oah - 211b complaint

7/31/2019 OAH - 211B Complaint

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STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGSPO Box 64620

St. Paul, MN 55164-0620

COMPLAINT FORM FOR VIOLATION OF THE FAIRCAMPAIGN PRACTICES

AND CAMPAIGN FINANCE ACTS

Information about complaint filer (Complainant)Name of complaint filer

Common Cause MinnesotaAddress

2323 East Franklin AvenueCity, state, zip

Minneapolis, MN 55406Daytime telephone no.

Fax no.

E-mail address

Identify person/entity you are complaining about

(Respondent #1)Name of person/entity being complained about

Republican Party of Minnesota

Address525 Park St. Suite 250

City, state, zip

Saint Paul, MN 55103Daytime telephone no. 651-222-0022

Fax no.

E-mail address


Tony SuttonAddress

8540 Bechtel AvenueCity, state, zipInver Grove Heights, Minnesota 55076

Daytime telephone no.

Fax no.

E-mail address

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Ron HuettlAddress

1905 Blue Stem LaneCity, state, zip

Shoreview, Minnesota 55126Daytime telephone no

.Fax no.

E-mail address


Count Them All Properly, Inc.Address

165 Western Ave N. #210City, state, zip

St. Paul, MN 55102Daytime telephone no.

Fax no. E-mail address


Mary IgoAddress

165 Western Ave N. #210City, state, zip

St. Paul, MN 55102Daytime telephone no.

Fax no.

E-mail address

(Respondent #6)

Name of person/entity being complained about

Tom DatwylerAddress

740 Regal Ridge CircleCity, state, zip

Hudson, Wisconsin 54016Daytime telephone no.

Fax no.

E-mail address

(Respondent #7)Name of person/entity being complained aboutFred E. Meyer

Address

2177 Rosewood Lane NorthCity, state, zip

Roseville, Minnesota 55113Daytime telephone no.

Fax no.

E-mail address

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Respondent #7)Name of person/entity being complained about

Dan PuhlAddress

1533 Crowell Road,City, state, zip

Vienna, Virginia 22182Daytime telephone no.

Fax no.

E-mail address

Statues violated: Minn. Stat. 211B.15, subd. 2. and Minn. Stat. 211A.06

Date(s) of violation: November 2010 December 2011.Date of election or ballot question: November 2, 2010.Elected office or ballot question involved: Gubernatorial Race 2010: Tom Emmer

(R) vs. Mark Dayton (D).If allowed by law, do you wish to request an expedited probable cause hearing(within 3 business days)? No.

I. SUMMARY OF COMPLAINT

On July 13, 2012, the Minnesota Campaign Finance and Public Disclosure Board(Board) issued Findings and Order in the Matter of the Complaint of CommonCause Minnesota regarding the Republican Party of Minnesota and others(Findings and Order). A true and accurate copy of the Findings and Order is

attached to this Complaint as Exhibit A.1

The Findings and Order concluded, at least for now, the Boards seven-monthinvestigation into the activities of Count Them All Properly, Inc. (CTAP), aMinnesota corporation, the Republican Party of Minnesota (RPM), and theirprincipals, officers, attorneys, and representatives, in connection with the 2010gubernatorial election recount. As part of its investigation, the Board tookthirteen depositions and received documents from at least eight persons orentities. (Findings and Order at 3.)2 All of that evidence is incorporated hereinby reference.

Based on its investigation or CTAP, the RPM, and their principals, officers, andrepresentatives, the Board found, among other things, that:

1 The Findings and Order also are available at: http://www.cfboard.state.mn.us/bdinfo/investigation/07_13_2012_RPM_and_Others.pdf.

2 The Board has made transcripts of these deposition and other discoverydocuments available at: http://www.cfboard.state.mn.us/bdinfo/investigation/Public%20Documents/Documents_Index.pdf.

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1. CTAP made three $9,000 contributions to the RPM, totaling $27,000,when it paid the RPMs obligations to three different law firms, whichRPM incurred in connection with the election recount;3

2. CTAP existed for the major purpose of making contributions to theRPM in the form of payments for recount costs that were RPMsobligations;4

3. The RPM omitted its election recount legal fees and other unpaidobligations from its 2010 campaign reports to the Board;5 and

4. The RPM failed to maintain records that would provide in sufficientdetail the necessary information from which the RPMs filed campaignreports and statements could be verified, explained, clarified, andchecked for accuracy and completeness.6

For these and other violations of Chapter 10A of the Minnesota Statutes, theBoard imposed civil penalties on RPM, CTAP, and officers of RPM. (Findingsand Order at 26-27.)

