BEFORE THE HEARING OFFICER PANEL - oregonlive



BEFORE THE OFFICE OF ADMINISTRATIVE HEARINGSSTATE OF OREGONfor theSECRETARY OF STATEELECTIONS DIVISIONIN THE MATTER OF:ROBERT WOLFE, Chief Petitioner for IP 24 (2012)) PROPOSED ORDER)) OAH Case No.: 1202801) Agency Case No.: 2012-075)HISTORY OF THE CASEOn April 23, 2012, the Elections Division (Division) issued a Notice of Proposed Civil Penalty; Opportunity to Request Hearing (Notice) to Robert Wolfe (Wolfe), Chief Petitioner for Initiative Petition 24 alleging that Wolfe, as the Chief Petitioner for IP 24, violated Article IV, section 1b of the Oregon Constitution and OAR 165-0014-0260 by, in effect, paying initiative petition circulators per signature rather than by the hour. On May 14, 2012, Wolfe filed a hearing request. On May 25, 2012, the Division referred the hearing request to the Office of Administrative Hearings (OAH). Senior Administrative Law Judge (ALJ) Alison Greene Webster was assigned to preside at hearing. A hearing was scheduled for July 12 and 13, 2012.On June 28, 2012, Wolfe filed a Motion to Postpone or Continue the Hearing. On June 28, 2012, Wolfe also filed a Motion to Dismiss Notice of Proposed Civil Penalty and Contested Case Hearing (Motion to Dismiss I). On June 29, 2012, Wolf filed a Motion to Dismiss or Abate Contested Case Hearing and to Seal the Record (Motion to Dismiss II). In a July 3, 2012 prehearing telephone conference, ALJ Webster denied Wolfe’s motion to postpone the hearing, and deferred ruling on Wolfe’s motions to dismiss until the July 12, 2012 scheduled hearing.On July 10, 2012, Wolfe filed a Petition for Alternative Writ of Mandamus and a Motion to Stay in the Marion County Circuit Court, seeking to stay the administrative hearing or, alternatively, to dismiss the administrative civil penalty action against him. On July 11, 2012, Marion County Circuit Judge Albin Norblad ordered a stay of the administrative hearing pending the ALJ’s ruling on Wolfe’s motions to dismiss. On July 11, 2012, the hearing was convened for purposes of oral argument on Wolfe’s motions to dismiss. By Ruling dated July 16, 2012, ALJ Webster denied both motions to dismiss. That Ruling is incorporated herein by this reference. Subsequent to the ALJ’s Ruling, Judge Norblad lifted the stay.On September 28, 2012 Wolfe’s counsel of record, Ken Learner, withdrew as counsel. On October 1, 2012, Wolfe’s counsel D. Christopher Burdett withdrew as counsel. Wolfe subsequently retained new counsel, Dan Meek. On October 22, 2012, ALJ Webster presided over a telephone status conference. Mr. Meek appeared for Wolfe. Assistant Attorney General (AAG) Michael Grant appeared for the Division. During the conference, the hearing was set for January 7, 8, 9 and 11, 2013. The parties also agreed to a schedule for filing prehearing motions, including any motions in limine. In accordance with that schedule, on November 30, 2012, Wolfe filed two motions in limine. The Division timely filed responses to the motions. On December 14, 2012, ALJ Webster issued a Ruling on Motions in Limine denying Wolfe’s request to exclude hearsay testimony and to exclude evidence about other offenses allegedly committed by Wolfe. That December 14, 2012 Ruling is also incorporated herein by this reference. On January 2, 2013, Wolfe, through counsel, served a Civil Subpoena Duces Tecum on Kate Brown, Secretary of State, and on Stephen Trout, Director of the Elections Division. On January 3, 2013, the Division filed motions to quash the subpoenas served on Secretary Brown and Director Trout. In a prehearing telephone conference held January 4, 2013, ALJ Webster granted the Division’s motions to quash. In an oral ruling on the record, ALJ Webster determined, among other things, that in the absence of any final decision, or a final order of the Division on matters asserted in the Notice of Civil Penalty, Wolfe had not established any basis for questioning Secretary Brown or Director Trout about this administrative action.The hearing reconvened in Salem, Oregon on January 7, 2013, and continued on January 8, 9, 11 and 31, March 15, 18 and 21, and April 4 and 5, 2013. Attorney General Michael Grant represented the Division. Attorneys Dan Meek, Linda Williams and Beau Ellis represented Wolfe. The Division called the following witnesses to testify at the hearing: Summer Davis, Division Compliance Specialist; Alana Cox, Division Compliance Specialist; Paul Newman, Division Investigator; Kevin Bennett; Roy Colbert; Aren Mowreader; Jeremy Darling; Karina Hunt; Virginia Grosso, Compliance Specialist with the Bureau of Labor and Industries; Kyle “Billy Kyle” LoCascio; Jerry Christian; Robert Wolfe; Stacey Jackson, Division Compliance Specialist; Allan Zimmerman; and Jonathan Weir. In addition to Wolfe, the following witnesses testified at hearing on Wolfe’s behalf: Seth A. Woolley; David Hunnicutt; Paul Stanford; John Sajo; Edward Agazarm; Ariell Hartwell; Ross Day; and Hiram Asmuth. The hearing record closed on June 17, 2013, upon receipt of the last closing brief.ISSUES1. Whether IP 24 petition circulators Kevin Bennett and Roy Colbert were paid based on the number of signatures they obtained rather than the number of hours worked in violation of Article IV, section 1b of the Oregon Constitution and OAR 165-014-0260.2. If so, whether Robert Wolfe, in his capacity as Chief Petitioner of IP 24, is responsible the violations of Article IV, section 1b. ORS 260.561(1)(b). 3. If one or more violations of Article IV, section 1b are found, what is the proper penalty?4. Whether imposing a civil penalty on Wolfe for violations of Article IV, section 1b violates his rights under the United States Constitution and/or the Oregon Constitution. EVIDENTIARY RULINGSThe following exhibits, offered by the Division, were admitted at hearing without objection: A3, A6, A12, A13, A14, A20, A24, A25, A36, A37, A38, A39, A40, A41 through A88, A91, A92, A94, A95, A97, A99 through A125, A127 through A134, A138, A140 through A144, A146 through A150, A153, A153a, A158, A161 through A167, A190 through A193, A196 through A200, A202 and A203.The following exhibits, offered by the Division, were admitted at hearing over Wolfe’s multiple objections, including objections based on hearsay, the confrontation clause, Oregon Rule of Civil Procedure (ORCP) 1E and the Oregon Evidence Code: A1, A2, A4, A5, A7, A8, A9, A10, A11, A15, A16, A17, A19, A21, A22, A23, A26, A27, A29, A30, A32, A34, A90, A93, A96, A137, A139, A145, A155, A188, A189, A194, A195 and A201. The Division withdrew exhibits A18, A28, A31, A33, A35, A89, A126, A135, A136, A151, A152, A160 and A170.The following exhibits, offered by Wolfe, were admitted at hearing: R101 through R110, R112 through R154; R201, R214 through R229 and R231.The following exhibits offered by Wolfe were excluded as not relevant: R155 through R167, R169 through R178, and R230. Based on this ruling, the following Division exhibits were also excluded as not relevant: A154, A156, A157, A159, A168, A169, A171 through A187. Wolfe withdrew exhibits R111, R179, R180a and R202 through R213.RULINGS ON MOTIONS1. Wolfe’s June 2012 Motions to Dismiss. In June 2012, prior to the originally scheduled hearing date, Wolfe filed two motions to dismiss the Notice of Civil Penalty. As noted above, both motions were denied by a Ruling on Motions to Dismiss dated July 16, 2012. In that Ruling, the ALJ determined that the Division had no obligation to notify Wolfe within 48 hours of complaints alleging election law violations in the IP 24 campaign. The ALJ also found that neither ORS 260.345(3) nor ORS 260.345(4) provided any basis on which to dismiss the Division’s Notice. 2. Wolfe’s November 30, 2013 Motion in Limine. Prior to the hearing, Wolfe filed a Motion in Limine asserting that the proposed civil penalty was so substantial that it amounted to a penal sanction, entitling him to the constitutional and statutory protections afforded in a criminal prosecution. Wolfe further sought to exclude all hearsay evidence and evidence regarding how circulators other than Bennett and Colbert were paid. The motion was denied by the Ruling on Motion in Limine issued December 14, 2012. In denying the motion, the ALJ determined that the Department’s civil penalty action against Wolfe was not the equivalent of a criminal prosecution. The ALJ further declined to exclude all hearsay evidence and all evidence regarding how other IP 24 circulators were paid. 3. Wolfe’s January 7, 2013 Motion to Dismiss. At the outset of the hearing, Wolfe submitted a Motion to Dismiss on due process grounds, asserting bias on behalf of Secretary of State Brown. The ALJ denied the motion, and declined to address the issue of Secretary Brown’s alleged bias against Wolfe. 4. The Division’s Motion to Exclude Witnesses. At the outset of the hearing, the Division moved to exclude witnesses from the hearing, except those authorized to attend pursuant to OAR 137-003-0595. The ALJ granted the motion. In so ruling, the ALJ determined that Wolfe’s proffered expert on the initiative process, Attorney Ross Day, was not an expert for purposes of the factual allegations at issue. The ALJ therefore excluded Mr. Day from the hearing when not testifying.5. The Division’s January 7, 2013 Motion to Quash. On January 7, 2013, Wolfe’s counsel served additional civil subpoenas duces tecum on Secretary of State Brown and Elections Division Director Trout. The ALJ granted the Division’s motion to quash the subpoenas, again finding, among other things, that in the absence of any final decision of the Division on matters asserted in the Notice of Civil Penalty, Wolfe had not established any basis for questioning Secretary Brown or Director Trout about this administrative action. 6. Wolfe’s January 8, 2013 Motion to Compel Discovery Requests. Wolfe, through counsel, moved to compel answers to interrogatories and production of documents from Director Trout. The ALJ denied the motion finding, among other things, that the requested information was not a proper subject of discovery and was not likely to produce information generally relevant and necessary to the contested case.7. Wolfe’s January 8, 2013 Motion to Disqualify the Division’s Counsel. Wolfe, through counsel, moved to disqualify AAG Grant from representing the Division at hearing. Wolfe asserted that it is a denial of his federal due process for AAG Grant to serve dual roles as an advocate for the Division and advisor to Secretary Brown and/or Director Trout in their official capacities. The ALJ denied the motion, finding no due process violation and no authority under the APA to disqualify the Division’s counsel.8. Wolfe’s January 8, 2013 Motion to Exclude Alana Cox. Wolfe, through counsel, also moved to exclude Alana Cox, the Division’s representative at hearing. The ALJ denied the motion, noting that, as the Division’s representative, Ms. Cox was authorized to attend the hearing pursuant to OAR 137-003-0595(2). 9. Wolfe’s January 23, 2013 Motion to Compel Discovery Regarding Spreadsheets Similar to Exhibit A4. Wolfe, through counsel, moved to compel production of all accounting spreadsheets of a nature similar to Exhibit A4 (an OMPI payroll and signature spreadsheet) from all initiative petition campaigns for the 2010 or 2012 ballot other than IP 24. The Division objected to producing the requested discovery on multiple grounds, including timeliness, relevancy and as exempt from public disclosure under ORS 260.262(5). The ALJ denied the motion to compel, finding that Division prepared spreadsheets for other recent initiative petitions were not relevant and had no bearing on the alleged violations at issue in this proceeding. FINDINGS OF FACT1. In 2002, Oregon voters approved Ballot Measure 26, which made it unlawful to pay or receive money or other thing of value based on the number of signatures obtained on an initiative or referendum petition. Oregon Constitution, article IV, section 1b. Ballot Measure 26 withstood a constitutional challenge in 2006, when the Ninth Circuit held that Oregon’s prohibition on “pay per signature” did not significantly burden core political speech and did not violate the First Amendment of the United States Constitution. Prete v. Bradbury, 438 F3d 949 (9th Cir. 2006). 2. Robert Wolfe is the Treasurer of the OMPI Petition Committee and was the Chief Petitioner of Initiative Petition (IP) 24, a 2012 initiative that sought an amendment to the Oregon Constitution relating to marijuana laws in Oregon. As a Chief Petitioner for a statewide measure, Wolfe was required to file with the Division certain information and records, including a statement declaring whether one or more persons will be paid for obtaining signatures on the initiative petition. On July 6, 2011 at the outset of the petition campaign, Wolfe signed and filed Statement of Organization for Petition Committee (SEL 222 form), a Prospective Petition for State Measure (SEL 310) and a Statement One or More Petition Circulators Will be Paid (SEL 301). In the SEL 301, Wolfe declared that petition circulators will be paid money or other valuable consideration for obtaining signatures of active Oregon voters in support of IP 24. In that same document, Wolfe declared that “no circulators will be compensated on this petition based on the number of signatures obtained by the circulator.” (Test. of Wolfe; Ex. A1 at 7-11.)3. On or about November 20, 2011, Wolfe hired Kyle “Billy Kyle” LoCascio (LoCascio) to manage the circulation of petition sheets for IP 24. LoCascio’s employment duties included recruiting, training and supervising paid circulators as employees of OMPI, along with circulating IP 24 petitions in Oregon and obtaining signatures of Oregon registered voters. (Ex. A66; test of Wolfe.) 