Responsive Documents: CREW: FEC: Regarding Vern Buchanan: 1-13-15 Part 2

8/10/2019 Responsive Documents: CREW: FEC: Regarding Vern Buchanan: 1-13-15 Part 2

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1

B E F O R E T H E F E D E R A L E L E C T I O N C O M M I S S I O N '-^J/U N

4 Inthematterof ) ri r- .

5 )

CELA

6 10-2002LL C f/k/aSuncoastFord )

7 GaryJ.Scarbrough ) M U R6054

8 Sarasota 500, L L Cd /a SarasotaFord )

9 BuchananAutomotive Holdings )

10

11 GENERAL COUNSEL SREPORT10

12

13 L A C TIO N S R E C O M M E N D E D : (1)Findreasontobelievethat10-2002L L C

fiTc/a

14 SimcoastFordviolated2 U.S .C. 441fand 441a(a); (2)

find

reasontobelievethat

Gary

J.

15 Scarbrough

violated

2 U.S.C. 44If; (3)

find

no reasontobelieve

that

Sarasota500,

L L C

d/b/a

16 SarasotaFordor BuchananAutomotive Holdings violated2 U .S.C. 441fand close thefileas to

17 theserespondents;(4) approve theattached

Factual

andLegalAnalyses;(5) approve theattached

18 proposedconciliationagreements;and (6) approve the appropriate

letters.

19 IL BACKGROUND

20

Thismatter

concems campaign contributions received

by Vem

Buchanan

for

Congress

21 ( V B F C or Committee )

during

the 2006 and 2008

election

cyclesthatwere reimbursedwith

22 thefundsofcar dealerships in

which

Representative

Vernon

Buchanan ( Buchanan ) holds, or

23 previously held,amajority ownership

interest.

This

Report concems the reimbursement of

24 $ 18,400incontributions toV B F Cby 10-2002L L C flkiaSuncoastFord( Suncoast

Ford )

and

25 the operatingpartnerat Suncoast

Ford, GaryJ.

Scarbrough,

inviolationof 2 U.S.C .

441f.

26 In

General

Counsel's Report #5 ( GCR#5 ) inthis

matter,

we

informed

the

Commission

27 that

there

was evidencethat, in2007, SuncoastFordand Scarbrough reimbursed $18,400in

28 contributions toV B F C

made

by Scarbroughandthree

other

SuncoastFordemployees. Basedon

' 10-2002

LLC

recentlyfileda documentwiththeFloridaSecretaryo fState

that

canceleditsuseof Suncoast

Ford as the

name

o fits business.


247/265

M U R6054 2

General Counsel's Report

#10

1

this

evidence,whichis described ingreaterdetail below, we recommend

that

theCommission

2 find

reason

to believethat10-2002L L Cf/k/aSuncoastFordviolated2 U.S.C . 441fand

3

441a(a),

and

that

GaryJ.Scarbrough violated2 U.S.C. 44If. Wealso recommend

thatthe

4 Commissionenterinto

pre-probablecause

conciliation with

theserespondents.Additionally,

we

5 recommend

that

theCommission

find

no

reason

tobelieve

that

Sarasota500, L L Cd/b/aSarasota

6

Fordor Buchanan Automotive Holdings violated2 U.S .C. 441fand close thefileas to

these

7 respondentsidentifiedintheM U R6054complaint.

8 III. ANALYSIS

9 A.

C O N T R I B U T I O N S I N T H E

N A M E

O F A N O T H E R

10

11

There

is evidence

that

Scarbrough directed the

Suncoast

Fordcontroller to

reimburse

12 contributions toV B F C ,includingScarbrough's, using

dealership funds.

The FederalElection

13

CampaignA ct

of

1971,

as amended

( Act ),provides

that

no

person

shallmakea contributionin

14

the nameofanotherperson

orknowinglypermit

his

or her

name

to be

used

to

effect

such a

15 contribution. 2U.S.C. 44 If. Section 44Ifprohibits providing money toothersto effect

16 contributions intheirnameswithout disclosing the

source

o fthe money to the recipient

candidate

17 or conmiittee at the time the contributionis

made,

and it applies to individuals aswellas

18 incorporated or unincorporated entities. 11 C.F.R.110.4(b)(2);2U.S.C. 431(11) (term

19

person

includes

partnerships

and corporations). Thisprohibition also applies to any

person

20 knowinglyhelping or assisting any

personin

making a contribution

in

the

nameo fanother,

21

including

those

who initiate or

instigate

or

have some

significant participation

in a

plan or

22

scheme

tomakea contributioninthenameo f

another[.]

