INDIANA ELECTION COMMISSION
MINUTES
JUNE 30, 1997
MEMBERS PRESENT: John T.L. Koenig (Acting Chairman of the Indiana Election Commission [IEC] and proxy for Jeffery M. Mallamad, Chairman); Dudley Cruea, Vice-Chairman; S. Anthony Long (proxy for Butch Morgan); Joseph M. Perkins, Jr.
MEMBERS ABSENT: Jeffery M. Mallamad (Chair); Butch Morgan.
STAFF ATTENDING: Laurie P. Christie, Co-Director, Election Division, Office of the Indiana Secretary of State ("Election Division"), Mary Ann Tippett, Co-Director, Election Division; J. Bradley King, Co-General Counsel, IEC and Election Division; Kristi Robertson, Co-General Counsel, IEC and Election Division; Annette Craycraft, Co-Director, Campaign Finance, Election Division; Michelle Thompson, Co-Director, Campaign Finance, Election Division.
ALSO ATTENDING: The Honorable William Crawford, Indiana State Representative; Leslie Davis Hiner, General Counsel, Indiana Secretary of State's Office;
Don Blinzinger, of Indianapolis; Jeff Brantley, of Indianapolis; Dick Frost, of Carmel; Stephan Hodge, of Indianapolis; Joe Impicciche, of Indianapolis; Richard Kempf, of Indianapolis; Marianne Kiely, of Indianapolis; Edgar R. Lantis, of Indianapolis; Suzanne McBride, Indianapolis Star/News; Linda Pence, of Indianapolis; Janet Williams, Indianapolis Star/News.
1. CALL TO ORDER AND OPENING REMARKS BY THE CHAIR:
The chair called the June 30, 1997 meeting of the Indiana Election Commission to order at 10:35 p.m. in Conference Center Room 4, Indiana Government Center South, 302 West Washington Street, Indianapolis, Indiana, stating that proper notice of the meeting had been given as required by state law, and noting that a quorum of the Commission (Mr. Cruea, Mr. Koenig, Mr. Long, Mr. Perkins) was present.
The chair noted that Mr. Mallamad had filed a document dated June 27, 1997 designating Mr. Koenig as his proxy for this meeting, and that Mr. Morgan had filed a document dated June 27, 1997 designating Mr. Long as his proxy for this meeting. Copies of Mr. Mallamad's proxy and Mr. Morgan's proxy are incorporated by reference in these minutes. [Copies of all documents incorporated by reference are available for public inspection and copying in the Election Division office.]
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Mr. Koenig noted that he was acting as proxy for Chairman Mallamad, who extended his apologies to Commission members and staff for his inability to be present at this meeting due to an upcoming trial.
The chair remarked that he had been attending these meetings for seven years, as a representative of the Secretary of State's office and later as a co-director of the Election Commission, but this was the first occasion he would be required to vote on anything.
The chair welcomed Mr. Long to the Commission. Mr. Long noted that he was from Boonville, and standing in as a proxy for Mr. Morgan. Mr. Cruea and Mr. Perkins introduced themselves, with Mr. Perkins noting that he had recently moved to Columbus, Indiana. The chair introduced Election Division staff and welcomed all those in attendance.
2. APPROVAL OF MAY 12, 1997 MINUTES:
The chair noted that copies of the minutes of the May 12, 1997 Commission meeting had been provided to members before this meeting. There being no additions or corrections, Mr. Cruea moved, seconded by Mr. Perkins, that the May 12, 1997 minutes be approved as submitted. The chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
3. CAMPAIGN FINANCE ENFORCEMENT:
A.PROPOSED FINDINGS OF FACT AND FINAL ORDERS FROM MAY 12, 1997 MEETING:
The chair recognized Ms. Robertson, who remarked that Commission members had received drafts of proposed findings of fact and final orders. She noted that these documents had been prepared by the Election Division following the Commission's determination at its May 12, 1997 regular meeting to assess a civil penalty against several candidate committees and regular party committees.
Ms. Robertson stated that the findings of fact and final orders concerned the following causes:
97-3985-95Committee to Elect Fred Warsco
97-4034-105Citizens for Steiner
97-0587-45Friends of Dave Nicholson
97-4066-112Friends of Jill Chambers
97-1529-142Fifth District Democratic Central Committee
97-0026-143Indiana Democratic State Central Committee
97-0724-145Third District Democratic Central Committee
97-3350-146Sixth Republican Congressional Central CommitteeIndiana Election Commission
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Following Commission review of the proposed findings of fact and final orders in these causes, Mr. Koenig moved, seconded by Mr. Long, that Orders 1997-40 through 1997-47, inclusive, be approved as submitted. The chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
Copies of the signed orders are incorporated by reference in these minutes.
B.STATUS OF PREVIOUSLY ADOPTED ENFORCEMENT ORDERS; REFERRALS TO ATTORNEY GENERAL FOR COLLECTION:
The chair recognized Ms. Robertson to present information in this matter. In response to a question from Mr. Cruea, Ms. Robertson stated that at the May 12, 1997 Commission meeting, the Election Division staff had been advised to forward campaign finance causes to the Attorney General's office for collection if a committee had not paid an assessed civil penalty by the due date set forth in the Commission's order and if the committee did not respond to one final letter sent out by the Election Division. She added that Campaign Finance had sent out the final letter, and that a number of committees had still not paid previously assessed civil penalties as of this date.
Ms. Robertson, who noted that a two page document entitled "Committees that have not paid fines as of 6/25/97" had been provided to Commission members at this meeting. This document is incorporated by reference in these minutes.
Ms. Robertson stated that this spread sheet listed eighteen committees who have been previously fined by the Commission, but who have not paid the assessed civil penalty. She added that one committee (Lardell Harbor) had paid the assessed civil penalty earlier today, but that the remaining seventeen committees would be referred to the Attorney General's office for collection.
In response to a question from Mr. Cruea, Ms. Robertson stated that since the Commission had voted at its May 12 meeting to refer these matters for collection, no further action by the Commission was necessary at this time, and that the Attorney General's office would commence collection proceedings. In response to a question from the chair, Ms. Robertson stated that Cindy Lott of the Attorney General's office would contact Election Division staff to keep them informed of developments regarding the collection process.
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C.PROPOSED ORDER 1997-54 (STANDARDS FOR ASSESSMENT OF CIVIL PENALTIES FOR EXCESS CORPORATE AND LABOR ORGANIZATION CAMPAIGN CONTRIBUTIONS):
The chair recognized Ms. Tippett to present information regarding this proposed order to the Commission.
Ms. Tippett stated that the Commission had unanimously voted at its May 12 meeting to authorize herself and Ms. Christie to conduct an investigation and fact-finding hearing regarding allegations of excess corporate contributions set forth in an Indianapolis Star/News article and to report the results of the investigation and hearing back to the Commission.
Ms. Tippett stated that the fact finding hearings were conducted on June 3, 1997, and that later in the meeting she and Ms. Christie would be reporting their findings of fact and recommended civil penalties where applicable. She noted that Order 1997-54 sets forth the standards that she and Ms. Christie used in preparing these recommendations for the assessment of penalties. Ms. Tippett remarked that state law limits the aggregate amount of contributions that may be made during a calendar year by a corporation or labor organization, and sets a $5,000 aggregate contribution limit for statewide races, a $2,000 aggregate contribution limit for Indiana house candidates, a $2,000 aggregate limit for Indiana senate candidates, a $2,000 aggregate contribution limit to Indiana state senate legislative caucuses, and a $2,000 aggregate contribution limit to Indiana state house legislative caucuses. She added that the statutory penalty for excess contributions is set at up to three times the amount of the excess, plus documented investigative costs.