Common Cause files this Complaint seeking referral to the appropriate CountyAttorneys Office for criminal prosecution of CTAP, the RPM, and the principals,officers, and representatives of those entities who were responsible for theconduct described above, which violates Minn. Stat. 211B.15 and 211A.06. 7

II. RELEVANT STATUTORY PROVISIONS

A. Minn. Stat. 211B.15. Corporate Political Contributions.

Subdivision 1. Definitions.

For purposes of this section, "corporation" means:(1) a corporation organized for profit that does business in this state;(2) a nonprofit corporation that carries out activities in this state; or

3 Ex. A at 26; see alsoid. at 18-23.

4

Id. at 26.5Id. at 25.

6Id.; see also id. at 10-17.

7 A review of previous decisions of this Office seems to permit filing againstrespondents separately or in one complaint. In the event we have erred incombining respondents, Common Cause Minnesota respectfully requests to beinformed as soon as possible in order to file two separate complaints.

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(3) a limited liability company formed under chapter 322B, or undersimilar laws of another state, that does business in this state.

Subd. 2. Prohibited contributions.

A corporation may not make a contribution or offer or agree to make acontribution directly or indirectly, of any money, property, free service of itsofficers, employees, or members, or thing of monetary value to a majorpolitical party, organization, committee, or individual to promote or defeatthe candidacy of an individual for nomination, election, or appointment to apolitical office. For the purpose of this subdivision, "contribution" includesan expenditure to promote or defeat the election or nomination of acandidate to a political office that is made with the authorization orexpressed or implied consent of, or in cooperation or in concert with, or atthe request or suggestion of, a candidate or committee established tosupport or oppose a candidate but does not include an independent

expenditure authorized by subdivision 3.

***Subd. 6. Penalty for individuals.

An officer, manager, stockholder, member, agent, employee, attorney, orother representative of a corporation acting in behalf of the corporationwho violates this section may be fined not more than $20,000 or beimprisoned for not more than five years, or both.

Subd. 7. Penalty for corporations.A corporation convicted of violating this section is subject to a fine notgreater than $40,000. A convicted domestic corporation may be dissolvedas well as fined. If a foreign or nonresident corporation is convicted, inaddition to being fined, its right to do business in this state may bedeclared forfeited.

***

Subd. 13. Aiding violation; penalty.An individual who aids, abets, or advises a violation of this section is guiltyof a gross misdemeanor.

Subd. 14. Prosecutions; venue.Violations of this section may be prosecuted in the county where thepayment or contribution was made, where services were rendered, orwhere money was paid or distributed.

***

B. Minn. Stat. 211A.06. Failure to Keep Account; Penalty.

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A treasurer or other individual who receives money for a committee isguilty of a misdemeanor if the individual:

(1) fails to keep a correct account as required by law;

(2) mutilates, defaces, or destroys an account record; or

(3) in the case of a committee, refuses upon request to provide financialinformation to a candidate; and

(4) does any of these things with the intent to conceal receipts ordisbursements, the purpose of receipts or disbursements, or the existenceor amount of an unpaid debt or the identity of the person to whom it isowed.

III. FACTUAL BASIS FOR ESTABLISHMENT OF A PRIMA FACIE CASE

A. The Respondents.

CTAP was organized on December 3, 2010, and it is registered as a domesticcorporation under Minn. Stat. Ch. 302A.8 During the relevant time period: (1)Mary Igo was the CEO of CTAP;9 (2) Tom Datwyler was the secretary of CTAPand a member of its board of directors;10 (3) Fred Meyer was a member CTAPsboard of directors;11 and (4) Dan Puhl was the original incorporator of CTAP.12

CTAP is a corporation for purposes of Minn. Stat. 211B.15. 13 In its Findingsand Order, the Board found that CTAP existed for the major purpose of makingcontributions to the RPM in the form of payments for recount costs that wereRPM obligations.14

The RPM is a major political party. See Minn. Stat. 10A.01, subd. 23 and200.02, subd. 7. During the relevant time period: (1) Tony Sutton was the chairof the RPM;15 and (2) Ron Huettl was its finance director.16

8See Exhibit D, Business Record Details for CTAP obtained from the MinnesotaSecretary of States website.

