|
|
11-0320-17509-CV |
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
|
David
S. Day,
Complainant, vs. State
Senator Michael Jungbauer, Respondent. |
FINDINGS
OF FACT, CONCLUSIONS,
AND ORDER |
The above-entitled matter came on for an evidentiary
hearing on
David Day,
NOTICE
This is the final decision in this
case, as provided in Minn. Stat. § 211B.36, subd. 5. A party aggrieved by this decision may seek
judicial review as provided in
STATEMENT OF ISSUES
1.
Did Respondent violate Minnesota Statutes § 211B.12(7) by making expenditures that
were not reasonably related to the conduct of Respondent’s election campaign,
or that were spent on assets converted to personal use?
The panel concludes that the
Complainant has failed to establish by a preponderance of the evidence that the
Respondent’s expenditure on insurance for his February 22, 2006, fundraising
event violated Minn. Stat. § 211B.12(7).
This allegation is dismissed.
The panel concludes that the
Complainant has established that the Respondent’s expenditures on airplane
models violated Minn. Stat. § 211B.12(7).
2. Did Respondent violate Minn. Stat. § 211B.15 by
accepting a $600 contribution from Anoka Air Charters, Inc.?
The panel concludes that the
Complainant failed to establish that Respondent violated Minn. Stat. § 211B.15,
and therefore this allegation is dismissed.
Based upon the entire record, the panel makes the
following:
FINDINGS OF FACT
1.
Michael
Jungbauer is a Minnesota State Senator representing District 48. Mr. Jungbauer was first elected in 2002. He is
running for re-election in the November 7, 2006, General Election.
2.
Minnesota Senate
District 48 covers portions of
3.
Senator
Jungbauer has an interest in aviation issues and owns his own plane, which he
keeps at a hangar at the
4.
Jamie Gunderson volunteered
as Senator Jungbauer’s campaign manager from approximately October 2005 until
July 2006. She served as a deputy
treasurer for the campaign from approximately December 2005 through at least
May 2006. Prior to joining Senator
Jungbauer’s campaign, Ms. Gunderson worked for the Minnesota Senate Republican
Caucus. Apart from participating in
campaign literature “drops” for other candidates, Ms. Gunderson had little
prior campaign experience. However, she
was aware that a campaign committee was prohibited from accepting corporate
contributions.[3]
5.
As Senator
Jungbauer’s campaign manager and deputy treasurer, Ms. Gunderson helped plan
and organize fundraising events and other campaign related appearances. She also was responsible for preparing the
campaign finance reports and keeping account of campaign expenditures and
contributions. Occasionally, Ms.
Gunderson deposited contribution checks into Senator Jungbauer’s campaign
account.[4]
6.
Ms. Gunderson
prepared Senator Jungbauer’s campaign finance report for 2005, but she did not prepare
the report for 2006.[5]
7.
As part of his
re-election efforts, Senator Jungbauer asked Harvey Karth and Tim Loth, members
of the aviation community, if they would be interested in holding a fundraiser
on behalf of his campaign.[6] Both Mr. Karth and Mr. Loth agreed to do so,
and with the help of Paul Weske, another member of the aviation community, they
began to plan a fundraising event.[7]
8.
Greg Herrick
owns a hangar at the
9.
Mr. Loth and Mr.
Weske both have hangars at the
10.
Ms. Gunderson
helped organize the fundraising event at the
11.
Harvey Karth
contacted his homeowner’s insurance company, Star Insurance Agency, and
obtained a quote of $712 for the required “liability and host liquor” insurance.[11] Jamie Gunderson wrote out a check for the
insurance on February 22, 2006, in the amount of $712 from the personal checking
account she shares with her husband, Eric Gunderson.[12] On that same date, Jamie Gunderson received a
check made out to her husband, Eric Gunderson, written on Senator Jungbauer’s
campaign committee account in the amount of $812. The check was a reimbursement for the
insurance payment and campaign mileage costs Ms. Gunderson had incurred in the
amount of $100.[13] Once signed, the insurance documents were
faxed to the
12.