Ms. Tippett noted that the Indiana Code provides no guidance for determining when the Commission should assess the maximum penalty, and when a lesser amount should be assessed. Ms. Tippett stated that she and Ms. Christie suggested adoption of this order as a proposed guide for the assessment of civil penalties in these cases. She remarked that in preparing this order, they had assumed that any time a violation was found to have occurred, the initial penalty would be set at one and one-half times the excess contribution amount, and that factors which would tend to explain or excuse the violation ("mitigating factors") would then result in a reduction of the penalty, and that factors which would tend to increase the gravity of the violation ("aggravating factors") would then result in an increase of the penalty.
Ms. Tippett stated that under Order 1997-54, the maximum triple excess penalty would be reserved for cases where a pattern of egregious behavior or evidence of criminal behavior was present. She requested that the Commission review the proposed standards set forth in Order 1997-54, and proceed to adopt the order to establish
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standards that could be used to assess penalties in these cases and in future cases that may occur during the interim period until administrative rules or other policies are adopted.
In response to a question from the chair, Ms. Tippett indicated that she anticipated that the Election Commission would ask the Division to take appropriate action to enable the Commission to adopt these standards (or something similar) through the rulemaking process. She indicated that the Election Division hoped to receive guidance from Commission members today regarding these standards. Staff then made copies of Order 1997-54 available for public inspection.
Mr. Long stated that it was important to adopt standards to bring as much uniformity as possible to the civil penalty assessment process. He added that adopting the proposed order as an interim standard would be helpful. He stated that he was particularly concerned in reviewing the evidence submitted from the factfinding hearings that there are some possible criminal violations in these cases. Mr. Long indicated that it was important to establish a policy for coordination between the Election Division and the offices of the various county prosecuting attorneys if the assessment of a civil penalty by the Commission would preclude a criminal prosecution in a case under the theory of double jeopardy. He added that this concern may be more with timing, and that it was important to proceed with the adoption of standards now. Mr. Long concluded by stating he thought the list of mitigating factors should be expanded to include a "catch-all" provision that would permit the Commission to consider any other appropriate factor for purposes of mitigating the civil penalty.
Mr. Cruea stated that he would be concerned if the Commission adopted this order without the public having an opportunity to review the order and to offer comments at a public hearing. He indicated that the Commission should have conducted a public hearing to establish standards before proceeding with hearings in particular cases where a violation was alleged to have occurred. Mr. Cruea stated that the adoption of standards was important, and that the Commission should take time to review the proposal, and receive comments and opinions from others interested in the process.
Mr. Perkins remarked that having a standard for the assessment of these civil penalties is very important for the Commission, but that he shared the views voiced by Mr. Cruea. He added that there should be a forum for public comment regarding these standards before their adoption, and that he would be concerned if the Commission voted to adopt these standards today without offering this opportunity for public comment.
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In response to a question from the chair, Ms. Tippett stated that the Commission had required the Co-Directors to conduct factfinding hearings and come back with recommendations. She added that before she and Ms. Christie could present specific penalty recommendations, they had to develop proposed standards. Ms. Tippett stated that these standards were offered as what the Co-Directors had used in determining what their recommendations should be. She added that the Commission could adopt these standards as an interim guide, and that the rulemaking process would provide an opportunity for public input and comment.
The chair acknowledged for the record that Order 1997-54 embodied the standards used by the Co-Directors in developing their recommendations for Commission action today. He indicated that it would be useful for the Commission to direct the Election Division staff to begin the formal rulemaking process, using Order 1997-54 as a starting point. He added that anyone can comment on the proposed standards during the rulemaking process, and that the text of the final rule would come before the Election Commission for a vote before final adoption.
Mr. Perkins asked if the chair was proposing to adopt Order 1997-54 in the interim, and then begin the formal process for administrative rulemaking. The chair stated that he envisioned recognizing for the record that these standards had been used by the Co-Directors in developing their recommendations for the Commission for without the formality of a motion to adopt the proposed order, and that the discussion was on whether there should be further direction to staff with regard to proposed rulemaking.
Mr. Cruea moved that the Co-Directors poll the Commission members to set a future meeting to conduct a public hearing, and that proposed standards be developed after discussion with Commission members. He added that the Commission could then proceed to vote on standards at that meeting.
In response to a question from the chair, Mr. King summarized the administrative rulemaking process. He noted that the Commission would begin by publishing a notice of intent to adopt proposed rules in the Indiana Register. He indicated that a Commission meeting is then conducted to consider the proposed rules, and that a public hearing as held as part of that meeting to receive comment. Mr. King stated that after the public hearing, the rules can be amended or withdrawn, but if the rules proceed forward, the agency then adopts an order to approve the final rules. He noted that the final rules are published in the Indiana Register after approval by the Attorney General for legality and by the Governor. Mr. King concluded by noting that the final rules would take effect shortly after filing with the Secretary of State's office. He noted that the entire rulemaking process can take up to nine months.
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In response to a question from the chair, Mr. Cruea stated that his motion was intended to begin the rulemaking process by conducting the initial Commission meeting and public hearing on the proposed standards. Mr. Perkins seconded the motion.
There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
Mr. Long stated that the Commission should indicate that the standards set forth in proposed Order 1997-54 should continue to be used by the Co-Directors in making recommendations in similar cases where excess contributions have been found to occur until the completion of the rulemaking process. Mr. Koenig seconded the motion.
There being no further discussion, the chair called the question, and declared that with three members (Mr. Cruea, Mr. Koenig, and Mr. Long) voting "aye" and one member voting "nay" (Mr. Perkins), the motion was adopted.
D.HEARING OFFICER REPORTS CONCERNING ALLEGED EXCESS CORPORATE CONTRIBUTIONS AND PROPOSED FINDINGS OF FACT AND FINAL ORDERS:
The chair recognized Mr. Long, who stated that he wished to make some disclosures for the record before the Commission proceeded in these matters. Mr. Long indicated that he did not think any of his connections would affect his vote in any way on these matters, but he did wish to acknowledge that he sits as a member of the Indiana Democratic Party state central committee as district chairman for the 8th Congressional District. Mr. Long added that in one of the cases, Mike Phillips's campaign had received a contribution, and that he was the first cousin of Mr. Phillips. Mr. Long concluded by noting that he was acting as proxy for Mr. Morgan, and that one of the cases to be presented involved a corporation that Mr. Morgan is affiliated with, and that he has not discussed this matter in any way with Mr. Morgan.
The chair also stated that one of the attorneys representing a corporation today is a personal friend of his, but that he had not discussed this case in any way with that individual, and that he was not personally familiar with any of the facts in that case before reviewing the material presented by the hearing officers.
The chair noted that the purpose of this portion of the Commission meeting was to determine if certain limitations set forth in Indiana Code 3-9-2-4 had been violated, and if so, what civil penalty if any should be assessed by the Commission under Indiana Code 3-9-4-16.
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He noted that the Commission had directed the Election Division Co-Directors at a previous Commission meeting to conduct factfinding hearings in these matters. With the consent of the Commission, the report of the hearing officers and attached exhibits from the June 3, 1997 factfinding hearing were accepted into the record of the Commission's meeting today for each of the following causes.
The chair noted that the first several causes involved alleged excess corporate contributions that occurred before state law was amended effective July 1, 1995 to give the Commission authority to impose a civil penalty. He stated that when cause was called, staff would present information based on the June 3, 1997 factfinding hearing, and then the Commission would allow anyone present on behalf of the corporation an opportunity to be heard. The chair requested that any testimony be as brief as practical so that the Commission could complete its agenda. He also asked that anyone who wished to testify to please come forward and identify themselves for the record.
The chair then requested all those in attendance who planned to offer testimony in these causes to rise for the administration of the oath. Mr. King administered the oath to these individuals.
The chair then called the following cause:
97-147Championship Auto Racing Teams, Inc.
Ms. Tippett stated that the alleged excess corporate contribution in this case occurred in 1994, before the effective date of the statute permitting the Commission to assess a civil penalty. She added that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law had occurred in this case.
Ms. Tippett stated that the hearing officers found that CART exceeded the $2,000 limit for contributions to Indiana house candidates by $3,000, and that CART exceeded the $2,000 limit for contributions to Indiana senate candidates by $3,000, for a total excess contribution of $6,000.
