Missouri Ethics Commission v. Philip Levota

In the Missouri Court of Appeals
Western District
MISSOURI ETHICS COMMISSION, )
Respondent, ) WD84233
v. )
)
PHILIP LEVOTA, ) FILED: December 14, 2021
Appellant. )
APPEAL FROM THE CIRCUIT COURT OF COLE COUNTY
THE HONORABLE PATRICIA S. JOYCE, JUDGE
BEFORE DIVISION THREE: LISA WHITE HARDWICK, PRESIDING JUDGE,
GARY D. WITT AND EDWARD R. ARDINI, JR., JUDGES
After the Missouri Ethics Commission (“MEC”) determined that Philip
LeVota violated campaign finance laws and issued two $10,000 civil fees against
him, LeVota appealed to the Administrative Hearing Commission (“AHC”). The
AHC disagreed with the MEC and found that LeVota did not violate campaign
finance laws and was not subject to a civil fee. The circuit court reversed the
AHC’s decision. On appeal, the MEC seeks review of the AHC’s decision,
contending that the AHC erred in finding that LeVota could not be held liable
because he was not associated with a continuing committee and did not use
committee contributions for impermissible purposes. The MEC further argues
that the AHC erred in finding that the MEC needed to include an argument as an
affirmative defense and in stating that it was reviewing the MEC’s order of only
one $10,000 fee. For reasons explained herein, we affirm the AHC’s decision that
LeVota did not violate Section 130.034, RSMo 2016,1 but reverse the AHC’s
decision finding LeVota not liable for violating Section 130.031.2. We remand the
case to the circuit court with directions to remand the case to the AHC. The AHC
is directed to remand the case to the MEC. The MEC is directed to order the
appropriate penalty for LeVota’s violation of Section 130.031.2.
FACTUAL AND PROCEDURAL HISTORY
In April 1998, the Show-Me Council (“Council”), a continuing committee as
defined by Section 130.011(10),2 was formed and registered with the MEC. The
MEC statement of committee organization for the Council listed Chris Whiting as
its treasurer and LeVota as its chairman. In January 2000, the Council filed an
amended statement of committee organization listing LeVota as its treasurer. No
other officers were listed on the form. According to LeVota, he ceased being
chairman of the Council at that time and was only the Council’s treasurer. In July
2003, the Council filed another amended statement of committee organization
1
All statutory references are to the Revised Statutes of Missouri 2016.
2
Section 130.011(10) defines a “continuing committee,” in pertinent part, as:
[A] committee of continuing existence which is not formed, controlled or directed
by a candidate, and is a committee other than a candidate committee or campaign
committee, whose primary or incidental purpose is to receive contributions or
make expenditures to influence or attempt to influence the action of voters whether
or not a particular candidate or candidates or a particular ballot measure or
measures to be supported or opposed has been determined at the time the
committee is required to file any statement or report pursuant to the provisions of
this chapter.
2
listing LeVota’s wife, Katherine Stepanek, as the Council’s treasurer. Again, no
other officers were listed on the form. According to LeVota, he has not held any
position with the Council since that time.
Since its formation, the Council has maintained a bank account at UMB with
Whiting and LeVota as signatories on the account. When Stepanek attempted to
become a signatory after she became the Council’s treasurer, she was unable to
do so because UMB required Whiting to be present. Stepanek has never been
made a signatory on the Council’s account.
$4,000 and $950 Withdrawals from the Council’s Account
In 2013, the Committee for Research Treatment and Cures (“CRTC”)
approached LeVota to assist as a campaign consultant with a ballot issue. The
CRTC was to pay LeVota $4,750 for his services. On November 1, 2013, the CRTC
wrote a check to the Council for $4,750. On the CRTC’s itemized expenditures
form that it filed with the MEC, it listed the purpose of this expenditure to the
Council as “leaflet distribution and endorsement support.” The CRTC’s check was
deposited in the Council’s bank account.