4. Wolfe hired LoCascio to manage the IP 24 petition campaign because LoCascio had had prior success gathering signatures for an initiative petition that made the ballot in 2010 (Measure 74, which would have allowed medical marijuana dispensaries in Oregon). Wolfe understood that LoCascio was an experienced petition circulation manager and that he had a working knowledge of the Division’s laws and rules for initiative petition circulation in Oregon. Wolfe did not perform a background check on LoCascio before hiring him. Wolfe also did not provide LoCascio with any training regarding managing petition circulators before or during his employment with OMPI. (Test. of Wolfe; Ex. A52 at 7.) 5. Soon after Wolfe hired LoCascio as the petition circulation manager, LoCascio, on behalf of OMPI, hired his friend and roommate Jerry Christian (Christian) to work as a paid circulator for IP 24. For several months, LoCascio also personally paid Christian to assist with IP 24 management duties. In April 2012 (subsequent to the events at issue in this case), Wolfe officially hired Christian as a manager with the IP 24 petition campaign. (Test. of LoCascio; test. of Christian; test. of Wolfe.) 6. In late December 2011, LoCascio placed advertisements on CraigsList seeking paid circulators. The advertisements promised payment of $20 per hour for gathering signatures. Thereafter, LoCascio began hiring people who responded to the CraigsList posting. (Test. of LoCascio; test. of Bennett; test. of Colbert.) 7. For each paid circulator LoCascio hired to gather signatures for IP 24, Wolfe was required to sign and submit to the Division an SEL 309 form (Chief Petitioner Acknowledgement). As the Chief Petitioner, Wolfe was required to acknowledge every paid circulator gathering signatures on his petition’s behalf. By signing the SEL 309 forms, Wolfe also acknowledged that he was “liable for violations of law or rule committed by the above named circulator.” (Test. of Davis; Ex. A7 at 3.) 8. On or about December 31, 2011, after LoCascio had already hired several paid circulators (including circulators Kevin Bennett and Roy Colbert), he had the newer hires sign an Employment Agreement. The Employment Agreement described the nature of work the paid circulator was to perform and the paid circulator’s wages. The contract stated, in part, as follows:3. Detailed Work Description: a) Paid Circulator will work as a regular petitioner and be paid as a regular petitioner.b) Paid Circulator agrees to adhere to all laws and rules of the State of Oregon regarding paid petition circulators, as well as all OMPI instructions and directives regarding petition circulation.c) Paid Circulator is required to obtain a minimum number of signatures per week, to be determined by OMPI. Weekly minimums may change from time to time with advance notice.d) Paid Circulator is responsible for submitting petition sheets to the Petitioning Manager weekly, on Sundays at 4 pm at the Voter Power office located at 6701 SE Foster Rd Suite D Portland OR 97208. This day, time and place may vary with advance notice. Weekly petition sheet submission at the time and place announced is mandatory.e) Paid circulator must maintain a signature validity rate of at least 75% to qualify for continued employment with OMPI. Signature validation checks will be conducted in a manner to be determined solely by OMPI.f) Paid circulator agrees to attend other meeting, training sessions or briefings as may be announced upon occasion.4. Petitioner Wages: OMPI agrees to pay Paid Circulator $20.00 per hour.a. 19-21 signatures must be collected each hour in order to qualify to remain employed for 1 additional hour of work.b. If signature quota is not reached in any given hour of work, employment is terminated and Paid Circulator will work no additional hours.5. Pay Method: Paid circulators are paid by the hour only. No Paid Circulator shall be paid by the signature, which is illegal in the State of Oregon. Paychecks will be available on Friday of each week, for work done the previous week.6. Termination: OMPI may terminate the employment of Paid Circulator at any time with notice. Notice may be delivered verbally, in writing, via text message, email or phone call. Paid circulator will have no recourse except hourly wages due at time of termination.(Ex. A87.) At the time the IP 24 campaign began using this Employment Agreement, Wolfe believed that a similar agreement had been used previously in 2010 (on what became Measure 74) and that the provisions of the agreement had been approved by an attorney familiar with the election laws in Oregon. (Test. of Wolfe.)9. Despite the Employment Agreement’s terms, LoCascio did not automatically terminate a paid circulator who did not collect 19-21 signatures each hour. Wolfe allowed LoCascio the discretion to continue to employ circulators who were not meeting the 19-21 signatures per hour quota if LoCascio determined that the circulator could be redeemed with additional training or exposure. (Test. of Wolfe; Ex. A52 at 5, 11.)10. From the time that Wolfe hired LoCascio in November 2011, and at all times pertinent to this matter, Wolfe delegated to LoCascio primary responsibility for hiring, firing and training IP 24 petition circulators. Wolfe nevertheless remained actively involved in the IP 24 signature gathering campaign. He counted signature sheets turned in by the circulators and signed and submitted required paperwork to the Division. Wolfe also reviewed the payroll summary sheets that LoCascio compiled each week before submitting them to the payroll company to complete OMPI’s payroll. (Test. of Wolfe; Ex. A52 at 5-6.) 11. During the months of January and February 2012, OMPI did not use time sheets and did not require the paid circulators to document the number hours the circulator had worked during the one week pay period. OMPI also did not require the paid circulators to report when they started working on any particular day, when they stopped working, or when or where they had collected signatures. (Test. of Wolfe; Ex. A52 at 10-11; test. of Bennett; test of Colbert.)12. At all times relevant to this matter, LoCascio and Christian held weekly signature sheet turn-in meetings. The turn-in meetings were initially held at Tiny’s coffee shop in Portland and later at the Voter Power office in Portland. OMPI considered the paid circulators’ attendance at the weekly turn-in meetings mandatory, although the circulators were not compensated for the time they spent at these meetings. (Test. of LoCascio; Ex. A67 at 10.) Turn-in meetings generally lasted 45 minutes to an hour. At the meetings, the circulators submitted to LoCascio and/or Christian the signature sheets they had collected over the previous week along with a cover sheet showing the their name, the number of signatures collected per day and the total number of signatures collected for the week. This cover sheet did not have a place for the circulator to document his or her hours for the week. (Test. of Wolfe; test. of LoCascio; test. of Christian; Ex. A67 at 8 to 9; Ex. 71 at 6.)13. Though Wolfe did not run the weekly turn-in meetings, he attended several of them during January, February and March 2012. He spoke with the circulators and gave motivational talks telling them to “keep up the good work.” He encouraged them to continue with their signature gathering to get IP 24 on the ballot. (Test. of Wolfe; Ex. A52 at 7.)14. During January and February 2012, no one from OMPI management asked the paid circulators to report the number of hours the circulator had worked during the pay period. Circulators only reported the number of signatures they had gathered during the week and the number of petition sheets they were submitting. During this period, there was generally a close correlation between the number of signatures gathered by the circulator and the circulator’s pay. (Test. of Bennett; test. of Colbert; test. of Darling; Ex. A19; test. of Hunt; Ex. A23; see also Exs. A4, A10, A16, A17, A21, A27 and A29.) 15. At all times relevant to this matter, Wolfe relied on LoCascio to track the paid circulators’ time for payroll purposes. For each payroll period during this time, LoCascio completed a “Weekly Circulator Payroll Reporting Sheet,” which had columns for the circulators’ name, hours, pay rate, gross pay, and the number of signatures. LoCascio wrote in the circulator’s name, the number of hours and the number of signatures collected for the pay period. Wolfe then reviewed the completed weekly payroll summary sheets and submitted the sheets to OMPI’s payroll company. (Test. of Wolfe.)16. On or about February 18, 2012, Wolfe spoke with circulator Roy Colbert. Colbert told Wolfe that he had not been paid for all of the hours he had worked and he threatened to expose IP 24 for paying by the signature in violation of the law. Colbert also told Wolfe that Ted Blaszak, the owner of Democracy Resources (a Portland-based canvassing and signature gathering company), was investigating IP 24’s operation. Colbert’s complaint and Blaszak’s interest in OMPI’s pay plan caused Wolfe to question the system OMPI was using to compensate paid circulators. (Ex. A36 at 2.)17. On February 22, 2012, Division Compliance Specialist Stacey Jackson sent Wolfe an email stating the following:Bob, I was wondering if there are timesheets turned in by each circulator for their hours and signatures collected by day or by pay period. If there are, we would like those turned in as part of the payroll records. If there are no individual circulator timesheets, how are the hours worked reported to you and who determines the number of signatures collected in the pay period[?] Thanks for the info. Stacey(Ex. A93.)18. In late February 2012, Wolfe consulted with Attorney Margaret Olney about OMPI’s pay plan and record keeping. He also met with Liz McCann of Our Oregon to discuss circulator policies. With their input, Wolfe designed a new system for compensating the IP 24 paid circulators. This new system (hereafter referred to as the “reboot” or “new payroll system”) included a new employment contract for the paid circulators, a “Code of Conduct” addendum to the employment contract, training for circulators on how the system worked, and a weekly timesheet for circulators to complete and sign. In addition, as part of the new payroll system, Wolfe planned to reduce the circulators’ hourly pay to $10 per hour, reduce the quota to 9 to 11 signatures per hour, and require that each circulator work a minimum of eight hours per week. He also established a bonus system for circulators who obtained a certain number of signatures per week. (Test. of Wolfe; Exs. A63, A92, R121, R122, R128.) 19. On March 3, 2012, Wolfe provided LoCascio and Christian with drafts of the new employment agreement and the Code of Conduct addendum. Wolfe asked for their comments on the documents and explained that he was waiting for the attorney’s review before implementing the new payroll system. Wolfe also told LoCascio and Christian to start using the circulator timesheet immediately. (Ex. A64.) 20. Also on or about March 3, 2012, in the course of his duties, Division Investigator Paul Newman contacted several paid circulators who were gathering signatures for various initiative petitions at Portland’s Saturday Market. LoCascio and Christian were among the circulators Newman interviewed that day. When LoCascio and Christian advised Newman that they were lead workers on the IP 24 campaign, Newman asked them about IP 24’s signature collection process. They explained that IP 24 circulators attend a meeting every Sunday at the Voter Power office, where they turn in their signature sheets. Newman asked if he could attend the turn-in meeting the following day. Christian invited him to do so. (Test. of Newman.)21. When Newman arrived at the Voter Power office on March 4, 2012 to observe IP 24’s turn in process, Wolfe contacted him in the parking lot outside the building and asked that he not attend the meeting. Wolfe explained that he was going to be changing the process, including the circulators’ hourly pay rate. Wolfe told Newman he would prefer that Newman see the new system rather than the old system. He added that Newman’s presence at that afternoon’s meeting might disrupt the process. Wolfe requested that Newman wait a week or two before observing a turn-in meeting. Newman agreed to do so. (Test. of Newman.) 22. At the March 4, 2012 turn-in meeting, LoCascio asked circulators to complete time sheets stating the number of hours the circulator had worked during the week. At least once during that meeting LoCascio suggested to a paid circulator that the circulator adjust his hours downward to be closer to meeting the hourly signature quota of 19 to 21 signatures. (Test. of Bennett.) 