Ms. Tippett stated that the hearing officers recommended that the Commission issue the attached letter of reprimand to Championship Auto Racing Teams, Inc. (CART), advise the corporation regarding the current statute, suggest that the corporation institute internal procedures to prevent future violations, and then dismiss this cause. She remarked that the proposed letter to admonish the corporation and suggest the institution of internal procedures at the corporation would be included in the file regarding this matter.
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The chair recognized Ms. Robertson, who stated that Commission members had been provided with a four page letter dated May 29, 1997 from Randy Dzierzawski, Executive Vice-President of CART, and received by the Election Division on June 5, 1997. Commission members reviewed this letter and with the consent of the Commission, this letter was incorporated by reference into the minutes of this meeting.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of CART. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
In response to a question from Mr. Perkins, Mr. King and Ms. Robertson responded that the statute authorizing the Commission to assess a civil penalty was effective July 1, 1995, and would not apply retroactively to a violation occurring before that date.
Mr. Long moved, seconded by Mr. Koenig, that the Commission approve the proposed findings of fact in this cause and adopt Order 1997-48 as presented. There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-148Gas City, Ltd.
Ms. Tippett stated that the alleged excess corporate contribution in this case occurred in 1994, before the effective date of the statute permitting the Commission to assess a civil penalty. She added that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law had occurred in this case. Ms. Tippett testified that the hearing officers found that Gas City, Ltd. exceeded the $2,000 limit for contributions to Indiana house candidates by $500.
Ms. Tippett stated that the hearing officers recommended that the Commission issue the attached letter of reprimand to Gas City, Ltd., advise the corporation regarding the current statute, suggest that the corporation institute internal procedures to prevent future violations, and then dismiss this cause. She remarked that the proposed letter to admonish the corporation and suggest the institution of internal procedures at the corporation would be included in the file regarding this matter.
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There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Gas City, Ltd. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause and adopt Order 1997-49 as presented. There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-149Golden Rule Insurance Co.
Ms. Tippett stated that the alleged excess corporate contribution in this case occurred in 1994, before the effective date of the statute permitting the Commission to assess a civil penalty. She added that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law did not occur in this case since the $3,000 contribution to an Indiana house candidate questioned in the Indianapolis Star/News article was made from Mr. and Mrs. Pat Rooney's personal checking account, and not by the corporation.
Ms. Tippett noted that Indiana law does not impose any limit on the amount of contributions that may be made an individual to a candidate. She stated that the hearing officers recommended that the Commission issue the attached letter to Golden Rule Insurance indicating that Golden Rule Insurance Co. had not violated IC 3-9-2-4 in this case, and then dismiss this cause.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Golden Rule Insurance Co. Mr. Edgar Lantis rose to speak, but stated he had nothing further to add in this matter.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause and adopt Order 1997-50 as presented. There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-150Hillhaven Corporation and Nationwide Care, Inc.Indiana Election Commission
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Ms. Tippett stated that the alleged excess corporate contributions in this case occurred in 1994, before the effective date of the statute permitting the Commission to assess a civil penalty, and that both Hillhaven Corporation and Nationwide Care, Inc. had subsequently been acquired by another corporation, Vencor, Inc. after the alleged violations had occurred.
Ms. Tippett remarked that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law by Nationwide Care, Inc. had occurred in this case, but that the facts indicated that Hillhaven Corporation had not violate the excess corporate contribution law in this instance. She stated that the hearing officers found that Nationwide Care, Inc. exceeded the $2,000 limit for contributions to Indiana house candidates by $500. She remarked that the evidence indicates that Hillhaven Corporation had not exceeded the $2,000 limit for contributions to Indiana house candidates since one House candidate, Lynn Bigley, accidentally reported the same $2,000 contribution from Hillhaven Corporation on two separate reports.
Ms. Tippett said that the hearing officers recommended that the Commission issue the attached letter to Vencor, Inc. to advise the corporation regarding the current statute, suggest that the corporation institute internal procedures to prevent future violations, and then dismiss this cause.
The chair recognized Ms. Robertson, who stated that Commission members had been provided with a two page photocopy of a facsimile dated June 11, 1997 [but received by the Election Division on June 10] from Lynn Bigley concerning the contributions made to her Indiana house campaign by Hillhaven Corporation. Commission members reviewed this document and with the consent of the Commission, this document was incorporated by reference into the minutes of this meeting.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Vencor, Inc. or the subsidiary corporations. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause and adopt Order 1997-51 as presented. There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
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The chair then called the following cause:
97-151Indiana Home Care, Inc.
Ms. Tippett stated that the alleged excess corporate contribution in this case occurred in 1994, before the effective date of the statute permitting the Commission to assess a civil penalty. She added that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law had occurred in this case. Ms. Tippett stated that the hearing officers found that Indiana Home Care, Inc. exceeded the $2,000 limit for contributions to Indiana house candidates by $500.
Ms. Tippett stated that the hearing officers recommended that the Commission issue the attached letter of reprimand to Indiana Home Care, Inc., advise the corporation regarding the current statute, suggest that the corporation institute internal procedures to prevent future violations, and then dismiss this cause. She remarked that the proposed letter to admonish the corporation and suggest the institution of internal procedures at the corporation would be included in the file regarding this matter.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Indiana Home Care, Inc. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause and adopt Order 1997-52 as presented. There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-152Omni Source Corporation, Inc.
Ms. Tippett stated that the alleged excess corporate contribution in this case occurred in 1994, before the effective date of the statute permitting the Commission to assess a civil penalty. She added that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that there was insufficient evidence in this case to determine that a violation of the excess corporate contribution law had occurred.
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Ms. Tippett stated that the hearing officers found that although there was evidence that Omni Source Corporation exceeded the $2,000 limit for contributions to Indiana house candidates for calendar year 1994 by $250, it was unclear whether this contribution in fact made by the corporation in December 1993 and reported by the candidate as received in early January 1994.
Ms. Tippett stated that the hearing officers recommended that the Commission issue the attached letter to Omni Source Corporation, advise the corporation regarding the current statute, suggest that the corporation institute internal procedures to prevent future violations, and then dismiss this cause. She remarked that the proposed letter to remind the corporation of the contribution limit and suggest the institution of internal procedures at the corporation would be included in the file regarding this matter.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Omni Source Corporation. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Long moved, seconded by Mr. Koenig, that the Commission approve the proposed findings of fact in this cause and adopt Order 1997-53 as presented. There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-153Subaru-Isuzu Automotive, Inc.
Ms. Tippett stated that although the alleged excess corporate contribution reported by the Indianapolis Star/News in this case occurred in 1994, before the effective date of the statute permitting the Commission to assess a civil penalty, the hearing officers also received evidence concerning a violation that occurred after July 1, 1995. She stated that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that violations of the excess corporate contribution law had occurred in this case in both 1994 and 1995.
Ms. Tippett stated that the hearing officers found that:
(1) Subaru-Isuzu Automotive, Inc. exceeded the $2,000 limit for contributions to Indiana house candidates in 1994 by $200; and
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(2) Subaru-Isuzu Automotive, Inc. exceeded the $2,000 limit for contributions to Indiana house candidates in 1995 by $150.
Ms. Tippett stated that based on the guidelines embodied in proposed Order 1997-54, the hearing officers recommended that the Commission dismiss the portion of this case concerning the 1994 violation and, with regard to the violation occurring after July 1, 1995, assess a civil penalty of $150 against the corporation. She noted that among the mitigating factors in this case were the efforts by the corporation to seek a refund of its contribution; the fact that the corporation brought information regarding additional violations to the attention of the hearing officers; the institution of internal procedures to prevent future violations; and the identification of violations in this case and efforts to correct internal problems being made before the Indianapolis Star/News article appeared. Ms. Tippett stated that the only aggravating factors in this case were that the corporation is not a small or unsophisticated company, and that the corporation had a history of involvement in the political process. She remarked that, all in all, the hearing officers determined that the mitigating factors outweighed the aggravating factors in this instance, and that the appropriate civil penalty would be the amount of the excess contribution, meaning $150.
