Louisiana Board of Ethics VS Melvin "Kip" Holden

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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2012 CA 1127 LOUISIANA BOARD OF ETHICS VERSUS MELVIN KIP HOLDEN V F j 1 On Appeal from the Nineteenth Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana j No 609 243 Honorable Kay Bates Judge Presiding Kathleen M Allen Counsel for Plaintiff Appellant Michael Dupree Suzanne Quinlan Mooney Baton Rouge LA Louisiana Board of Ethics R Counsel for Defendant Appellee Gray Sexton Jennifer L Jackson Sexton Mayor Melvin Kip Holden Hebert Baton Rouge LA BEFORE PARRO CRAIN AND KLINE J 7udgment rendered i 2 5 2013 ee Judge William F Kline r retired is serving as judge ad hoc by special appointment of the Louisiana Supreme Court PARRO The Louisiana Board of Ethics seeks review of a district court judgment that dismissed its action in which it sought civil penalties against a candidate for alleged violations of the Campaign Finance Disclosure Act For the reasons that follow we affirm FACTS AND PROCEDURAL HISTORY In 2011 Melvin Kip Holden Mayor of the City of Baton Rouge and President of East Baton Rouge Parish filed his 2010 supplemental campaign finance report with the Louisiana Board of Ethics acting in its capacity as the Supervisory Committee on Campaign Finance Disclosure the Board The report disclosed three donations among others made by Mayor Holden from excess campaign contributions as follows 1 500 to the family of Brittni Boatner to help pay her funeral costs 2 197 to the Congressional Youth Leadership Council CYLC and 3 500 to the People to People Ambassadors Program PPAP Following an investigation the Board filed a petition for a rule to show cause with the Nineteenth Judicial District Court for the Parish of East Baton Rouge alleging that the three donations violated S R LSA 1 I 2 1505 18 of the Campaign Finance Disclosure Act CFDA Following a hearing the district court found that Mayor Holden s donations were made in accordance with LSA 18 and dismissed S 2 R 1505 1 I the Board petition with prejudice s The Board has appealed assigning the following errors 1 The District Court erred in finding that the expenses for the Boatner Funeral Tya Wicker and Davis C Hotard CYLC PPAP were reto the holding ofpub o ated ic e c Z Louisiana Revised Statute 18 provides A 1 1511 The Supervisory Committee on Campaign Finance Disclosure is established The Board of Ethics as established in R 42 shall fundion S 1132 as the supervisory committee to administer and enforce the provisions of this Chapter and the rules regulations and orders issued hereunder The members of the Board of Ethics shall constitute the supervisory committee 3 See LSA 18 S5 R 1511 3 A 4 See LSA 18 S7 R 1511 B 2 2 The District Court erred in finding that the expenditures made to Tya Wicker and Davis C Hotard were acceptable CYLC PPAP contributions of campaign funds under 26 USC 170 c 3 The District Court erred in qualifying and allowing Mr William Potter as an expert witness to interpret the law La R S 1 2I 1505 18 DISCUSSION The Louisiana Legislature recognized that the effectiveness of representative government is dependent upon a knowledgeable electorate and upon the confidence of the electorate in their elected public officials The legislature therefore enacted the CFDA to provide public disclosure of the financing of election campaigns and to regulate certain campaign practices See S R 1482 LSA 18 At issue in this case is the interpretation of LSA 18 S 2 R 1505 1 I which provides in pertinent part On and after January 1 1991 contributions received by a candidate or a political committee may be expended for any lawful purpose but such funds shall not be used loaned or pledged by any person for any personal use unrelated to a political campaign the holding of a public office or party position or in the case of a political committee other than a candidate principal campaign s committee or subsidiary committee the administrative costs or operating expenses of the political committee except campaign funds may be returned to contributors on basis given as a charitable contribution as provided c 170 given to a charitable organization as defined that excess a pro rata in 26 USC in 26 USC 3 c 501 At the hearing Mayor Holden with regard to the funeral expenses of Brittni Boatner testified that he had known Brittni father his entire life and the s Boatner family had come to him because they could not afford to bury their daughter who had been murdered Mayor Holden testified that since he had some resources I did not hesitate to make that check The second expenditure at issue to CYLC was made to sponsor a ss councilwoman daughter trip to C Washington D with the group Mayor Holden explained that the CYLC is an education program that allows people from around the country to go in and actually see firsthand the workings of 3 Congress itself and basically how bilis are made how they are drafted the committee system The third expenditure at issue was a donation given to PPAP Mayor Holden explained that PPAP was an organization that afforded children the opportunity to visit other parts of the world and communicate with other people Mayor Holden indicated that the experiences the program offered the children broadened their opportunities Mayor Holden stated that he had a history throughout his twenty plus years as an elected official of making donations to funerals from his excess campaign contributions and had also previously made donations to CYLC and PPAP from his