 2004, Ms. Schipper wrote a check on

Respondent's campaign account. The check was payable to

Respondent in the amount of $7,500. The purpose of the check

was to reimburse Respondent for the amount Respondent paid to

Mr. Petermann out of Responde nt's personal account on June 30,

2004.

30. On August 6, 2004, Ms. Schipper wrote a check on

Respondent's campaign account. The check was payable to

Petermann Advertising in the amount of $10,000. The check

states that its purpose was advertising.

3 1. Respondent's F2 CRT, which covered the period from

July 24, 2004, through August 6, 2004, was due to be filed on

August 13, 2004. The F2 CRT listed the following payments as

expenditures: (a) a check dated July 24, 2004, to Petermann

Advertising for campaign advertising in the amount of $10,000;

(b) a check dated August 5, 2004, to Petermann Advertising/mlp

(Respondent's initials) for campaign advertising in the amount

of $7,500; and (c) a check dated August 6, 2004, to Petermann

Advertising for campa ign advertising in the amount of $10,000.

The August 5, 2004, check, listed as payable to Petermann

Advertising/mlp, was a reimbursement to Respondent for the

personal check he wrote on June 30, 2004. Respondent's F2 CTR

did not disclose that Mr. Peterma nn spent $1,700 on behalf of

Respondent's campaign to pay for advertisements on two

television stations during the reporting period.

32. Ms. Schipper contacted someone in Mr. Beasley's office

in Santa Rosa Beach, Florida, by telephone on August 13, 2004 ,

before she filed Respondent's F2 CRT. Ms. Schipper inquired

about the proper method of reporting the August 5, 2004, payment

of campaign funds to reimburse Respondent for his personal check

dated June 30, 2004, to Mr. Petermann. During the hearing, Ms.

Schipper testified as follows:

Okay. I called the -- there was a

question about this particular expense

because the nature of the check that I just

explained because I wasn't sure. I knew I

had to report it, but I wasn't sure how I

should report it. So I called the

supervisor of elections office and I told

them what had happened, including the fact

that Lee Perry was totally self - funding his

campaign and that he had a paid check

personally that we need to record as an

expenditure on the campaign account and I

told her that I had to -- to fund the

campaign account and then pay it back to Lee

and it was just like an in and out

transaction, but I had to report it, but it

was to Petermann Advertising. We had other

checks to Petermann Advertising. It was all

the campaign advertising. How did I need to

do that.

33. After speaking with an unidentified female in

Mr. Beasley's office, Ms. Schipper was not comfortable with the

answer to her inquiry. Ms. Schipper decided to list the check

as payable to Petermann Advertising/mlp. Ms. Schipper did not

call anyone else regarding the proper method of reporting the

June 30, 2004, check, which reimbursed Respondent for

reimbursing Mr. Petermann for advertising services and

advertising expenses paid to televis ion stations.

34. On August 20, 2004, Ms. Schipper wrote a campaign

check payable to Petermann Advertising for campaign advertising

in the amount of $15,000.

35. Respondent's F3 CTR, covering the period from

August 7, 2004, through August 26, 2004, w as due to be filed on

August 27, 2004. Respondent's F3 CTR listed one expenditure to

Petermann Advertising for campaign advertising in the amount of

$15,000. Respondent's F3 CTR did not disclose that

Mr. Petermann had spent $1,700 on behalf of Respondent 's

campaign to pay for advertisements on two television stations

during the reporting period.

36. On September 10, 2004, Ms. Schipper wrote a campaign

check payable to Petermann Advertising for campaign advertising

in the amount of $11,422.23.

37. Re spondent's G1 CTR, covering the period from

August 27, 2004, through September 10, 2004, was due to be filed

on September 17, 2004. Respondent's G1 CTR listed a check

payable to Petermann Advertising as an expenditure. The check,

dated September 10, 2004 , was for campaign advertising in the

amount of $11,422.23. Respondent's G1 CTR did not disclose that

Mr. Petermann spent $331.50 on behalf of Respondent's campaign

to pay for advertisements on one television station during the

reporting period.