11 C.F.R. 110.4(b)(l)(iii);

23 Explanation and Justificationfor 11 C.F.R. 110.4(b)(l)(iii)at54Fed. Reg.34,105(1989).


248/265

MUR

6 54

3

General

Counsel'sReport#10

1 The

evidence

thatScarbrough

andSimcoast

Ford

made

contributions

in

the

names

of

2

othersincludes

theswom

affidavit

ofKennethLybarger,who was the

controller

atSuncoast

3 Ford

at

thetimeof thecontributionsand one of theallegedconduits.Lybarger

statedin

his

4 affidavitthat,atScarbrough'sdirection,he

wrote

a personal

contribution

checkto

VBFC

and

5 issuedreimbursement

checksfrom

Simcoast

Ford's

accoimttoScarbrough,HaroldH .( Sormy )

6

Glover,

III,

M .Osman

( Ozzie )Ally,

and

himself.Lybarger

Aff. at

14-5.

VBFC

disclosed that

7

Scarbrough, Glover,

Ally, andLybargereach

contributed

$4,600

inMarchof2007.According

8 toLybarger,the

entries

in

SimcoastFord's

ledger

for

the

reimbursementswere

subsequently

9

questioned

by

Ed

Schmid,

anassistant

corporatecontroller

of the

Buchanan

Automotive

Group

10

( BAG ).

Lybarger

Aff. atH

6. Lybargerexplainedto

Schmid

thathe wasdirectedto

reimburse

11 thecontributions.Id.

On

June

18,2007,VBFC

refundedall $18,400of thereimbursed

Suncoast

12 Ford

employeecontributions.

See

GCR

#5 at

25-26;

Deposition

Tr.

of

VBFC

treasurer Joseph

13 Gmtersat 55, 68, 92;

Emailfi:omRonTumer

toCelena Thibodeaux

re:

2007

Retumed

14

Contributions

datedAugust11,2008

(produced

by

Vemon

Buchananat

VGB006). When

15 Lybarger

received

the

refundfromVBFC,

he

wrotea personal

checkrepaying

Suncoast

Ford for

16 thereimbursement.

Lybarger Aff. atK

7.

17

EdSchmidstatedin aninterview

that

in

the

course

of hiswork

for BAG,

he

reviewed

the

18

books

ofSunCoastFord and

noticed several

unusual

disbursements

to

employees,

and

either

19

LybargerorScarbrough

toldhimthatthe

disbursementswerereimbursementsfor

contributions

20 to

VBFC.

Schmid

notified

one of his

superiors

at BAG

of

what

he had

found,

and

Schmid

stated

RonTumerwasBuchanan's

campaign

managerforthe

2006

election

campaign

andafterBuchananwasswom

into

Congressin

January

2007,TumerwasBuchanan's

district

director. BuchananDepositionTr.at120-121.

Celena Thibodeaux

wasBuchanan'sexecutive assistant

and

his

campaign's fmancedirector.

Id.

at47-48.


249/265

MUR6 54 4

GeneralCounsel'sReport #10

1

that

he was

aware that

the

SunCoastFord

employees'

contributions

toVBFC

wereeventually

2

refunded.

3 Scarbrough

testified

in adeposition thatBuchananaskedhim a few

times

tocontribute

4 to VBFC,Scarbrough

Deposition

Tr. at 13, but

that

he did notremember

whether

Buchananalso

5 askedhim tosolicit Suncoast

Ford

employeestocontribute to VBFC. Id. at 15. Scarbroughalso

6 testifiedthathe did notrememberif heaskedhisemployeestocontributeto VBFC , but he may

7 have doneso. Id. at 16, 19. Scarbroughadmittedthathe had

somechecks

cutbackto

some

8

people

fortheir contributionsto

Vem's campaign,

andshortlyafter that,wefoundoutthatwe

9

couldn't

do

that.

Id. at 31.

Scarbrough

alsotestified

that

he

probably

asked

someone

to

write

10 the

checks,

and the

purpose

ofissuingthe

SuncoastFord

checksto the

contributors

was [t]o

11

refund

the

money that

theyhad

contributed

to the

campaign.

Id.

Scarbrough

testified

that

he

12

intended

to

repay

Simcoast

Ford

for its

reimbursement

of his

contribution

toVBFCbut had not

13

done

so

before

his

contribution

was

refunded.

Id. at 36. Afterthe

contributions

and

14 reimbursementswere

made,

a

person

fi:omBuchanan's

businessorganization named

Ed, who

15

periodically

reviewed SuncoastFord's

accounting,informed Scarbroughthat

he

could

not

16 reimburse

contributions

and

that

the

contributions

had to be

refunded.

