Walters v. Oklahoma Ethics Com'n

• Decision Date: 27 October 1987
• Docket Number: No. 67685,67685
• Citation: 1987 OK 103,746 P.2d 172
• Parties: David WALTERS, Appellee, v. OKLAHOMA ETHICS COMMISSION, Appellant.
• Court: Oklahoma Supreme Court

Page 172

746 P.2d 172

1987 OK 103

David WALTERS, Appellee, v. OKLAHOMA ETHICS COMMISSION, Appellant.

No. 67685.

Supreme Court of Oklahoma.

Oct. 27, 1987.

Rehearing Denied Dec. 8, 1987.

Thomas J. Enis, Special Counsel, Oklahoma Ethics Com'n, Oklahoma City, for appellant.

Turner, Turner, Green & Braun, Robert J. Turner and Richard J. Goralewicz, Oklahoma City, for appellee.

HODGES, Justice.

This appeal involves the construction of the provisions of the new Oklahoma Ethics Commission Act, 74 O.S.Supp.1986 §§ 4200-4248.1 (Act). The factual history involved here began with a complaint filed by the General Counsel for the Republican Party, Craig Dodd (Dodd), against David Walters (Walters or appellee), Democratic gubernatorial candidate in the 1986 election, with the Oklahoma Ethics Commission (Commission or appellant) on September 12, 1986, pursuant to the Act. Dodd alleged certain private loans from four individuals in the amount of $162,500 obtained by Walters by giving mortgages on his house were illegal under the Act. Section 4216 of the Act limits a person's or family's contribution to a candidate for state office to $5,000. Section 4202(6) defines "contribution" as "any money, property ... or any other thing of value whatsoever which is given or loaned to be used in a campaign...." (emphasis added). Each of the individuals who had loaned money to Walters had already donated the maximum amount.

On September 25, 1986, upon initial review of the complaint the review committee of the Commission referred the complaint to the full Commission for investigation. After the conclusion of the investigative hearing conducted by the Commission on October 6, 1986, the Commission voted to refer the complaint to the District Attorney of Oklahoma County for action. The complaint filed by Dodd against Walters was the first complaint heard by the Commission under the new Act.

On the morning of October 10, 1986, Walters filed a petition for extraordinary relief in the District Court of Oklahoma County. Walter's petition sought declaratory relief as to the constitutionality of the procedural aspects of the Act and the loan prohibition as applied to him. The district court entered a temporary order that day staying any further action upon the complaint and setting the cause for hearing on October 13th. The Commission was further ordered to appear and show cause why the referral and the complaint should not be dismissed.

Prior to the hearing, the Commission filed an application to assume original jurisdiction and a petition for writ of prohibition in the Supreme Court of Oklahoma. This Court assumed original jurisdiction and entered a writ of prohibition for the limited purpose of prohibiting any proceeding in the cause the object of which is to review the action of the Commission in making a referral of the matter under its investigatory power to a prosecutor. ¹

Trial on the merits was commenced the evening of October 13th. The trial court announced its ruling on October 14th. The trial court found the Oklahoma Administrative Procedures Act (APA) applies to the complaint procedures of the Commission. It ruled Walters had been denied his constitutional rights to procedural due process. It further found § 4207(H) unconstitutionally vague in that it fails to prescribe a "In making a determination to dismiss a complaint or to proceed with an investigation or to make a referral to the appropriate authority, the Commission may exercise such discretion as it deems necessary to provide fairness to the accused and to maintain confidence in the public officials and employees who are subject to the provisions of the Oklahoma Ethics Commission Act."

burden and standard of proof. Section 4207(H) reads:

The district court also stated three additional reasons to support its finding the above quoted section of the Act is unconstitutional and Walters was denied due process: 1) there is no provision in the Act nor did the Commission provide a certified shorthand reporter; 2) no findings of fact and conclusions of law were made; and 3) complainant Dodd was allowed to become the prosecutor and legal advisor to the Commission. Lastly, the trial court found the loans to Walters were legal and the interpretation placed on the loans by the Commission is an unconstitutional interpretation in violation of the First Amendment to the United States Constitution. It therefore set aside as null and void the action by the Commission against Walters and enjoined it from any further proceedings against him concerning the loans.

The Commission challenges on appeal the district court's rulings that 1) Section 4207(H) is unconstitutional for vagueness and failure to provide standards, 2) certain procedures followed by the Commission denied Walters procedural due process, and 3) the private loans to Walters to provide funds for his political campaign did not violate the contribution limits in the Act.

I.