23. On March 6, 2012, Wolfe spoke with Division Compliance Specialist Alana Cox about IP 24’s pay system. Cox advised Wolfe that while a system of $20 per hour/quota of 18 to 20 signatures per hour was not illegal in and of itself, it raised concern because of the high signature per hour quota. Cox also advised Wolfe that Division staff had received reports that circulators who did not make the quota were not being fired (as set out in the original Employment Agreement), but were instead receiving lower pay. In an email that same date, Wolfe advised Division staff of his plans for the new payroll system, which included changing the circulators’ pay plan and record keeping requirements. (Ex. A92; test. of Cox.)24. On March 10, 2012, Wolfe emailed Newman to advise that he expected to fully implement the new circulator payroll system at the March 18, 2012 turn-in meeting. In the email, Wolfe described the reboot to Newman as including:-hiring a full time person to track circulator hours and signatures-daily check-ins by all circulators with their hours, signatures gathered and locations worked-no hourly quota but a floating average that may be evaluated daily, weekly or monthly-a written warning system to allow deficient circulators a chance to bring their average up-a formal dismissal system for non-performers-requiring circulators to work for us exclusively(Ex. R123.) Wolfe invited Newman to attend the March 18 turn-in meeting. Wolfe added that he would be personally briefing groups of circulators on the new procedure. (Id.)25. On March 18, 2012, Newman returned to the Voter Power office and observed IP 24’s Sunday turn-in meeting. While there, Newman chatted with Wolfe about the campaign. Newman saw the circulators turning in their signature sheets and saw Christian entering information into a laptop computer. (Test. of Newman.) 26. In a March 19, 2012 email to his campaign team, Wolfe described the new payroll system. He explained that the changes and enhancements he planned to implement in the circulator pay system were designed to allow for the closer monitoring of the paid circulators’ work. (Exs. A63 and R125.) Over the next few days, Wolfe, LoCascio and Christian implemented the reboot with the circulators. This included having all paid circulators sign the new employment agreement and the Code of Conduct addendum. (Ex. R126; test. of Wolfe.) Thereafter, Wolfe and LoCascio began terminating circulators who were not meeting the new standard of at least eight hours and 80 signatures per week. (Ex. A44; test. of Wolfe.) 27. As part of the reboot, Wolfe hired a full-time administrative assistant to help track circulator hours and signatures. During April 2012, Wolfe also hired some of IP 24’s most experienced circulators as “Team Captains.” The Team Captains were paid more to serve as field managers for the other circulators. (Ex. R126; test. of Wolfe.)28. Despite the reboot, OMPI still had difficulty tracking circulator hours with the circulators completing their own timesheets. For the March 25, 2012 and April 2, 2012 payroll periods, there were missing timesheets and significant discrepancies between the hours circulators reported on their timesheets and the hours LoCascio reported on the weekly payroll summary. (Exs. A68 and A79.) 29. On March 28, 2012, Division Compliance Specialist Cox received a telephone call from a paid circulator named Dave Singerman who claimed that he had not been paid for all of the hours he had worked gathering signatures for IP 24. Although Division staff had previously received calls raising concerns about IP 24’s pay system, this was the first time a circulator was willing to give his name to the Division. This phone call prompted Cox to begin investigating whether the IP 24 campaign was paying circulators by the signature. (Test. of Cox; Ex. R201at 42-43.) 30. On March 29, 2012, Cox spoke with Kevin Bennett, who also asserted that he was paid by the signature when he worked for IP 24. (Ex. A1 at 62.)31. In a March 30, 2012 email to members of the campaign finance team regarding “OMPI needs cash NOW for payroll,” Wolfe wrote as follows:Guys, after last week’s payroll and paying for the office and paying back C & E the $3K, we are about $300 short for our big payroll this week – quite large because we got a very large number of signatures.We need an emergency infusion of at least $300 ASAP, and then another $15 - $20K to cover payroll for next week (assuming we get 10K signatures; less money if we get fewer signatures).(Ex. A101.)32. On April 23, 2012, the Division issued a Notice of Proposed Civil Penalty; Notice of Opportunity to Request Hearing to Wolfe. The Notice alleged that Wolfe, in his capacity as chief petitioner for IP 24, violated Article IV, section 1b. The Notice proposed a civil penalty of $65,000, based on 26 signature sheets at $2500 per signature sheet. (Ex. A1 at 1-5.) Wolfe timely requested a hearing. (Ex. A3.)33. In a May 26, 2012 email to members of the campaign finance team Wolfe wrote about “Billy’s Payroll Sheet Thing” as follows: Guys:I’ve been given a deadline of next Friday to respond to the SoS with missing information regarding our payroll for the first two weeks we had circulator timesheets in use. The issues vary.Some of the issues have to do with Payroll info missing – these will be cleared up, no one has gone unpaid, and all payments are up to date.The bigger issue is discrepancies between what the circulators wrote on their timesheets, and what Billy wrote on a payroll summary. This is not Billy doing payroll per se, but simply moving hours onto a consolidated sheet and adding any bonuses due per our published bonus structure that week and adding any special pay, such as for field managers. This is where the problem comes in. I’ve finished a time consuming analysis of one of the two critical pay periods, with these results:Note on SoS Analysis of 3-25-12 Payroll issues1. For the payroll period there are 63 adjustments of circulator hours in the translation between circulator timesheets and Billy’s signed payroll sheets.a.45 are increase of .25 hours to 10 hours, and 17 are a decrease in hours of up to 23 hoursi. 20 changes are type a – an increase in time that does NOT appear to push pay towards a $1 per signature standardii. 35 changes are type b – a change in time up or down that appears to push pay towards a $1 per signature standardiii.Four changes are type c – a reasonable explanation exists1. One is an improperly recorded bonus2. Three are math errors by circulatorsiv. Four changes are type d – a large increase or decrease of 6 to 15 hours that have no reasonable explanation and do not appear to push pay towards a $1 per signature standardThe fact is, I cannot explain most of these occurrences in any reasonable way. For the “type b” changes, I think most reasonable people would view the changes as pushing payroll towards a pay-per-signature result. While I have not fully analyzed the second pay period yet, I presume it is similar.This was all tightened up on the third week of the new system, and we have a spread sheet showing that timesheets “match” the payroll summary down the line ever since.Last week, the payroll summary was once different from the circulator timesheets in a dozen significant ways, AGAIN. That has been cleared up, and we will no longer have a “payroll summary sheet” as Liz will be taking all timesheets, the bonus program, and other pay considerations and crafting the payroll spreadsheet directly.(Ex. A68.)34. In a May 29, 2012 email to members of the campaign finance team Wolfe again addressed the discrepancies in the payroll records:I am still working on this issue of changes to the timesheets. I sent you all some of my analysis this weekend. Alas, there’s not much of an explanation for most of the many changes Billy made. It will be quite easy for SoS to say that he was ignoring timecards and simply doing pay-per-signature math in those examples.I plan to write a response that acknowledges the problem, to note that I have been unable to get a reasonable explanation from Billy (who met with Ken Lerner, and provided no help). I can show that the system was tightened up after those first two weeks, and also that we have removed Billy from the entire equation of time sheets and calculating hours and bonuses. It will be sincere, contrite and other good things.(Ex. A72.)35. In a May 31, 2012 email, LoCascio offered the following explanation for the timesheet changes:The time sheets of the weeks ending 3-25 and 4-2 reflect a time period of change/chaos due to the demands of the secretary of state to have a more compliant system. A “BETTER SYSTEM.” AND WE DID JUST THAT. 2 years ago we used the same system that the secretary of state was opposed to this year yet no complaints were ever made, or investigations. I know for a fact that Ted Blasak/Democracy Resources ‘set-up’ this complaint.* * * * *Obvious explanation is Human error due to Exhaustion and Haste in multitasking dozens of tasks and random chaotic events all at once. For those two weeks I may have done turn in with Christian, which usually kept us in the Voter Power office until 10+PM, and then having to rush off to Eugene. Christian having accidentally taken the timesheets with him, and myself having to drive to Eugene to solve feudal issues at the Eugene office I had to take #’s down via phone call to make sure payroll was going to be done on time so that people got paid. I may have even had to take down #’s while I was driving via the speaker phone/while driving making sure I did not get in to an accident/being completely exhausted. This all adds up unfortunately to human error by extreme exhaustion and extreme circumstances.(Ex. A73.) Paid Circulator Roy Colbert36. On or about December 22, 2011, Roy Colbert responded to the CraigsList posting for paid circulators for IP 24. He went to a recruitment meeting a coffee shop, where LoCascio hired him and several others on the spot. In connection with his employment as an IP 24 paid circulator, Colbert completed and signed paperwork, including the SEL 306 form (Circulator Training Certificate) and SEL 308 (Circulator Registration). Colbert was not asked to sign an Employment Agreement. (Ex. A15; test. of Colbert.) 37. On January 3, 2012, Wolfe signed and submitted to the Division a SEL 309 (Chief Petitioner Acknowledgment) acknowledging Colbert as an IP 24 paid circulator. (Ex. A15 at 2.) A couple of days later, Colbert received his paid circulator badge and began collecting voter signatures for IP 24. (Test. of Colbert.) Colbert put himself on a schedule, where he would work for two or three hours each weekday morning after dropping his daughter off at school, and two or two and a half hours on Saturday and/or Sunday. On this schedule, Colbert collected signatures for approximately 15 to 20 hours during the week. (Test. of Colbert; Ex. R121 at 22-28.)38. At the weekly turn-in meeting for the pay period ending January 15, 2012, Colbert submitted four IP 24 signature sheets with a total of 39 voter signatures. (Ex. A1 at 87 through 90.) No one from OMPI management asked Colbert to report the number of hours he had worked. He was only asked about the number of signatures he had gathered during the week. (Ex. A10 and A11; test. of Colbert; Ex. R212 at 32-34.) 39. On the OMPI weekly circulator payroll reporting sheet for the pay period ending January 15, 2012, LoCascio reported that Colbert had worked 2.25 hours and obtained 39 signatures. (Ex. A1 at 15.) OMPI paid Colbert $ 45.00 for the pay period ending January 15, 2012. (Ex. A4 at 6.)40. At the weekly turn-in meeting for the pay period ending January 22, 2012, Colbert turned in two IP 24 signature sheets with a total of 20 voter signatures. (Ex. A1 at 91 to 92.) Colbert reported the number of signatures he had gathered. He was not asked how many hours he had worked collecting those signatures. (Ex. A10 and A11; test. of Colbert.) On the weekly payroll reporting sheet for that pay period, LoCascio reported that Colbert had worked 1.25 hours and obtained 20 signatures. (Ex. A1 at 18.) OMPI paid Colbert $25.00 for this pay period. (Ex. A4 at 6.)41. At the weekly turn-in for the pay period ending January 29, 2012, Colbert submitted five IP 24 signature sheets with a total of 50 voter signatures. (Ex. A1 at 93 to 97.) As before, no one from OMPI management asked Colbert to report his hours. He was only asked to report the number of signatures he had gathered. (Test. of Colbert.) On the weekly circulator payroll reporting sheet for the pay period, LoCascio reported that Colbert had worked 2.75 hours and had obtained 53 signatures. OMPI issued Colbert a check for $55.00 for the pay period. (Ex. A4 at 6.)42. During the month of January 2012, Colbert worked most days for at least an hour or two. He signed and turned in a total of 11 signature sheets containing 109 voter signatures. He was paid a total of $125. (Exs. A1 at 87-97 and A4 at 6; test. of Colbert) Colbert did not work collecting signatures for IP 24 during the first two weeks of February because he was traveling out of state. (Test. of Colbert.) 