La. Bd. of Ethics v. Holden

• Decision Date: 25 June 2013
• Docket Number: No. 2012 CA 1127.,2012 CA 1127.
• Citation: 121 So.3d 113
• Parties: LOUISIANA BOARD OF ETHICS v. Melvin “Kip” HOLDEN.
• Court: Court of Appeal of Louisiana — District of US

121 So.3d 113

LOUISIANA BOARD OF ETHICS

v.Melvin “Kip” HOLDEN.

No. 2012 CA 1127.

Court of Appeal of Louisiana, First Circuit.

June 25, 2013.

Kathleen M. Allen, Michael Dupree, Suzanne Quinlan Mooney, Baton Rouge, LA, for Plaintiff/Appellant Louisiana Board of Ethics.

R. Gray Sexton, Jennifer L. Jackson, Sexton & Hebert, Baton Rouge, LA, for Defendant/Appellee Mayor Melvin “Kip” Holden.

Before PARRO, GRAIN and KLINE,¹ JJ.

PARRO, J.

[1 Cir. 2]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).² 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 ³ with the Nineteenth Judicial District Court for the Parish of East Baton Rouge,⁴ alleging that the three donations violated LSA–R.S. 18:1505.2(I)(1) 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–R.S. 18:1505.2(I)(1) and dismissed the Board's petition, with prejudice. The Board has appealed, assigning the following errors:

1. The District Court erred in finding that the expenses for the Boatner Funeral, Tya Wicker/CYLC and Davis C. Hotard/PPAP were “ related to the holding of public office.”

2. [1 Cir. 3]The District Court erred in finding that the expenditures made to Tya Wicker/CYLC and Davis C. Hotard/PPAP were acceptable 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. 18:1505.2I(1).

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. SeeLSA–R.S. 18:1482.

At issue in this case is the interpretation of LSA–R.S. 18:1505.2(I)(1), 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 persona! 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's principal campaign committee or subsidiary committee, the administrative costs or operating expenses of the political committee; except that excess campaign funds may be returned to contributors on a pro rata basis, given as a charitable contribution as provided in 26 USC 170(c), given to a charitable organization as defined in 26 USC 501(c)(3)....

At the hearing, Mayor Holden, with regard to the funeral expenses of Brittni Boatner, testified that he had known Brittni's father his entire life and the 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 councilwoman's daughter's trip to Washington, D.C. 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 [1 Cir. 4]Congress itself, and basically how bills are made, how they are drafted, the committee system.”

The third expenditure at issue was a donation given to PPAP.⁵ 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's advice prior to making any of the three donations, because 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 [1 Cir. 5]across the reports that are filed out there.” Mr. Potter noted that in many campaigns, “expenditures are more constituent-based whereas 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. LSA–C.E. art. 702, Official Comment (d). A district court's decision to qualify an expert will not be overturned absent an abuse of discretion. Cheairs v. State Dep't of Transp. and Dev., 03–0680 (La.12/3/03), 861 So.2d 536, 540–41. Moreover, the effect and weight to be given expert testimony is within the broad discretion of the district court. Louisiana State Bar Ass'n v. Carr and Assoc., Inc., 08–2114 (La.App. 1st Cir.5/8/09), 15 So.3d 158, 171,writ denied,09–1627 (La.10/30/09), 21 So.3d 292. We note that Mr. Potter's testimony focused on the Board's general custom 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, 31,495 (La.App. 2nd Cir.1/29/99), 727 So.2d 683, 684 n. 1,writ granted, case remanded on other grounds,99–0595 (La.3/24/00), 757 So.2d 647.See also Louisiana State Bar Ass'n v. Carr and Assoc., Inc., 15 So.3d at 171 n. 14.Accordingly, the Board's third assignment of error is without 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 [1 Cir. 6]holding of public office. The Board avers that Mayor Holden's testimony 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's holding the office 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–R.S. 18:1505.2(I)(1), the spirit 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, unless such use is personal under 11 CFR 113.1(g).” See11 CFR § 113.2(e). Specifically, 11 CFR § 113.1(g) 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 of the candidate's campaign or duties as a Federal officeholder.” ⁶ The Board 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. 1997–070, the Board concluded that...