LeVota subsequently submitted an invoice to the Council for $4,950. The
invoice, dated November 15, 2013, stated that it was “[f]or campaign efforts
relating to support for Jackson County’s Ballot Question 1 on the November 5,
2013 ballot. Consisting of direction and consultation with the Translational
Research Committee and the Committee for Research Treatments and Cures’
efforts.” On September 30, 2014, LeVota withdrew $4,000 in cash from the
3
Council’s account. LeVota then purchased a cashier’s check, made payable to
Chase Card Services, for that amount and listed himself as the remitter. He used
the check to pay his business credit card. On May 4, 2015, LeVota wrote a check,
made payable to “cash,” on the Council’s account for $950. According to LeVota,
Stepanek authorized both the $4,000 and $950 withdrawals as payment to him for
the services he provided as a vendor.
The Council did not file quarterly disclosure reports with the MEC listing the
CRTC’s $4,750 contribution or the Council’s $4,000 and $950 expenditures to
LeVota. Instead, the Council filed committee statement of limited activity reports
on January 13, 2014, October 13, 2014, and July 7, 2015. Each of these reports
contained a certification by Stepanek that, for the quarter covered by the report,
“neither the aggregate amount of contributions received nor the aggregate
amount of expenditures made by the committee exceeded five hundred dollars.”
$360 Withdrawal from the Council’s Account
On January 17, 2014, LeVota withdrew $360 in cash from the Council’s
bank account and donated it to the Season of Sharing (“SOS”) Foundation. The
SOS Foundation is a charity that passes out money to people in Kansas City
around Christmastime. A news article about the SOS Foundation, which was
posted online on December 16, 2015, described the SOS Foundation as a “brand
new local nonprofit that will help those in need around the holidays.” The SOS
Foundation was incorporated by LeVota and another person as a nonprofit public
corporation on September 16, 2016. The SOS Foundation credited the Council for
4
the $360 donation on its “Official Donation Receipt For Income Tax Purposes”
form, dated January 30, 2014. According to LeVota, Stepanek authorized the $360
withdrawal from the Council’s account and donation to the SOS Foundation.
MEC’s Audit of the Council, Consent Order, and Complaint Against LeVota
In 2015, a citizen filed a complaint with the MEC alleging campaign finance
violations in an Independence City Council election. The complaint named three
entities: the Council; Stepanek, as the Council’s treasurer; and LeVota. While
investigating this complaint, the MEC initiated an audit of the Council due to
compliance issues found while conducting the investigation. Following the audit,
the MEC filed a 12-count complaint; nine counts were against the Council and
Stepanek, and three counts were against LeVota.
In January 2017, the Commission entered a consent order against the
Council and Stepanek resolving the nine counts against them. The Council and
Stepanek stipulated to seven violations, including four related to the transactions
involving LeVota: (1) failure to disclose expenditures made for not reporting the
$4,000 cashier’s check to Chase Credit Card, $950 cash withdrawal, and $360 cash
withdrawal, in violation of Section 130.041.1(4); (2) failure to report contributions
received for not reporting the CRTC’s $4,750 contribution, in violation of Section
130.041.1(3); (3) committee expenditures of $4,000, $950, and $360 were not made
by checks signed by the Council’s treasurer but were instead made by LeVota,
who was not the Council’s treasurer at that time, in violation of Sections
130.021.4(1) and 130.031.2; and (4) failure to file required quarterly disclosure
5
reports and improperly filing limited activity reports, in violation of Sections
130.041 and 130.046. For these violations, the MEC imposed a $10,000 fee against
the Council and Stepanek.3 Following the entry of the consent order, the Council
filed an amended January 2014 quarterly report in August 2017. The Council’s
amended quarterly report listed the CRTC’s $4,750 contribution, the $4,950
expenditure to LeVota, and the $360 expenditure to the SOS Foundation.
The MEC held a hearing on the three counts against LeVota. Only two of
the three counts concerned the transactions at issue here.4 Following the hearing,
the MEC entered its findings of fact, conclusions of law, and order finding
probable cause that LeVota knowingly violated campaign finance statutes.
Rejecting LeVota’s argument that he could not be held liable because he was not
the Council’s registered treasurer, the MEC found that he was acting as the
Council’s treasurer and, therefore, was subject to the campaign finance statutes.
With regard to Count II, the MEC determined there was probable cause to find that
LeVota violated Section 130.031.2 in two respects: (1) he violated the statute’s
requirement that committee expenditures of more than $50 must be made by a
check drawn on the committee’s account and signed by the committee treasurer
3
The consent order provided that, if the Council and Stepanek paid $1,000 of the $10,000 fee
within 45 days of the date of the order, the remainder of the fee would be stayed unless the
Council or Stepanek committed any further violations of the campaign finance laws within two
years.
