Opinion ID: 2029434
Heading Depth: 1
Heading Rank: 15

Heading: January 11, 2005, Campaign Statement

Text: We now turn to the Legislature's allegation in article III that Hergert knowingly furnished false information to the NADC on January 11, 2005, and the allegation in article V that this false information was intended to impede the NADC's investigation. In Hergert's January 11 campaign statement, he reported that he had incurred an expenditure to Jackson-Alvarez on December 14, 2004. We find that Hergert knew this expenditure was incurred no later than October 12, 2004. First, Hergert admitted in his deposition and at trial that Jackson-Alvarez had completed its work by mid-October 2004, in time for him to use its contents in his advertising. Hergert specifically admitted in his deposition 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. Thus, Hergert had not only incurred the Jackson-Alvarez expenditure by October 13, he was receiving the benefit of the expenditure. Second, the preprinted instructions on the unpaid bills section of Hergert's campaign statement provide, in relevant part: List all unpaid bills, accounts payable and other payments owed by the committee, i.e., accrued expenses for goods, materials, services, or facilities received, for which payment has not been made as of the closing date of this statement. Include any amounts owed to the candidate if the candidate intends to seek reimbursement from the committee. If the exact amount of an unpaid bill is unknown, report a reasonable estimate of the amount owed. (Emphasis supplied.) Notably, in Hergert's first campaign statement, filed on April 21, 2004, Hergert listed an unpaid bill of $9,740 as accrued on April 6. In addition, the unpaid bills section includes a bolded and capitalized Important notice, which provides in relevant part: Candidates for these offices who have not agreed to abide by these limits are reminded that for the purpose of determining if a candidate has exceeded the estimate of maximum expenditures on file with the Commission, unpaid bills and accrued expenses are considered expenditures. These instructions are explicit, and Hergert had demonstrated an understanding of them as early as April 2004. If, on his October 25 campaign statement, Hergert had properly estimated his expenditure to Jackson-Alvarez at even $7,000, and properly listed his unpaid invoices, the NADC would have been alerted that he had exceeded the 40-percent mark, or $16,000, no later than October 13, the date he received an invoice from Majority Strategies for $10,456.55. Hergert's failure to review the NADC brochures does not excuse his disregard of instructions on the forms. While Hergert defended his many filing errors with the excuse that the NPADA and CFLA requirements were confusing or inconsistent, his deposition testimony shows that he could not have accurately made such an assessment because he failed to inform himself of the requirements in any event. We find that Hergert's omission of the Jackson-Alvarez expenditure from his October 2004 campaign statement was deliberate. In his January 11, 2005, campaign statement, however, Hergert falsely reported that he incurred the Jackson-Alvarez expenditure on December 14, 2004, thus deflecting the NADC's investigation away from this expenditure. When the NADC initiated an audit of Hergert's failure to file a forty-percent affidavit in case No. 04-36, it had no notice that Hergert had incurred an expenditure to Jackson-Alvarez during October 2004. Its initial investigation into the forty-percent affidavit was focused on the information shown by the committee's banking records. Nothing in the records Hergert provided would have alerted the NADC to the Jackson-Alvarez expenditure, and as noted, check No. 1065 was not written until sometime in 2005. When Hergert sent his forty-percent affidavit to the NADC, which was received on November 12, 2004, he reported that he had mailed the affidavit on October 29. On November 12, the NADC notified Hergert that it was initiating an investigation for a possible violation of § 32-1604(5)(b). On November 22, through his attorney, Hergert repeated his good faith belief that he had mailed his affidavit to the NADC. On December 9, Howland notified Brashear that he intended to explore the facts and circumstances surrounding [Hergert's] belief in a deposition pursuant to the investigation in case No. 04-36. Thus, Hergert was on notice that his intent concerning the forty-percent affidavit was at issue in the NADC's investigation. Moreover, concealment of expenditures in general, and the Jackson-Alvarez expenditure in particular, was relevant to possible criminal charges. The language in § 32-1604(5)(b) provides, in relevant part, that [a] candidate who intentionally fails to file the required [forty-percent] affidavit within either five-day period [for the primary or the general election period] shall be guilty of a Class II misdemeanor. (Emphasis supplied.) Furthermore, during the investigation of case No. 04-36 and up until the settlement agreements were reached, a conclusion that Hergert had violated the felony provisions of § 32-1607(4) was also