Id. at28,32.

17 Scarbroughtestifiedthathe did notremember:(a)whoseideait was toreimburse

18 Suncoast

Ford

employeecontributionsto VBFC ; (b)whetherhe did it of his ownaccord;or

19 (c)whether

someone

askedhim tohavehisemployees'

contributioris

reimbursed. Id. at33,39.

20 In

nearly identical

responses

to our

February

14,2011,

notification

letters,

Scarbrough

21 and

SuncoastFordeachstatedthatthey discovered amistake

was

made when

the

contributions

22 ...

werereimbursed

and

that [u]ponleaming

of themistake,VBFCwas

notified

and

[VBFC]

23

took

immediate

corrective action

by

refunding

the

contributions

to

each

individual

withinthree


250/265

MUR

6 54

5

General

Counsel's

Report #10

1 monthsof thereimbursementof thecontributionsandbeforethe FE Cs

involvement.

2 ScarbroughResponseat 1;

Suncoast

FordResponseat 1. TheResponses,therefore,do not

3 appearto

contest

the

allegation

setforthin thenotification

letters,

which

allegation

wasrestated

4 inbothof theresponses,thatScarbroughdirectedLybargerto

reimburse

thecontributions using

5 SuncoastFordfunds.See ScarbroughResponseat 1;SuncoastFordResponseat 1.

6 Consequently,basedon theswom accountsofLybargerandScarbrough,and the

7

Responses,

werecommendthattheConmiissionfindreasontobelievethat

10-2002

LLC f^a

8 SuncoastFord

made

contributions totaling$18,400in the

names

of

GaryJ.Scarbrough,

Kenneth

9

Lybarger,

Harold

H .

Glover,

III, and

M .

Osman

Ally

in

violation

of 2

U.S.C.

441f.

Because

10

Scarbrough,

who was theoperatingpartnerat

Simcoast

Ford,knowingly permittedhis

name

to

11 beusedto

effect

a

contribution

in thenameofanother,andassistedSuncoastFordinmaking

12 $18,400incontributionsin the

names

of

others

bydirectinghissubordinate,

Lybarger,

to

issue

13 checks

firom

aSuncoast

account

toreimbursethecontributions,werecommendthatthe

14 CommissionfindreasontobelievethatGaryJ.Scarbroughviolated2

U.S.C.

441f.

15 TheCommissionhasfound

reason

to

believe

as to

conduits

that

actively

participatedin

6

the reimbursement scheme and recmited others

to

participate. See MUR 5871 Noe);

see

also

17 MUR5666(MZM) (RTB as toreimbursed

managers

who

also

coercedorencouraged

employees

18 toparticipatein thescheme).Consistent withpriorCommissiondecisions,we aremakingno

19

recommendations

with

respect

to

Lybarger

and the

other

conduits,who

appear

to be

20

subordinates.

See MUR 5871

(Noe);

MUR5666

(MZM).

21 The Actaddressesviolationsof lawthatareknowingandwillful. See 2

U.S.C.

22 437g(a)(5)(B)and

437g(d).

Theknowingand

willful

standardrequiresknowledge thatone is

23

violating the law. Federal Election Commission v. John A. Dramesifor Congress Committee,


251/265

M U R6054 6

General Counsel's Report#10

1 640F .Supp. 985, 987(D. N .J.1986). Aknowing andwillful

violation

may be established by

2

proof

thatthedefendantacted deliberately andwithknowledgethatthe

representation

was

3 false. UnitedStatesv.

Hopkins,

916F.2d207,214 (5* Cir.1990). Evidencedoesnot

have

to

4 showthatthedefendanthad a specific knowledgeoftheregulations; an inferenceo f aknowing

5 andwillfulact may be drawnfromthedefendant's

scheme

to disguise thesourceoffundsused

6 inillegalactivities. at213-15.

7 Inviewof

the

circumstances

that

weknow thefu l lscopeoftheviolation;

that

8 Scarbrough saidthatthe

reimbursements

werea mistake, and wehave

little

otherevidencethat

9

Respondents' violations

were

knowing and

w illful;

and

that

the

Commission

made

probable

10

cause

to believefindingsas toSamKazranand11-2001 L L Cd/b/aHyundaiofNorth

11

Jacksonville, who

are

similarly-situated

respondents,

ona non-knowing and

willful

bisis,

12 investigating Scarbrough'sstateo f

mind

inthismatterwouldnot be an efficient useof

13

Commission

resources.

Accordingly,we reconunend anattemptto resolve thismatterasto

14 Suncoast

Ford

and

M r.