4
The other count pertained to the Independence City Council election. The MEC found in favor of
LeVota on this count, and it is not at issue in this appeal.
6
when he withdrew $4,000, $950, and $360 in cash from the Council’s account; and
(2) he violated the statute’s prohibition against making a check payable to “cash”
except to replenish a petty cash fund. With regard to Count III, the MEC
determined that there was probable cause to find that LeVota violated Section
130.034.1’s prohibition against using contributions received by a committee for
his personal use, because the $4,000 cashier’s check was to pay, at least, in part,
his personal expenses and debts, and the $950 and $360 withdrawals were not
made for any allowable purpose under Section 130.034.2. Pursuant to Section
105.961.4(6), the MEC ordered that a fee be imposed against LeVota in the amount
of $10,000 for each of the two counts, for a total of $20,000.5
Appeal to AHC and Petition for Judicial Review
LeVota appealed the MEC’s order to the AHC. The AHC held an evidentiary
hearing, during which LeVota and the MEC’s supervisor of investigations assigned
to the case testified. Following the hearing, the AHC entered its decision
concluding that LeVota did not violate campaign finance laws. In its findings of
fact, the AHC found that Stepanek was the Council’s treasurer and that LeVota had
not held a position with the Council since July 2003. The AHC further found that
Stepanek, as the Council’s treasurer, authorized LeVota’s withdrawals of $4,000,
$950, and $360; that the $4,000 that LeVota withdrew to purchase a cashier’s
check to pay his business credit card was properly owed to him for expenses he
5
The MEC’s order provided that, if LeVota paid $2,000 of the $20,000 fee within 45 days of the date
of the order, the remainder of the fees would be stayed unless LeVota committed any further
violations of campaign finance laws within two years.
7
incurred on behalf of the Council; that the $950 LeVota withdrew was properly
owed to him for his work as a campaign consultant; and that the $360 LeVota
withdrew was donated to a charity, the SOS Foundation.
In its conclusions of law, the AHC determined that the plain language of
Section 130.031.2 does not allow for imposing fees on an individual not
associated with a committee, and LeVota was not associated with the Council at
the time of the transactions. The AHC further concluded that the MEC failed to
sustain its burden of proving that LeVota violated Section 130.034.1 and .2,
because LeVota established that the payments made were for allowable purposes.
Because it determined that LeVota did not violate campaign finance laws, the AHC
concluded that he was not subject to a civil fee under Section 105.961.4(6).
The MEC subsequently filed a petition for judicial review of the AHC’s
decision in the Circuit Court of Cole County. After reviewing the administrative
record and the parties’ briefs, the court found that the AHC’s decision was
arbitrary, capricious, unreasonable, unlawful, not supported by substantial and
competent evidence on the record as a whole, and an abuse of discretion.
Therefore, the court reversed the AHC’s decision and approved and adopted the
MEC’s findings of fact, conclusions of law, and order. LeVota appeals.6
STANDARD OF REVIEW
On an appeal from the trial court’s review of an AHC decision,
we review the decision of the AHC, not the judgment of the trial
6
Because the MEC is the party aggrieved by the AHC’s decision, the MEC has filed the appellant’s
brief and reply brief. Rule 84.05(e).
8
court. The AHC’s decision will be upheld unless it is not supported
by competent and substantial evidence upon the whole record; it is
arbitrary, capricious, or unreasonable; it is an abuse of discretion; or
it is otherwise unauthorized by law or in violation of constitutional
provisions.
In determining whether a decision is supported by competent
and substantial evidence, we review the record as a whole and
determine whether the AHC’s decision is against the overwhelming
weight of the evidence. Though we do not view the AHC’s factual
findings in the light most favorable to the decision, we still must
defer to its credibility findings, as the AHC is the sole judge of the
credibility of witnesses and the weight and value to give to the
evidence. We review the AHC’s conclusions on the interpretation and
application of the law, however, de novo.
Cash v. Mo. Dep't of Revenue, 461 S.W.3d 57, 60 (Mo. App. 2015) (quoting
Faenger v. Bach, 442 S.W.3d 180, 185-86 (Mo. App. 2014) (citations and internal
quotation marks omitted)).