9Id; see also Ex. A at 3.

10 Ex. A at 3.

11Id.12Id.

13See Minn. Stat. 211B.15, subd. 1.

14 Ex. A at 26.

15 Ex. A at 3.

16Id.

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B. Respondents Violations of Minn. Stat. 211B.15.

In its recent Findings and Order, the Board found, among other things, that in2010, CTAP made three $9,000 payments for attorneys fees [incurred by the

RPM], resulting in three contributions to the RPM.17

Although the Boardimposed civil penalties on certain of the Respondents for their involvement in thisand related conduct under Chapter 10A of the Minnesota Statutes, the Boarddoes not have the authority to enforce Chapter 211B. Instead, that power isvested in the county attorneys. Minn. Stat. 211B.16.

Because CTAPs contribution to the RPMas determined by the Board followinga thorough seven month investigationviolates the prohibition on corporatecontributions included in Minn. Stat. 211B.15, subd. 2, this matter should bereferred to the appropriate county attorney for prosecution. As noted above,corporations are expressly prohibited from making direct or indirect contributions

to a political party or individual to promote or defeat the candidacy of anindividual for election to a political office. Minn. Stat. 211B.15, subd. 2.Corporations that violate this statute, and the principals, officers, andrepresentatives of a corporation that violate or aid and abet a violation of thisstatute, are subject to significant penalties. CTAP is a corporation, and it existedfor the major purpose of making contributions to the RPM in the form ofpayments for recount costs that were RPM obligations.18 In other words, CTAPexisted for the major purpose of violating Minn. Stat. 211B.15, and the BoardsFindings and Order demonstrate that RPM and its officers knowingly acceptedthese illegal contributions from CTAP.

As a result of their violation of the Minn. Stat. 211B.15, CTAP and the RPMboth are subject to a fine of not more than $40,000, corporate dissolution, and/oran order revoking their right to do business in Minnesota.19 Similarly, for thesame conduct, the principals, officers, and representatives of CTAP and the RPMare subject to a fine of not more than $20,000, may be imprisoned for not morethan five years, or both.20 And finally, any person found to have aided, abetted, oradvised a violation of the statute is guilty of a gross misdemeanor.21

Given their involvement in the violation of Minn. Stat. 211B.15 by CTAP andthe RPM, the individual Respondentsin addition to CTAP and the RPMshould be referred to the appropriate county attorney for prosecution. Evidence

17 Ex. A at 26.

18Id.

19 Minn. Stat. 211B.15, subd. 7.

20 Minn. Stat. 211B.15, subd. 6.

21 Minn. Stat. 211B.15, subd. 13.

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of the individual Respondents involvement in these violations includes, but is notlimited to, the following:

1. Respondent Tony SuttonMr. Sutton was the chair of the RPM from 2009 through 2011. The alleged

violations occurred during that time period. The Board describes Mr. Suttonsinvolvement in the following way: Mr. Sutton and Mr. Puhl arranged to directa contribution of $30,000 from Robert Cummins to CTAP with theunderstanding that CTAP would use that contribution to retire RPM debt.These facts constitute redirection of a contribution by Mr. Sutton through athird party, CTAP, for the benefit of a registered association, the RPM.22

2. Respondent Ron HuettlMr. Huettl was the finance director of the RPM during the relevant timeperiod. He was responsible for managing the financial records of the RPMand presenting campaign report material to the party Treasurer, Mr. David

Storrock. In its Findings and Order, the Board stated: Mr. Sturrock's failureto require sufficient financial recordkeeping and the failure of the party chair[i.e., Mr. Sutton] and finance director [i.e., Mr. Huettl] on their own to developand maintain those records results in a violation of[the record keepingrequirements included in] Minnesota Statutes section 10A.025, subdivision3.23 The Board also found that along with Mr. Sutton, Mr. Huettl participatedin the intentional withholding of information from the treasurer and executivecommittee of the RPM.24 In fact, Mr. Huettl has admitted his involvement inthe intentional withholding of information.25

Mr. Huettl also played a direct role in bringing about the illegal contribution atissue. In fact, he along with Mr. Sutton asked the three law firms thatconducted recount work on behalf of the RPM to reissue their invoices toCTAP, which CTAP then paid.26 Those invoices initially were issued to theRPM.