38. On October 19, 2004, Ms. Schipper wrote a campaign

check payable to Petermann Advertising for the "Perry Campaign"

in the amount of $9,100.

39. After filing Respondent's F3 CTR, Ms. Schipper

realized that Mr. Petermann never received the August 20, 2004,

campaign check in the amount of $15,000. Therefore,

Ms. Schipper cancelled the check and filed an Amended F3 CTR on

October 22, 2004.

40. Respondent's Amended F3 CTR indicated that $15,000 was

subtracted from Respondent's expenditures. The Amended F3 CTR

listed the October 19, 2004, check as an expenditure. The check

was payable to Petermann Advertising for campaign advertising in

the amount of $9,100.

41. Mr. Beasley has two offices. The main office is

located in Defuniak Springs, Florida. The sat ellite office is

located in Santa Rosa Beach, Florida. Neither office has a

written record of inquiries concerning the reporting of

expenditures for Respondent's campaign. As a general office

practice, Mr. Beasley's staff does not make notes or records o f

telephone conversation with candidates or other individuals who

call regarding campaign issues.

42. Ms. Schipper called Mr. Beasley's office in Santa Rose

Beach, Florida, when she had a question about her duties as

campaign treasurer. If she could no t get an answer to her

question, Ms. Schipper called Mr. Beasley's office in Defuniak

Springs, Florida.

43. Ms. Schipper's office during the 2004 campaign was in

Respondent's residence, which had two telephone lines. During

the hearing, Respondent pres ented telephone records showing

seven telephone calls from the residence to Mr. Beasley's main

office in Defuniak Springs, Florida, on the following dates:

July 1, 2004; July 7, 2004; July 16, 2004; July 17, 2004;

August 27, 2004; August 30, 2004; and Sep tember 9, 2004. The

telephone records do not show any calls made to Mr. Beasley's

office in Santa Rosa Beach, Florida.

44. Ms. Schipper called Mr. Beasley's Santa Rosa Beach

office to inquire about reimbursing Respondent for the June 30,

2004, personal payment to Mr. Petermann. However, there is no

evidence that Ms. Schipper called either of Mr. Beasley's

offices to inquire specifically about the proper method of

reporting campaign expenditures, paid directly to Mr. Petermann,

part of which included in direct payments or reimbursements for

advertising on television stations.

45. Mr. Beasley has no independent recollection of

speaking with Ms. Schipper during the campaign. There is no

evidence that anyone on Mr. Beasley's staff remembers speaking

with Respondent or Ms. Schipper about campaign finance reports

during the 2004 campaign.

46. Mr. Beasley's office provided Respondent with a copy

of the 2004 Candidate and Campaign Treasurer Handbook (published

November 2003)(handbook) and Chapter 106, Flor ida Statutes

(2003). Respondent and Ms. Schipper referred to these resources

from time to time during the campaign on an as needed basis.

47. The handbook did not specifically require a candidate

to "itemize" expenditures to media consultants.

48. T he handbook contains the following statement on the

first page:

Important Notice

The information contained in this

publication is intended as a quick reference

guide only and is current upon publication.

Chapter 97 - 106, Florida Statutes, the

Constituti on of the State of Florida,

Division of Elections' opinions and rules,

Attorney General opinions, county charters,

city charters and ordinances, and other

sources should be reviewed in their entirety

for complete information regarding campaign

financing an d qualifying.

In addition, the following publication

produced by the Florida Department of State,

Division of Elections should be reviewed for

further information regarding candidates and

committees:

2004 Federal Qualifying Handbook

2004 Committee and Campaign Treasurer

Handbook

2004 Handbook on Filing Campaign Reports

2004 Election Cycle Calendar of Reporting

Dates for Candidates, Political Committees

and Committees of Continuous Existence

2004 Election Cycle Calendar of Reporting

Dates for Political P arty Executive

Committees.

All forms and publications provided by the

Division of Elections are available on our

web site at http://election.dos.state.fl.us.