43. On or about February 15, 2012, Colbert met with Ted Blaszak of Democracy Resources and advised Blaszak that IP 24 was paying its petition circulators by the signature rather than by the hour. With Colbert’s permission, Blaszak recorded their conversation. Blaszak asked Colbert to gather more information and documentation from the IP 24 campaign to support his claim. (Test. of Colbert; test. of Hartwell.)44. On February 18, 2012, Colbert texted Christian and asked to be paid for the all of hours he had worked in January. In a series of messages to Christian, Colbert wrote as follows:Hey dude I just realize u guys are gettin over on us i have put in 35 hours an i might have made a hun bucks when should been 700 bucks so where is da rest of My money at dude[.] i have already turned u guys in to my old job which is democracy resources an they said u guys are payin us wrong it should b based on hours An[d] not signatures[.] i have already received about a hun bucks from y guys yall still owe me at least six hun more and it need to b on my check this sunday and if Not there gonna b a big issue wit boli or u guys can pay me what yall owe this sunday and I leave quietly or i have my job to help me push da issue which theyHave already agree to help me if u guys dont so somebody needs to get bac to me today wit some answer or im gonna go live to da news ok this is roy colbert.(Ex. A12 at 4.) 45. Following Colbert’s texts to Christian, LoCascio called Colbert to discuss the matter. During the phone conversation, Colbert reiterated his concern that his pay had been based on the number of signatures he turned in rather than the hours it took to gather the signatures. LoCascio told Colbert to call Wolfe. (Ex. R206.)46. When Wolfe and Colbert spoke, Wolfe declined to pay Colbert for the hours that Colbert claimed he worked. Wolfe took the position that, by threatening to go to the media, Colbert was trying to “extort” money from OMPI. (Ex. A98; test. of Wolfe; test. of Colbert; Ex. R212 at 40.) 47. On February 18 or 19, 2012, Wolfe terminated Colbert’s employment with OMPI. Wolfe told Colbert that he was being terminated because he had signed petition signature sheets with an address he knew was not his current residence. Wolfe also notified the Division that he had terminated a circulator for using an incorrect address on the signature sheets. (Ex. A120; test. of Wolfe; test. of Colbert.)48. On February 19, 2012, Wolfe sent an email to members of the campaign finance team regarding a “Circulator Problem.” The email addressed Colbert’s demand to be paid for the hours he worked. Wolfe wrote in pertinent part as follows:I’ve spent more time on this issue and want to give you an update.Billy recorded about an hour of conversation with the disgruntled-but-very-experienced petitioner and a woman (wife, I believe) who spoke for him. They are saying we pay by the hour, and that we don’t log start and stop times with a time clock or similar method. This fellow is saying he worked five hours to get 25 signatures, and is unhappy that his check is closer to $25 than to $100.He expressed his unhappiness with texts to Christian, saying he was going to the media, etc. to discredit us. He offered in his text to let things lay if we paid him XXX.In the recorded conversations with his wife, she tells us that Democracy Resources has taken a recorded statement from the petitioner, and that they are preparing a complaint against us. We owe Roy one small check (due him after two weeks because he was out of town), and they have asked Roy to bring them the paystub, according to Roy’s presumptive wife.I spoke with Roy briefly. I told him that we are in 100% compliance, and that we provide a full accounting of everything we do to the SOS every month, as required.* * *When we were setting up this system, I relied on a contract from Dan Meeks, guidance from Billy, and a review by John. All of them believe we are doing things right. But the fact than an experienced operator in this sphere thinks a formal complaint may be in order makes me question our methods (assuming we are getting the truth from Roy’s wife, of course.)* * *Dealing with the petitioner: I don’t believe he is going to do anything formal at this point. They are full of bluster and Billy has done an excellent job of dialoging them out of their umbrage. However, my belief does not preclude anything.(Ex. A36.)49. After being threatened with charges of extortion and being told by Wolfe and/or LoCascio that he could face a big fine or prison, Colbert decided not to pursue the matter further. Colbert then began working as a circulator for Democracy Resources. (Test. of Colbert; Ex. R212 at 40.) 50. Several weeks later, on April 6, 2012, Division Investigator Alana Cox spoke with Colbert by telephone as part of her investigation into IP 24’s payment practices. Colbert advised Cox that he believed his paycheck was based on the number of signatures he collected. (Ex. A10; test. of Cox.) On April 7, 2012, Colbert met in person with Division Investigator Paul Newman and signed a statement indicating that he was not asked to report the number of hours he had worked, only the number of signatures he had gathered during the week. (Ex. A11; test. of Newman; test. of Colbert.)51. On or about April 18, 2012, Colbert filed a Wage and Hour claim with the Bureau of Labor and Industries (BOLI), claiming that he was not paid for all of the hours he worked between January 3 and February 16, 2012. (Ex. A98.) BOLI Compliance Specialist Virginia Grosso investigated Colbert’s claim. In doing so, Grosso made contact with both Colbert and Wolfe. Colbert told Grosso that he never turned in the number of hours he worked, just the signatures he gathered. He advised that when he worked for OMPI he was paid weekly but never asked to report the number of hours he worked. Colbert also told the investigator that he thought that was “weird,” because when he worked for Democracy Resources, he always reported the number of hours worked. (Ex. A96.) Wolfe told Grosso that Colbert had tried to extort money from him. Wolfe acknowledged that at the time Colbert worked for him, OMPI did not keep a record of employees’ work hours. Wolfe asserted that employees were asked to self-report their hours. (Ex. A98.) Colbert’s claim was eventually resolved through settlement, with OMPI agreeing to pay him an additional $600. (Test. of Grosso; test. of Colbert.) Paid Circulator Kevin Bennett52. On or about December 27, 2011, Kevin Bennett responded to LoCascio’s CraigsList posting for paid circulators. Bennett went to a recruitment meeting at Tiny’s coffee shop, where he and several others were interviewed and hired by LoCascio. In connection with his employment as an IP 24 paid circulator, Bennett completed a circulator packet and signed forms, including the SEL 306 (Circulator Training Certificate) and SEL 308 (Circulator Registration). (Test. of Bennett; Ex. A7.) Bennett was not asked to, and did not sign, an OMPI Employment Agreement upon his hiring. (Test. of Bennett.)53. On or about January 6, 2012, Wolfe signed and submitted to the Division a SEL 309 acknowledging Bennett as an IP 24 paid circulator. (Ex. A7 at 3.) A few days later, Bennett received his paid circulator badge and, on January 10, 2012, began collecting signatures for IP 24. Bennett worked several hours on January 10, 13, 14 and 15 attempting to obtain voter signatures. On one day, he took MAX to the Skidmore Fountain area of Portland, hoping to gather signatures at Saturday Market. On arrival, he realized that Saturday Market had yet to open for the season. He then rode MAX in search of people willing to sign the petition. (Test. of Bennett.)54. On Sunday afternoon January 15, 2012, Bennett attended the turn-in meeting where he signed and submitted two IP 24 signature sheets. One sheet had 10 signatures and the other had two signatures. He reported 12 signatures. (Ex. A1 at 15, 79 and 85; test. of Bennett.) No one from OMPI management asked Bennett how many hours he had worked during the week. (Test. of Bennett; Ex. R213 at 9.) On the weekly circulator payroll reporting sheet for the pay period ending January 15, 2012, LoCascio reported that Bennett had worked .5 hours and obtained 12 signatures. (Ex. A1 at 15.) 55. On January 19, 2012, Bennett went to the WalMart store in St. Helens, Oregon, to gather voter signatures for IP 24. He spent about three hours there gathering signatures, until the store manager asked him to leave the premises. Bennett obtained about 25 signatures during that time. (Test. of Bennett; Ex. R213 at 20.) 56. On January 22, 2012, Bennett attended the turn-in meeting where he signed and submitted in two IP 24 signature sheets. (Ex. A1 at 78 and 80.) Once again, he was not asked to report the number of hours he worked, only the number of signatures he had obtained. (Test. of Bennett.) On the weekly payroll reporting sheet for the pay period ending January 22, 2012, LoCascio reported that Bennett had worked 1.25 hours and obtained 30 signatures. (Ex. A1 at 17.) On January 25, 2012, OMPI paid Bennett $35.00 for his work in the pay periods ending January 15 and January 22, 2012. (Ex. A6 at 1.) 57. For the pay period ending January 29, 2012, Wolfe reported to the Division that Bennett had worked .25 hours, and had gathered six signatures. On February 1, 2012, OMPI paid Bennett $5.00 for this pay period. (Ex. A4 at 3; A6 at 2.)58. At the February 5, 2012 turn-in meeting, Bennett signed and submitted four IP 24 signature sheets. (Ex. A1 at 81, 82, 83 and 84.) As before, no one from OMPI management asked him to report the number of hours he had worked. (Test. of Bennett.) On the weekly payroll reporting sheet for the pay period ending February 5, 2012, LoCascio reported that Bennett had worked 2 hours and obtained 39 signatures. (Ex. A1 at 23.) OMPI paid Bennett $40.00 for the pay period ending February 5, 2012. (Ex. A4 at 3; Ex. A6 at 3.) 59. At the February 26, 2012 turn-in meeting, Bennett submitted three IP 24 signature sheets. (Ex. A1 at 75, 76 and 77.) Again, Bennett was not asked to report the number of hours worked, only the number of signatures he obtained. (Test. of Bennett.) On the weekly payroll reporting sheet for the pay period ending February 26, 2012, LoCascio reported that Bennett had worked 1.25 hours and obtained 20 signatures. (Ex. A1 at 36.) OMPI paid Bennett $25.00 for the pay period ending February 26, 2012. (Ex. A4 at 3; Ex. A6 at 4.)60. On Sunday, March 4, 2012, Bennett went to Saturday Market in downtown Portland to gather signatures for IP 24. This was opening weekend for Portland Saturday Market for the year and there were several other IP 24 circulators at that location, all of whom were competing for registered voter signatures. Bennett spent several hours at Saturday Market that day, but he only gathered 25 signatures. (Test. of Bennett; Exs. A8 and A9.)61. Later that same day, Bennett attended the turn-in meeting, where he submitted four IP 24 signature sheets. (Ex. A1 at 71 through 74.) This meeting marked the first time Bennett was asked to report how many hours he had worked. Bennett advised LoCascio that he had worked six and one half hours that day at Saturday Market, but had only gathered 25 signatures. LoCascio advised Bennett to adjust his hours to meet the 20 signatures per hour quota. LoCascio also told Bennett it would not be fair for Bennett to be paid for the time that he was not producing at the desired signature rate. Bennett advised LoCascio that he was “just being honest” about the time he had worked gathering signatures. Bennett declined to adjust his reported hours. (Test. of Bennett; Exs. A8 and A9; Ex. R213 at 36.) 62. A day or two later, Bennett received a telephone call from Wolfe. Wolfe expressed concern that Bennett’s signature numbers did not match up with his reported hours. Wolfe suggested that, in the future, Bennett make sure that his reported hours match up with signatures. (Test. of Bennett; Exs. A8 and A9; R213 at 36-37.) 63. Despite Bennett reporting that he had worked six and one half hours at Saturday Market, LoCascio indicated on the weekly payroll sheet for the pay period ending March 4, 2012 that Bennett had worked 1.5 hours and obtained 25 signatures. (Ex. A1 at 45.) On March 7, 2012, OMPI paid Bennett $30.00 for the pay period ending March 4, 2012. (Ex. A4 at 3; Ex. A6 at 5.)64. On or about March 19, 2012, Bennett stopped working for the IP 24 campaign. He was angry that Wolfe refused to pay him for all of the hours he had worked. (Test. of Bennett.) 65. According to payroll records OMPI submitted to the Division, Bennett worked for OMPI as a paid circulator from January 10, 2012 through March 4, 2012. During that time, he signed and certified a total of 15 IP 24 signature sheets containing 132 voter signatures. He was paid a total of $135.00 by OMPI. (Ex. A1 at 71 through 85; Ex. A4 at 3.) 66. On March 20, 2012, Bennett applied for a job with Democracy Resources. While there, Bennett met and spoke with Blaszak, the company’s president. In a conversation recorded by Blaszak with Bennett’s consent, Bennett asserted that OMPI had paid him by the signature rather than by the hour, in violation of the law. Bennett also asserted that two weeks prior, when he did report that he had worked six and a half hours and collected 25 signatures, both LoCascio and Wolfe advised him to adjust his hours to match signatures. (Ex. A8; test. of Bennett.) 