The chair recognized Ms. Robertson, who provided Commission members with a three page letter dated June 11, 1997 from Thomas V. Easterday, General Counsel of Subaru-Isuzu Automotive, Inc., and received by the Election Division on June 19, 1997. Commission members reviewed this letter and with the consent of the Commission, this letter was incorporated by reference into the minutes of this meeting.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Subaru-Isuzu Automotive, Inc. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Long moved, seconded by Mr. Cruea, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-55 to insert the phrase "One Hundred Fifty Dollars ($150.00)" in the blank, and adopt Order 1997-55 as amended. There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
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97-154Butler, Fairman & Seufert
Ms. Tippett stated that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law had occurred in this case. Ms. Tippett testified that the hearing officers found that Butler, Fairman & Seufert exceeded the $5,000 aggregate limit for contributions to statewide candidates in 1996 by $1,200.
Ms. Tippett stated that based on the guidelines embodied in proposed Order 1997-54, the hearing officers recommended that the Commission assess a civil penalty of $1,800 against the corporation. She noted that among the mitigating factors in this case were the efforts by the corporation to institute internal procedures to prevent future violations and the fact that the corporation brought forward information regarding a possible additional violation to the attention of the hearing officers. Ms. Tippett stated that the aggravating factors in this case were that the corporation is not a small or unsophisticated company, that the corporation had a history of involvement in the political process, and that the corporation was unaware of the violation until the Republican Party brought the violation to the corporation's attention. She remarked that, all in all, the hearing officers determined that neither the mitigating factors nor the aggravating factors prevailed in this instance, and that the appropriate civil penalty would be one and one half times the amount of the excess contribution, meaning $1,800.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Butler, Fairman and Seufert. Mr. Richard Kempf rose, and stated that he had no additional remarks to make in this case. Hearing no additional response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Long moved, seconded by Mr. Koenig, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-56 to insert the phrase "One Thousand Eight Hundred Dollars ($1,800.00)" in the blank, and adopt Order 1997-56 as amended.
There being no further discussion, the chair called the question, and declared that with two members (Mr. Koenig and Mr. Long) voting "aye" and two members voting "nay" (Mr. Cruea and Mr. Perkins), the Commission had not taken official action, and therefore the motion was not adopted.
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Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-56 to insert the phrase "One Hundred Fifty Dollars ($150.00)" in the blank (as an amount equal to approximately ten percent (10%) of the excess contribution), plus any mailing costs incurred by the Election Division, and to adopt Order 1997-56 as amended.
The chair stated that he leaned towards adopting the joint recommendation of the Co-Directors as presented since the Co-Directors took great pains at their June 3 meeting, and in preparing for this Commission meeting, to go through enormous records, to take testimony at the June 3 hearing, and to consider all the aggravating factors and mitigating factors. He remarked that the staff was in a good position to go through all the records and make an educated recommendation, and that he would prefer to adopt that.
There being no further discussion, the chair called the question, and declared that with two members (Mr. Cruea and Mr. Perkins) voting "aye" and two members voting "nay" (Mr. Long and Mr. Koenig), the Commission had not taken official action, and therefore the motion was not adopted.
In response to a question from Mr. Long concerning the appropriate procedure for the Commission to follow when no official action is taken in a matter, Ms. Robertson and Mr. King stated that in previous cases, the Commission has adopted an order at the next following meeting to dismiss a cause in which the Commission tied two-to-two, but that a dismissal of the cause was not automatic or required. In response to a question from Mr. Koenig, Mr. King added that unless another motion was pending concerning the cause (aside from dismissal), the matter remained pending until the following meeting.
The chair then called the following cause:
97-155Capitol Consultants, Inc.
Ms. Tippett stated that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law had occurred in this case. Ms. Tippett testified that the hearing officers found that Capitol Consultants, Inc. exceeded the $2,000 limit for contributions to Indiana house candidates in 1996 by $600.
She noted that among the mitigating factors in this case were the efforts by the corporation to institute internal procedures to prevent future violations, that the corporation was cooperative in providing information to the hearing officers, and that the corporation is small and relatively new to the political process.
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June 30, 1997 Minutes
Ms. Tippett stated that the aggravating factors in this case were that the owner of the corporation is registered lobbyist with experience in the campaign finance process, and that the corporation was unaware of the violation until the Indianapolis Star/News article brought the violation to the corporation's attention. She remarked that, all in all, the hearing officers determined that neither the mitigating factors nor the aggravating factors prevailed in this instance, and that the appropriate civil penalty would be one and one half times the amount of the excess contribution, meaning $900.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Capitol Consultants, Inc. Ms. Linda Pence, attorney for Capitol Consultants, Inc., expressed her thanks to the Election Division staff for assisting her with understanding the campaign finance laws and the Commission's procedures. She stated that she had not had the opportunity to review the standards set forth in Order 1997-54, or to review the proposed penalty of one and one-half times the excess contribution with her client, and she would like the opportunity to do so.
Ms. Pence stated that she wished to contest the one and one-half times amount under the guidelines since she believed that following those guidelines should result in a lesser civil penalty for Capitol Consultants. She noted that the corporation is a relatively new corporation, and was organized by a law firm in 1992, but that her client took control of the corporation approximately two years ago. Ms. Pence stated that while her client is sophisticated with regard to lobbying, he had only taken charge of the books and records of the corporation during the past year. She remarked that the corporation employed a part-time bookkeeper, but the corporation does not have a sophisticated system in place.
Ms. Pence said that although Capitol Consultants is a small company, not a major corporation, internal procedures have been instituted to prevent the occurrence of future violations. She noted that the corporation has only one employee and one officer. She also remarked that Capitol Consultants has not had significant involvement in the political process in prior years, and has no previous criminal or civil violations.
Ms. Pence noted that the $600 contribution being investigated in this case was not a significant contribution, and that this appeared to be the case in the other causes before the Commission today, with the exception of CART. Ms. Pence stated that while the violations uncovered need to be corrected, they appear to be innocent mistakes and that the violations do not indicate a widespread or major problem.
Indiana Election Commission
June 30, 1997 Minutes
Ms. Pence stated that as soon as the Indianapolis Star/News article appeared, Capitol Consultants was very candid and cooperative with the newspaper's reports and with the Election Division staff. She noted that in contrast, some of the other corporations alleged to have exceeded the contribution limits had not appeared at either the staff hearing or the Commission's meeting. Ms. Pence stated that the Commission's inquiry in this area was important, and that she had been instructed by her client to cooperate fully in this regard. She added that the corporation had obtained refunds in an amount that exceeds the amount of the excess corporate contributions, and that the corporation had voluntarily supplied information concerning possible additional violations to Election Division staff.
Ms. Pence requested that, since this occasion is the first time in which this corporation has been cited for a violation, the Commission give leniency by imposing no fine on Capitol Consultants. She thanked the members of the Commission.
In response to a question from the chair, Ms. Pence stated that Capitol Consultants had provided information to the hearing officers at the June 3 meeting, and advised the Commission that the corporation would be willing to provide any additional information that the Commission might request. In response to an additional question from the chair, Ms. Pence stated that Capitol Consultants does not contest that an excess contribution in the amount of $600 was made by the corporation, but that the mistake was an innocent one and not willful or wanton. Ms. Pence noted that although the statute gives the Commission the authority to impose a fine in these cases, there are no guidelines for determining when a fine should be imposed and what the amount of the fine should be. She added that the maximum penalty of three times the amount of the excess contribution was appropriate for a reckless disregard of the statute, but that the "reckless disregard" standard was not applicable in this case.
Ms. Pence suggested that a first offense in this area should be almost akin to a diversion program. She stated that she understood that the Commission took these violations seriously, and that her client does so, but added that since the Commission was setting precedent for the future that any fine against Capitol Consultants, Inc. should recognize that the violation resulted from an innocent mistake and that the corporation had cooperated with and voluntarily supplied information to the Commission.
