Friday, May 30, 2003
C.A. Upholds $1.1 Milion Fine on Roberti Antagonists, Largest Penalty Ever Imposed Under Reform Act
By a MetNews Staff Writer
A fine of over $800,000 for violations of the Political Reform Act, which has grown to more than $1.1 million with interest, was affirmed yesterday by the Third District Court of Appeal.
The fine imposed by the Fair Political Practices Commission on Californians Against Corruption and its treasurers, Carl Russell “Russ” Howard and Steven Cicero, is the largest in the history of the commission. It stems from the group’s unsuccessful 1994 effort to recall then-state Sen. David Roberti, a Los Angeles Democrat and former Senate president pro tem.
The court upheld a Sacramento Superior Court judgment obtained by the FPPC, saying the defendants should have challenged the fine during the administrative process or by pursuing a mandamus action after the decision, rather than waiting for the commission to bring a collection suit.
Conservative activists Howard and Cicero—Howard is a former National Rifle Association board member—have claimed the FPPC action is a form of political persecution, although they did not challenge it while it was still pending before the commission. Howard, a Manhattan Beach resident, has established a defense fund to raise money to fight the action and has obtained the assistance of the Virginia-based Gun Owners Foundation.
Under the Political Reform Act, the commission may proceed against alleged violators of the act through either administrative or judicial proceedings. If administrative proceedings are used, the maximum fine is $2,000 per violation.
If the respondent does not pay the fine, the commission is authorized to bring suit to collect it.
The proceedings against CAC and the treasurers was initiated in 1995, with the commission alleging 404 violations of the act. The violations included not reporting the occupations of more than 90 contributors, not reporting the employers of more than 90 contributors, failure to itemize more than 60 contributions, failure to report the street addresses of 100 contributors, understating contributions, and failure to maintain required records.
Neither treasurer responded to the accusation within the required 15 days, nor the committee. The commission entered a default decision and imposed the maximum fine as to each violation.
A petition for writ of mandate challenging the decision was filed, but was dismissed for lack of prosecution. The commission filed its collection suit in 1996, and eventually won a judgment after Judge Charles Kobayashi ruled in its favor.
Justice George Nicholson, writing for the Court of Appeal yesterday, rejected the contention that the commission failed to establish that it gave the defendants due process during the administrative proceedings, one of the requisites for the grant of judgment in a collection suit under the act.
The argument, Nicholson explained, was based on a claim that then-Commission Chairman Ravi Mehta unlawfully delegated to commission staff members his authority to conduct the probable cause hearing—which the defendants did not attend, either personally or through counsel—and to file the accusation.
“We conclude defendants cannot make this argument here because they did not challenge the authority of FPPC officials in earlier proceedings,” Nicholson wrote. Even if the delegation was illegal, he elaborated, the staff members became “de facto officers” whose actions were not subject to collateral attack.
Similarly, Nicholson wrote, the defendants cannot attack the fine as constitutionally excessive.
The issues to be litigated in the collection suit, the justice explained, are limited to those set forth in the statute—procedural due process, actual or constructive notice, and failure to pay after demand.
Any other defect in the administrative proceeding, the justice said, can only be challenged by bringing a petition for writ of administrative mandate. By abandoning their petition, he said, the defendants failed to exhaust their judicial remedies and can no longer challenge the amount of the fine.
The opinion was joined by Justices Vance Raye and Fred Morrison.
Copyright 2003, Metropolitan News Company