67. On April 10, 2012, Bennett submitted a written statement to the Division alleging “widespread violations of signature-gathering law going on at Voter Power in their efforts to get marijuana decriminalization on the ballot.” (Ex. A9.) In the statement, Bennett asserted that for the first several weeks he worked for IP 24, he was asked to report the number of signatures he gathered, but was never asked how many hours he had worked. Bennett also asserted that when he got his paycheck, it showed one hour worked for every 20 signatures he obtained. Bennett claimed that, as a practical matter, he was being paid one dollar for every signature accepted, and that all other signature gatherers were being paid the same way. Bennett further claimed that when the OMPI started using time sheets for the first time in March, LoCascio told him to cut his reported hours down to two and a half because he only submitted 25 signatures. Bennett claimed that Wolfe also advised him to adjust his hours in the future so that they match the signatures collected. Bennett added that when he was only paid for 2.5 hours for gathering 25 signatures, he quit working for IP 24. (Id.) Other IP 24 Paid Circulators68. As part of the Division’s investigation into IP 24’s payment practices, Division Investigator Alana Cox spoke with several other circulators who worked for OMPI in addition to Colbert and Bennett. (Test. of Cox.) On March 28, 2012, Cox documented receiving a telephone call from Dave Singerman claiming that he was not properly paid by IP 24. Singerman asserted that he had not been paid for all of the hours he had worked. (Ex. A22.)69. On April 4, 2012, Cox spoke with Jeremy Darling, who collected signatures for IP 24 during January 2012. Darling advised Cox that he quit working for IP 24 because it was “so shady.” Darling reported that he was never asked how many hours he worked; he only turned in his signature sheets. Darling also reported that he was told by OMPI management that he would only be paid $20 per hour if he made the quota of 18-20 signatures per hour. Darling added that it was almost impossible to get 20 signatures in an hour. (Ex. A19; test. of Darling; test. of Cox.)70. On April 4, 2012, Cox also spoke with Jared Luis, who collected signatures for IP 24 during February 2012. Luis reported that although the CraigsList advertisement said he would be earning $20 per hour, he later learned that he had to get 20 signatures to get paid for the hour. Luis also reported that every Sunday when he turned in his signature sheets he was never asked how many hours he had worked. He explained that when he got a check, he just accepted that it was how much he earned based on the number of signatures he had collected. He added that he quit because it was costing him too much gas money and he really was not getting paid $20 per hour. (Ex. A21; test. of Cox.)71. On April 4, 2012, Cox also spoke with Rachel Cruciani, who collected signatures for IP 24 in January and February 2012. Cruciani advised that she never reported her hours when she worked on IP 24, she reported only the number of signatures she gathered. She also said that it was impossible to get 20 signatures an hour, so she quit because she was not getting paid for all of the time she worked. (Ex. A27; test. of Cox.)72. On April 4, 2012, Cox also spoke with Midian Lee, who collected signatures for IP 24 in February 2012. Midian Lee reported that when he worked for IP 24, he was paid based on his signatures and he never reported how many hours he worked. He added that he never filled out a time sheet and was paid about a dollar per signature. (Ex. A29.)73. On April 20, 2012, Cox spoke with Brian Lee, who collected signatures for IP 24 from late December 2011 until April 2012. Brian Lee contacted the Division because, based on what he had been hearing from other circulators, he was concerned that he may have been paid by the signature on IP 24. Brian Lee advised Cox that until recently, he only reported the number of signatures he had gathered, and not the number of hours he worked. He added that his pay was based entirely on the number of signatures he reported. On April 26, 2012, Brian Lee met with Division Investigator Newman. He confirmed the accuracy of Cox’s Contact Memorandum regarding their phone conversation and provided a written statement with similar information. (Ex. A16; test. of Cox; test. of Neman.) 74. On April 27, 2012, Cox spoke with Karina Hunt, who collected signatures for IP 24 during February and March 2012. Hunt contacted the Division to report that she had been paid by the signature when she worked for IP 24. She explained that she now worked for Signature Gathering Company of Oregon, and that her current her boss, Lee Vasche, had told her to contact the Division. Hunt reported to Cox that when she worked for IP 24, there was nowhere to report her hours, only the number of signatures gathered. Hunt also reported that at one point she went to management and told them that she was not able to get 20 signatures per hour, and said that she would be willing to have her hourly wage reduced if they reduced the number of signatures required. Hunt advised Cox that she was told at the time not to worry about it, because the contract would be changing soon. Hunt also advised Cox that she was only paid for about one third of the hours she worked. She said that when she approached Wolfe and told him she wanted to be paid for all of the hours she worked or she would make a claim for those hours with BOLI, Wolfe told her to go ahead and file the BOLI claim. (Ex. A23; test. of Hunt; test. of Cox.) 75. On April 29, 2012, Hunt met with Investigator Newman. She confirmed the accuracy of Cox’s Contact Memorandum regarding their phone conversation and provided a written statement containing similar information. (Ex. A23; test. of Hunt; test. of Cox; test. of Newman.)76. On May 16, 2012, Hunt filed a Wage and Hour claim with BOLI, claiming that she was not paid for all of the hours she worked. On the claim form, to explain the reason why she believed she was still owed wages, Hunt wrote: “Employer was to pay 20.00/hr for collected signatures, but then paid according to the # of signatures turned in & not hours worked.” (Ex. A26 at 5.) To explain why her employer had failed or refused to pay her wages, Hunt wrote: “Mr. Wolfe’s reasoning was that I did not turn in enough signatures to be paid for the hours I reported.” (Id.) Hunt, who kept track of the hours she worked on a note pad at home, claimed that she had worked a total of 36 hours, but had only been paid for nine hours, leaving 26 hours for which she had not been paid. (Id.; test. of Hunt; test. of Grosso.)77. On May 3, 2012, Cox spoke with Kyle Fisher, who collected signatures for IP 24 in January, February, March and April 2012. Fisher contacted the Division to make a complaint regarding how he was paid when working for IP 24. Like others, Fisher reported that prior to March 2012, he never reported his hours. He advised that he would go to the turn-in meetings and report how many signatures he gathered, and he would be paid based on the number of signatures reported. (Ex. A17; test. of Fisher; test. of Cox.)78. In a May 3, 2012 email to Investigator Newman, Fisher stated, in pertinent part:Bob Wolfe was present at many of these weekly turn in and was approached multiple times in regards to the training program that says you cannot be paid by the signature. The circulators wanted to know why there was nowhere to report their hours worked and how they were going to be paid the right amount if they don’t report their hours. Bob Wolfe always said the same thing which is that he does not handle the way they are paid that Billy and Christian manage that part of the campaign entirely. I was very skeptical of the campaign from the beginning because of these inefficiencies and all the issues I kept hearing people mention while at the turn ins. Every week there were multiple people complaining about not getting their checks or their checks being smaller than they should be. In March I began going on road trips with a crew to Eugene and surrounding areas. During these trips I became more familiar with the way the campaign was being ran. I produced very well on these trips and it led to me becoming the field coordinator for Eugene. I was advised to train each circulator on how to maximize their pay and discourage anyone from reporting hours worked with signatures collected below the quota by telling them they would be fired if they did not meet their quota. I was told to encourage each circulator to fill out their time sheets in a way that would allow them to keep their job by meeting their quota.(Ex. A17 at 2-3.) 79. On May 29, 2012, Cox spoke with Justin Schoenleber, who collected signatures for IP 24 from December 2011 until April or May 2012. Schoenleber contacted the Division because he was upset about being fired from IP 24. Schoenleber advised Cox that he had been a circulator for more than 10 years. Schoenleber also reported that he went to Wolfe months earlier, before the civil penalty notice was issued, and advised Wolfe that he thought Wolfe was paying by the signature. Schoenleber told Cox that he warned Wolfe that he (Wolfe) could get into trouble, and showed him a copy of the circulator turn in sheets used by Lee Vasche’s company. Schoenleber also told Cox that previously, back in February, circulators were only reporting signatures and not their hours. He added that the circulators’ hours were determined by taking the signature total and dividing by the quota. (Ex. A201.)CONCLUSIONS OF LAW 1. IP 24 petition circulators Kevin Bennett and Roy Colbert were paid based on the number of signatures they obtained rather than the number of hours worked in violation of Article IV, section 1b of the Oregon Constitution and OAR 165-014-0260.2. Robert Wolfe, in his capacity as Chief Petitioner of IP 24, is responsible for the violations of Article IV, section 1b of the Oregon Constitution. 3. The proper penalty is $2,500 per signature sheet, a total of $65,000.4. Imposing a civil penalty on Wolfe for violations of Article IV, section 1b does not violate his rights under the United States Constitution and/or the Oregon Constitution. OPINIONA. Applicable Law Article IV, section 1b of the Oregon Constitution, the pay per signature ban, provides as follows: “It shall be unlawful to pay or receive money or other thing of value based on the number of signatures obtained on an initiative or referendum petition. Nothing herein prohibits payment for signature gathering which is not based, directly or indirectly, on the number of signatures obtained.”After the constitutional provision went into effect in 2003, the Division promulgated OAR 165-014-0260 to effectuate Article IV, section 1b and other laws related to the pay per signature ban. As pertinent to this matter, OAR 165-014-0260 provides as follows:(1) The purpose of this rule is to interpret Article IV, section 1b of the Oregon Constitution * * *.(2) Section 1b and ORS 260.569 bans the practice of paying circulators or others involved in an initiative, referendum, candidate nominating petition or voter registration card collection effort if the basis for payment is the number of signatures obtained. This means that payment cannot be made on a per signature basis. Employment relationships that do not base payment on the number of signatures collected are allowed. Allowable practices include: paying an hourly wage or salary, using express minimum signature requirements (quota), terminating those who do not meet the productivity requirements, adjusting salaries prospectively relative to productivity, and paying discretionary bonuses based on reliability, longevity and productivity, provided no payments are made on a per signature basis. The use of express minimum signature requirements (quota) for an initiative or referendum petition is allowable so long as that requirement is disclosed to the Elections Division on the SEL 320 as part of accounts. * * * * * (4) The phrase “directly or indirectly” in Section 1b means that the chief petitioners who are responsible for the circulation and submission of the initiative or referendum petition cannot directly pay for signature gathering based on the number of signatures obtained, and cannot contract or delegate to another person or entity to obtain signatures and allow the third party to pay circulators on the basis of the number of signatures obtained. However, chief petitioners may contract with a person or entity to manage the signature gathering, and pay the person or entity for services, including the service of qualifying the petition for the ballot, so long as the individuals who actually circulate the petition are not paid based on the number of signatures obtained. The chief petitioners are responsible for insuring that agents of the chief petitioner (anyone who is delegated the task of obtaining signatures on the initiative or referendum petition) do not violate Section 1b. (5) Violations of Section 1b or ORS 260.569 will be processed under 260.995 as civil penalties. Penalties may be assessed against chief petitioners or any other persons who either directly or indirectly pay based on the number of signatures or voter registration cards obtained. Liability may be imposed on chief petitioners as provided in 260.561. Violations of Section 1b or 260.569 will be calculated by deeming each individual signature sheet or voter registration card that contains signatures that were collected in violation of Section 1b or 260.569 as a single occurrence with a minimum civil penalty of $100. Violations of Section 1b or 260.569 shall not be combined under OAR 165-013-0020(1)(b)(E). (Emphasis added.)ORS 260.561(1)(b) addresses the liability of chief petitioners for violations committed by persons