Opinion ID: 2029434
Heading Depth: 1
Heading Rank: 8

Heading: evidence adduced of events after hergert's assuming office

Text: On January 6, 2005, Hergert was sworn into office. On January 11, the NADC received Hergert's postelection campaign statement for the general election, covering the period from October 18 [sic] 2004 TO December 31 2004. Hergert's signature on the report bears a date of January 4. Jacobson's signature was dated January 10. On January 10, after Charlotte Herrell, the office manager for Hergert's businesses, had sent the completed campaign statement to Jacobson to sign and to file, she faxed to Jacobson two pages which were to be substituted and placed in the report before filing. The two substitute pages are identifiable by the fax inscription at the top of each page from Hergert Milling, Inc., dated January 10, 2005. The first substituted page summarizes the committee's receipts, expenditures, and cash balance. The second substituted page is the required listing of the committee's unpaid bills and other accrued expenses. On the second page, Hergert reported that the committee had incurred an unpaid expenditure of $13,272.66 to Jackson-Alvarez on December 14, 2004. According to Hinman's testimony, the two pages are not related, i.e., the total of unpaid expenditures from the unpaid bills section of the campaign statement is not brought forward in the summary page. Hergert also reported borrowing $62,500 from Valley Bank and Trust Company on October 22, 2004. A typewritten insertion listed $59,907.20 in paid expenditures over $250. These expenditures included: (1) $36,000 paid to Scott Cottington, Inc., on October 19; (2) $10,295 paid to Majority Strategies on October 19; and (3) $9,727.13 paid to the Nebraska Press Association on October 21. The committee's total expenditures for the period were reported as $75,923.07. On January 31, 2005, the NADC received Hergert's annual campaign statement for his committee, signed by Hergert and Brenda Spath as the committee's new treasurer. Spath was an employee of one of Hergert's businesses. The annual statement did not list the Jackson-Alvarez expenditure as either a paid or an unpaid expenditure. On February 15, 2006, Hinman wrote to Spath at Hergert's home address to ask why the reported expenditure to Jackson-Alvarez in the January 11 filing was not listed as either a paid or an outstanding bill in the annual statement. On February 23, the NADC received Spath's response: [P]lease be advised check 1065 was paid to Jackson-Alvarez Group in the amount of $13,272.66. Spath did not provide a date for this payment or a copy of the check. Contrary to Spath's representation, the record shows the amount of check No. 1065 was actually $13,978.98 and that it was paid out of the committee's checking account on April 21, 2005. The date on the face of the check to Jackson-Alvarez appears to be March 4, 2005. The check notation provides that it was written for legal fees. At some point after the NPADA complaints were filed, Daley and Howland met with the Attorney General, who deferred jurisdiction to the NADC in the Hergert investigations. On March 7, 2005, Brashear wrote Howland and offered to settle the existing complaints against Hergert for $34,522.10, on the condition that no criminal charges be initiated, that Hergert's deposition be canceled, and that the offer constitute a complete resolution of all pending matters. On March 8, Howland responded to Brashear in writing. In that letter, Howland stated: One last concern that I want to mention is that I noticed that the [January 11 campaign statement] shows a negative balance on the campaign account in the amount of $12,349.83 along with an unpaid bills balance of $13,272.66 both of which will have to be paid from contributions from the candidate or others and not from additional loans. In April 2005, the NADC approved all the settlements, which required Hergert to pay a total of $33,512.10 in late filing fees and civil penalties. In July 2005, the Nebraska State Patrol initiated an independent investigation and interviewed Hergert on October 8, 2005. During that interview, Hergert claimed that he delinquently filed, on November 3, 2004, the report of the $44,000 late contribution because he had forgotten to sign the report before he left to go on a campaign trip. When asked why he had used October 26, 2004, on the report as the date that he received the $44,000 loan, Hergert stated that he did not prepare the report and relied on his office staff for the accuracy of all his reports. He also attempted to distinguish a line of credit from a loan: [W]hen that [late contribution] report was due, they [his office staff] just called there and said what is the balance on the note. And took it off the balance. It wasn't a loan that day, that was just the balance of, of the account that day. Similarly, he did not know why the January 11, 2005, campaign statement showed that the bank had loaned his committee $62,500 on October 22, 2004, instead of October 26, because he did not prepare the January 11 report. Hergert denied knowing that Scott Cottington, Inc., had invoiced his committee on October 17, 2004. He admitted knowing that Jackson-Alvarez had completed its work in early October, admitted his belief that the firm's research would cost $7,000 to $8,000, but stated that he did not report the expense because Jackson-Alvarez had not billed the committee. Hergert also stated that he determined the date of an expenditure was the date a