ANALYSIS
In Point I, the MEC contends the AHC erred in concluding that LeVota did
not violate Section 130.031.2 because he was not associated with the Council
when he withdrew $4,000, $950, and $360 from the Council’s account. The MEC
argues that anyone who is not the committee treasurer, deputy treasurer, or
candidate who withdraws more than $50 in cash can be held liable for violating
the statute, while LeVota contends that only the committee treasurer can be held
liable for violating the statute. Resolution of this point requires us to interpret the
language of Section 130.031.2.
9
“The goal of statutory analysis is to ascertain the intent of the legislature, as
expressed in the words of the statute.” United Pharmacal Co. of Mo., Inc. v. Mo.
Bd. of Pharmacy, 208 S.W.3d 907, 909 (Mo. banc 2006). “This goal is achieved by
giving the language used its plain and ordinary meaning.” Id. at 910. “When the
legislative intent cannot be determined from the plain meaning of the statutory
language, rules of statutory construction may be applied to resolve any
ambiguity.” Id. “In determining the intent and meaning of statutory language,
‘the words must be considered in context and sections of the statutes in pari
materia, as well as cognate sections, must be considered in order to arrive at the
true meaning and scope of the words.’” State ex rel. Evans v. Brown Builders
Elec. Co., 254 S.W.3d 31, 35 (Mo. banc 2008) (quoting State ex rel. Wright v.
Carter, 319 S.W.2d 596, 600 (Mo. banc 1959)). “The provisions of a legislative act
are not read in isolation but construed together, and if reasonably possible, the
provisions will be harmonized with each other.” Id. (quoting Bachtel v. Miller Cty.
Nursing Home Dist., 110 S.W.3d 799, 801 (Mo. banc 2003)).
Section 130.031 sets forth, among other things, the restrictions and
limitations on contributions and expenditures for committees. Subsection 2 of
this statute provides, in pertinent part, that, except for expenditures from a petty
cash fund, “each expenditure of more than fifty dollars . . . shall be made by check
drawn on the committee’s depository and signed by the committee treasurer,
deputy treasurer or candidate.” § 130.031.2. Subsection 2 also states, “A check
10
made payable to ‘cash’ shall not be made except to replenish a petty cash fund.”
Id.
The evidence indicates that, while Stepanek, as the Council’s treasurer,
approved LeVota’s $4,000, $950, and $360 withdrawals, the $4,000 and $360
withdrawals were not made by checks drawn on the Council’s bank account and
were not signed by Stepanek. Although the $950 withdrawal was made by a
check drawn on the Council’s bank account, the check was not signed by Stepanek
and was made payable to “cash.” The Council had no deputy treasurer, and it did
not have a candidate, because the Council was a continuing committee. All three
withdrawals were made by LeVota, a signatory on the Council’s account.
The Council’s statements of committee organization indicate that LeVota
was the Council’s chairman in 1998 and became the Council’s treasurer in 2000,
and Stepanek became the Council’s treasurer in July 2003. LeVota testified that,
when he became treasurer in 2000, he ceased being the Council’s chairman, and
when Stepanek became the Council’s treasurer in July 2003, he was no longer the
Council’s treasurer. The MEC elicited from LeVota on cross-examination that he
did not have any written documentation showing that he had ever resigned as the
Council’s chairman. Nevertheless, the AHC chose to believe LeVota’s testimony
that he was no longer the chairman and to give this testimony greater weight. In
its order, the AHC specifically found that, “[s]ince July 3, 2003, LeVota has not
held a position with the Council.” We defer to the AHC’s credibility
determinations and the weight it accords the evidence. Cash, 461 S.W.3d at 60.
11
The issue, then, is whether LeVota, who was not the Council’s treasurer and
did not hold a position with the Council at the time he made the withdrawals in
2014 and 2015, can be held liable for violating Section 130.031.2’s requirement
that expenditures of over $50 in cash must be made by checks drawn on the
Council’s account and signed by the Council’s treasurer, and Section 130.031.2’s
prohibition against making a check payable to “cash” except to replenish the
Council’s petty cash fund. Because Section 130.031.2 does not explicitly state that
he can be, we must interpret the provision in the context of the whole chapter to
determine what the legislature intended.
