Created By: Sylvia Scott on 09/04/2001 at 11:37 AM
Category: Campaign Finance Rulings
LOUISIANA BOARD OF ETHICS
acting as the
SUPERVISORY COMMITTEE ON CAMPAIGN FINANCE DISCLOSURE
Date: May 17, 2001 Opinion No.: 2000-308
Re: DeSonier receipt of excess in-kind contributions and inaccurate reporting
The Louisiana Board of Ethics, acting as the Supervisory Committee on Campaign Finance Disclosure (the "Board"), conducted a confidential investigation after receiving a complaint that James P. DeSonier had not accurately reported campaign finance information concerning his October 1999 State Senate race. On the basis of information obtained by the Board during the course of the investigation, and with the concurrence of James P. DeSonier, the Board now makes the following:
FINDINGS OF FACT
James P. DeSonier (“DeSonier”) was a candidate for the Louisiana State Senate, District 6, in the October 23, 1999 primary election.
2. The office sought by DeSonier is defined as a “district office” in accordance with LSA-R.S. 18:1483(7).
Docket No. 2000-308
Page of 8
3. DeSonier was subject to a $2,500 per person contribution limit for the election pursuant to LSA-R.S. 18:1505.2(H).
4. DeSonier contracted and paid St. Raymond Communications to control and produce television spots and vendors to produce said spots. St. Raymond Communications was to invoice DeSonier’s campaign. DeSonier also contracted and paid Patti Kempf and Associates for management, consulting, and record keeping. The contract with Kempf provided that she would be responsible for “all records keeping within the dictates of campaign finance reporting laws and the Louisiana Election Code .”
5. Michael St. Martin (“St. Martin”), an attorney from Houma, Louisiana, opposed the re-election of Senator John Hainkel, and therefore supported DeSonier’s campaign.
6. St. Martin arranged for Deno Seder Productions, a Washington, D.C. based public relations firm, to produce campaign commercials for the Hainkel-DeSonier race as well as another Senate race.
7. Deno Seder productions produced three commercials and was paid $70,000 by North Sunrise, LLC, a legal entity owned and controlled by St. Martin for the production costs.
8. Two of the commercials produced by Deno Seder were never broadcast.
9. The third commercial produced by Deno Seder Productions, and paid for by St. Martin’s company, was known as the Game Show Host commercial.
10. The video tape of the Game Show Host commercial was given, at no charge, to DeSonier’s media manager, St. Raymond Communications.
11. St. Raymond Communications, on behalf of DeSonier, placed the Game Show Host Commercial for broadcast with two New Orleans television stations.
12. St. Martin, through North Sunrise, L.L.C. and Mandalay Oil and Gas, L.L.C., legal entities he owned and controlled, paid directly to St. Raymond Communications $60,000 to have the Game Show Host commercial broadcast.
13. St. Raymond Communications also billed the DeSonier campaign for the broadcast costs of the Game Show Host commercial.
14. The Game Show Host commercial contained a notice that it was “Paid for by the DeSonier for Senate Campaign.”
15. DeSonier’s campaign finance disclosure reports reflected a total of $105,000 in payments made to St. Raymond Communications for “media production.” No expenditures to television stations were included in DeSonier’s reports.
16. DeSonier’s campaign did not report the receipt of an in-kind contribution from St. Martin, North Sunrise, L.L.C. and/or Mandalay Oil and Gas, L.L.C.
17. DeSonier failed to timely file supplemental reports due by February 15, 2000 and February 15, 2001 and was assessed late fees of $600 for each of those late reports.
The Campaign Finance Disclosure Act (“CFDA”) specifies limits on the amount of campaign contributions that candidates may receive. District level office candidates are subject to a $2,500 per person, per election limit. LSA-R.S. 18:1505.2(H)(3)(c).
“Contributions” include “expenditures made by any person in cooperation, consultation, or concert with, or at the request or suggestion of, a candidate, his authorized political committees, or their agents.” LSA-R.S. 18:1483(6)(b)(i).
The provisions of LSA-R.S. 18:1505.2(J) provide that any candidate who violates the contribution limit prohibitions shall be assessed a penalty of $5,000 or the amount of the violation, whichever is greater, except that the penalty for a knowing and willful violation shall be not more than $10,000 or 200% of the violation, whichever is greater.