Please direct any questions to either your

county supervisor or elections or the

Florida Departm ent of State, Division of

Elections at (850) 245 - 6240. (Emphasis

included)

49. Chapter 7 of the handbook states as follows regarding

the duties and responsibilities of campaign treasurers:

IMPORTANT : No contribution or expenditure,

including contribu tions or expenditures of a

candidate or of the candidate's family,

shall be directly or indirectly made or

received in furtherance of the candidacy of

any person for nomination or election to

political office in the state except through

the duly appointed campaign treasurer of the

candidate. (Emphasis included)

50. Chapter 10 of the handbook states as follows regarding

campaign expenditures:

An expenditure is a purchase, payment,

distribution, loan, advance, transfer of

funds by a campaign treasurer or deputy

campaign treasurer between a primary

depository and a separate interest - bearing

account or certificate of deposit, or gift

of money or anything of value made for the

purpose of influencing the results of an

election.

* * *

A candidate shall :

1. Pay all campaign expenditures by a check

drawn on the campaign account (except petty

cash); (emphasis included)

51. Chapter 14 of the handbook states as follows regarding

the filling of campaign reports:

Reporting Expenditures

Form DS - DE 14, Itemize d Expenditures is used

to report all expenditures made, regardless

of the amount and must contain:

1. Full name an address of each person to

whom expenditures have been made along with

the amount, date and clear purpose of the

expenditure. Name, address and office

sought by each candidate on whose behalf

such expenditure was made.

2. Full name and address of each person to

whom an expenditure for personal services,

salary or reimbursed expenses was made along

with the amount, date and clear purpose o f

the expenditure. A candidate or any other

individual may be reimbursed for expenses

incurred for travel, food and beverage,

office supplies, and mementoes expressing

gratitude to campaign supporters as provided

for in section 106.021(3), F.S.

* * *

5. Amount and nature of debts and

obligations owed by or to the candidate,

which relate to the conduct of any political

campaign. (Emphasis included)

52. On July 1, 2004, amendments to Chapter 106, Florida

Statutes (2004), became effective, including t he addition of

Section 106.07(4)(a)13., Florida Statutes (2004), which states

as follows:

(4)(a) Each report required by this

section shall contain:

* * *

13. The primary purpose of an

expenditure made indirectly through a

campaign treasur er for goods and services

such as communications media placement or

procurement services, campaign signs,

insurance, and other expenditures that

include multiple components as part of the

expenditure. The primary purpose of an

expenditure shall be that pu rpose, including

integral and directly related components

that comprises 80 percent of such

expenditure.

53. After July 1, 2004, the Department of State, Division

of Elections, revised and published the 2004 Candidate and

Campaign Treasurer Handbook (e ffective July 2004)(amended

handbook). The preface to the amended handbook states as

follows: "This publication has been amended in July of 2004 to

reflect changes as provided by Chapter Law 2004 - 252. New

language is displayed in red."

54. The notice o n the first page of the amended handbook

was not revised.

55. Chapter 7 of the amended handbook states as follows

regarding the duties and responsibilities of campaign

treasurers:

IMPORTANT : No contribution or expenditure,

including contributions or ex penditures of a

candidate or of the candidate's family,

shall be directly or indirectly made or

received in furtherance of the candidacy of

any person for nomination or election to

political office in the state except through

the duly appointed campaign tr easurer of the

candidate, subject to the following

exceptions:

* * *

2 . Reimbursements to a candidate or any

other individual for expenses incurred in

connection with the campaign by a check

drawn upon the campaign account and reported

pursuant to Sec tion 106.07(4), F.S. After

July 1, 2004, the full name and address of

each person to whom the candidate or other

individual made payment for which

reimbursement was made by check drawn upon

the campaign account shall be reported

pursuant to Section 106.07 (4), F.S.,

together with the purpose of such payment;

3. Expenditures made indirectly through a

treasurer for goods or services, such as

communications media placement or

procurement services, campaign signs,

insurance or other expenditures that include

multiple integral components as part of the

expenditure and reported pursuant to Section

106.07(4)(a)13 . . . .