check cleared the bank. He admitted, however, that he did not verify when a check had cleared. Hergert stated that only the treasurer and those preparing his reports would know whether any of his expenditures were reported after the date they were incurred. He stated that he did not instruct his staff when to report expenses because he had not read the NADC's candidate's handbook. Finally, Hergert stated during the interview that once he learned the NADC had not received his forty-percent affidavit, he and Herrell tore up the office looking for the form until he finally instructed her to use a duplicate form from his files. Hergert claimed that a month later, he found the original forty-percent affidavit form in a chicory file for one of his businesses. After the Legislature adopted its resolution of impeachment, the Legislature's counsel deposed Hergert on May 2, 2006. Hergert testified that he self-directed his campaign, but admitted that he had not made any effort to acquaint himself with the NADC regulations or to read its publications. Hergert testified that he told Herrell to alert him when the committee had spent 40 percent of his estimated expenditures. He repeated his contention that he considered a payment made when it cleared the bank for the purpose of triggering the requirement of sending in his forty-percent affidavit. Hergert also testified that he had learned since his interview with the State Patrol that he was not required to sign late contribution reports and that he did not know why the $44,000 contribution was reported late. He stated that he did not learn until later that the loan advance had been made on October 22, 2004, instead of October 26. Hergert admitted receiving the Jackson-Alvarez report by mid-October 2004 and using its contents in his advertising. He further admitted that Jackson-Alvarez had completed its work before he was invoiced by Majority Strategies on October 13 and Scott Cottington, Inc., on October 17, and before the Nebraska Press Association quoted him a price on October 19. He also admitted that Jacobson was not responsible for the content of any of his reports and that he told Herrell what date to put on the forty-percent affidavit. When asked why he choose October 26 as the date to use for his forty-percent affidavit, he stated, I had received a call from Cottington and said he hadn't received the money, and would I make sure that it was made available, so I determined that that was the date we made it available. Although he admitted that he wrote the $36,000 check to Scott Cottington, Inc., on October 19, he stated that he did not use that date because the check had not cleared the bank. Hergert denied (1) that he directed Herrell to make corrections to his January 11, 2005, campaign statement; (2) that he directed Herrell to fax the substitute pages to Jacobson on January 10, to place in the January 11 filing; or (3) that he saw the faxed pages before his deposition. When asked about events in October 2004, Hergert testified that he last spoke to someone at Jackson-Alvarez in the middle of October 2004 and that neither he nor anyone in his campaign had communicated with the firm, directly or indirectly, since that time, including all of 2005 and 2006. Yet, when asked why he had reported the Jackson-Alvarez bill as accrued on December 14, 2004, Hergert responded: I don't know. We were notified that we owed this amount. But Hergert was unable to say who from Jackson-Alvarez had made the contact, who had received the notification, or whether the contact was made via a telephone call. Hergert stated that he used the date he was notified because he knew the work was completed. Although he delayed payment until March or April 2005 because he contested the amount of the claim, Hergert did not use the date the check cleared the bank, April 21, 2005, as the date he incurred the expenditure. During trial, Herrell testified that she determined when to send in the campaign statements and that she used the date a check was written to a vendor as the expenditure date. She testified that she only signed campaign checks at Hergert's direction. In contrast to Hergert's deposition testimony, Herrell stated that she was never told that she should not list an expenditure until she could look at the back of the check to see if it had cleared the bank or until she had received a canceled check from the bank. She testified that Hergert never spoke to her about the forty-percent affidavit being lost, other than to dictate the letter he sent to the NADC accompanying his late filing in November 2004. She also testified that she relied on Hergert to tell her when to send in the forty-percent affidavits and reports of late contributions. Hergert admitted during his trial testimony that he was responsible for the dates of these filings. He again admitted that Jackson-Alvarez had completed its work by the time he received its report in mid-October and maintained that he had never received an invoice from them. Regarding the January 11, 2005, filing, Herrell testified that she faxed the substituted pages to Jacobson at Hergert's direction. The parties stipulated that Jacobson's assistant would testify, if called as a witness, that she was contacted by telephone and asked to make this substitution before sending the report to the NADC. Herrell also testified that she never saw any invoice from Jackson-Alvarez and that Hergert provided her the information about that expenditure reported in the January 11 campaign statement.