The CFDA further requires candidates to timely and accurately file campaign finance disclosure reports. LSA-R.S. 18:1505.1. Failure to do so can result in the imposition of civil penalties of $60 per day, in the case of district office candidates, up to a total of $2,000 per report.
Candidates are required to itemize expenditures made on their behalf by public relations firms. The CFDA states:
Docket No. 2000-308
Page of 8
Expenditures made by a public relations firm, an advertising agency, or agent for a candidate shall be considered expenditures of the candidate and must be reported . . . . Each such firm, agency, or agent which makes any expenditure for any candidate shall timely furnish to such candidate such information relative thereto as may be required for compliance . . . .
Docket No. 2000-308
Page of 8
It is the opinion and conclusion of the Board that DeSonier violated the contribution limits of the CFDA when the media consultant for his campaign accepted the Game Show Host commercial video and broadcast it on behalf of DeSonier’s campaign. The production and broadcast costs of this commercial were paid by St. Martin, through companies he owned. This convoluted method of payment appears designed to effectively conceal the true source of the funding. When DeSonier’s media consultant, St. Raymond Communications, accepted the use of the commercial, it became an in-kind contribution to DeSonier’s campaign, subject to disclosure and the contribution limits. This failure by DeSonier to report the excessive in-kind contribution effectively prevented public disclosure of the manifest and substantial support and involvement by St. Martin. DeSonier, as the candidate subject to the CFDA, is responsible for all actions and/or inactions of his campaign personnel.
It is further the conclusion of the Board that DeSonier violated the CFDA when he failed to report the receipt of in-kind contributions from St. Martin and/or his companies. A fundamental purpose of the CFDA is to provide public disclosure to insure a knowledgeable electorate. Here, the electorate was deprived of significant information about St. Martin’s support for DeSonier at a time that it was pertinent during the election cycle.
The Board further finds that DeSonier inaccurately reported his campaign expenditures when he failed to itemize expenditures made on his behalf through his media manager. It was the responsibility of the media manager to make this information available to DeSonier so that it could have been properly reported.
The Board concludes that the imposition of a civil penalty of $29,700 would adequately redress the above described violations of the CFDA, including the outstanding late fees.
The Board had earlier issued charges to conduct a public hearing to determine if DeSonier had inaccurately reported. Also, the Board had instituted a civil lawsuit to impose penalties for excess contributions received. The Board concludes that the publication of this opinion adequately addresses each of the alleged violations and that the public hearing will be canceled and the civil lawsuit will be dismissed with prejudice.
Docket No. 2000-308
Page of 8
DECREE AND ORDER For the foregoing reasons:
IT IS ORDERED, ADJUDGED AND DECREED that the Board finds as a matter of fact and as a conclusion of law that James P. DeSonier violated provisions of the CFDA as more specifically described above in connection with his October 1999 candidacy for the State Senate, District 6.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that James P. DeSonier be ordered to pay to the State Treasurer of Louisiana the sum of $29,700 within six months of the publication of this opinion.
By Order of the Board this 17th day of May , 2001.
s/Robert L. Roland s/T. O. Perry, Jr.
Robert L. Roland, Chairman T. O. Perry, Jr., Vice-Chairman
s/E. L. Guidry, Jr. s/Billy J. Guin, Jr.
Judge E. L. Guidry, Jr. Billy J. Guin, Jr.
s/Joseph Maselli s/Virgil Orr Joseph Maselli Dr. Virgil Orr
s/Revius O. Ortique, Jr. s/Henry C. Perret, Jr. Justice Revius O. Ortique, Jr. Henry C. Perret, Jr.
Did not participate in adoption of opinion Did not participate in adoption of opinion
Ronald L. Sawyer Edwin O. Ware
Did not participate in adoption of opinion
Rev. Carole Cotton Winn
The undersigned (a) stipulates to the facts found by the Board; (b) waives the procedural requirements contained in R.S. 18:1511.1 et seq.; (c) admits to the civil violations described above; (d) consents to the publication of this opinion; (e) agrees to comply with the conditions and orders set forth in this opinion; and (f) agrees not to seek judicial review of the findings and actions taken in this opinion.
s/James P. DeSonier 4/25/01
James P. DeSonier Date