(Emphasis included)

56. Chapter 10 of the amended handbook states as follows

regarding campaign expenditures:

An expenditure is a purchase, payment,

distribution, loan, advance, transfer of

funds by a campaign treasurer or deputy

campaign treasurer between a primary

depository and a separate interest - bearing

account or certificate of deposit, or gift

of money or anything of value made for the

purpose of influencing the results of an

election or making an electioneering

communication.

An expenditure for an electioneering

communication is made when the earliest of

the following occurs:

1. A person executes a contract for

applicable goods or s ervices;

2. A person makes payment, in whole or in

part, for applicable goods or services ; or

3. The electioneering communication is

publicly disseminated.

* * *

A candidate or other individual may be

reimbursed for expenses incurred in

connection with the campaign by a check

drawn on the campaign account and reported

pursuant to section 106.07(4), F.S. After

July 1, 2004, the full name and address of

each person to whom the candidate or other

individual made payment for which

reimbursement was mad e by check drawn upon

the campaign account shall be reported

pursuant to Section 106.07(4), F.S.,

together with the purpose of such payment.

* * *

A candidate shall :

1. Pay all campaign expenditures by a check

drawn on the campaign account (except p etty

cash); (Emphasis included)

57. Chapter 14 of the amended handbook states as follows

regarding the filling of campaign reports:

Reporting Expenditures

Form DS - DE 14, Itemized Expenditures is used

to report all expenditures made, regardless

of the amo unt and must contain:

1. Full name an address of each person to

whom expenditures have been made along with

the amount, date and clear purpose of the

expenditure. Name, address and office

sought by each candidate on whose behalf

such expenditure was mad e.

2. Full name and address of each person to

whom an expenditure for personal services,

salary or reimbursed expenses was made along

with the amount, date and clear purpose of

the expenditure. A candidate or any other

individual may be reimbursed for expenses

incurred for travel, food and beverage,

office supplies, and mementoes expressing

gratitude to campaign supporters as provided

for in section 106.021(3), F.S. (Emphasis

included)

* * *

5. Amount and nature of debts and

obligations owed by or to the candidate,

which relate to the conduct of any political

campaign.

* * *

7. The primary purposes of an expenditure

made indirectly through a campaign treasurer

for goods and services such as

communications media placement or

procurement services, campaign signs,

insurance, and other expenditures that

include multiple components as part of the

expenditure. The primary purpose of an

expenditure shall be that purpose, including

integral and directly related components,

that comprises 80 percent of s uch

expenditure. (Emphasis included)

58. For the 2004 campaign, reporting forms applicable to

candidates did not provide for "itemization" of payments made by

media consultants to various component providers of goods and

services. In contrast, forms ap plicable to political parties

and committees required and provided a reporting mechanism for

itemizing payments made by third party consultants to the

providers of the component services. Those forms did not

specifically apply to individual candidates.

59. At the time of the hearing, the Department of State,

Division of Elections, was in the rulemaking process to develop

standards and reporting forms for candidates to use when

itemizing component parts of an expenditure made to a campaign

consultant or vendor.

60. Respondent and Ms. Schipper never called the Florida

Department of State, Division of Elections, to make campaign

finance report inquiries. After reviewing the handbook as

published in November 2003, Ms. Schipper believed she had a fair

und erstanding of campaign reporting requirements. Ms. Schipper

did not review Chapter 106.07(4), Florida Statutes (2004), or

the amended handbook.

61. Respondent also reviewed Chapter 106, Florida Statutes

(2003), and the handbook as published in November 2003. He did

not review Section 106.07(4)(a), Florida Statutes (2004), but

primarily relied on Ms. Schipper to properly report campaign

expenditures.

62. All checks written on Respondent's campaign account

were reported on Respondent's CTRs. Responde nt's CTRs reflect

that Respondent's total campaign account receipts equaled his

total expenditures.

63. During the hearing, the parties stipulated that

Respondent had the ability to pay the maximum fine possible if

it was determined that he committed th e violations charged.