On February 22,
2006, the fundraiser for Senator Jungbauer’s campaign was held at the
13.
Michael Hayes is
the owner of Anoka Air Charters, Inc., which operates out of the
14.
Mr. Hayes attended
the fundraiser for Senator Jungbauer’s campaign. On the evening of
15.
Senator
Jungbauer has on occasion signed blank “political contribution receipts” in
advance of a fundraising event.[18] The record in this case did not establish who
initialed or signed the receipt for Anoka Air Charter’s February 22, 2006,
contribution, but neither Senator Jungbauer nor Ms. Gunderson denied that the
receipt was issued.[19]
16.
Mr. Hayes was
not aware that
17.
Senator
Jungbauer never asked Mr. Hayes to make a corporate contribution and not until approximately
September 7, 2006, was he aware that Mr. Hayes in fact had done so. Senator Jungbauer did not see the corporate
check during the evening of the February 22, 2006, fundraiser or at any other
time prior to approximately September 7, 2006.
18.
Senator
Jungbauer has on occasion had corporate checks delivered unsolicited to his
home or campaign office. On those
occasions, Senator Jungbauer or a volunteer has returned the checks to the contributors
along with a letter explaining that such contributions are prohibited under
19.
On February 24,
2006, Ms. Gunderson deposited $4,530 into Senator Jungbauer’s campaign
account. This amount reflected the
contributions received at the February 22, 2006, fundraiser, as well as at a separate
fundraiser held at O’Gara’s restaurant on February 21, 2006. There was no endorsement on the checks
submitted for deposit.[22]
20.
Sometime in July
of 2006, Ms. Gunderson quit her position with the Jungbauer campaign and went
to work for another candidate running for U.S. Congress.[23]
21.
Beginning in approximately
August of 2006, Patty Olson, a certified public accountant, began handling the financial
and bookkeeping matters for Senator Jungbauer’s campaign.[24]
22.
Sometime in
August of 2006, Ms. Gunderson received a voicemail message from Senator
Jungbauer asking for his campaign documents.
On or about
23.
Senator
Jungbauer’s campaign finance report for the period covering January 1, 2006,
through August 21, 2006, was required to be filed with the Campaign Finance and
Public Disclosure Board on August 29, 2006.[26]
24.
On the day the
campaign report was due to be filed, Ms. Olson was entering data into the
report using a computer software program provided by the Campaign Finance and
Disclosure Board. After she had entered
all of the information, the software program flagged a number of possible
errors contained in the report. One of
the errors identified by the software program was that the campaign finance
report had listed receipt of a $600 corporate contribution. Ms. Olson called Senator Jungbauer and
informed him that the campaign report software had indicated receipt of a
prohibited corporate contribution.
Because the report was due that same day, Senator Jungbauer directed Ms.
Olson to go ahead and submit the report electronically. He did not review the report, but assumed
that the corporate contribution receipt flagged by the software was simply the
result of an error made in entering the data.
Because the report asks for the identity of the contributor as well as
the contributor’s employer, Senator Jungbauer assumed that the contributor and
employer information had been mistakenly transposed.[27]
25.
On or about
August 30, 2006, Senator Jungbauer received a call from a staff person at the
Campaign Finance and Public Disclosure Board informing him of problems with the
report, including the receipt of a corporate contribution from Anoka Air
Charter, Inc. Senator Jungbauer informed
the Board staff person that he would look into the identified problems,
including the corporate contribution.[28]
26.
On September 7,
2006, Senator Jungbauer obtained and reviewed a copy of the $600 check made out
to his campaign committee from Anoka Air Charter. Once he received a copy of the check, Senator
Jungbauer called Mr. Hayes and told him that he would reimburse Anoka Air
Charter for its contribution since corporate contributions are prohibited under
27.
Mr. Herrick, the
owner of the Golden Wings museum, also owns a business called Historic Sales,
which sells model airplanes.[30]
28.