The chair stated that since Capitol Consultants had obtained a refund of the $600 excess corporate contribution, the corporation in one sense was better off now as a result of obtaining the refund than it was after making the contribution. He remarked that since
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Capitol Consultants admitted to making the excess contribution, and due to the mitigating circumstances in this case, he felt that a penalty of $600 would be appropriate in this case so that the corporation would not remain better off as a result of obtaining a refund of the contribution.
Ms. Pence noted that one difficulty in the statute was the absence of limits on contributions by individuals. She remarked that if the individuals involved with these corporations had made the same contributions from their personal accounts, there would be no hearing today at all. The chair responded that state legislators had also struggled with that aspect of the campaign finance law.
Ms. Pence stated that both Capitol Consultants and its owner were sympathetic with the duties that the Commission has, and that although she had not been able to consult with her client regarding any proposed penalty, she felt personally that a corporation that cooperated with the Commission's investigation at an early stage and remedies the problem deserves some consideration. There being no further testimony concerning Capitol Consultants, Inc., the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Cruea stated that he believed there should be some financial penalty in these cases where a corporation has violated the excess contribution limits in the same manner that the Commission has imposed civil penalties against individual candidates for filing a late campaign finance report. He added that in this case, he felt a penalty equal to ten percent of the excess contribution, or a minimum amount of $150 would be appropriate.
Mr. Long stated that when an excess corporate contribution is made, that amount of money is already gone from the entity. He remarked that he did not believe that a ten percent penalty sent much of a message. Mr. Long remarked that a policy setting a penalty equal to the amount of the excess as a minimum, and then increasing the penalty from there, would be more of a deterrent.
Mr. Perkins stated that until the Commission adopted specific standards regarding the amount of civil penalties in these cases, he felt that there should be a financial penalty for violations, but he was not certain what the amount of the civil penalties should be. He added that after hearing testimony in this matter, and reviewing the findings of fact, he felt that a minimum penalty would be appropriate here. Mr. Perkins stated that he would therefore be inclined to support a civil penalty in the amount of $150 in this case, as suggested by Mr. Cruea.
Indiana Election Commission
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Mr. Long stated that there appeared to be agreement among all the Commissioners that a civil penalty of a minimum amount should be imposed in this case, but that the disagreement remained as to the amount of the minimum penalty.
The chair responded that while his inclination would be to defer to the joint recommendation of the Co-Directors who had more opportunity to review the record and facts in this case, perhaps something is better than nothing in terms of a fine. He added that since it was clear from Ms. Pence's testimony that Capitol Consultants does not contest the fact that an excess contribution was made by the corporation in violation of the law, he believed that a penalty of some amount was appropriate. the chair stated that perhaps a minimum fine of $150 was not a bad starting point.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-57 to insert the phrase "One Hundred Fifty Dollars ($150.00)" in the blank, and adopt Order 1997-57 as amended.
Mr. Long stated that while he could support the motion in this case, he was troubled by the fact that while Capitol Consultants, Inc. would be subject to a fine, Butler, Fairman & Seufert would not be fined due to the inability of the Commission to take official action on the previous matter, and that since the cause concerning that corporation would probably be dismissed, the Commission would be sending a very inappropriate message.
In response to a question from Mr. Cruea, Mr. King stated that since the Commission did not take official action with regard to Butler, Fairman & Seufert due to a two-to-two vote, the Commission could either bring the matter up again at the next meeting of the Commission, or, although the Commission had already closed consideration of the cause at this meeting, move to reconsider the matter at this time.
The chair stated that while he shared Mr. Long's preference to vote on all these matters in accordance with the staff recommendations, he did not wish to go through the administrative gymnastics of taking a vote at this meeting and then dismissing these matters at a subsequent Commission meeting. The chair remarked that he would be open to reconsidering the case of Butler, Fairman & Seufert at this meeting after the Commission acted on the pending motion concerning Capitol Consultants, Inc. He added that some penalty, even if not as stiff as he would like, could then be imposed.
Mr. Cruea stated that he would also be in favor of reopening the Butler, Fairman & Seufert cause.
Indiana Election Commission
June 30, 1997 Minutes
There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion to approve Order 1997-57 concerning Capitol Consultants, Inc., was adopted.
The chair recognized Mr. Long, who asked leave for the Commission to reopen the following cause:
97-154Butler, Fairman & Seufert
In response to a question from Mr. Cruea, Mr. King indicated that the adoption of a motion for the Commission to reconsider this matter would not be necessary in this case, but that the Commission could proceed with the consent of its members. Commission members unanimously consented to the reconsideration of this cause.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-56 to insert the phrase "One Hundred Fifty Dollars ($150.00)" in the blank, and adopt Order 1997-56 as amended.
The chair recognized Mr. Perkins, who asked if Mr. Kempf had any additional testimony to offer on behalf of Butler, Fairman & Seufert before the Commission voted on this motion. Mr. Kempf indicated that he did not.
There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-156Cole Associates, Inc.
The chair recognized Ms. Tippett, who stated that in this case the corporation was alleged to have exceeded the $5,000 aggregate limit on corporate contributions to a state political party central committee in 1996 by $1,500. She stated that the hearing officers found that Cole Associates had in fact given only $5,000 to the Indiana Democratic State Committee in 1996, and that the corporation had given an additional $1,500 to what the corporation believed was a separate political organization which was apparently never established. Ms. Tippett stated that the hearing officers recommended sending a letter to the Monroe County Election Board referring this matter to the Board for further investigations and proceedings in accordance with the findings of fact and recommendations made by the hearing officers in this case.
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The chair asked if any person was present to offer testimony on behalf of Cole Associates, Inc. Ms. Linda Pence stated that she also represented this corporation, but had no testimony to offer at this time.
Mr. Cruea stated that he wished to amend the proposed final order in this cause to notify the Monroe County Election Board to follow up with a response to the Election Commission after the Board completes its proceedings in this matter.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-58 to provide that the Monroe County Election Board is to notify the Commission concerning what action was taken in this case, and adopt Order 1997-58 as amended.
There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-157Delta Dental Plan of Indiana, Inc.
Ms. Tippett stated that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law had occurred in this case. Ms. Tippett testified that the hearing officers found that Delta Dental Plan of Indiana, Inc. exceeded the $2,000 aggregate limit for contributions to Indiana house candidates in 1996 by $200.
Ms. Tippett noted that among the mitigating factors in this case were the identification of the problem by the corporation shortly after the donation was made; the corporation's effort to obtain a refund of the contribution, which occurred before the Indianapolis Star/News article was published; the corporation's institution of internal procedures to prevent future violations; and the fact that the corporation was cooperative with the Election Division investigation in this matter. Ms. Tippett stated that the aggravating factors in this case were that the corporation has been in existence for a long while; that the corporation is not a small or unsophisticated company; that the corporation hired attorneys as consultants with regard to making contributions, and that these individuals would be expected to have special knowledge concerning the contribution limitations. She remarked that, all in all, the hearing officers determined that the mitigating factors outweighed the aggravating factors in this instance, and that the appropriate civil penalty would be the amount of the excess contribution, meaning $200.
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There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Delta Dental Plan of Indiana, Inc.
Ms. Marianne Kiely with Baker & Daniels law firm rose to testify, and was administered the oath by Mr. King. Ms. Kiely identified herself as Delta Dental Plan of Indiana's consultant for governmental affairs. She stated that the corporation should receive consideration for its correction of this problem since, based on the facts presented by staff: (1) Delta Dental discovered this problem two weeks into the year, and before the matter was reported by the Indianapolis Star; (2) the corporation obtained a refund of the contribution by the beginning of February; (3) the corporation had not made large numbers of contributions in previous years; (4) the corporation had committed no previous violations; and (4) this problem arose due to an innocent mistake where the contribution slipped through. Ms. Kiely noted that other corporations had been fined $150 by the Commission for similar violations, but that these corporations had not made the efforts similar to those made by Delta Dental Plan to correct the violation.