obtaining signatures on the petition. It provides, in pertinent part, as follows:If a chief petitioner of a statewide initiative or referendum petition has knowledge or should have had knowledge of a violation of ORS 250.048, 260.262, 260.555, 260.558, 260.567, 260.575, 260.665, 260.715 (1) or section 1b, Article IV of the Oregon Constitution, or any rule adopted by the Secretary of State related to section 1b, Article IV of the Oregon Constitution, petition sheets or circulator training, registration or certification, committed by a person obtaining signatures on the chief petitioner’s petition or prospective petition or a contractor or subcontractor, as defined in ORS 260.563, the violation by the person obtaining signatures or the contractor or subcontractor is conclusively considered a violation by the chief petitioner.B. Payment by the Signature The Division alleges that Bennett and Colbert were paid by the signature in violation of Article IV, section 1b. As the proponent of this fact, the Division bears the burden of proof. ORS 183.450(2); Gallant v. Board of Medical Examiners, 159 Or App 175, 183 (1999). The Division must establish its allegations by a preponderance of the evidence. Cook v. Employment Div., 47 Or App 437 (1980) (in the absence of legislation adopting a different standard, the standard in administrative hearings is preponderance of the evidence). Proof by a preponderance of evidence means that the fact finder is persuaded that the facts asserted are more likely true than false. Riley Hill General Contractors v. Tandy Corp., 303 Or 390 (1989). One of the key facts in dispute in this case is whether, at the turn-in meetings during January and February 2012, LoCascio asked the IP 24 paid circulators (including Bennett and Colbert) to report the number of hours the circulator had worked during the week. LoCascio asserts that he (and/or Christian) did so, whereas several paid circulators assert otherwise. For the reasons that follow, I am persuaded that, during this time period, neither LoCascio nor anyone else from OMPI management asked IP 24 paid circulators to report their hours worked. At hearing, LoCascio testified that, at the weekly turn-in meetings during January and February 2012, he orally asked the paid circulators how many hours they had worked and that he wrote down the circulator’s response on a piece of scratch paper which he later used to complete the payroll summary sheet but did not retain. (1/11/13 recording.) In his deposition, LoCascio initially asserted that the paid circulators wrote down their hours on a turn-in sheet. (Ex. A67 at 8 (depo. pp. 28-29).) However, later in the deposition he acknowledged that the circulator turn-in cover sheet that OMPI used during January and February 2012 did not have a place for reporting hours. (Id. at 9 (depo p. 32.) LoCascio nevertheless maintained that he and Christian “would have asked people what their hours were when they turned in.” (Id. at 8-9 (depo. pp. 29-33).) Christian, on the other hand, testified at hearing that he did not handle “the hours thing,” and that he did not ask the circulators to report their hours during January and February 2012. (1/11/13 recording.) He added that his job at the weekly turn-in meetings was to review the submitted petition sheets; he had no responsibility for tracking circulator hours. Christian testified that he believed LoCascio asked the circulators for their hours, though he acknowledged that he did not pay attention to what was going on at LoCascio’s table during the turn-in meetings. (Id.) Christian’s testimony at hearing differed from his deposition testimony. In his deposition, Christian claimed that at the weekly turn-in meetings he asked people to report their hours “all the time.” (Ex. 71 at 8; depo. p. 27.) He then stated that the circulators reported their hours directly to LoCascio, who was seated at a nearby table during the turn-in meetings. Christian added that if LoCascio was not around, then he would ask the circulator to report hours worked, write down the response, and phone the information in to LoCascio. (Id.; depo pp. 27-29.) Contrary to the conflicting and internally inconsistent testimony of LoCascio and Christian discussed above, several paid circulators, including both Bennett and Colbert, assert that they were never asked to report the number of hours they spent gathering signatures during January and February 2012. Jeremy Darling, who worked for OMPI in December and January 2012, testified that he was never asked to report his hours, only the number of signatures he had turned in. Karina Hunt similarly testified that, prior to the reboot, she was not asked to report her hours at the weekly turn in meeting. She was asked only to report the number of signatures she had gathered. The statements of several other paid circulators (i.e., Brian Lee, Jared Luis, Rachel Cruciani , Midian Lee and Justin Schoenleber) who worked for OMPI under LoCascio and Christian during January and February 2012 period provide further corroboration on this point. (Exs. A16, A17, A21, A27 and A29.) The signed declarations of paid circulators offered by Wolfe (Ex. R180) do not directly controvert the above evidence. Rather, these declarations assert, in a very conclusory manner, that the declarants were never paid by the signature or never asked or instructed to adjust the hours they reported. The assertion that these particular declarants were not instructed to adjust their reported hours is distinctly different from a claim that (unlike the other circulators discussed above) these particular declarants were asked to, and did, orally report their hours to OMPI management during the two months in question. For this and other reasons, these declarations are afforded little weight. Consequently, after weighing the evidence, I am persuaded by the testimony of Bennett, Colbert, Darling and Hunt and the corroborating hearsay statements of other paid circulators who worked for OMPI gathering signatures for IP 24 during the relevant time period, that the paid circulators were not asked to report their hours worked during January and February 2012. Because OMPI did not use time sheets during January and February 2012 and OMPI management did not ask the circulators to report their hours during this time, the only other basis that OMPI had to determine the compensation for Bennett and Colbert and other paid circulators was the number of signatures the circulator had gathered during the pay period. Moreover, the fact that Bennett was paid $25 for the pay period ending March 4, 2012 despite reporting to OMPI management that he had worked six and a half hours to collect 25 signatures he turned in that day further supports the conclusion that Bennett was paid by the signature rather than by the hour. Additional evidence suggesting that Bennett’s and Colbert’s pay was based on the number of signatures gathered rather than the number of hours worked is the close correlation between Bennett’s and Colbert’s signature numbers and their pay. As found above, during the two months that Bennett worked for IP 24, he collected a total of 132 voter signatures and was paid a total of $135 (an average of $1.02 per signature). During the month that Colbert worked for IP 24, he collected a total of 109 voter signatures and was paid a total of $125 (an average of $1.15 per signature). The accounting spreadsheets for IP 24 show this same close correlation between signature numbers and compensation for many other paid circulators working for IP 24 during the relevant time period. Accordingly, the Division has proven that, more likely than not, Bennett and Colbert were paid by the signature in violation of Article IV, section 1b. C. Wolfe’s Responsibility for Violations of Article IV, section 1b Having found that OMPI paid Bennett and Colbert by the signature in violation of Article IV, section 1b, the next inquiry is whether Wolfe, as the Chief Petitioner for IP 24, bears responsibility for the violations. As set out above, under ORS 260.561(1)(b), if a chief petitioner knows, or should have known, of a violation of Article IV, section 1b by a person obtaining signatures on the chief petitioner’s petition, the chief petitioner will be conclusively liable for the violation. Under OAR 165-014-0260(4), chief petitioners are responsible for insuring that agents of the chief petitioner (anyone who is delegated the task of obtaining signatures on the initiative or referendum petition) do not violate Article IV, Section 1b. A preponderance of the evidence demonstrates that Wolfe knew, or at a minimum should have known, that IP 24 circulators, including Bennett and Colbert, were being paid by the signature in violation of the law. Wolfe was actively involved in the signature gathering campaign. He attended weekly turn-in meetings during January, February and March. At those meetings, he interacted with the paid circulators. He heard circulators express concern about IP 24’s payment system. He also reviewed the payroll summary sheets that LoCascio compiled each week before he submitted them to the payroll company. Had Wolfe compared the circulators’ reported hours to the number of signatures gathered he would have seen that IP circulators were being paid very close to $1.00 per signature. By February 18, 2012, if not before, Wolfe had actual knowledge that at least one circulator, Colbert, was claiming he had not been paid for all the hours he had worked. In Wolfe’s February 19, 2012 “Circulator Problem” email to his campaign finance team, he reported that a “disgruntled-but-very-experienced petitioner” was saying that he had worked five hours to get 25 signatures and was unhappy that his check was closer to $25 than to $100. (Ex. A88.) Rather than investigate Colbert’s claim by monitoring LoCascio’s methods for tracking the circulators’ time, Wolfe accused Colbert of trying to extort money from the campaign. In that same February 19, 2012 email to his campaign team Wolfe noted the fact that “an experienced operative in this sphere thinks a formal complaint may be in order makes me question our methods.” (Id.) A few days later, on February 22, 2012, Wolfe received an email from Division Compliance Specialist Stacey Jackson asking “if there are no individual circulator timesheets, how are the hours worked reported to you”? (Ex. A93.) Wolfe already knew that circulators were not being asked to complete time sheets, so the fact that the Division was also questioning the campaign’s methods for tracking circulator time should also have prompted Wolfe to further investigate the basis on which his circulators were being paid. Other evidence indicating that Wolfe was aware that LoCascio’s pay system for circulators did not comply with the law is his request to Investigator Newman not to attend the March 4, 2012 turn-in meeting. When Newman arrived to observe the turn-in process, Wolfe explained that he was going to be changing the process, and that he would prefer that Newman see the new system rather than the old system. Wolfe also told Newman that Newman’s presence at that afternoon’s meeting might disrupt the turn-in process. Another document reflecting Wolfe’s knowledge that circulators were being paid by the signature rather than by the hour is his March 30, 2012 email to the campaign finance team requesting cash to cover payroll. He noted that the payroll for that week was “quite large because we got a very large number of signatures.” (Ex. A101, emphasis added.) He then added “We need * * * another $15 - $20K to cover payroll for next week (assuming we get 10K signatures; less money if we get fewer signatures).” (Id., emphasis added.) Wolfe’s linking payroll costs to the number of signatures gathered instead of the number of circulators working and/or the anticipated hours of work, shows that he had knowledge that IP 24 circulators were being paid based on the number of signatures they gathered. OAR 165-014-0260(4) makes chief petitioners responsible for insuring that their agents comply with Article IV, section 1b. In Day v. Elections Division, 246 Or App 140 (2011), the court found that under the Division’s interpretation of OAR 165-014-0260(4), chief petitioners must “make efforts to independently verify” that all of their agents are complying with Article IV, section 1b. Id. at 151. In Day, the chief petitioners merely relied on oral assurances and a contract with a contractor; they did not review records or otherwise follow up with the subcontractor to ensure that circulators were not being paid by the signature. In affirming a Final Order assessing a civil penalty against both chief petitioners of Initiative Petition 57 (2006), the court adopted the Division’s determination that the chief petitioners did not take sufficient steps to insure that all subcontractors and their employees were complying with the law. The court also adopted the Division’s determination that, under OAR 165-014-0260(4), chief petitioners are obligated to “make sure, or certain” that their agents comply with section 1b. Id. at 150.In this case, although Wolfe delegated management of the IP 24 signature gathering campaign to LoCascio, Wolfe nevertheless remained obligated to independently verify that LoCascio was doing so in compliance with Article IV, section 1b. Like the chief petitioners in Day, Wolfe purportedly relied on an agent’s (LoCascio’s) assurances