On May 13th
and May 15, 2006, Senator Jungbauer used campaign funds to purchase a total of
14 model airplanes from Historic Sales of New Brighton for a total cost of
$741.39.[31] The airplane models were sold to Senator
Jungbauer at a 40- to 50-percent “collector’s” discount.[32]
29.
After purchasing
the airplane models, Senator Jungbauer took some of the models out of their
packaging at his Senate office and put them on display at a couple hangars.[33]
30.
Ms. Gunderson
was unaware of the airplane model purchases and at no time did Senator
Jungbauer discuss with her any plans to auction off airplane models at a future
fundraiser.[34]
31.
Senator
Jungbauer’s August 2006 campaign finance report listed the May 13 and 15, 2006,
expenditures on airplane models. The
expenditures were described as “other miscellaneous spending airplane models,”
and the total amount of the expenditures was listed as $741.39.[35]
32.
In early
September 2006, Senator Jungbauer was asked by a reporter for a local on-line
political publication to explain his campaign’s expenditures on airplane models.
Senator Jungbauer stated that he
believed the reference to “airplane models” was simply a mischaracterization in
his campaign report possibly caused by the fact that the owner of Historic
Sales also owns the hangar in which the February 22, 2006, fundraiser was held.[36]
33.
When asked the
same question about the airplane model expenditures in mid-September 2006, by
another reporter for an on-line political publication, Senator Jungbauer
explained that the model airplanes “were used as silent auction gifts for fundraisers”
for his campaign.[37]
34.
In a letter
dated September 19, 2006, to the Campaign Finance and Public Disclosure Board,
Senator Jungbauer explained that his campaign payments to Historic Sales “were
for airplane models we will use for a silent auction at a future fundraising
event to raise proceeds for my campaign committee.” Senator Jungbauer further stated in the
letter that he is not using the models personally and “they are presently in
storage until the auction is held.”[38]
35.
As of the date
of the hearing, which was held three weeks before the general election, Senator
Jungbauer had not scheduled a fundraising event to auction off the airplane
models.[39]
36.
By failing to
schedule an auction to recoup the cost of the airplane models, by opening the boxes
in which the models were purchased, and by displaying the models in airplane hangars,
Senator Jungbauer has converted the airplane models to personal use.
Based upon the foregoing Findings of
Fact, the panel makes the following:
CONCLUSIONS
1.
Minn. Stat. §
211B.35 authorizes the panel of Administrative Law Judges to consider this
matter.
2. The burden of proving the allegations in the complaint is on the Complainant and the standard of proof is preponderance of the evidence.[40]
3. Minn. Stat. § 211B.15, subd. 2, prohibits corporations from making a contribution of money or thing of monetary value to a committee or individual to promote or defeat the candidacy of an individual for nomination, election, or appointment to a political office. Subdivision 2 is directed at corporations; it does not prohibit individuals from accepting corporate contributions.
4. Minn. Stat. § 211B.15, subd. 13, prohibits individuals from “aiding, abetting, or advising” a violation of Section 211B.15.
5. The Complainant has failed to establish that Respondent violated Minn. Stat. § 211B.15, subd. 2, by aiding, abetting or advising a violation of Minn. Stat. § 211B.15. The Complainant failed to establish that the Respondent had aided, or abetted his campaign committee’s receipt of the $600 contribution from Anoka Air Charter, Inc. The Complainant also has failed to establish that Respondent violated the related prohibition contained in Minn. Stat. § 211B.13, subd. 2, which prohibits a person from “knowingly” soliciting, receiving, or accepting any money, property, or other thing of monetary value . . . that is a disbursement prohibited by this section or section 211B.15.” The Complainant failed to establish that the Respondent knowingly solicited, received or accepted the $600 contribution from Anoka Air Charter, Inc.