The chair asked if anyone else wished to present additional testimony in this cause. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-59 to insert the phrase "One Hundred Fifty Dollars ($150.00)" in the blank, and adopt Order 1997-59 as amended.
There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-158D. P. French, Inc.
Ms. Tippett stated that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law had occurred in this case. Ms. Tippett testified that the hearing officers found that D. P. French, Inc., exceeded the $2,000 aggregate limit for contributions to Indiana house candidates in 1996 by $571.91.
Indiana Election Commission
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Ms. Tippett noted that among the mitigating factors in this case were the facts that the contribution in this case was an "in-kind" contribution of services, and not a cash donation; the corporation made an effort to obtain a refund of the contribution; the corporation is a small one, and has not hired a consultant for advice concerning the distribution of contributions. Ms. Tippett stated that the aggravating factors in this case were that the corporation has a history of involvement in the political process and the violation in this case was not discovered by the corporation before the Indianapolis Star/News article was published. She remarked that, all in all, the hearing officers determined that the mitigating factors outweighed the aggravating factors in this instance, and that the appropriate civil penalty would be the amount of the excess contribution, meaning $571.91.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of D. P. French, Inc. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-60 to insert the phrase "One Hundred Fifty Dollars ($150.00)" in the blank, and adopt Order 1997-60 as amended.
There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-159Gaylor Electric Co.
Ms. Tippett stated that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law had occurred in this case. Ms. Tippett testified that the hearing officers found that Gaylor Electric Company exceeded the $2,000 aggregate limit for contributions to Indiana house candidates in 1996 by $100, and that the corporation also exceeded the $5,000 aggregate limit for contributions to statewide candidates in 1996 by $750.
Ms. Tippett noted that among the mitigating factors in this case were the facts that the corporation had sought a refund of the excess contributions in this case; the corporation instituted internal procedures to prevent the occurrence of future violations; and the corporation voluntary disclosed information concerning an additional violation not reported in the Indianapolis Star/News article.
Indiana Election Commission
June 30, 1997 Minutes
Ms. Tippett noted that among the aggravating factors in this case were that the violation in this case was not discovered by the corporation before the Indianapolis Star/News article was published; the corporation is a large, sophisticated company; and the corporation has a history of involvement in the political process. She remarked that, all in all, the hearing officers determined that neither the mitigating factors nor the aggravating factors won out in this instance, and that the appropriate civil penalty would be one and one-half times the amount of the excess contribution, meaning $1,275.
The chair recognized Ms. Robertson, who noted that Commission members had received a copy of a one page letter from The Honorable Jeff Espich, Indiana State Representative, dated June 12, 1997, and received by the Election Division on June 16, along with a three page amendment to the Jeff Espich for Representative Committee's January 1997 report concerning the return of the excess contribution to Gaylor Electric Co. These documents are incorporated by reference in these minutes.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Gaylor Electric Company.
Mr. Joe Impicciche rose to testify, and was administered the oath by Mr. King. Mr. Impicciche stated that he took exception to the staff's description of Gaylor Electric as a large company. He added that although Gaylor was not the size of Subaru, he did not know what was considered a "large" company, since he had not seen the guidelines used by staff in making this determination. Mr. Impicciche remarked that the original violation reported in the press was an excess contribution of $100, and that Gaylor had made an innocent mistake in the same manner as the other corporations who appeared before the Commission so far today. He stated that the only difference was the amount, and that Gaylor had reported the additional violations to the Commission. Mr. Impicchiche added that Gaylor had obtained refunds for these additional violations, and that this was not mentioned as a mitigating factor in the presentation by staff. He suggested that if a penalty would be imposed in this case that the amount should be comparable to those already assessed since Gaylor's mistake had been an innocent one.
The chair recognized Mr. Cruea, who stated that until the Commission adopted standards concerning civil penalties, the amount of the fine should not be based on one, one and one-half, or two times the amount of the excess, but should be assessed according to the facts in each case. He noted that he hoped there would not be any repeat offenders, but that assessing civil penalties in these cases would demonstrate that the Commission was serious. Mr. Cruea stated that the Commission could then look carefully at setting up standards to determine which are large corporations, and which are small corporations.
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The chair asked if any additional person wished to testify on behalf of Gaylor Electric Company, Inc. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-61 to insert the phrase "One Hundred Fifty Dollars ($150.00)" in the blank, and adopt Order 1997-61 as amended.
There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-160Houston Companies, Inc.
Ms. Tippett stated that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law had occurred in this case. Ms. Tippett testified that the hearing officers found that Houston Companies, Inc. exceeded the $2,000 aggregate limit for contributions to Indiana house candidates in 1996 by $1,000.
Ms. Tippett noted that among the mitigating factors in this case were the facts that the corporation had sought a refund of the excess contributions in this case; the corporation had instituted internal procedures to prevent the occurrence of future violations; and the corporation had cooperated with the Election Division.
Ms. Tippett noted that among the aggravating factors in this case were that the corporation is a large, sophisticated company; the corporation has been in existence for several years; the corporation has a history of involvement in the political process; and the violation in this case was not discovered by the corporation before the Indianapolis Star/News article was published. She remarked that, all in all, the hearing officers determined that neither the mitigating factors nor the aggravating factors won out in this instance, and that the appropriate civil penalty would be one and one-half times the amount of the excess contribution, meaning $1,500.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Houston Companies, Inc. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
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Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-62 to insert the phrase "One Hundred Fifty Dollars ($150.00)" in the blank, and adopt Order 1997-62 as amended.
There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-161Monarch Beverage Co.
Ms. Tippett stated that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law had occurred in this case. Ms. Tippett testified that the hearing officers found that Monarch Beverage Company exceeded the $2,000 aggregate limit for contributions to Indiana house candidates in 1996 by $3,000.
Ms. Tippett noted that among the mitigating factors in this case were the facts that the corporation had sought a refund of the excess contributions in this case; the corporation had instituted internal procedures to prevent the occurrence of future violations; the corporation was cooperative with the Election Division; and the corporation did not employ a consultant expected to have special knowledge concerning the campaign finance contribution limitations.
Ms. Tippett noted that among the aggravating factors in this case were that the violation in this case was not discovered by the corporation before the Indianapolis Star/News article was published; the corporation is a large, sophisticated company; and the corporation has a history of involvement in the political process. She remarked that, all in all, the hearing officers determined that neither the mitigating factors nor the aggravating factors won out in this instance, and that the appropriate civil penalty would be one and one-half times the amount of the excess contribution, meaning $4,500.
The chair recognized Ms. Robertson, who noted that Commission members had received a copy of a three page letter from Stephan L. Hodge, Esq., of McHale Cook & Welch, dated June 10, 1997, and received by the Election Division on that date, which included a photocopy of a return check of $900 from the Early for Governor Committee. These documents are incorporated by reference in these minutes.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Monarch Beverage Company.
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Mr. Stephan Hodge rose to testify, and stated that he had previously been sworn in. Mr. Hodge remarked that he wished to thank the Commission's staff on behalf of Monarch Beverage for their assistance and understanding through this process, which had been difficult and embarrassing for his client.
Mr. Hodge testified that he had not seen the text of proposed Order 1997-54 or the proposed findings of fact in this case, so he could not comment on what it says, but he wished to stress that his client had been very cooperative in this matter. Mr. Hodge noted that his client immediately contacted the Co-Directors and attended the June 3 factfinding hearing. He stated that there was no intent to commit any wrong-doing, but the excess contribution was simply an innocent mistake made by his client. Mr. Hodge noted that Monarch Beverage Company had instituted procedures to prevent future violations, and that his client's level of cooperation should be a significant factor in determining whether to assess a penalty.