that circulators were not being paid by the signature, but he did not make independent efforts to insure that no violations occurred. Indeed, as noted above, Wolfe did not know what system LoCascio was using to keep track of the paid circulators’ hours during January and February 2012. Instead, Wolfe relied on his belief that LoCascio knew what he was doing, because he had used a similar system for paying circulators in 2010. Given these circumstances, the Division has shown that Wolfe did not exercise sufficient oversight of IP 24’s signature gathering campaign to ensure that his agent (LoCascio) did not violate Article IV, section 1b. Because Wolfe knew or, given the circumstances discussed above, certainly should have known that LoCascio was basing circulator pay on the number signatures gathered rather than the hours worked, Wolfe is liable for the violations of Article IV, section 1b and OAR 165-014-0260. Wolfe argues that holding him liable for pay-per-signature violations of his agents “through strict and vicarious liability” violates his federal due process rights. (Wolfe’s Opening Brief at p. 74.) If this was a criminal proceeding, and strict liability was the standard, perhaps Wolfe’s argument would have some sway. However, as discussed above and in the December 14, 2012 Ruling on Motion in Limine, this is not a criminal action. In the civil context, the idea that a person may be liable for the acts or omissions of his or her servant, agent, employee or representative is well established. Moreover, Wolfe is not subject to a strict liability standard. Under ORS 260.561(1)(b), a chief petitioner is liable for violations of Article IV, section 1b only if he or she “has knowledge or should have had knowledge” of the violations. This is a negligence standard and, as found above, the record persuasively establishes that Wolfe knew, or at a minimum should have known, how Colbert and Bennett were being paid. Wolfe also contends that he cannot be held liable because the violations were not committed by a contractor or subcontractor, but by the OMPI Petition Committee, a political committee. This contention is belied by the language of the statute. Under ORS 260.561(1)(b), if the chief petitioner has, or should have had, knowledge of a violation of Article IV, section 1b, or any rule adopted by the Secretary related to section 1b, “committed by a person obtaining signatures on the chief petitioner[’]s petition or prospective petition or a contractor or subcontractor * * * the violation by the person obtaining signatures or the contractor or subcontractor is conclusively considered a violation by the chief petitioner.” Article IV, section 1b prohibits the payment or receipt of money based on the number of signatures. Because Wolfe had, or should have had, knowledge of violations committed by persons obtaining signatures on his petition (i.e., IP 24 circulators being paid by the signature), he is liable for the violations. It is immaterial for purposes of ORS 260.561 that OMPI was the employer. D. Penalty CalculationPursuant to ORS 260.995(2)(c), the Division is authorized to impose a civil penalty against chief petitioners who violate Article IV, section 1b of up to $10,000 for each violation. Pursuant to OAR 165-014-0260(5), “Violations of section 1b or 260.569 will be calculated by deeming each individual signature sheet or voter registration card that contains signatures that were collected in violation of section1b or 260.569 as a single occurrence with a minimum civil penalty of $100.” (Emphasis added.) Pursuant to the Division’s penalty matrix, violations of Article IV, Section 1b will be calculated by deeming each individual signature sheet that contains signatures that were collected in violation of Section 1b as a single occurrence with a minimum civil penalty of $2,500. OAR 165-013-0020(1)(b)(F) (emphasis added).Consistent with the above rules, the Division proposes to assess a civil penalty of $2,500 for each signature sheet submitted by Bennett and Colbert containing signatures that were collected in violation of Article VI, section 1b. The evidence demonstrates that Bennett submitted 15 signature sheets and that Colbert submitted 11 signature sheets, for a total of 26 signature sheets containing signatures that were collected in violation of the law. Accordingly, counting each individual signature sheet as a single violation, Wolfe is subject to a civil penalty of $65,000 ($2,500 x 26 = $65,000). Contrary to Wolfe’s contention, the Division is not required to combine the 26 signature sheets into a single violation under OAR 165-013-0020(1)(b). First, OAR 165-014-0260, the Division’s rule implementing Article IV, section 1b specifically states otherwise: “Violations of Section 1b or 260.569 shall not be combined under OAR 165-013-0020(1)(b)(E).” (Emphasis added.) Second, OAR 165-013-0020(1)(b)(E) expressly pertains to multiple violations of the same “statutory provision,” rather than multiple violations of a constitutional provision, such as Article IV, section 1b. Third, even if this rule were applicable to a first violation of a constitutional provision, the exception in the rule permits the Division to impose a separate fine for each violation “where specific circumstances warrant.” Considering that the violations of Article IV, section 1b found above involved more than one circulator and occurred repeatedly over a two month period, the circumstances warrant imposing a fine for each violation. In challenging the civil penalty, Wolfe also renews his contention that the penalty is so substantial that amounts to a penal sanction entitling him to the constitutional and statutory protections afforded in a criminal prosecution. For the reasons set out in detail the December 14, 2012 Ruling on Motion in Limine this contention is not persuasive. See Jackson County v. Roark, 124 Or App 505 (1993) (holding that a law imposing a penalty of at least $2,000 and no more than $10,000 for selling drug paraphernalia in violation of ORS 475.525 was properly characterized is civil, rather than criminal in nature because the sale of drug paraphernalia was not a crime at common law or a crime under Oregon’s criminal code). In short, this administrative action does not have the characteristics of a criminal prosecution. The constitutional and regulatory provisions at issue are not, and have never been criminal in nature, and a penalty of $2,500 per signature sheet is not so punitive as to render the proceeding criminal in nature. E. Wolfe’s Constitutional Challenges 1. First AmendmentCiting Independence Institute v. Gessler (D. Colo. 3-29-2013), Wolfe contends that Oregon’s pay-per-signature ban severely burdens protected speech, including his own. In Independence Institute, the plaintiffs challenged the constitutionality of Colorado Revised Statute § 1-40-112(4), which makes it “unlawful for any person to pay a circulator more than twenty percent of his or her compensation for circulating petitions on a per signature or petition section basis.” The district court found the law unconstitutional because it “unjustifiably inhibit[s] the circulation of ballot initiative petitions.” Slip op at p. 43. The District Court’s determination on the constitutionality of Colorado’s statutory limitation on pay-per-signature compensation is not instructive or binding in this matter. Rather, the governing opinion for purposes of Oregon’s pay-per-signature ban is Prete v. Bradbury, 438 F3d 949 (2006). In Prete, the plaintiffs, chief petitioners of proposed ballot measures for the 2004 general elections, brought action in federal court alleging that Article IV, section 1b (referred to therein as Measure 26) violated the First Amendment as an impermissible burden on core political speech. Specifically, the plaintiffs contended that the pay-per-signature ban made paid signature gathering prohibitively expensive and inefficient and that it resulted in a higher rate of invalid signatures. In affirming the district court’s judgment, the Ninth Circuit held that Measure 26 did not severely burden the plaintiffs’ First Amendment rights, that the law serves an important regulatory interest in preventing fraud and forgery in the initiative signature gathering process, and that, as applied, does not violate the First Amendment. Id. at 971.I adopt the court’s reasoning in Prete and decline to revisit the issue of whether Article IV, section 1b violates the First Amendment. In an attempt to distinguish Prete, Wolfe contends that Oregon’s pay-per-signature ban has become “far more burdensome with the enactment of additional laws regarding its implementation by the Oregon Legislature in 2009.” (Wolfe Opening Brief at 56.) Wolfe does not specify exactly which additional laws allegedly make Article IV, section 1b significantly more burdensome today. For purposes of this case, however, the only relevant change since Prete is the increase in penalties for violations of the law. OAR 165-013-0020(1)(b)(F). In Day v. Elections Division, the chief petitioners were subject to a penalty of $250 each for their failure to verify that their agent was complying with Article IV, section 1b. 246 Or App at 142. Here, Wolfe is facing a significantly larger fine ($2,500 for each occurrence) for the IP 24 campaign’s lack of compliance with Article IV, section 1b and OAR 165-014-0260. Thus, the only First Amendment issue not addressed by Prete is whether a civil penalty totaling $65,000 for violations of Article IV, section 1b constitutes an undue burden on protected speech.Citing Polykoff v. Collins, 816 F2d 1326 (9th Cir. 1987), Wolfe asserts that the size of the fine alone acts as a prior restraint on speech. (Wolfe Opening Brief at 57.) In Polykoff, the plaintiffs, owners of stores selling products related to adult sexual entertainment, challenged Arizona’s obscenity statute and the state’s provisions authorizing a fine of not more than $150,000 for a felony committed by an individual and not more than $1,000,000 for a felony committed by an enterprise. Among other contentions, the plaintiffs asserted that the felony fine provisions constituted a prior restraint on speech because the high fines would permit the forced closure, if not bankruptcy, of businesses selling adult materials. In rejecting the plaintiff’s arguments, the court noted:Appellants' prior restraint argument is unusual insofar as the alleged prior restraint arises from the imposition of a fine, not an injunction. There is a historical distinction between prior restraints and criminal penalties in the first amendment setting, which has both practical consequences and a theoretical basis:The presumption against prior restraints is heavier--and the degree of protection broader--than that against limits on expression imposed by criminal penalties. Behind the distinction is a theory deeply etched in our law: a free society prefers to punish the few who abuse rights of speech after they break the law than to throttle them and all others beforehand. * * * Hence we believe that the heavier presumption of invalidity for prior restraint laws is inappropriate for the felony fine provisions at issue here.In any event, the fine provisions, properly understood, do not authorize the imposition of a prior restraint. As criminal penalties, the fine provisions punish illegal activity.816 F2d at 1337 (citations omitted.) The Polykoff court acknowledged the possibility that an “extremely high fine” that threatened to force the closure of a business might act as a prior restraint, but it also noted that it could not “discern in advance what fine amounts might constitute a prior restraint in the variety of circumstances attending different convicted defendants.” Id. at 1338.Polykoff does not support Wolfe’s claim that a civil penalty of $65,000 for violating the election laws acts as a prior restraint on speech. Indeed, Polykoff involved criminal fines, not civil penalties. Also, the penalty amount at issue here is well below the $150,000 maximum fine authorized against an individual under Arizona law. Furthermore, in this case, there is no evidence that the civil penalty notice threatened to force the closure of the IP 24 campaign. The notice issued April 23, 2012. The campaign continued to gather signatures until the July 2012 deadline. Wolfe’s reliance on Citizens United vs. Federal Elections Commn., 558 US 310 (2010), in support of his prior restraint argument is similarly misplaced. In Citizens United, the Supreme Court addressed the constitutionality the 2002 Bipartisan Campaign Reform Act, specifically 2 U.S.C. §441b, which contained an “outright ban, backed by criminal sanctions.” 