Scarbrough expeditiously throughconciliation

on

a non-knowing and

15 willfulbasispriortoafindingo fprobable

cause

to believe.

16 B.

EXCESSIVECONTRIBUTION

17

18

In

the

2008

electioncycle,theindividualcontributionlimit

fo rgiving

to

candidate

19 committeeswas $2,300 per

election.

See2 U.S.C. 441a(a)(l)(A). The contributions ofa

20 partnershipareattributedto both thepartnersand thepartnership

itself,

thatis ,thepartnership

21 itselfis

subject

tothecontributionlimitin

effect

attheimefor

individuals.

See11C.F.R.

22

110.1 (e). Accordingly,apartnership

that

reimbursed contributions totalingmore than$2,300

23

per electioninthe

2008

cycle wouldalso

have made

an excessive contributioninviolationof

24 2

U.S.C.

441a(a).Because Suncoast

Fordis

taxed as

a

partnershipand, acting through


252/265

M UR6054 7


1

Scarbrough,reimbursed

$18,400

incontributions by Scarbrough and its

employees

toV B F C

2

during the2008electioncycle,we reconmiendthatthe

Commission

findreason

to

believethat

3 10-2002

L L C

fi^aSuncoastFord

violated2U.S.C.

441a(a)

by contributing

more

than

$2,300

4 per election

in

2007to

V B F C .

5 C. SARASOTAFORD

AND

BUCHANAN

AUTOMOTIVEHOLDINGS

6 The

M U R

6054Complaint allegedthatcampaign contributions

were

reimbursedat

7 Sarasota

500, L L C

d/b/aSarasotaFord,anothercardealership

in

whichBuchananholds,or

8

previously held,a

majority

ownership

interest.

The Complaint

also

alleged

that

Buchanan

9

AutomotiveHoldings,Inc.

( BA H ) ,

whichissolely-owned byVemonBuchanan and is

the

10

managing

member

of

Floridalimitedliab ilitycompaniesthatoperatecardealerships,

including

11 SarasotaFord,participated

in

thereimbursement

o f

contributions.

On

thebasis

ofthe

M U R

12

6054

First General Counsel's Report,

the

Commission

took

noaction as toSarasotaFordor

13

B A H .

SeeFGCRat 16-17;Commission Certification

dated June

23,2009. The investigation

as

14 to

other

respondentsin MU R

6054

has notproduced

evidence

to conclude

that

thereisreasonto

15 believethateither

of

theseentitiesviolated the

Act. Although

therewastestimonyindicating

16

thatemployees

of

SarasotaFord

were

offeredcash

reimbursements

for

their

contributions,there

17 is no

evidencethat

SarasotaFordreimbursedany disclosed contributions toVBF C. As for BA H,

18 thereis no

evidence

that

B A H

was thesource

of

any

reimbursements

of

contributions to

V B F C .

19 Accordingly,

we

reconunendthatthe

Commission

find

no

reasonto believethatSarasota500,

20

L L C

d/b/a

Sarasota

Ford

or Buchanan Automotive

Holdings,

Inc. violated

2

U.S.C.

441f

and

21

close thefileas to

theserespondents.

22

23


253/265

M U R

6054 8

General Counsel's

Report

#10

1

2

3

4

5

6

7

8

9

11

12

13

14

15

16 V. RECOMMENDATIONS

17 1.

Find

reasonto believethat

10-2002

L LC f/k/a

Suncoast

Ford violated 2U.S.C.

18 441f;

(b)(3)(A), (b)(5), (b)(7)(E)

(b)(3)(A), (b)(5), (b)(7)(E)


254/265

MUR 6 54

GeneralCounsel'sReport

#10

1

2

2.

3

4

5 3.

6

7

4.

8

9 5.

10

11

12

6.

13

14

15 7.

16

17 8.

18

19

20

21

22

23

24 Date:

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

441a(a);

2

U.S.C.

441f

andclose

the

fileas

to

thisrespondent;

Findno

reason

to

believe

thatBuchanan

AutomotiveH(

2

U.S.C.

44 If

andclose

the

file

as to

thisrespondent;

Christopher

Hughey

Acting GeneralCounsel

BY:

Stephen

A .