In response to a question from Mr. Long, Mr. Hodge stated that he understood that the corporation had made a total of $5,900 in contributions to the Early for Governor campaign, and that $900 was the excess amount. He noted that Monarch had obtained a refund of the excess contribution. In response to a further question from Mr. Long, Mr. Hodge stated that in the future, he and Mr. Terry would be monitoring all contributions, and that no corporate contributions would be made by Monarch Beverage until Mr. Hodge had reviewed them for compliance with the law.
The chair asked if any additional person wished to testify on behalf of Monarch Beverage Company. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-63 to insert the phrase "Three Hundred Dollars ($300.00)" in the blank, and adopt Order 1997-63 as amended. Mr. Cruea noted that he suggested this amount since the excess contribution had been $3,000, and that ten percent of that amount would therefore exceed the $150 minimum civil penalty that he had moved in prior causes.
There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
The chair then called the following cause:
97-162Solar Sources, Inc. Indiana Election Commission
June 30, 1997 Minutes
Ms. Tippett stated that she and Ms. Christie conducted a factfinding hearing in this matter on June 3, and found that a violation of the excess corporate contribution law had occurred in this case. Ms. Tippett testified that the hearing officers found that Solar Sources, Inc. exceeded the $2,000 aggregate limit for contributions to Indiana house candidates in 1996 by $1,050.
Ms. Tippett noted that among the mitigating factors in this case was the fact that the corporation had sought a refund of the excess contributions in this case.
Ms. Tippett noted that among the aggravating factors in this case were that the violation in this case was not discovered by the corporation before the Indianapolis Star/News article was published and the corporation had not been particularly cooperative with the Election Division. She remarked that, all in all, the hearing officers determined that neither the mitigating factors nor the aggravating factors won out in this instance, and that the appropriate civil penalty would be one and one-half times the amount of the excess contribution, meaning $1,575.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of Solar Sources, Inc. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
Mr. Cruea moved, seconded by Mr. Perkins, that the Commission approve the proposed findings of fact in this cause, amend Order 1997-64 to insert the phrase "One Hundred Fifty Dollars ($150.00)" in the blank, and adopt Order 1997-64 as amended.
There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted.
E.CAUSE 97-0974-163 (CRAWFORD COMMITTEE):
The chair recognized Ms. Thompson, who stated that it was brought to the attention of the Election Division that Representative William Crawford's 1995 annual report covered the period from October 13, 1995 through December 31, 1995, instead of January 1, 1995 through December 31, 1995. She stated that Carole Casto, who then served as Campaign Finance Co-Director, spoke with Representative Crawford on May 8, and that he had advised Ms. Casto that he would file an amended report, but that the Election Division did not receive the report, and sent out a "five day notice" on May 16. Ms. Thompson stated that Representative Crawford did file an amended report on June 25, 1997. Staff distributed
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copies of a seven page document received by the Election Division from the Crawford Committee on June 25, which was included in the record of this cause, and is incorporated by reference in these minutes. Ms. Thompson also submitted a one-page document entitled "Defective Committee Report(s)", which was included in the record of this cause, and is incorporated by reference in these minutes. She noted that since the report from this committee had been received more than ten days after the Election Division notified the committee to file a corrected report, the proposed fine was $105.04, which included certified mail costs documented by the Election Division.
In response to a question from Mr. Koenig, Ms. Thompson stated that the Crawford Committee's original report was defective since it only covered part of the year, and not all of 1995. In response to a further question from Mr. Koenig, Ms. Thompson noted that the annual report for 1995 had been due January 16, 1996, and the Election Division discovered that this committee's report was defective earlier in 1997.
There being no further information to be presented by Election Division staff, the chair inquired if anyone present wished to speak on behalf of the Crawford Committee. The Honorable William Crawford, Indiana State Representative, rose to testify, and stated that he had previously been sworn in.
Mr. Crawford stated that he did not dispute anything that was said earlier, and that he did receive a call at home from Ms. Casto, and had returned her call to advise her that the committee would file an amended report. He testified that in the process of doing so, he discovered that his files were missing. Mr. Crawford said that before December 1996, his office in the State House had been in Room 336, and that these records had been boxed up due to lack of space. He added that after December, his office had been moved to Room 405, and the boxes had been misplaced. Mr. Crawford stated that he had so advised Ms. Casto, and that he had been required to go back to Key Bank to have them search for and get copies of the missing records. He indicated that he received Ms. Casto's call during the second week of May, and that he had not received the last of the documents he requested from the bank until June 24.
Mr. Crawford said that immediately after receiving these documents he filled out the corrected report, and filed it on June 25. Mr. Crawford stated that he had not been ignoring the Election Commission, but had advised Ms. Casto that he did not have the records to properly fill out the report. He stated that he understood he had committed a Class B misdemeanor by losing these records, but he waited until he completed the necessary research, and then he was able to file the amended report. Mr. Crawford stated that it was an error on his part to file a defective report.
Indiana Election Commission
June 30, 1997 Minutes
He stated that he prepared his own campaign finance reports for the committee, and was responsible for defect in the committee's 1995 report. In response to a question from Mr. Long, Mr. Crawford stated that he had received the records concerning the Crawford Committee from Mr. Terry at Key Bank, and wished to submit them into the record. Mr. Crawford submitted a twenty-six page document consisting of photocopies of deposit slips, cancelled checks, and other documents concerning the Crawford Committee's bank account, which was included in the record of this cause, and is incorporated by reference in these minutes.
Mr. Crawford stated that Key Bank had originally planned to charge him $20 per hour to conduct this research, but had waived the fee since it took Key Bank more than a month to produce the documents. Mr. Long stated that upon examining these documents, it appears that the facsimile transmission was sent on June 23, 1997, and noted that Mr. Crawford filed his report on June 25. Mr. Long stated that this evidence supported Mr. Crawford's testimony that he filed his report immediately upon receiving the documents from Key Bank.
The chair inquired if anyone else present wished to speak on behalf of Crawford Committee. Hearing no response, the chair declared the public testimony portion of the Commission's proceedings in this cause to be closed.
In response to a question from the chair concerning the Commission's actions regarding past defective reports, Mr. Cruea stated the report filed in this case was in one sense not the right report since the report only covered part of a reporting period. The chair stated that Mr. Crawford had filed something on time, but not the right report.
In response to a question from Mr. Long, Ms. Thompson stated there were not two reports due for this committee in 1995, but only one report due in January 1996. In response to a question from Mr. Cruea, Ms. Thompson stated that, until recently, no report had been filed for January 1 through October 13, 1995. The chair noted that typically, a committee only files one report, which is due in the following January, but that in an election year in which the candidate is on the ballot, the committee is required to file a post election report beginning in mid-October through December 31.
Mr. Cruea moved, seconded by Mr. Perkins, that the recommended civil penalty of $100, plus $5.04 in investigative costs documented by the Election Division, be imposed in this cause.
Mr. Long stated that he would defer to the Commission's experience in this regard, but that he was satisfied with Mr. Crawford's explanation of his efforts to correct this matter.
Indiana Election Commission
June 30, 1997 Minutes
There being no further discussion, the chair called the question, and declared that with four members (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) voting "aye" and no member voting "nay", the motion was adopted. The chair directed staff to prepare the appropriate findings of fact and final order in this cause for subsequent adoption by the Commission.
4. IEC FORMS:
The chair recognized Mr. King, who stated that the Commission had received copies of the following forms: PRE-1 (R3/06-97); and VRG-18 (R/6-97). He noted that these documents were the current version of these forms as reflected in the records of Forms Management Division in the Commission on Public Records as of May 1, 1997. Copies of these forms are incorporated by reference in these minutes.
Mr. King remarked that the PRE-1 precinct oath book had been revised to reflect 1997 legislation which now permits first cousins of candidates to serve on precinct election board, and which prohibits the chairman or treasurer of a candidate's committee from serving on a precinct election board in a precinct in which the candidate is on the ballot. He added that the VRG-18 was a postcard form, which was the first of several postcards to be mailed as part of the duplicate voter registration elimination program.
