Opinion ID: 1225410
Heading Depth: 1
Heading Rank: 1

Heading: Contributions and Expenditures

Text: Under the principles laid down in the Cook case, the trial court's conclusion that Mr. Johnson violated the statute by making excessive expenditures can be sustained only if the evidence shows (1) that Mr. Johnson's expenditures exceeded the amount allowed by statute, (2) that he deliberately exceeded the statutory maximum, and (3) that the expenditure, if in excess of the statutory maximum, was material. Reports filed with the Secretary of State indicate that approximately $140,000 was spent on Mr. Johnson's general election campaign. The law imposes no restriction on the amount that can be spent in a campaign. The law, however, does limit the amount that a candidate may spend from his own funds. [1] In a general election a candidate personally can spend only 10 per cent of the annual salary of the position for which he is a candidate. In this case the limit was $2,000. The trial court found that Mr. Johnson spent more than $2,000 of his own money, or of money the statute treats as his own. The trial court's findings, however, did not specify what particular expenditures by Mr. Johnson were to be considered campaign expenditures. Mr. Johnson's amended personal statement of contributions and expenditures filed January 6, 1969, states he contributed $2,000 of which $1,500 was a cash contribution to the Lee Johnson for Attorney General Committee. Estimated out of pocket expenses for travel, phone and miscellaneous campaign expenditures were reported to be $500. The statement of expenditures filed for the Lee Johnson Committee by its treasurer reports a contribution by Bob Bell of $1,657.90 and a payment to Mr. Bell of the same amount for printing services, postage and stationery. It is contended that this contribution constituted a violation of ORS 260.040 which provides in part that a contribution of a fellow official or fellow employe of a corporation is considered a contribution by the candidate. Mr. Bell is a director and a vice president of Eagle Flightways, a corporation. Mr. Johnson was secretary of the corporation and his brother was president. Mr. Johnson had no stock in the company and drew no income and contends that for these reasons he and Mr. Bell should not be considered fellow corporate officials within the meaning of the statute. The statute is ambiguous on this point but we shall assume without deciding that even though the contestee was not a stockholder and received no income from the corporation he was a fellow official of the corporation with Bob Bell. The question remains as to whether Bell's contribution was made under circumstances which constituted a deliberate violation of the statute. The same problem is presented with respect to a contribution of $500 made by Robert T. Mautz, who is senior partner of Mautz, Souther, Spaulding, Kinsey & Williamson. The contestee was an associate of the firm at the time he decided to run for the office of Attorney General. Mr. Johnson testified he had been on leave of absence since the beginning of 1967 and had received no compensation from the law firm since that time. He stated that if he were not elected he would have gone back with that firm. He admitted, however, that he saw a few clients during this period and serviced them out of the Mautz office. Although it is not clear whether the statute was intended to include the relationship which existed between the contestee and Mr. Mautz, we shall assume, without deciding, that the contribution is to be treated as though made by the contestee himself. But making the assumption that the Bell and Mautz contributions are to be treated as those of Mr. Johnson himself there is no violation of the statute unless it is shown that contributions were received under circumstances evidencing a deliberate and material violation of the statute. ORS 251.025. We construe the term deliberate as used in ORS 251.025 to mean an intentional violation of the statute; a violation which is knowingly committed. In relation to ORS 260.050 a violation would occur and the person elected would forfeit his office only if he made the expenditures knowing that they exceeded the statutory amount or with conscious indifference whether it was in violation of the statute. State v. Jancigaj, 54 Or. 361, 366, 103 P. 54 (1909); Jenkins v. Carman Mfg. Co., 79 Or. 448, 453, 155 P. 703 (1916); Heikkila v. Ewen Transfer Co., 135 Or. 631, 635, 297 P. 373 (1931). In the case at bar there is no direct or circumstantial evidence that Mr. Johnson's excessive expenditures were made deliberately. There is no proof, for example, that Mr. Johnson knew of the Bell and Mautz contributions or that he should have known of them until after the campaign. There is no evidence when either contribution was made or when Mr. Johnson made his own personal contributions. There were over 500 contributors to a campaign fund of more than $140,000. Before declaring void an election because of deliberate overexpenditure, the court must be satisfied that excessive gifts were knowingly received and used. Another reason why the excessive contributions or expenditures by or on behalf of Mr. Johnson do not appear to have been deliberate is that when money was needed for the campaign the candidate had no difficulty raising substantial sums from persons who could legitimately contribute unlimited amounts to his campaign. For example, an additional $10,000 was temporarily needed for the