DeputyAssociate(jfen ral Counsel

for

Enforcement

MarkAllen

Assistant

GeneralCounsel

MichaelA .Columbo

Attomey

Jack

Gould

Attomey

(b)(3)(A), (b)(5)


255/265

MUR

6 54

10


1

2

Attachments:

3

4

5

6

7

8

9

(b)(3)(A), (b)(5)

(b)(3)(A), (b)(5)

(b)(5)


256/265

1

B E F O R E T H E F E D E R A L E L E C T I O N C O M M I S S I O N '-^J/U N

4 Inthematterof ) ri r- .

5 )

CELA

6 10-2002LL C f/k/aSuncoastFord )

7 GaryJ.Scarbrough ) M U R6054

8 Sarasota 500, L L Cd /a SarasotaFord )

9 BuchananAutomotive Holdings )

10

11 GENERAL COUNSEL SREPORT10

12

13 L A C TIO N S R E C O M M E N D E D : (1)Findreasontobelievethat10-2002L L C

fiTc/a

14 SimcoastFordviolated2 U.S .C. 441fand 441a(a); (2)

find

reasontobelievethat

Gary

J.

15 Scarbrough

violated

2 U.S.C. 44If; (3)

find

no reasontobelieve

that

Sarasota500,

L L C

d/b/a

16 SarasotaFordor BuchananAutomotive Holdings violated2 U .S.C. 441fand close thefileas to

17 theserespondents;(4) approve theattached

Factual

andLegalAnalyses;(5) approve theattached

18 proposedconciliationagreements;and (6) approve the appropriate

letters.

19 IL BACKGROUND

20

Thismatter

concems campaign contributions received

by Vem

Buchanan

for

Congress

21 ( V B F C or Committee )

during

the 2006 and 2008

election

cyclesthatwere reimbursedwith

22 thefundsofcar dealerships in

which

Representative

Vernon

Buchanan ( Buchanan ) holds, or

23 previously held,amajority ownership

interest.

This

Report concems the reimbursement of

24 $ 18,400incontributions toV B F Cby 10-2002L L C flkiaSuncoastFord( Suncoast

Ford )

and

25 the operatingpartnerat Suncoast

Ford, GaryJ.

Scarbrough,

inviolationof 2 U.S.C .

441f.

26 In

General

Counsel's Report #5 ( GCR#5 ) inthis

matter,

we

informed

the

Commission

27 that

there

was evidencethat, in2007, SuncoastFordand Scarbrough reimbursed $18,400in

28 contributions toV B F C

made

by Scarbroughandthree

other

SuncoastFordemployees. Basedon

' 10-2002

LLC

recentlyfileda documentwiththeFloridaSecretaryo fState

that

canceleditsuseof Suncoast

Ford as the

name

o fits business.


257/265

M U R6054 2

General Counsel's Report

#10

1

this

evidence,whichis described ingreaterdetail below, we recommend

that

theCommission

2 find

reason

to believethat10-2002L L Cf/k/aSuncoastFordviolated2 U.S.C . 441fand

3

441a(a),

and

that

GaryJ.Scarbrough violated2 U.S.C. 44If. Wealso recommend

thatthe

4 Commissionenterinto

pre-probablecause

conciliation with

theserespondents.Additionally,

we

5 recommend

that

theCommission

find

no

reason

tobelieve

that

Sarasota500, L L Cd/b/aSarasota

6

Fordor Buchanan Automotive Holdings violated2 U.S .C. 441fand close thefileas to

these

7 respondentsidentifiedintheM U R6054complaint.

8 III. ANALYSIS

9 A.

C O N T R I B U T I O N S I N T H E

N A M E

O F A N O T H E R

10

11

There

is evidence

that

Scarbrough directed the

Suncoast

Fordcontroller to

reimburse

12 contributions toV B F C ,includingScarbrough's, using

dealership funds.

The FederalElection

13

CampaignA ct

of

1971,

as amended

( Act ),provides

that

no

person

shallmakea contributionin

14

the nameofanotherperson

orknowinglypermit

his

or her

name

to be

used

to

effect

such a

15 contribution. 2U.S.C. 44 If. Section 44Ifprohibits providing money toothersto effect

16 contributions intheirnameswithout disclosing the

source

o fthe money to the recipient

candidate

17 or conmiittee at the time the contributionis

made,

and it applies to individuals aswellas

18 incorporated or unincorporated entities. 11 C.F.R.110.4(b)(2);2U.S.C. 431(11) (term

19

person

includes

partnerships

and corporations). Thisprohibition also applies to any

person

20 knowinglyhelping or assisting any

personin

making a contribution

in

the

nameo fanother,

21

including

those

who initiate or

instigate

or

have some

significant participation

in a

plan or

22

scheme

tomakea contributioninthenameo f

another[.]