possible. Subsection 32-1607(4) provides: Any candidate who files, or causes to be filed, [a forty-percent] affidavit executed by him or her that he or she knows contains any material element which is false shall be guilty of a Class IV felony. (Emphasis supplied.) Thus, Hergert's intentional conduct of filing his forty-percent affidavit late  received on November 12, 2004  and swearing that he had spent 40 percent of his estimated expenditures on October 26, could have subjected him to criminal charges. Given the NADC's record request, Hergert was cornered. He could not conceal the expenditures that he had paid to Scott Cottington, Inc. ($36,000 on October 19), or to Majority Strategies ($10,456.55 on October 19), because those expenditures were shown on his October bank statement. Hergert did not pay Jackson-Alvarez, however, until sometime in March or April 2005 and did not report this unpaid expenditure until January 11. Thus, the date of the expenditure to Jackson-Alvarez represented the only information that Hergert could conceal in an effort to deflect a finding that he had intentionally and knowingly filed a false report as to when he exceeded 40 percent of his estimated maximum expenditures. On January 10, 2005, after he took office, we find that Hergert directed Herrell to fax two substitute pages to Jacobson to replace in his postelection campaign statement before Jacobson sent the statement to the NADC. The second substituted page was the unpaid bills section, in which Hergert reported that the Jackson-Alvarez expenditure was for Research/Communications and incurred on December 14, 2004. We find that the filing was a false representation to the NADC on January 11, 2005, asserting, in effect, that the Jackson-Alvarez expenditure was not relevant to its investigation of the expenditures he made in October 2004 and the actual triggering date for his late forty-percent affidavit filed in November. Howland's letter to Brashear on March 8, 2005, during ongoing settlement negotiations, indicates that as of that date, Howland's concern about the Jackson-Alvarez expenditure was limited to ensuring that Hergert did not attempt to pay the unpaid bill through an additional loan. It was only after the NADC had approved the settlement agreements with Hergert in April 2005 that the State Patrol initiated an independent investigation, in July 2005, and confronted Hergert about the Jackson-Alvarez expenditure. Hergert contends that the uncontested evidence shows that he did not know of the actual amount of the Jackson-Alvarez bill until December 2004. However, we are not bound to blindly accept as true all testimony which is not directly contradicted or impeached. The testimony of a witness should be weighed in connection with all the facts in the case. Pahl v. Sprague, 152 Neb. 681, 42 N.W.2d 367 (1950). We find Hergert's explanations for reporting the Jackson-Alvarez expenditure as having been incurred on December 14, 2004, are not credible and contradicted by his own testimony. In his deposition, Hergert initially testified that neither he nor anyone in his campaign had communicated with Jackson-Alvarez in any way since October. However, his only explanation for using the December 14 date was his claim that some unknown person from Jackson-Alvarez had contacted some unknown person in his campaign about money his committee owed the firm. Although Hergert purportedly delayed payment to Jackson-Alvarez because he disputed the amount of its claim, he nonetheless used the December 14 purported contact date as the date the expenditure was incurred because he knew Jackson-Alvarez' work had been completed in October. Hergert denied knowing who directed that corrections be made to the January 11, 2005, campaign statement or who directed that the corrections be faxed to Jacobson with instructions to use the substitute pages. Herrell, however, testified that she faxed the substituted pages to Jacobson at Hergert's direction and that Hergert provided the information stated on the unpaid bills section of the January 11 campaign statement. Considering the inconsistencies in Hergert's testimony, we believe Herrell; we do not believe Hergert. We find that the Legislature has proved by clear and convincing evidence as alleged in article III that while in office Hergert knowingly furnished materially false information to the NADC on January 11, 2005, when he represented that he had incurred an expense to Jackson-Alvarez on December 14, 2004. See § 28-907. We also note that such conduct is a potential Class IV felony under § 49-4,134 (any person who files a statement or report required under the [NPADA] knowing that information contained in the statement or report is false ... shall be guilty of a Class IV felony). We further find that the false statement was intended to deflect the NADC's investigation into the forty-percent affidavit issue in case No. 04-36 away from this incurred expenditure. Thus, Hergert, as alleged in article V, intended to impede the investigation of an actual criminal matter. We therefore conclude that Hergert is guilty of article III, False Reporting, and article V, Obstructing Government Operations.