6. Minn. Stat. § 211B.12 provides as follows:
Use
of money collected for political purposes is prohibited unless the use is
reasonably related to the conduct of election campaigns, or is a noncampaign
disbursement as defined in section 10A.01, subdivision 26. The following are permitted expenditures when
made for political purposes:
(1) salaries, wages, and fees;
(2) communications, mailing, transportation,
and travel;
(3) campaign advertising;
(4) printing;
(5) office and other space and necessary
equipment, furnishings, and incidental supplies;
(6) charitable contributions of not more than
$50 to any charity annually; and
(7) other expenses, not included in clauses
(1) to (6), that are reasonably related
to the conduct of election campaigns. In
addition, expenditures made for the purpose of providing information to
constituents, whether or not related to the conduct of an election, are
permitted expenses. Money collected for
political purposes and assets of a political committee or political fund may
not be converted to personal use.
7. The Complainant has failed to establish that the Respondent’s expenditure on the insurance for the February 22, 2006, fundraising event violated Minn. Stat. § 211B.12(7). The expenditure on insurance was reasonably related to the conduct of Respondent’s campaign.
8. The Complainant has established that the Respondent’s expenditures on airplane models did violate Minn. Stat. § 211B.12(7). There was no convincing evidence that the models were originally purchased for a fundraiser, but even if they were, they were not used for that purpose and they were converted to personal use.
Based upon the record herein, and for
the reasons stated in the following Memorandum, the panel of Administrative Law
Judges makes the following:
ORDER
IT IS ORDERED:
That State Senator Michael Jungbauer pay a civil penalty of $600 by November 30, 2006, for violating Minn. Stat. § 211B.12(7).[41] That in all other respects, the Complaint is dismissed.
Dated:
October 20, 2006
|
/s/ Barbara L. Neilson |
|
BARBARA L. NEILSON |
|
Presiding Administrative Law Judge |
|
/s/ Beverly Jones Heydinger |
|
BEVERLY JONES HEYDINGER |
|
Administrative Law Judge |
|
/s/ Cheryl LeClair-Sommer |
|
CHERYL LECLAIR-SOMMER |
|
Administrative Law Judge |
MEMORANDUM
The Complainant failed to establish by a preponderance of the evidence that the Respondent aided or abetted his campaign committee’s receipt of the $600 contribution from Anoka Air Charters, Inc., in violation of Minn. Stat. § 211B.15, subd. 13, or that the Respondent knowingly solicited or received the corporate contribution in violation of Minn. Stat. § 211B.13, subd. 2. There was no credible evidence that the Respondent solicited a corporate contribution or had any knowledge that one may have been made until the August 2006 financial report was prepared. Once alerted to the possibility that the campaign had received a corporate contribution, the Respondent obtained a copy of the check and, upon seeing it, immediately notified the corporation that the campaign could not accept the contribution and refunded the money. Accordingly, those allegations in the Complaint are dismissed.
The Complainant also failed to establish by a preponderance of the evidence that the Respondent’s campaign committee’s expenditure on insurance for his February 22, 2006, fundraiser was not reasonably related to the conduct of his campaign in violation of Minn. Stat. § 211B.12(7). In fact, the Complainant conceded at the close of the hearing that the insurance payment made by the Jungbauer campaign was a permitted expenditure for purposes of Section 211B.12. Therefore, this allegation in the Complaint is dismissed.
The panel concludes, however, that the Complainant did
establish by a preponderance of the evidence that Respondent’s expenditures on
airplane models violated Minn. Stat. § 211B.12(7). There was conflicting evidence
concerning the original purpose for which the models were purchased. The Respondent’s former campaign manager,
whose duties included organizing funraising events, was unaware that the
campaign had purchased over $700 in airplane models and had no knowledge of any
plans to auction off airplane models at a fundraising event. Moreover, since purchasing the airplane models,
the Respondent has given different accounts as to why they were purchased and how
they are related to his campaign. When
asked by a reporter in early September about the expenditures identified as
“miscellaneous spending airplane models” on his campaign finance report, the
Respondent first stated that the reference to “airplane models” was simply a
mischaracterization in his campaign report possibly caused by the fact that the
owner of Historic Sales also owns the hangar in which the fundraiser was held. Later, in response to another reporter’s
questions and in his September 19, 2006, letter to the Campaign Finance and
Public Disclosure Board, the Respondent stated that the airplane models were
purchased for a silent auction to be held as part of a fundraiser. During the hearing, Senator Jungbauer
suggested that he may, in the alternative, attempt to sell the models on E-Bay. The panel concludes that there was no
convincing evidence that the models were originally purchased for a fundraiser,
but even if they were, they were not used for that purpose and they were
converted to personal use.