11 C.F.R. 110.4(b)(l)(iii);

23 Explanation and Justificationfor 11 C.F.R. 110.4(b)(l)(iii)at54Fed. Reg.34,105(1989).


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MUR

6 54

3

General

Counsel'sReport#10

1 The

evidence

thatScarbrough

andSimcoast

Ford

made

contributions

in

the

names

of

2

othersincludes

theswom

affidavit

ofKennethLybarger,who was the

controller

atSuncoast

3 Ford

at

thetimeof thecontributionsand one of theallegedconduits.Lybarger

statedin

his

4 affidavitthat,atScarbrough'sdirection,he

wrote

a personal

contribution

checkto

VBFC

and

5 issuedreimbursement

checksfrom

Simcoast

Ford's

accoimttoScarbrough,HaroldH .( Sormy )

6

Glover,

III,

M .Osman

( Ozzie )Ally,

and

himself.Lybarger

Aff. at

14-5.

VBFC

disclosed that

7

Scarbrough, Glover,

Ally, andLybargereach

contributed

$4,600

inMarchof2007.According

8 toLybarger,the

entries

in

SimcoastFord's

ledger

for

the

reimbursementswere

subsequently

9

questioned

by

Ed

Schmid,

anassistant

corporatecontroller

of the

Buchanan

Automotive

Group

10

( BAG ).

Lybarger

Aff. atH

6. Lybargerexplainedto

Schmid

thathe wasdirectedto

reimburse

11 thecontributions.Id.

On

June

18,2007,VBFC

refundedall $18,400of thereimbursed

Suncoast

12 Ford

employeecontributions.

See

GCR

#5 at

25-26;

Deposition

Tr.

of

VBFC

treasurer Joseph

13 Gmtersat 55, 68, 92;

Emailfi:omRonTumer

toCelena Thibodeaux

re:

2007

Retumed

14

Contributions

datedAugust11,2008

(produced

by

Vemon

Buchananat

VGB006). When

15 Lybarger

received

the

refundfromVBFC,

he

wrotea personal

checkrepaying

Suncoast

Ford for

16 thereimbursement.

Lybarger Aff. atK

7.

17

EdSchmidstatedin aninterview

that

in

the

course

of hiswork

for BAG,

he

reviewed

the

18

books

ofSunCoastFord and

noticed several

unusual

disbursements

to

employees,

and

either

19

LybargerorScarbrough

toldhimthatthe

disbursementswerereimbursementsfor

contributions

20 to

VBFC.

Schmid

notified

one of his

superiors

at BAG

of

what

he had

found,

and

Schmid

stated

RonTumerwasBuchanan's

campaign

managerforthe

2006

election

campaign

andafterBuchananwasswom

into

Congressin

January

2007,TumerwasBuchanan's

district

director. BuchananDepositionTr.at120-121.

Celena Thibodeaux

wasBuchanan'sexecutive assistant

and

his

campaign's fmancedirector.

Id.

at47-48.


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MUR6 54 4


1

that

he was

aware that

the

SunCoastFord

employees'

contributions

toVBFC

wereeventually

2

refunded.

3 Scarbrough

testified

in adeposition thatBuchananaskedhim a few

times

tocontribute

4 to VBFC,Scarbrough

Deposition

Tr. at 13, but

that

he did notremember

whether

Buchananalso

5 askedhim tosolicit Suncoast

Ford

employeestocontribute to VBFC. Id. at 15. Scarbroughalso

6 testifiedthathe did notrememberif heaskedhisemployeestocontributeto VBFC , but he may

7 have doneso. Id. at 16, 19. Scarbroughadmittedthathe had

somechecks

cutbackto

some

8

people

fortheir contributionsto

Vem's campaign,

andshortlyafter that,wefoundoutthatwe

9

couldn't

do

that.

Id. at 31.

Scarbrough

alsotestified

that

he

probably

asked

someone

to

write

10 the

checks,

and the

purpose

ofissuingthe

SuncoastFord

checksto the

contributors

was [t]o

11

refund

the

money that

theyhad

contributed

to the

campaign.

Id.

Scarbrough

testified

that

he

12

intended

to

repay

Simcoast

Ford

for its

reimbursement

of his

contribution

toVBFCbut had not

13

done

so

before

his

contribution

was

refunded.

Id. at 36. Afterthe

contributions

and

14 reimbursementswere

made,

a

person

fi:omBuchanan's

businessorganization named

Ed, who

15

periodically

reviewed SuncoastFord's

accounting,informed Scarbroughthat

he

could

not

16 reimburse

contributions

and

that

the

contributions

had to be

refunded.

Id. at28,32.