excess campaign contributions Mayor Holden testified that he did not seek the Board advice prior to making any of the three donations because s the Board had never challenged similar donations he had made in the past Mayor Holden opined that he derived no personal benefit from these donations and believed that all three expenditures were related to his holding of a public office and his responsibilities as mayor Additionally William Potter a Certified Public Accountant and an attorney employed by the accounting firm of Postlethwaite and Netterville who prepares and files reports under the CFDA was accepted by the trial court as an expert in the field of Internal Revenue Service rules and regulations and compliance with the CFDA Mr Potter when questioned about the three expenditures at issue testified that if he were advising somebody based on my knowledge and practice I would have told them I would have thought the expenditures were okay at this time When specifically questioned as to whether an expenditure for an indigent funeral is related to the holding of public office Mr Potter explained that a lot of people running for public office feel that the best expenditure of their funds to help get elected and to maintain their position in office is to spend funds directly with the constituents and you can see that 5 The check was made payable to Davis C Hotard who is a member of PPAP and to the organization 4 across the reports that are filed out there campaigns expenditures are Mr Potter noted that in many more constituent whereas based in other campaigns you may see more spent on advertising Mr Potter indicated that a candidate has to ensure that the expenditure is not for a relative or somehow a personal expenditure The Board asserts that the district court erred in qualifying Mr Potter as an expert A district court is accorded broad discretion in determining whether expert testimony should be held admissible and who should or should not be permitted to testify as an expert E C LSA art 702 Official Comment d A district court decision to qualify an expert will not be overturned absent an s abuse of discretion Cheairs v State Dep of Transp and Dev 03 t 0680 La 12 861 So 536 540 03 3 2d 41 Moreover the effed and weight to be given expert testimony is within the broad discretion of the district court Louisiana State Bar Ass v Carr and Assoc Inc 08 La App lst n 2114 Cir 5 15 So 158 171 writ denied 09 La 10 21 So 09 8 3d 1627 09 30 3d 292 We note that Mr Potter stestimony focused on the Board general custom s and usage regarding the CFDA and how he advises his clients regarding that statute After review of the record we cannot conclude that the district court abused its discretion in qualifying Mr Potter as an expert The Board avers that Mr Potter however was also allowed to interpret the law which it contends is contrary to the principle that the judge is the sole arbiter of the law While expert testimony is not permitted to address domestic law the allowance of such testimony is generally harmless error in a judge trial Succession of Allison 31 La App 2nd Cir 1 727 So 683 684 495 99 29 2d i n writ granted case remanded on other grounds 99 La 3 757 0595 00 24 2d So 647 See also Louisiana State Bar Ass v Carr and Assoc Inc 15 n 3d So at 171 n Accordingly the Board third assignment of error is without 14 s merit The Board argues that the expenditures at issue were made in violation of the CFDA because they were made for personal reasons unrelated to the 5 holding of public office The Board avers that Mayor Holden stestimony makes it clear that the expenditures were made to help people who did not have sufficient means and not because they were related to Mayor Holden holding the office s of mayor The Board asserts that while helping those in need is a noble cause it is not in keeping with the plain language of LSA 18 the spirit S 2 R 1505 1 I of the law or public policy The Board notes that the federal government provides a similar restriction on the use of campaign funds in federal elections and allows funds to be used for any other lawful purpose uniess such use is personal under li CFR g 1 113 See 11 CFR e 2 113 Specifically 11 CFR g 1 113 defines personal use of campaign funds using the irrespective test This test prohibits any use of funds in a campaign account of a present or former candidate to fulfill a commitment obligation or expense of any person that would exist irrespective officeholder of the The Board s candidate campaign or duties as a Federal avers that using the irrespective test the expenditures by Mayor Holden would exist even if he were not in office insofar as Mayor Holden indicated that he felt obligated to make these expenditures as a matter of a heart and a mind and feelings for people The Board cites some of its prior advisory opinions in which it concluded that similar uses of campaign funds violated the CFDA Specifically in La Ethics Bd Op 1997 the Board concluded that campaign funds could not be used 070 to purchase clothes for an underprivileged minor In La Ethics Bd Op 2007 786 the Board in a consent opinion between the Board and a candidate for parish president concluded that the candidate had violated the CFDA by making expenditures for funeral expenses and a fundraiser for a person suffering with cancer In La Ethics Bd Op 2007 which is a consent opinion between the 787 Board and a legislator the Board concluded that various donations were not 6 Further the federal regulations provide a non list of expenditures that would exclusive