In response to a question from the chair, Mr. King indicated that the VRG-18 postcard had been changed to incorporate language concerning the National Change of Address Program (NCoA), and to include the telephone number of the appropriate county voter registration office for the voter to contact, rather than the Election Division telephone number. In response to a question from Mr. Cruea and Mr. Long, Mr. King stated that the precinct election oath book was otherwise unchanged.
Mr. King added that the Election Division staff would be bringing several more forms to the Commission for approval later in the year to catch up with changes required by 1997 legislation.
Mr. Cruea moved, seconded by Mr. Koenig, that the proposed revised forms be approved as submitted. There being no further discussion, the chair called the question, and declared that with four members voting "aye" (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) and no member voting "nay", the motion was adopted.
Indiana Election Commission
June 30, 1997 Minutes
In response to a question from Mr. Long, Mr. King stated that under a new state law effective July 1, 1997, all new and revised forms will not take effect until being provided to the major party state committees, the county election boards, and county voter registration offices to make them aware of new forms.
The chair also noted that in the past, the Election Commission had convened an ad hoc committee to offer suggestions regarding election and registration forms, and that local election officials were represented on this committee. Mr. Long stated that he wanted to be able to advise his local clerk that she would have an opportunity for input.
5. CO-DIRECTOR REPORTS:
The chair recognized Ms. Christie, who stated that while the Co-Directors had been very sorry to see Carole Casto and Kathy Koehler leave the staff, they had been fortunate in that their replacements, Annette Craycraft and Bruce Northern, were valuable additions to the Election Division. She noted that Ms. Craycraft would be assuming Ms. Casto's campaign finance responsibilities, and that Mr. Northern would be working with regard to NVRA and precinct boundary changes.
Ms. Christie also announced that the annual election administrator seminar would be conducted December 8-10, 1997, at the Westin Hotel in downtown Indianapolis. In response to a question from Mr. Koenig, she stated that the last seminar had been conducted in January 1996.
6. COUNTY NVRA IMPLEMENTATION PLANS:
The chair recognized Mr. King, who stated that Commission members had received information concerning the NVRA implementation plans from the final nine counties whose plans were awaiting Commission action. He noted that these counties included Benton, Crawford, Dearborn, Harrison, Jackson, Jennings, Knox, Parke, and Wells Counties that Kathy Koehler had completed before leaving the Election Division staff. Mr. King remarked that Ms. Koehler had sent out proposed NVRA implementation plans to those counties, and reported that she received comments from several counties. He added that Ms. Koehler had advised the counties that the Commission could vote to approve the county's draft NVRA plan at this meeting to wrap up the approval process.
Indiana Election Commission
June 30, 1997 Minutes
In response to a question from the chair, Mr. King stated that these county plans had more or less defaulted to the Commission to prepare so that the counties would be in compliance with NVRA.
The chair noted that in many of these counties there were probably not a lot of extra NVRA registration sites to designate.
Mr. Koenig moved, seconded by Mr. Cruea, that the proposed NVRA implementation plans for the counties listed above be approved. There being no further discussion, the chair called the question, and declared that with four members voting "aye" (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins) and no member voting "nay", the motion was adopted.
7. REMARKS BY MR. DICK FROST:
The chair recognized Mr. Frost, who stated that he was "Jack Frost's brother, Dick", and that he had FAXed to the Co-Directors an offer that they could refuse. Mr. Frost said that for $1 he would be willing to input into his computer data base one hundred campaign finance reports.
Mr. Frost stated that the figure of fourteen million dollars, or whatever millions it was, to accomplish what the Indianapolis Star did was ridiculous, in the same way that it would be to pay someone fourteen million dollars to find out if your computer would work in the year 2000.
The chair remarked that the State Budget Committee took action last week to transfer $250,000 for the computerization of the Election Division's campaign finance records. He added that the Election Division would be subject to state procurement laws in terms of bidding procedures, and that Mr. Frost would be free to be involved in that process.
Mr. Frost stated that he was a retired state employee, and that he does everything for free, including counseling people thinking about going into business and is also with the consortium "Q-Fit, Inc." [sp?], which advises state and federal agencies free of charge, so he was not certain whether the state could afford $1 or not. Mr. Frost said that the only problem might be how he could enter one hundred returns and the Election Division maintain security of the document. He noted that he could not come down from Hamilton County and not charge the Commission mileage. Mr. Frost added that after photocopying any one hundred reports, his construction of a data base would either do the job or not, and in either case there would be no obligation or cost. Mr. Frost stated that if the Commission wished him to bid a buck through the state, he would be glad to do so.
Indiana Election Commission
June 30, 1997 Minutes
The chair recognized Ms. Tippett, who stated that the Co-Directors were reviewing campaign finance computerization proposals from vendors. She apologized to Mr. Frost that the Co-Directors had not had the time to respond to his facsimile transmission. She stated that his proposal would be welcomed as they would welcome those from all vendors, but that the Co-Directors were in the final decision making process of their review. She suggested that Mr. Frost provide a detailed proposal to the Co-Directors as soon as possible. Ms. Tippett stated that since the Election Division had received funding for this project, the Election Division would move forward as rapidly as possible to accomplish this goal.
In response to a question from Mr. Long, Ms. Tippett stated that the Election Division receives filings from 850 committees, including candidates, political action committees, and regular party committees. In response to a question from Mr. Frost, Ms. Tippett stated that some of these committees file extremely long reports of more than 1,000 pages in length. In response to a question from Mr. Cruea, Ms. Tippett stated that corporations are not required to file reports, only political committees.
In response to a question from Mr. Frost, Mr. King stated that any administrative rules concerning the standards for the assessment of civil penalties would be codified in the Indiana Administrative Code, and that any state agency rule would have the force and effect of law, subject to the general assembly's ability to override or void the administrative rule.
8. DOCUMENTS FOR COMMISSION INFORMATION:
The chair recognized Mr. King, who provided Commission members with four pamphlets recently updated by the Election Division: Common Questions About Indiana's Campaign Finance Laws for Candidates & Candidate's Committees; Political Signs and "Disclaimer" Requirements for Political Literature and Advertisements; Questions and Answers about Voter Registration in Indiana; and Vacancies in Elected Offices.
Mr. King noted that Commission members had received copies of the letters, both dated May 19, 1997, from the Co-Directors to Mr. Dan T. McGinnis, Vice-President, Business Records Corporation, and Mr. Larry Mandel, President of Governmental Business Systems, Inc., concerning the Commission's actions at its May 12 meeting regarding the voting systems marketed by these vendors.
Indiana Election Commission
June 30, 1997 Minutes
Mr. King stated that the Commission members received copies of a letter dated May 22, 1997 from Mr. George T. Patton, Jr., of Bose McKinney & Evans and an enclosed "Petition by Marion County Election Board to Appeal Under 28 U.S.C. 1292(b)", along with a letter dated May 29, 1997 from Cindy M. Lott of the Attorney General's office to Mr. Chuck Branch, Deputy Clerk of the U.S. Seventh Circuit containing an entrance of appearance on behalf of Commission members, a "Petition by Indiana State Election Commission to Appeal Under 28 U.S.C. 1292(b)", and a proposed Order granting the petition. He remarked that these documents concerned Anderson v. Mallamad, the Marion County small claims court judges case. These documents are incorporated by reference in these minutes.
9. FUTURE COMMISSION MEETINGS:
The chair recognized Mr. King, who stated that the Attorney General's office had requested that the Commission conduct a brief executive session in the near future concerning pending litigation involving the Commission.
10. ADJOURNMENT:
There being no further business to come before the Commission, Mr. Cruea moved, seconded by Mr. Long, that the Commission do now adjourn. The chair called the question and declared the motion adopted with four members voting "aye" (Mr. Cruea, Mr. Koenig, Mr. Long, and Mr. Perkins), and no members voting "nay". The Commission then adjourned at 12:30 p.m.
Respectfully Submitted,
________________________ ___________________________
Laurie P. Christie Mary Ann Tippett
Co-Director Co-Director
APPROVED:
__________________________
Dudley Cruea,
Chairman