17 Scarbroughtestifiedthathe did notremember:(a)whoseideait was toreimburse

18 Suncoast

Ford

employeecontributionsto VBFC ; (b)whetherhe did it of his ownaccord;or

19 (c)whether

someone

askedhim tohavehisemployees'

contributioris

reimbursed. Id. at33,39.

20 In

nearly identical

responses

to our

February

14,2011,

notification

letters,

Scarbrough

21 and

SuncoastFordeachstatedthatthey discovered amistake

was

made when

the

contributions

22 ...

werereimbursed

and

that [u]ponleaming

of themistake,VBFCwas

notified

and

[VBFC]

23

took

immediate

corrective action

by

refunding

the

contributions

to

each

individual

withinthree


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MUR

6 54

5

General

Counsel's

Report #10

1 monthsof thereimbursementof thecontributionsandbeforethe FE Cs

involvement.

2 ScarbroughResponseat 1;

Suncoast

FordResponseat 1. TheResponses,therefore,do not

3 appearto

contest

the

allegation

setforthin thenotification

letters,

which

allegation

wasrestated

4 inbothof theresponses,thatScarbroughdirectedLybargerto

reimburse

thecontributions using

5 SuncoastFordfunds.See ScarbroughResponseat 1;SuncoastFordResponseat 1.

6 Consequently,basedon theswom accountsofLybargerandScarbrough,and the

7

Responses,

werecommendthattheConmiissionfindreasontobelievethat

10-2002

LLC f^a

8 SuncoastFord

made

contributions totaling$18,400in the

names

of

GaryJ.Scarbrough,

Kenneth

9

Lybarger,

Harold

H .

Glover,

III, and

M .

Osman

Ally

in

violation

of 2

U.S.C.

441f.

Because

10

Scarbrough,

who was theoperatingpartnerat

Simcoast

Ford,knowingly permittedhis

name

to

11 beusedto

effect

a

contribution

in thenameofanother,andassistedSuncoastFordinmaking

12 $18,400incontributionsin the

names

of

others

bydirectinghissubordinate,

Lybarger,

to

issue

13 checks

firom

aSuncoast

account

toreimbursethecontributions,werecommendthatthe

14 CommissionfindreasontobelievethatGaryJ.Scarbroughviolated2

U.S.C.

441f.

15 TheCommissionhasfound

reason

to

believe

as to

conduits

that

actively

participatedin

6

the reimbursement scheme and recmited others

to

participate. See MUR 5871 Noe);

see

also

17 MUR5666(MZM) (RTB as toreimbursed

managers

who

also

coercedorencouraged

employees

18 toparticipatein thescheme).Consistent withpriorCommissiondecisions,we aremakingno

19

recommendations

with

respect

to

Lybarger

and the

other

conduits,who

appear

to be

20

subordinates.

See MUR 5871

(Noe);

MUR5666

(MZM).

21 The Actaddressesviolationsof lawthatareknowingandwillful. See 2

U.S.C.

22 437g(a)(5)(B)and

437g(d).

Theknowingand

willful

standardrequiresknowledge thatone is

23

violating the law. Federal Election Commission v. John A. Dramesifor Congress Committee,


261/265

M U R6054 6


1 640F .Supp. 985, 987(D. N .J.1986). Aknowing andwillful

violation

may be established by

2

proof

thatthedefendantacted deliberately andwithknowledgethatthe

representation

was

3 false. UnitedStatesv.

Hopkins,

916F.2d207,214 (5* Cir.1990). Evidencedoesnot

have

to

4 showthatthedefendanthad a specific knowledgeoftheregulations; an inferenceo f aknowing

5 andwillfulact may be drawnfromthedefendant's

scheme

to disguise thesourceoffundsused

6 inillegalactivities. at213-15.

7 Inviewof

the

circumstances

that

weknow thefu l lscopeoftheviolation;

that

8 Scarbrough saidthatthe

reimbursements

werea mistake, and wehave

little

otherevidencethat

9

Respondents' violations

were

knowing and

w illful;

and

that

the

Commission

made

probable

10

cause

to believefindingsas toSamKazranand11-2001 L L Cd/b/aHyundaiofNorth

11

Jacksonville, who

are

similarly-situated

respondents,

ona non-knowing and

willful

bisis,

12 investigating Scarbrough'sstateo f

mind

inthismatterwouldnot be an efficient useof

13

Commission

resources.

Accordingly,we reconunend anattemptto resolve thismatterasto

14 Suncoast

Ford

and

M r.

Scarbrough expeditiously throughconciliation

on

a non-knowing and

15 willfulbasispriortoafindingo fprobable

cause

to believe.