CONCLUSIONS OF LAW

64. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

proceeding pursuant to Sections 106.25, 120.569, and 120.57(1),

Florida Statutes (2005).

65. Petitioner has the burden of proving by clear and

convincing evidence that Respondent violated Section 106.07(5),

Florida Statutes (2004), by certifying that his 2004 Q2, F2, F3,

Amended F3, and G1 CTRs were true, correct and complete when

they were not. See Diaz de la Portilla v. Florida Elections

Commission , 857 So. 2d 913 (Fla. 3rd DCA 2003), rev . denied , 872

So. 2d 899 (Fla. 2004).

66. There are several statutory sections that apply to

this case, beginning with Section 106.011(4), Florida Statutes

(2004), whic h states as follows in pertinent part:

(4)(a) "Expenditure" means a purchase,

payment, distribution, loan, advance,

transfer of funds by a campaign treasurer or

deputy campaign treasurer between a primary

depository and a separate interest - bearing

ac count of certificate of deposit, or gift

of money or any thing of value made for the

purpose of influencing the results of an

election or making an electioneering

communication . . ..

* * *

(b) As used in this chapter, an

"expenditure" for an ele ctioneering

communication is made when the earliest of

the following occurs:

1. A person executes a contract for

applicable goods or services;

2. A person makes payment, in whole or

in part, for applicable goods and services;

or

3. The e lectioneering communication is

publicly disseminated.

67. Regarding the duties of campaign treasurers, Section

106.021(3), Florida Statutes (2004), states as follows in

relevant part:

(3) No contribution or expenditure,

including contributions or expenditures of a

candidate or of the candidate's family,

shall be directly or indirectly made or

received in furtherance of the candidacy of

any person for nomination or election to

political office in the state or on behalf

of any political committee ex cept through

the duly appointed campaign treasurer of the

candidate or political committee, subject to

the following exceptions:

* * *

(b) Reimbursements to a candidate or

any other individual for expenses incurred

in connection with the campaign o r

activities of the political committee by a

check drawn upon the campaign account and

reported pursuant to s. 106.07(4). After

July 1, 2004, the full name and address of

each person to whom the candidate or other

individual made payment for which

reimbur sement was made by check drawn upon

the campaign account shall be reported

pursuant to s. 106.07(4), together with the

purpose of such payment;

(c) Expenditures made indirectly

through a treasurer for goods or services,

such as communications media p lacement or

procurement services, campaign signs,

insurance, or other expenditures that

include multiple integral components as part

of the expenditure and reported pursuant to

s. 106.07(4)(a)13 . . ..

68. Candidates must sign statements that they have r ead,

and understand Chapter 106, Florida Statutes (2004). See §

106.023(1), Fla. Stat. (2004). The execution and filing of the

statement does not create a presumption that any violation of

Florida's election laws is willful. See § 106.023(2), Fla.

Stat. (2004).

69. Section 106.07(4)(a), Florida Statutes (2004), states

as follows in relevant part:

(4)(a) Each report required by this

section shall contain:

* * *

6. The full name and address of each

person to whom expenditures have been mad e

by or on behalf of the committee or

candidate within the reporting period; the

amount, date, and purpose of each such

expenditure; and the name an address of, and

office sought by, each candidate on whose

behalf such expenditure was made. However,

expen ditures made from the petty cash fund

provided for in s. 106.12 need not be

reported individually.

7. The full name and address of each

person to whom an expenditure for personal

services, salary, or reimbursement for

authorized expenses as provide d in s.

106.021(3) has been made and which is not

otherwise reported, including the amount,

date, and purpose of such expenditure.

However, expenditures made from the petty

cash fund provided for in s. 106.12 need not

be reported individually.

* * *

10. The amount and nature of debts and

obligation owed by or to the committee or

candidate, which relate to the conduct of

any political campaign.