Chapter 130 is the Campaign Finance Disclosure Law. Section 130.021.1
requires that every committee have a treasurer. For a continuing committee such
as the Council that does not have a deputy treasurer, Section 130.021.4(1)
provides that “[c]ontributions shall not be accepted and expenditures shall not be
made by a committee except by or through an official depository account and the
committee treasurer[.]“ The committee treasurer is responsible for maintaining
accurate bookkeeping records and accounts and filing required reports, including
statements of committee organization and disclosure reports detailing all of the
committee’s receipts and expenditures. §§ 130.036.1; 130.021.5; 130.041.1.
Section 130.058 provides that the committee treasurer “is ultimately responsible
for all reporting requirements pursuant to this chapter.”
LeVota argues that, because the legislature placed the responsibility for
opening bank accounts, accepting and distributing funds, maintaining
12
bookkeeping records, and filing reports on the committee treasurer, the
legislature intended that only the committee treasurer can be held liable for
violating the chapter’s provisions regarding the committee’s financial
transactions, including Section 130.031.2. We disagree.
LeVota’s argument overlooks language in Sections 130.072 and 130.081.
Section 130.072 provides:
Any person who knowingly accepts or makes a contribution or makes
an expenditure in violation of any provision of this chapter or who
knowingly conceals a contribution or expenditure by filing a false or
incomplete report or by not filing a required report, in addition to or
in the alternative to any other penalty imposed by this chapter, shall
be held liable to the state in civil penalties in an amount equal to any
such contribution or expenditure.
Similarly, Section 130.081.1 states that “Any person who purposely violates the
provisions of this chapter is guilty of a class A misdemeanor.” For purposes of
Chapter 130, a “person” is defined as:
[A]n individual, group of individuals, corporation, partnership,
committee, proprietorship, joint venture, any department, agency,
board, institution or other entity of the state or any of its political
subdivisions, union, labor organization, trade or professional or
business association, association, political party or any executive
committee thereof, or any other club or organization however
constituted or any officer or employee of such entity acting in the
person's official capacity;
§ 130.011(22). Thus, under Section 130.072, any individual or entity who meets
the chapter’s broad definition of “person” and who knowingly accepts a
contribution, makes a contribution, or makes an expenditure in violation of
Chapter 130’s provisions may be held liable for civil penalties, and under Section
13
130.081.1, any such individual or entity who purposely violates one of Chapter
130’s provisions is guilty of a class A misdemeanor. These two statutes
demonstrate the legislature’s clear intent that liability for a committee’s financial
transactions that are made in violation of any of the chapter’s provisions,
including those contained in Section 130.031.2, is not limited to only committee
treasurers or persons who hold a position on a committee.7
LeVota’s $4,000, $950, and $360 withdrawals violated Section 130.031.2’s
requirement that an expenditure of more than $50 be made by a check drawn on
the committee’s account and signed by the committee treasurer. Additionally,
LeVota’s $950 withdrawal violated Section 130.031.2’s prohibition against making
a check payable to “cash” except to replenish a petty cash fund. Reading the
provisions of Chapter 130 together as a whole, LeVota can be held liable for his
violations of Section 130.031.2. The MEC correctly found LeVota liable on Count
II, and the AHC erred in holding otherwise. Point I is granted.
In Points II and III, the MEC contends that the AHC erred in determining that
LeVota’s $4,000, $950, and $360 withdrawals did not violate Section 130.034’s
prohibition against converting committee contributions to his personal use or
7
The MEC did not pursue civil penalties under Section 130.072 or refer LeVota for criminal
prosecution under Section 130.081.1. Instead, the MEC chose to pursue fees under Section
105.961.4(6), which allows the MEC “to seek fees for violations in an amount not greater than one
thousand dollars or double the amount involved in the violation” through reconciliation
agreements or civil actions. That the MEC chose not to seek penalties under either Section 130.072
or Section 130.081.1 does not affect our determination that these statutes demonstrate a clear
legislative intent to hold anyone who knowingly violates Chapter 130’s provisions regarding a
committee’s financial transactions liable for such violations.
14
using them for a purpose not allowed by law. Section 130.034.1 provides that
“[c]ontributions as defined in section 130.011, received by any committee shall
not be converted to any personal use.” Section 130.034.2 states that
“[c]ontributions may be used for any purpose allowed by law including, but not
limited to” eight purposes listed in the statute.