3. Respondent Mary IgoMs. Igo was the CEO of CTAP at all times relevant, and CTAP existed for themajor purpose of making contributions that are prohibited under Minn. Stat. 211B.15.27 Additionally, according to CTAPs corporate documents, whichwere obtained by the Board, Ms. Igo approved CTAPs illegal contribution to

22

Ex. A at 21.23Id. at 7.

24Id. at 17.

25Id.

26Id. at 25.

27 Ex. A at 26.

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the RPM.28

4. Respondent Tom DatwylerMr. Datwler was the secretary and a board member of CTAP during therelevant time period, and CTAP existed for the major purpose of making

contributions that are prohibited under Minn. Stat. 211B.15.29

Additionally,according to CTAPs corporate documents, which were obtained by theBoard, Mr. Datwyler approved CTAPs illegal contribution to the RPM.30

5. Respondent Fred MeyerMr. Meyer was a board member of CTAP during the relevant time period, andCTAP existed for the major purpose of making contributions that areprohibited under Minn. Stat. 211B.15.31 Additionally, according to CTAPscorporate documents, which were obtained by the Board, Mr. Meyerapproved CTAPs illegal contribution to the RPM.32

6. Respondent Dan PuhlMr. Puhl is the founder and original incorporator of CTAP, and he founded thecorporation for the purpose of using CTAP to pay RPM bills.33 Mr. Puhlalso conspired with Mr. Sutton to funnel a $30,000 contribution from Mr.Robert Cummins to CTAP, which in turn was used to pay $27,000 of legalexpenses incurred by the RPM in connection with the recount. 34 In itsFindings and Order, the Board stated: On April 16, 2011, CTAP madepayments of $9,000 each to the firms associated with Tony Trimble andMichael Toner. A similar payment was made to the firm associated with EricMagnuson on May 20, 2011. No subsequent payments to the firms for costsrelated to the recount have been made by either CTAP or the RPM. 35

The illegal contributions from CTAP to the RPM were made after November 4,2010.36 On that date, the Board issued a staff advice memo cautioning partyunits not to accept contributions from corporations to support their recount

28 Ex. B.

29 Ex. A at 26.

30 Ex. B.

31

Ex. A at 26.32 Ex. B.

33 Ex. A at 26.

34Id. at 21.

35Id.

36Id.

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efforts.37 This advisory memorandum was known to the Respondents beforeCTAP made its illegal contributions to the RPM.38

Prior OAH decisions have concluded that a prima facie case warranting aprobable cause hearing under Minn. Stat 211B.34 arises when an entity or

individual pleads that a corporation made a prohibited contribution under Minn.Stat. 211B.15, subd. 2.39 This Complaint does far more than that. The fact ofthe violation at issue is well documented. In fact, OAH should take judicial noticeof the Findings and Order recently issued by the Board, quickly determine that aprima facie case has been established, and set this case for a probable causehearing without delay.

C. Respondents Violation of Minn. Stat. 211A.06.

The Findings and Order also demonstrates that a prima facie case exists againstRespondents Sutton and Huettl for violation of Minn. Stat. 211A.06. This

statute provides that the treasurer or any other individual who receives money forpolitical party committee is guilty of misdemeanor if the individual: (1) fails tokeep a correct account as required by law; (2) with the intent to concealreceipts or disbursements, the purpose of receipts or disbursements, or theexistence or amount of an unpaid debt or the identity of the person to whom it isowed. Id.

In the Findings and Order, the Board concluded that the RPM failed to keep acorrect account of its receipts and expenditures. Specifically, the Board stated:

The Board concludes that in 2010 the RPM failed tomaintain records, including worksheets, that wouldprovide in sufficient detail the necessary informationfrom which the filed reports and statements may beverified, explained, clarified, and checked foraccuracy and completeness.

The treasurer sets the tone for interaction betweenthe party unit's professional staff and the elected party

37Id. at 4; see also Ex. C.

38Id. at 4 and 18.

39See, e.g., Notice of Determination of Prima Facie Violation and Notice andOrder For Probable Cause Hearing,Adams v. Klatt True Value Hardware, 12-0320-19975-CV (complainant alleged that hardware store was a corporation andhad made an in-kind contribution by allowing candidate yard signs on corporateproperty); Probable Cause Order, Weinlick v. Natalie Johnson Lee Campaign,3-6326-16948-CV (finding probable cause for violation of 211B.15. subd. 2 evenwhen campaign realized error in accepting corporate contributions and returnedcontributions before complaint was filed).

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officers. In this matter, it appears that Mr. Sturrockmaintained a hands-off approach demanding nothingfrom his staff other than what they chose to provide.