* * *

13. The primary purpose of an

expenditure made indirectly through a

campaign treasurer for goods and services

such as communications media placement or

procurement services, campaign signs,

insurance, and other expenditures that

include multiple components as part of the

expenditure. The primary purpose of an

expenditure shall be that purpose, including

integral and directly related components

that comprises 80 percent of such

expenditure.

70. As to certification and filing CTRs, Section

106.07(5), Florida Statutes (2004), states as follows in

relevant part:

(5) The candidate and hi s or her

campaign treasurer . . . 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.

71. The Department of State, Division of Elections, has

auth ority to issue advisory opinions when any supervisor of

elections or any candidate makes such a request. See §

106.23(2), Florida Statutes (2004).

72. Section 106.25(3), Florida Statutes (2004), states as

follows:

(3) For the purposes of commiss ion

jurisdiction, a violation shall mean the

willful performance of an act prohibited by

this chapter or chapter 104 or the willful

failure to perform an act required by this

chapter or chapter 104.

73. Regarding civil penalties, Section 106.265(1), Fl orida

Statutes (2004), states as follows:

(1) The commission is authorized upon

the finding of a violation of this chapter

or chapter 104 to impose civil penalties in

the form of fines not to exceed $1,000 per

count. In determining the amount of suc h

civil penalties, the commission shall

consider, among other mitigating and

aggravating circumstances:

(a) The gravity of the act or

omission;

(b) Any previous history of similar

acts or omissions;

(c) The appropriateness of such

penalty to the financial resources of the

person, political committee, committee of

continuous existence, or political party;

and

(d) Whether the person, political

committee, committee of continuous

existence, or political party has shown good

faith in atte mpting to comply with the

provisions of this chapter or chapter 104.

74. A "willful violation" is defined in Section 106.37,

Florida Statutes (2004), which states as follows:

106.37 Willful violations. -- A person

willfully violates a provision o f this

chapter if the person commits an act while

knowing that, or showing reckless disregard

for whether, the act is prohibited under

this chapter, or does not commit an act

while knowing that, or showing reckless

disregard for whether, the act is require d

under this chapter. A person knows that an

act is prohibited or required if the person

is aware of the provision of this chapter

which prohibits or requires the act,

understands the meaning of that provision,

and performs the act that is prohibited or

f ails 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 con stitute a violation of this

chapter.

75. Petitioner met its burden of proving that Respondent

violated Chapter 106.07(5), Florida Statutes (2004). On five

occasions, Respondent certified that his CTRs were correct and

complete even though he failed to itemize expenditures for

advertising on two television stations.

76. Before July 1, 2004, all campaign expenses had to be

paid directly using a check on the campaign account. The law

did not provide for making indirect payments through a third

party l ike a media consultant. After July 1, 2004, candidates

could pay campaign expenses indirectly through a media

consultant provided such payments were itemized.

77. Respondent received a copy of Ms. Hampton's letter

dated June 17, 2004. That letter clea rly gave Respondent notice

that there were legislative changes in the law relating to

campaign financing. Respondent never took the time to review

the new law or the amended handbook. Moreover, Respondent

failed to show the letter to Ms. Schipper, who di d not learn

about the legislative changes until after the campaign.

78. It is clear that Respondent made no effort after

July 1, 2004, to determine whether his payments to Mr. Petermann

needed to be itemized on the CTR for the period in which

Respondent 's campaign indirectly incurred the obligation to pay

the underlying expenses. At the very least, the addition of

Section 106.07(4)(a)13., Florida Statutes (2004), should have

alerted Respondent that there were changes in the method of

reporting the reimb ursement of campaign expenses to media

consultants. Respondent cannot now claim that he did not wholly

disregard the law, making no reasonable effort to determine

whether he was violating Chapter 106, Florida Statutes (2004).