The AHC determined that the MEC failed to prove that the withdrawals were
used for LeVota’s personal business or for a purpose not allowed by law. Looking
first at the propriety of the $4,000 and $950 withdrawals, which is the subject of
the MEC’s Point II, one of the eight allowable purposes for contributions under
Section 130.034.2 is “[a]ny ordinary expenses incurred relating to a campaign[.]”
§ 130.034.2(1). In its decision, the AHC found that LeVota established that the
$4,000 and $950 withdrawals were reimbursement for expenses incurred on
behalf of the Council and payment for his services as a campaign consultant.
The evidence on this issue was LeVota’s testimony that the CRTC hired him
to provide campaign consulting services for $4,750 and that, for his services, the
CRTC could have paid the Council or paid him directly. The CRTC wrote a $4,750
check to the Council. LeVota testified that he did not do work for the Council.
When the MEC’s counsel asked LeVota why the CRTC passed the payment for his
services through the Council if he did not do work for the Council, he testified that,
while the payment “should have” been to him, the CRTC “possibly wanted to
have the [Council] do other work also. You have to ask them.” LeVota further
testified that, “in the campaign finance world, committees assign other
15
committees to do work. I don’t know if the [CRTC] did not want to pay me
directly, have my name on a disclosure.8 But there is—there’s no nefarious thing
going on here.”
LeVota testified that, because the CRTC paid the Council for his services, the
Council then owed him money as a vendor. LeVota offered into evidence the
invoice that he submitted to the Council seeking payment of $4,950 for his
campaign efforts for the CRTC.9 The invoice, dated November 15, 2013, stated
that it was “[f]or campaign efforts relating to support for Jackson County’s Ballot
Question 1 on the November 5, 2013 ballot. Consisting of direction and
consultation with the Translational Research Committee and the Committee for
Research Treatments and Cures’ efforts.” LeVota testified that, with Stepanek’s
authorization as the Council’s treasurer, his withdrawal of $4,000, which he used
to purchase a cashier’s check to pay his business credit card, and his withdrawal
8
Concealing the identity of the recipient of a contribution or an expenditure is a violation of
Section 130.031.3, which provides, in part:
No contribution shall be made or accepted and no expenditure shall be made or
incurred, directly or indirectly, in a fictitious name, in the name of another person,
or by or through another person in such a manner as to conceal the identity of the
actual source of the contribution or the actual recipient and purpose of the
expenditure.
Anyone who knowingly makes a contribution or expenditure in violation of Section
130.031.3 or who knowingly conceals a contribution or expenditure by filing a false report
is subject to a fine under Section 130.072. Whether the CRTC knowingly concealed
LeVota’s identity by paying the Council instead of directly paying him is not before us and
we do not reach that issue.
9
Before he was sworn in as a witness, LeVota made an opening statement to the AHC in which he
indicated that he “believed” the $200 difference between his $4,750 fee for his services to the
CRTC and his $4,950 invoice to the Council was for reimbursement for lunch he provided to poll
workers, but he could not remember.
16
of $950 in cash constituted the Council’s payment to him of his November 15,
2013 invoice.
The AHC found LeVota’s testimony and the invoice he provided credible.
This evidence was sufficient to support a finding that the $4,000 and $950
withdrawals were used for Section 130.034.2(1)’s allowable purpose of “[a]ny
ordinary expenses incurred relating to a campaign.” We find no error in the
AHC’s determination that LeVota did not violate Section 130.034.1 and .2 when he
withdrew $4,000 and $950 as payment for the services he rendered to the CRTC’s
campaign.10 Point II is denied.
With regard to the $360 withdrawal, the MEC contends in Point III that the
AHC erred in stating that the MEC failed to include an allegation concerning the
propriety of that expenditure in one of its affirmative defenses. In his complaint
filed with the AHC, LeVota alleged that his $360 withdrawal was authorized under
Section 130.034.2(7) because it was a gift to a charity, the SOS Foundation.
Section 130.034.2(7) provides that one allowable purpose for which committee
contributions may be used is:
(7) To make an unconditional gift which is fully vested to any
charitable, fraternal or civic organizations or other associations
formed to provide for some good in the order of benevolence, if such
candidate, former candidate or holder of elective office or such
person's immediate family gain no direct financial benefit from the
unconditional gift[.]