constitute personal use See 11 CFR g 1 113 6 appropriate uses of campaign funds including donations to individuals for a mission trip On the other hand Mayor Holden contends that the Board has selectively enforced its own interpretation of the CFDA and does not consistently enforce its own advisory opinions on the subject Mayor Holden notes that since 1999 the Board has challenged only two of 113 funeral donations made by elected o cials from excess campaign contributions Additionally 100 combined donations were made to CYLC and PPAP by at least 60 elected officials including Mayor Holden over the past eight years As such Mayor Holden concludes that it is fundamentally unreasonable and unfair for the Board to challenge these expenditures as violations of the CFDA when these types of donations have been sanctioned by the Board own conduct s The starting point in the interpretation of any statute is the language of the statute itself City of New Orleans v Louisiana Assessors Retirement and Relief Fund 05 La 10 986 So 1 17 Words and phrases 2548 07 1 2d are to be read in their conte and to be accorded their generally prevailing meaning See C LSA art S R 11 LSA 3 1 When a law is clear and unambiguous and its application does not lead to absurd consequences the law shall be applied as written and the letter of it shall not be disregarded in search of the intent of the legislature or under the pretext of pursuing its spirit See C LSA art 9 and LSA 1 When the words of a law are ambiguous their S R 4 meaning must be sought by examining the context in which they occur and the te of the law as a whole LSA art 12 Because violations of the CFDA can C result in the assessment of a civil penalty pursuant to LSA 18 the S5 R 1511 Mayor Holden has filed a motion to strike the Board references to its advisory opinions s asserting that the Board seeks to expand the district court record and rely on advisory opinions that were never presented to the district court We recognize however that the Board s opinions are readily accessible via its website www laus Like attorney general state ethics opinions the advisory opinions of a board or commission have been recognized as persuasive authority and the court has discretion to review them as such See Duolantis v Louisiana Bd of Ethics DO La 3 782 So 582 590 n City of New Orleans v Board of Directors 1750 Ol 23 2d 7 of Louisiana State Museum 98 La 3 739 So 748 753 n They are not 1170 99 2 2d 11 evidentiary matters that need to be put on the record but may be presented in briefs and be reviewed by the court as any other legal authority Therefore Mayor Holden motion to strike is s denied 7 statute is penal in nature and must be strictly construed See Matter of Insulation Technologies Inc 95 La App lst Cir 2 669 So 1184 96 23 2d 1343 1350 writ denied 96 La 5 672 So 692 0749 96 3 2d Louisiana Revised Statute 18 allows a candidate to expend 1 I 2 1505 excess campaig contributions for any lawful purpose but such funds shall not be used loaned or pledged by any person for any personal use unrelated to the holding of a public office Unquestionably the three expenditures at issue were made for lawful purposes At issue is whether the contributions were made for personal use unrelated to the holding of a public office In concluding that the three expenditures were not violations of the CFDA the district court reasoned Paramount to the duties of a public office such as Mayor Holden is protecting serving and aiding the people in his jurisdiction In the case of Mayor Holden his constituents are the people of the City of Baton Rouge and the Parish of East Baton Rouge Day in and day out Mayor Holden takes action and makes decisions for the benefit protection and aid of his constituents or Moreover the district court found that Mayor Holden derived no personal benefit from any of the three donations Although the Board asserts that the three expenditures would not be permitted under the irrespective test as enunciated in the federal regulations for defining personal use our legislature did not restrict or define the term personal use Considering the broad ambit of this statutory language and because this penal statute must be construed strictly we conclude that the district court did not err in finding that the three expenditures at issue were not for the personal use of Mayor Holden and that the expenditures were in the broadest sense related to the holding of public office by Mayor Holden Accordingly the district court did not err in concluding that Mayor Holden did not violate LSA 18 S2 R 1505 1 I g We note that criminal sanctions are available for a wiliful and fraudulent violation knowing of the CFDA but any criminal action must be filed by the district attorney or attorney general See LSA 18 S6 R 1511 9 Having reached this conclusion with respect to assignment of error number one we pretermit discussion of assignment of error number two 8 CONCWSION For the foregoing reasons we deny Mayor Holden motion to strike and s we affirm the district court April 27 2012 judgment Costs of this appeal in the s amount of 1 are assessed to the appellant the Louisiana Board of 50 321 Ethics MOTION TO STRIKE DENIED JUDGMENT AFFIRMED 9 LOUISIANA BOARD OF ETHICS STATE OF LOUISIANA COURT OF APPEAL VERSUS FIRST CIRCUIT NO 2012 CA 1127 MELVIN KIP HOLDEN Kline J concurring i I concur only to respectfully express that the statutory language in LSA S R 1 I 2 1505 18 would better serve candidates office holders and the Louisiana Board of Ethics if it included more exact standards