79. Applying the statutory factors set forth in Section

106.265, Florida Statutes (2004), it is concluded as follows:

(a) The gravity of Respondent's omissions were significant,

leaving the public no way to determine how much and at what

television stations Respondent spent money for advertising; (b)

Respondent has no prior history of similar acts or omissions;

(c) Respondent has the ability to pay the maximum fine; and (d)

Respondent failed to show good faith in his attempts to comply

with his statutory obligations because he was more concerned

with keeping Mr. Petermann paid and with campaigning than with

the legal requirements of the law.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED:

That Petitioner enter a final order finding that Respondent

violated Section 106.07(5), Florida Statutes (2004), as charged

in Counts 1 - 5 of the Order of Probable Cause, dismiss Count 6 of

the Order of Probable Cause, and impose a civil penalty in the

amount of $5,000.

DONE AND ENTERED this 30th day of June, 2006, in

Tallahassee, Leon County, Florida.

S

SUZANNE F. HOOD

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 30th day of June, 2006.

ENDNOTE

1/ Respondent's Motion in Limine seeks to exclude testimony

about "other ev ents/acts" that occurred during the campaign, but

which were not charged in the Order of Probable Cause. Most

important, Respondent's motion relates to the following: (a)

Respondent's June 30, 2004, personal check payable to Mr.

Petermann; (b) the August 5, 2004, campaign check payable to

Respondent as a reimbursement; and (c) the listing on

Respondent's F2 CRT of the August 5, 2004 campaign check as

payable to Petermann Advertising/mlp.

As a general rule, any fine or penalty imposed by

Petitioner may be based only upon those violations specifically

alleged in the Order of Probable Cause. See Cottrill v.

Department of Insurance , 685 So. 2d 1371, 1372 (Fla. 1st DCA

1996).

Petitioner agrees that "other events" are not admissible to

form a basis for vi olations of law not alleged in the Order of

Probable Cause. However, Petitioner asserts that evidence of

the "other events" is relevant to show Respondent's

"willfulness," i.e. that Respondent knew, or had reckless

disregard for whether, the "other events /acts" were prohibited

by Chapter 106, Florida Statutes (2004).

"Willfulness" is an issue of fact. See McGann v. Florida

Elections Commission , 803 So. 2d 763,766 (Fla. 1st DCA 2001).

Regarding "similar fact" evidence, Section 120.57(1)(d),

Florida S tatutes (2004), states as follows in pertinent part:

(d) Notwithstanding s. 120.569(2)(g),

similar fact evidence of other violations,

wrongs, or acts is admissible when relevant

to prove a material fact in issue, such as

proof of motive, opportuni ty, intent,

preparation, plan, knowledge, identity or

absence of mistake or accident, but it is

inadmissible when the evidence is relevant

solely to prove bad character or propensity.

In this case, the evidence that Respondent seeks to exclude

is only r elevant, and therefore admissible, to show the

underlying facts of Counts I and II of the Order of Probable

Cause. Those counts involve allegations relating to

expenditures by Mr. Petermann on Respondent's behalf, the

reimbursement of those expenditures, and the failure to properly

disclose or itemize the expenditures on Respondent's Q2 CTR and

F2 CTR. Otherwise, the "other event/acts" are not probative to

show Respondent's "willfulness." Just because Respondent wrote

a personal check to Mr. Petermann, l ater reported as an

expenditure to Petermann Advertising/mlp, does not mean

Respondent knew he was violating the law, or that he was acting

with reckless disregard for the law, when he signed CTRs that

did not itemize payments made directly to Mr. Peterman n.

Accordingly, the Motion in Limine is granted in part and denied

in part.

COPIES FURNISHED :

Eric M. Lipman, Esquire

Florida Elections Commission

Collins Building, Suite 224

107 West Gaines Street

Tallahassee, Florida 32399 - 1050

Albert T. Gimbel, Esquire

Messer, Caparello & Self, P.A.

215 South Monroe Street, Suite 701

Post Office Box 1876

Tallahassee, Florida 32302 - 1876

Pasty Rushing, Clerk

Florida Elections Commission

The Collins Building, Suite 224

107 West Gaines Street

Tallahassee, Florida 32399 - 1050

Barbara M. Linthicum, Executive Director

Florida Elections Commission

The Collins Building, Suite 224

107 West Gaines Street

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.