The Commission asserts § 4207(H) of the Act is not unconstitutionally vague. The Commission's principal argument is it has only limited investigatory power and does not render any final decision as the ultimate decision to dismiss or prosecute resides with the authority to whom the complaint is referred. An analogy is made to the proceedings before the Council on Judicial Complaints under 20 O.S.1981 § 1652, which has been described as only investigatory in nature, as opposed to being adjudicatory in nature. Nichols v. Council on Judicial Complaints, 615 P.2d 280 (Okla.1980); In re "Judge Anonymous", 590 P.2d 1181 (Okla.1978). It asserts the trial court erroneously imposed adjudicatory standards of due process on the Commission's exercise of investigatory power.

Walters, on the other hand, asserts the Commission conducts proceedings which are judicial in nature and it has been granted unfettered quasi-judicial power which should be struck down, citing CitiCorp Savings & Trust v. Banking Board of the State of Oklahoma, 704 P.2d 490, 494 (Okla.1985). He asserts the Commission proceedings are akin to grand jury proceedings and the Commission should be similarly subject to statutory guidelines concerning its powers and duties. The Commission, it is argued, in its decision to refer affected his fundamental right to seek office by politically stigmatizing him. Thus such proceedings should be subject to the traditional adjudicatory procedural safeguards and standards.

We recognize that administrative investigations have been compared to the power granted in grand juries by the courts. ² However, one significant distinction exists between the Commission and a grand jury. A grand jury not only functions as an inquisitorial body, it is accorded constitutional power to return indictments for all character and grades of crimes. Okla. Const. art. II, § 18; 22 O.S.1981 §§ 331, 333. A criminal prosecution cannot be instituted except by presentment or indictment by a grand jury, or by information filed by the prosecuting attorney. Okla. Const. art. II, § 17. A grand jury's return of a true bill (indictment) is similar to a decision to prosecute. Tweedy v. Oklahoma Bar Ass'n, 624 P.2d 1049, 1054 n. 12 (Okla.1981). The Commission, on the other hand, only has power to refer a complaint Because the Commission possesses only functions of investigation and referral it is merely an investigatory body. Nelson v. Oklahoma State Ethics Commission, 551 P.2d 1117 (Okla.1976). Nonadjudicative, fact-finding investigations into possible violations of the Act conducted by the Commission do not constitute an adjudication of legal rights. Therefore, the full panoply of judicial procedures which have traditionally been associated with adjudicatory proceedings under the due process clause is not constitutionally required. S.E.C. v. Jerry T. O'Brien, Inc., 467 U.S. 735, 742, 104 S.Ct. 2720, 2725, 81 L.Ed.2d 615 (1984); Hannah v. Larche, 363 U.S. 420, 440-443, 80 S.Ct. 1502, 1513-1515, 4 L.Ed.2d 1307 (1960); Ewing v. Mytinger & Casselberry, 339 U.S. 594, 598, 70 S.Ct. 870, 872, 94 L.Ed.2d 1088 (1950). The full requirements of due process do not attach until the adjudicatory stage is begun if and when criminal proceedings are initiated.

concerning the alleged violation to the appropriate authority who then decides whether or not to prosecute an action, based upon the particular facts revealed from the results of the administrative investigation. ³

Inasmuch as the Commission's proceedings are purely investigatory in nature, and as such, the Commission is not authorized to adjudicate rights, the Commission does not fall within the definition of agency under 75 O.S.1981 § 301(1) of the APA. We therefore find the Commission is not subject to the procedures mandated by the APA, except for the provisions relative to the promulgation and filing of its rules and regulations.

We do not believe the Commission's grant of discretion is unconstitutionally vague. In ascertaining the constitutionality of a statute, a legislative act is presumed to be constitutional and will be upheld unless it is clearly, palpably and plainly inconsistent with the Constitution. ⁴ The Commission is vested by statute with wide discretion; but such discretion is not unconditional. In its exercise of discretion it must act fairly and justly in such a manner which will instill confidence in the proceedings. 74 O.S.Supp.1986 § 4207(H). Furthermore, the Commission, as a governmental body, must remain within the bounds of the Constitution. ⁵ The broad authority conferred on the Commission is not the equivalent of unbridled freedom to investigate any person merely upon supposition as administrative action must have a reasonable or rational basis and must not be used in an arbitrary and discriminatory manner. ⁶ We hence hold § 4207(H) is not an unconstitutionally vague grant of power without proper standards or guidelines.

Although the Commission is not bound by the full panoply of adjudicatory procedures, the...