558 U S at 338. The law at issue prohibited all corporations—including nonprofit advocacy corporations—from either expressly advocating the election or defeat of candidates or broadcasting electioneering communications within 30 days of a primary election and 60 days of a general election. In discussing why it considered the facial validity of §441b, as opposed to resolving the case on a narrower ground, the Court found that the law’s “onerous restrictions” functioned “as the equivalent of prior restraint by giving the FEC power analogous to licensing laws implemented in 16th- and 17th-century England, laws and governmental practices of the sort that the First Amendment was drawn to prohibit.” Id. at 335-36. Unlike the federal election law at issue in Citizens United? Oregon’s prohibition on paying per signature is not an outright ban on speech backed by criminal sanctions. Article IV, section 1b does not prohibit Wolfe, or any other individual, from participating in the initiative petition process. Article IV, section 1b does not prohibit paid circulators, it only prohibits one method for compensating paid circulators. Contrary to Wolfe’s contention, Citizens United does not stand for the proposition that the threat of substantial fines for election law violations amounts to a prior restraint on speech. Wolfe further argues that the regulations and reporting requirements for chief petitioners in Oregon are so onerous that they constitute a prior restraint. This contention is without merit and not relevant to the issue of whether a $65,000 civil penalty for violations of the pay-per-signature ban constitutes an undue burden on protected speech. Wolfe’s assertion that Article IV, section 1b is an impermissible content based restriction is also without merit. The Prete court expressly rejected this claim:Measure 26 does not regulate what can be said in an initiative and referendum petition, nor does it adopt or reject any particular subject that can be raised in a petition. Therefore, Measure 26 is not a content-based restriction and strict scrutiny does not apply.438 F3d at 969, n.25. In short, I find that neither Article IV, section 1b, nor the statutes and rules enacted to implement the constitutional provision, violate the First Amendment.///2. Oregon ConstitutionWolfe next contends that the Division’s enforcement of Article IV, section 1b violates his rights under Article I, section 8 (freedom of speech) and Article I, Article 26 (freedom of association) and Article IV, section 1 (legislative power, initiative and referendum). Though he does not articulate specific arguments under Article I, section 26 or Article IV, section 1, Wolfe asserts that, under analysis set out in State v. Robertson, 293 Or 402 (1982) and its progeny, the statutes and rules implementing Article IV, section 1b violate Article I, section 8. More precisely, Wolfe contends that the provisions of ORS 260.561 imposing conclusive liability on chief petitioners, and the provisions of ORS 260.995(1)(c) permitting a fine up to $10,000 for each violation of Article IV, section (1)(b) constitute invalid restrictions on speech. Although Wolfe contends that he is only challenging the statutes and rules implementing Article IV, section 1b and not the pay-per-signature ban itself, his argument remains premised on the contention that prohibiting payment per signature impermissibly suppresses speech. For example, in his Reply brief, Wolfe argues that “disabling any aspect” of his “right to obtain signatures explicitly and necessarily targets expression and expressive conduct, which the Legislature cannot limit under Article I, §§ 8 and 26.” (Wolfe’s Reply Brief at p. 47.) Because constitutional language must be interpreted in a way to harmonize potentially conflicting provisions, Article IV, section 1b cannot be held to violate other state constitutional rights. Furthermore, even if Article IV, section 1b did conflict with Article I, sections 8 or 26 or Article IV, section 1, the later-adopted constitutional amendment would take precedence. In re Fadeley, 310 Or 548, 560 (1990), citing Hoag v. Washington-Oregon Corp., 75 Or 588, 612 (1915). Second, even if Wolfe could challenge ORS 260.561 and 260.995(1)(c) apart from Article IV, section 1b in this context, he has not established that the statutes violate the Oregon Constitution. In Robertson, the Oregon Supreme Court set out a framework within which to analyze challenges to statutes under Article I, section 8. Cases since Robertson further refined that framework. See, e.g., State v. Plowman, 314 Or 157 (1992). Recently, in State v. Babson, 249 Or App 278 (2012), the court summarized the analysis as follows: Robertson, Plowman, and numerous subsequent Article I, section 8, cases * * * divide the universe of enactments that are subject to a challenge under that provision into three categories. The first consists of enactments directed toward expression per se, such as an anti-obscenity statute that imposes penalties for uttering specified words. See State v. Henry, 302 Or 510, 732 P2d 9 (1987). The second category consists of enactments that are directed toward some regulable results and “expressly prohibit” expression used to achieve those results, Plowman, 314 Or at 164, such as a statute that penalizes threats to coerce a person into performing an act that she has the right to refuse, Robertson, 293 Or 402. The third category (or, in Plowman terms, the second part of the second category) consists of enactments that regulate or prohibit conduct “without referring to expression at all,” Plowman, 314 Or at 164, but may, when enforced, interfere with a person’s expression. An example is a statute that imposes a penalty for criminal trespass, imposed against a political protestor. Huffman and Wright Logging Co. v. Wade, 317 Or 445, 857 P2d 101 (1993). Each of these types of enactment is reviewed for constitutionality under different rules. Thus, the first step in reviewing an enactment under Article I, section 8, is to determine the enactment’s category.249 Or App at 285-86.Wolfe asserts that the statutes and rules implementing Article IV, section 1b fall into the first Robertson category, and are subject to a facial challenge, because they “target communication of political ideas.” (Wolfe Reply Brief at 48.) Notwithstanding Wolfe’s argument, the challenged laws are not directed toward expression per se (category 1) nor do they expressly prohibit expression as a means to other results (category 2). ORS 260.561(1)(b) imposes liability on chief petitioners if they know, or should have known, of violations of certain enumerated election laws (including Article IV, section 1b) committed by persons obtaining signatures on their petitions. ORS 260.995(2)(c) authorizes the Division to impose a civil penalty of up to $10,000 for each violation of certain enumerated election laws (including Article IV, section 1b). Neither enactment is directed toward expression and neither expressly prohibits expression. In fact, these laws, in and of themselves, do not prohibit anything. The underlying law containing the prohibition is Article IV, section 1b itself, which, as noted above, is not subject to challenge under Article I, section 8.Furthermore, even if Wolfe could challenge the pay-per-signature ban under Article I, section 8, the challenge is not well taken. The pay-per-signature ban prohibits conduct (a method of paying circulators), and not expression. All of the expressive conduct related to petition circulation – talking with voters, asking them to sign petitions, and the voters’ signatures themselves are permitted under the constitutional provision and statutes at issue. The ban applies to a non-expressive aspect of the employment relationship between chief petitioners and paid circulators. In other words, Wolfe is subject to civil penalties not because of any speech or other form of expression he engaged in, but because he knew or should have known that persons obtaining signatures on behalf of his petition were being paid per signature. The fact that a circulator may speak with voters while obtaining signatures is immaterial, because the punishable conduct is payment or receipt of compensation based on the number of signatures obtained. See Vannatta v. Oregon Government Ethics Comm., 347 Or App 449 (2009) (giving gifts to public officials is nonexpressive conduct); See also Huffman and Wright Logging Co. v. Wade, 317 Or 445, 452 (1993) (noting that “a person’s reason for engaging in punishable conduct does not transform conduct into expression under Article I, section 8” and “speech accompanying punishable conduct does not transform conduct into expressions under Article I, section 8.”) For these reasons, the Division’s enforcement of Article IV, section 1b does not violate Article I, section 8, Article I, section 26 or Article IV, section 1 of the Oregon Constitution. 3. Excessive Fines ChallengeWolfe also asserts that the imposition of a $65,000 fine for pay-per-signature violations constitutes an excessive fine under the Eighth Amendment to the United States Constitution and Article I, section 16 of the Oregon Constitution. The Eighth Amendment provides, “Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.” Under the Eighth Amendment, a fine is excessive if it is “grossly disproportionate to the gravity of the defendant’s offense.” U.S. v. Mackby, 339 F3d 1013, 1016 (9th Cir. 2003) (holding that $729,454.92 in civil penalties and treble damages for violations of the False Claims Act did not violate the Excessive Fines Clause of the Eighth Amendment).In the administrative law context, the courts have recognized that “[n]o matter how excessive (in lay terms) an administrative fine may appear, if the fine does not exceed the limits prescribed by the statute authorizing it, the fine does not violate the Eighth Amendment.” Newell Recycling Company, Inc. v. United States Environmental Protection Agency, 231 F3d 204 (5th Cir. 2000) (upholding a civil penalty of $1.345 million for the company’s violation of the Toxic Substances Control Act); see also Pharon v. Board of Governors of the Federal Reserve System, 135 F3d 148 (D.C. Cir. 1998) (holding that a $37 million penalty for violations of the Bank Holding Company Act was “proportional to the violation and well below the statutory maximum.”)In this case, the Division is authorized by statute to impose a fine of up to $10,000 for each violation of Article IV, section 1b. ORS 262.995(2)(c). In keeping with its statutory authority, the Division promulgated OAR 165-013-0020(1)(b)(F), which sets the minimum civil penalty per violation of Article IV, section 1b at $2,500 signature sheet. Because the $65,000 civil penalty for 26 violations of Article IV, section 1b is well within the limits prescribed by statute and administrative rule, it does not violate the Eighth Amendment. See, e.g., Evans v. Attorney General, 148 Or App 133 (1997) (upholding a civil sanction of $70,000 based on the petitioner’s violations of the bingo gaming statutes and rules); Bernard for Clackamas v. Elections Division, 229 Or App 419 (2009) (upholding a civil penalty of $11,550 for a campaign committee’s failure to report an in-kind contribution on its pre- and post-election contribution and expenditure reports for the 2004 primary and general elections); United Telephone Employees PAC v. Secretary of State, 138 Or App 135 (1995) (the secretary did not abuse his discretion in imposing $17,850 in civil penalties against a political action committee for its unintentional failure to report expenditures). Finally, contrary to Wolfe’s contention, Article I, section 16 of the Oregon Constitution is inapplicable in this case. As the Oregon Supreme Court has recognized, Article I, section 16 applies only in criminal proceedings. Lincoln Interagency v. Kitzhaber, 341 Or 496, 509 (2006); Oberg v. Honda Motor Co., 316 Or 263, 274-75 (1993), rev’d on other grounds, Honda Motor Co. v. Oberg, 512 U.S. 415 (1993). To reiterate what has been stated previously, this is a contested case and not a criminal proceeding. ORDERI propose the Division issue the following order:The April 23, 2012 Notice of Proposed Civil Penalty; Opportunity to Request Hearing (Notice) to Robert Wolfe, Chief Petitioner for Initiative Petition 24 is AFFIRMED.Robert Wolfe, in his capacity as Chief Petitioner for Initiative Petition 24 is assessed a civil penalty of $65,000.Alison Greene WebsterSenior Administrative Law JudgeOffice of Administrative HearingsAPPEAL PROCEDUREThis is the Administrative Law Judge’s Proposed Order. You have the right to file written exceptions and argument to be considered by the Elections Division. Your exceptions and argument must be received not later than 30 calendar days after the service date of this Proposed Order. The date of service is the day this proposed order was mailed, not the day you received it. Send them to:Elections Division255 Capitol St NE, Ste 501Salem, OR 97310-0722If the Administrative Law Judge’s proposed order recommends a decision favorable to a party and the agency intends to reject that recommendation and issue an order adverse to that party, the agency will serve an amended proposed order on the party. The agency shall at the same time notify the party when and how written exceptions for the amended proposed order must be filed to be considered by the agency.The administrator or designee will issue a Final Order that will explain your appeal rights.CERTIFICATE OF MAILINGOn July 5, 2013, I mailed the foregoing Proposed Order issued on this date in OAH Case No. 1202801.By: First Class Mail Daniel MeekAttorney at Law10949 SW 4th AvenuePortland OR 97219T. Beau EllisDay Law Group, PC12755 SW 69th Avenue Ste 200Portland OR 97223Linda K. WilliamsAttorney at Law10266 SW Lancaster RoadPortland OR 97219Alana CoxSecretary of State, Elections Division255 Capitol St NE Ste 501Salem OR 97310Michael GrantAssistant Attorney GeneralDepartment of Justice1162 Court Street NESalem OR 97301-4096Carol BuntjerAdministrative SpecialistHearing Coordinator ................
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