10
Even though the payments of $4,000 and $950 to LeVota were for an allowable purpose, the
manner in which they were paid to him was a violation of Section 130.031.2, as addressed in Point
I. The failure to properly report the payments was a violation by the Council and Stepanek and
was addressed in the MEC’s complaint against them.
17
In its second affirmative defense to this claim, the MEC alleged only that the
$360 withdrawal was not reported by the Council as having been made for any
allowable purpose and that LeVota failed to use those funds for an allowable
purpose. During the hearing, the MEC presented evidence that the $360 donation
to the SOS Foundation was made before the foundation was incorporated. In its
order, the AHC stated that the MEC failed to include, as part of its second
affirmative defense, its allegation that the $360 donation to the SOS Foundation
preceded the foundation’s formation as a charity. On appeal, the MEC argues that
it did not need to include this allegation because affirmative defenses are only
required to assert new issues and not to state defenses made to pleaded
allegations.
We need not decide whether the AHC erred in indicating that the MEC
needed to include its allegation as part of its second affirmative defense. After
stating that the MEC failed to include this allegation as part of its second
affirmative defense, the AHC found that the MEC failed to meet its burden of
proving the allegation, stating, “Nonetheless, LeVota produced a receipt from the
charity, and [the] MEC cites to no evidence in the record in support of this
allegation to sustain its burden of proof.”
Looking at the evidence on this issue, LeVota testified that, on January 17,
2014, he withdrew $360 from the Council’s bank account with Stepanek’s
authorization. He asked the Council for this money to give to the SOS Foundation,
a charitable organization he co-founded, which collects “money from business
18
people, and we go out the week before Christmas and go to thrift stores,
McDonald’s, grocery stores, and we hand out money.” LeVota offered into
evidence the SOS Foundation’s “Official Donation Receipt For Income Tax
Purposes,” issued on January 30, 2014, showing a $360 cash gift from the Council
to the foundation on January 17, 2014.
In response, the MEC offered a copy of the SOS Foundation’s webpage and
an online news article, dated December 16, 2015, which described the SOS
Foundation as a “brand new local nonprofit.” The MEC also offered certified
records from the Secretary of State’s office showing that the SOS Foundation was
incorporated as a nonprofit public corporation on September 16, 2016. Based on
this evidence, the MEC argues that the SOS Foundation was not a charitable entity
at the time LeVota withdrew the $360 and, therefore, the Council’s $360 donation
to the foundation was not for an allowable purpose.
Section 130.034.2(7) allows a committee to make an unconditional gift to
“charitable, fraternal or civic organizations or other associations formed to
provide for some good in the order of benevolence.” LeVota’s testimony and the
SOS Foundation’s donation receipt constituted sufficient evidence that the SOS
Foundation was a formed charitable organization when the Council made the $360
donation. The AHC chose to believe this evidence and accord it greater weight
than the MEC’s evidence, and we defer to the AHC’s decision to do so. Cash, 461
19
S.W.3d at 60. The AHC did not err in finding that the $360 withdrawal was for an
allowable purpose.11 Point III is denied.
In Point IV, the MEC contends the AHC erred in stating that it was reviewing
the MEC’s “$10,000 fee.” The MEC issued two civil fees of $10,000 each, for a
total of $20,000. Throughout its order, however, the AHC stated that the MEC
issued an order assessing a fee of only $10,000 against LeVota.
We have determined that LeVota is liable for violating Section 130.031.2 but
is not liable for violating Section 130.034. Because we are directing that the case
be remanded to the MEC to order the appropriate penalty for LeVota’s violation of
Section 130.031.2, this point is moot. Point IV is denied.
CONCLUSION
The AHC’s decision finding LeVota not liable under Count III for violating
Section 130.034 is affirmed. The AHC’s decision finding LeVota not liable under
Count II for violating Section 130.031.2 is reversed. We remand the case to the
circuit court with directions to remand the case to the AHC. The AHC is directed to
remand the case to the MEC. The MEC is directed to order the appropriate
penalty for LeVota’s violation of Section 130.031.2.
11
Even though the $360 withdrawal was for an allowable purpose, the manner in which the
withdrawal was made was a violation of Section 130.031.2, as addressed in Point I. The failure to
properly report the withdrawal was a violation by the Council and Stepanek and was addressed in
the MEC’s complaint against them.
20
____________________________________
LISA WHITE HARDWICK, JUDGE
ALL CONCUR.
21