16 B.

EXCESSIVECONTRIBUTION

17

18

In

the

2008

electioncycle,theindividualcontributionlimit

fo rgiving

to

candidate

19 committeeswas $2,300 per

election.

See2 U.S.C. 441a(a)(l)(A). The contributions ofa

20 partnershipareattributedto both thepartnersand thepartnership

itself,

thatis ,thepartnership

21 itselfis

subject

tothecontributionlimitin

effect

attheimefor

individuals.

See11C.F.R.

22

110.1 (e). Accordingly,apartnership

that

reimbursed contributions totalingmore than$2,300

23

per electioninthe

2008

cycle wouldalso

have made

an excessive contributioninviolationof

24 2

U.S.C.

441a(a).Because Suncoast

Fordis

taxed as

a

partnershipand, acting through


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M UR6054 7


1

Scarbrough,reimbursed

$18,400

incontributions by Scarbrough and its

employees

toV B F C

2

during the2008electioncycle,we reconmiendthatthe

Commission

findreason

to

believethat

3 10-2002

L L C

fi^aSuncoastFord

violated2U.S.C.

441a(a)

by contributing

more

than

$2,300

4 per election

in

2007to

V B F C .

5 C. SARASOTAFORD

AND

BUCHANAN

AUTOMOTIVEHOLDINGS

6 The

M U R

6054Complaint allegedthatcampaign contributions

were

reimbursedat

7 Sarasota

500, L L C

d/b/aSarasotaFord,anothercardealership

in

whichBuchananholds,or

8

previously held,a

majority

ownership

interest.

The Complaint

also

alleged

that

Buchanan

9

AutomotiveHoldings,Inc.

( BA H ) ,

whichissolely-owned byVemonBuchanan and is

the

10

managing

member

of

Floridalimitedliab ilitycompaniesthatoperatecardealerships,

including

11 SarasotaFord,participated

in

thereimbursement

o f

contributions.

On

thebasis

ofthe

M U R

12

6054

First General Counsel's Report,

the

Commission

took

noaction as toSarasotaFordor

13

B A H .

SeeFGCRat 16-17;Commission Certification

dated June

23,2009. The investigation

as

14 to

other

respondentsin MU R

6054

has notproduced

evidence

to conclude

that

thereisreasonto

15 believethateither

of

theseentitiesviolated the

Act. Although

therewastestimonyindicating

16

thatemployees

of

SarasotaFord

were

offeredcash

reimbursements

for

their

contributions,there

17 is no

evidencethat

SarasotaFordreimbursedany disclosed contributions toVBF C. As for BA H,

18 thereis no

evidence

that

B A H

was thesource

of

any

reimbursements

of

contributions to

V B F C .

19 Accordingly,

we

reconunendthatthe

Commission

find

no

reasonto believethatSarasota500,

20

L L C

d/b/a

Sarasota

Ford

or Buchanan Automotive

Holdings,

Inc. violated

2

U.S.C.

441f

and

21

close thefileas to

theserespondents.

22

23


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M U R

6054 8

General Counsel's

Report

#10

1

2

3

4

5

6

7

8

9

11

12

13

14

15

16 V. RECOMMENDATIONS

17 1.

Find

reasonto believethat

10-2002

L LC f/k/a

Suncoast

Ford violated 2U.S.C.

18 441f;

(b)(3)(A), (b)(5), (b)(7)(E)

(b)(3)(A), (b)(5), (b)(7)(E)


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MUR 6 54

GeneralCounsel'sReport

#10

1

2

2.

3

4

5 3.

6

7

4.

8

9 5.

10

11

12

6.

13

14

15 7.

16

17 8.

18

19

20

21

22

23

24 Date:

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

441a(a);

2

U.S.C.

441f

andclose

the

fileas

to

thisrespondent;

Findno

reason

to

believe

thatBuchanan

AutomotiveH(

2

U.S.C.

44 If

andclose

the

file

as to

thisrespondent;

Christopher

Hughey

Acting GeneralCounsel

BY:

Stephen

A .

DeputyAssociate(jfen ral Counsel

for

Enforcement

MarkAllen

Assistant

GeneralCounsel

MichaelA .Columbo

Attomey

Jack

Gould

Attomey

(b)(3)(A), (b)(5)


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MUR

6 54

10


1

2

Attachments:

3

4

(b)(3)(A) (b)(5)

(b)(3)(A), (b)(5)

Responsive Documents: CREW: FEC: Regarding Vern Buchanan: 1-13-15 Part 2

Documents

Transcript of Responsive Documents: CREW: FEC: Regarding Vern Buchanan: 1-13-15 Part 2