campaign and a cousin of Mr. Johnson, who had already contributed $40,000, loaned another $10,000 to the campaign committee. Later, because of a miscalculation in the amount of expenditures, it was found the committee did not have sufficient funds to repay the loan. Mr. Johnson so informed his cousin and thereupon the cousin contributed the amount of the loan to the committee. It would not be reasonable to hold that a candidate with that kind of financing would deliberately accept contributions in violation of the Act. Mr. Thornton also contends that Mr. Johnson personally contributed amounts in excess of those fixed by statute by personally paying for travel, secretarial and other miscellaneous expenses which Mr. Thornton now says were campaign expenses. In July 1967, after the legislative session, Mr. Johnson employed a Miss Bayley as his personal secretary. Aside from his future political ambitions, this appears to have been a normal procedure. He was a businessman, a state legislator and a lawyer who at the time was on leave of absence from his former law office. In 1968 she did some campaign work for Mr. Johnson, a substantial part of which was performed during hours for which she was not paid. Miss Bayley continued in his employment after the campaign. Mr. Thornton contends that at least $562 of the salary paid Miss Bayley during the campaign period should be considered a campaign expenditure. We hold that no part of the personal secretary's salary is a campaign expense. There is no proof that Mr. Johnson would not have continued to employ a personal secretary if he had not been a candidate; the inference is to the contrary. Apportioning an expense such as this between campaign and personal use is almost impossible and we do not believe the legislature so contemplated. In Laub's Expense Account, 145 Pa.Super. 513, 21 A.2d 575 (1941), held such personal expenses need not be apportioned. Mr. Thornton contends that $56 personally paid by Mr. Johnson to a press clipping service should be considered a campaign expenditure. The evidence supports that contention. Mr. Thornton claims that at least $145 was personally paid by Mr. Johnson for campaign telephone calls. The only evidence is that a $75.33 telephone bill paid by Mr. Johnson was an expenditure for campaign purposes in the general election. We will treat $75.33 as a proven expense. Mr. Thornton contends that Mr. Johnson paid other campaign expenses out of his personal account. The only proof offered to support this contention was that during the campaign Mr. Johnson made payments to firms, such as a photographic studio, which performed services or sold materials which could be used in a campaign. When Mr. Johnson was questioned about these expenditures, he testified either that they were for personal purchases or he could not remember what the payments were for. The invoices for which these payments were made were not produced and no representative of the firms so paid were called. These expenses were not proven to have been campaign expenses and must be disregarded. Mr. Johnson used his own plane for trips during which he did some campaigning and on two or three occasions he chartered a plane with a pilot and did some campaigning. On an undetermined number of such trips Mr. Johnson combined campaign and noncampaign activities. The number of trips was not established. The part of the cost of any trip which should be allocated to the campaign was not established. Mr. Thornton's estimation of $600 is probably as accurate an approximation as can be made. The travel expense, plus the other expenses which we find were proved, amount to a total of about $730. Mr. Johnson had reported $500 miscellaneous personal and travel expense, so if there was any excess it amounted to about $230. Assuming for the purpose of this case only that personal travel expense is a personal campaign expense that must be reported, we hold that Mr. Johnson's failure to do so was not deliberate within the meaning of the Corrupt Practices Act. Some of the reasons we stated for holding that Mr. Johnson did not act deliberately as regards the contributions of Messrs. Bell and Mautz are also applicable to this assumed overexpenditure of $230. There is doubt whether a candidate's personal travel in connection with a campaign was intended by the Oregon statute to be included in computing the amount personally contributed or expended. The statute does not expressly so provide. Mr. Thornton apparently was of the opinion that personal campaign travel was not to be included as a campaign expenditure as no such expenditure is included in his campaign expenditure report. The federal statute, which is an old one, provides that the candidate's travel expenses are not to be considered within the limit on personal campaign expenditures. [2] In Laub's Expense Account, supra (145 Pa.Super. 513, 21 A.2d 575), the only case cited by either party on the issue, the court held that the candidate's personal expenditures for gasoline, oil, and meals while campaigning were not required by the statute to be included in the candidate's report of personal expenditures. The statute of Pennsylvania on this point is similar to that of Oregon. There is no proof that the expenditures were made deliberately or with reckless disregard whether they were excessive. All the inferences are to the contrary. A person who has available and who spends $140,000 is unlikely to deliberately overspend $230 and thus jeopardize his entire campaign.