Even assuming for the
sake of argument that the models were in fact purchased for use at a
fundraiser, the Complainant has shown by a preponderance of the evidence that
they were not used for that purpose and instead were converted to personal
use. Senator Jungbauer had the models in
his possession since May of 2006, and never scheduled or held a fundraiser to
auction them off in the ensuing four months before the complaint was filed. Moreover, he removed at least some of the
models from their packaging in his Senate office and displayed them in airplane
hangars. By the date of the hearing, he
still had no definite plans for the sale of the airplane models. Thus, a preponderance of the evidence
supports a conclusion that the Respondent converted the airplane models to
personal use. The Respondent is obligated
under Minn. Stat. § 211B.12 to use items purchased with campaign funds in a
manner that is reasonably related to the conduct of his campaign. There is no evidence that he has done so.
Having
found that the Respondent violated Minn. Stat. § 211B.12(7), with respect to his
campaign expenditures on airplane models, the Panel may make one of several
dispositions.[42] The panel may issue a reprimand, may impose a
civil penalty of up to $5,000, and may refer the complaint to the appropriate
county attorney for criminal prosecution.
In this case, the panel has decided to impose a civil penalty of $600. The panel concludes that Respondent’s
violation was made knowingly but that it had no impact on voters. As such, the panel concludes that a civil
penalty of $600 is appropriate.
B.L.N., B.J.H., C.L.S.
[1] Testimony of
M. Jungbauer.
[2] Testimony of
M. Jungbauer.
[3] Testimony of
Gunderson.
[4] Testimony of
Gunderson.
[5] Testimony of
Gunderson.
[6] Testimony of
M. Jungbauer.
[7] Testimony of
M. Jungbauer and Karth.
[8] Testimony of
Schiller.
[9] Testimony of
Gunderson and M. Jungbauer; Ex. 9.
[10] Testimony of
Gunderson.
[11] Testimony of
Karth; Exs. 7 and 8.
[12] Ex. 6.
[13] Ex. 5.
[14] Ex. 7.
[15] Testimony of
M. Jungbauer, Hayes, and Gunderson.
[16] Testimony of
M. Jungbauer.
[17] Testimony of
Hayes and Gunderson; Ex. 3.
[18] Testimony of
Jungbauer.
[19] Testimony of
M. Jungabuer and Gunderson; Ex. 3.
[20] Testimony of
Hayes.
[21] Testimony of
Jungbauer.
[22] Testimony of
M. Jungbauer and Gunderson; Ex. 4.
[23] Testimony of
Gunderson.
[24] Testimony of M.
Jungbauer.
[25] Testimony of
Gunderson and M. Jungbauer.
[26] Testomony of
M. Jungbauer; Ex. 13.
[27] Testimony of M.
Jungbauer.
[28] Testimony of M.
Jungbauer.
[29] Testimony of
M. Jungbauer and Hayes; Ex. 2.
[30] Testimony of
M. Jungbauer.
[31] Testimony of
M. Jungbauer; Ex. 10.
[32] Testimony of M.
Jungbauer.
[33] Testimony of
M. Jungbauer.
[34] Testimony of Gunderson.
[35] Ex. 13.
[36] Testimony of
M. Jungbauer; Ex. 14.
[37] Ex. 15.
[38] Ex. 11.
[39] Testimony of
M. Jungbauer.
[40] Minn. Stat. §
211B.32, subd. 4.
[41] The check
should be made payable to: “Treasurer, State of
[42] Minn. Stat. § 211B.35, subd. 2.