Although Mr. Sturrock complained in his letter ofresignation that he was not being fully informed, it

was incumbent on him to establish the parameters ofhis own involvement. He failed to do so, resulting ininadequate disclosure of RPM financial activities andin the lack of records to explain the data on thereports.

Mr. Sturrock's failure to require sufficient financialrecordkeeping and the failure of the party chair [Mr.Sutton} and finance director [Mr. Huettl] on their ownto develop and maintain those records results in aviolation of Minnesota Statutes section 10A.025,

subdivision 3.

Section 10A.025, subdivision 3, subjects a person inviolation to prosecution for a misdemeanor. Althoughthe Board believes that a violation occurred and thatMr. Sturrock, Mr. Huettl, Mr. Sutton, and Mr. Puhl allbear some responsibility, it does not believe that they"knowingly" violated the statute, which is the thresholdfor misdemeanor prosecution. Therefore, the Boardwill not specifically urge criminal prosecution in thismatter.40

The elements of 211A.06 are different from those included in 10A.025, subd. 4.According, the Boards conclusion as to whether Respondents Sutton and Huettlknowingly violated the campaign reporting requirements included in Chapter 10Ahas no bearing on this Complaint, or whether either Respondent violated211A.06.

Indeed, the first element of a 211A.06 violation by Respondents Sutton andHuettl is evident in the above excerpt and other sections of the Findings andOrder, which conclude that the RPM, under the direction of these Respondents,failed to maintain statutorily sufficient records because of the indifference orineffectiveness of the officers, staff, and contractors of the RPM. . . .41 In fact,the Board found that these Respondents worked together to intentionallywithhold information from the RPMs treasurer and executive committee, whichwould have rendered the RPMs campaign reports true and accurate.42

40 Ex. A at 7.

41 Ex. A at 26.

42Id. at 17.

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Thus, the only question is whether either of these Respondents acted with theintent to conceal receipts or disbursements, the purpose of receipts ordisbursements, or the existence or amount of an unpaid debt or the identity of theperson to whom it is owed. And, on the question of the Respondents intent, the

record establishing a prima facie case under 211A.06 is equally clear.

For example, as explained above, Respondents Sutton and Huettle conspired inthe intentional redirection of a contribution to the RPM through CTAP for thepurpose of avoiding disclosure, which the Board noted is punishable by criminalsanctions at the discretion of the appropriate county attorney.43 Although theBoard suggested that only Mr. Sutton could be held criminally responsible, thesame is true of Mr. Huettl, given his involvement in the illegal contributionscheme.

In other important excerpts from the Findings and Order, the Board stated:

There is no question that the reports filed by the RPMin 2009 and 2010 omitted required information whichincluded both recount expenditures and other unpaidobligations44

***

The Board . . . finds Mr. Huettls testimony that hewas instructed by Mr. Sutton to withhold certaininformation from Mr. Sturrock, to be of great concern.Under oath, Mr. Huettl explained that the RPM Chair

ordered him to keep certain expenses from the RPMtreasurer. The Board understands that Mr. Suttonchallenges Mr. Huettl's testimony as being inaccurate.However, the Board has found that significantexpenditures were not included on the RPM's 2010reports. While Mr. Sutton cannot be charged by thisBoard with causing the filing of an inaccurate report(because no such violation exists [for a party chair]under Chapter 10A), the Board is compelled to pointout that Mr. Suttons conduct, if accurately portrayedby Mr. Huettl, goes to the heart of the campaign

disclosure system. That the Chair of one ofMinnesotas major political parties would orderinformation withheld from the partys treasurer notonly damages the party itself, but undermines citizens'

43Id. at 26.

44Id. at 11.

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confidence in Minnesota's system of campaignfinance disclosure as a whole.45

As with the above described violations of Minn. Stat 211B.15, OAHshould take judicial notice of the Findings and Order recently issued by the

Board, quickly determine that a prima facie case has been established forviolation of 211A.06 as well as 211B.15, and set this case for a probable causehearing without delay.

Oath:

I, Mike Dean, under penalty of perjury, swear or affirm that the statements I havemade in this complaint are true and correct to the best of my knowledge.

_____________________________ ____________________

Signature of person filing complaint Date(Sign in front of Notary Public)

Sworn/affirmed before methis ____ day of _________, 201_.

___________________________Notary Public/Seal

45 Ex. A at 17.

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