IN THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT, IN AND FOR LEON COUNTY, FLORIDA JOHN D. SMITH, Petitioners, v. CASE NO. 2007 CA 000696 AS ATTORNEY GENERAL OF THE corset case Numer DOV =ECA OS TS STATE OF FLORIDA, Vortted om_ 4 ee Bott isleci> @ Respondents. Dep cn ides > ! ORDER TO SHOW CAUSE, THIS CAUSE came before the Court upon Petitioner’s “Verified Petition for Writ of Quo ‘Warranto,” filed on April 3, 2017. After review of the file, and otherwise being fully advised, this Court FINDS: ‘That the Petitioner has made a prima facie showing for quo warranto relief, this Court, pursuant to Rule 1.630, Florida Rules of Civil Procedure, hereby orders Respondents to show cause, in writing, within forty (40) days of the date of this order, why such relief should not be granted. Copies of such response shall be filed with this Court. DONE and ORDERED in Chambers at Tallahassee, Leon County, Florida on this p™ day of. Ape 2017. Ol edi Ab Cinfuit Judge Copies To: zee BR 3 HON, PAMELA JO BONDI Scott E. Siverson, Esq. Attomey General, State of Florida 121 S. Orange Avenue Suite 1500 The Capitol, PL-01 Orlando, Florida 32801 Tallahassee, FL 32399Filing # 54573264 E-Filed 04/03/2017 04:40:40 PM IN THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT, IN AND FOR LEON COUNTY, FLORIDA JOHN D. SMITH Petitioner v, CASE NO. 2017 CA 000696 PAMELA JO BONDI, in her official as Attorney General of the State of Florida, Respondent. VERIFIED PETITION FOR WRIT OF QUO WARRANTO Petitioner JOHN D. SMITH, by and through his undersigned counsel, files this Petition for Writ of Quo Warranto against PAMELA JO BONDI, in her official capacity as Attorney General of the State of Florida and states: 1. The action is for declaratory and injunctive relief. PARTIES, JURISDICTION AND VENUE 2. Petitioner JOHN D. SMITH (hereinafter “Petitioner”) is a United States citizen, a resident of Orange County, Florida and is otherwise sui juris. 3. Respondent PAMELA JO BONDI is the duly elected Attorney General of the State of Florida and the person with the highest authority over how the affairs of the Office of Attorney General (“OAG”), which is an “agency” of the State of Florida within the meaning of Fla. Stat. § 287.012(1).4. With the separate petitions for quo warranto, this Court has jurisdiction pursuant to Fla. Const. Art. V, § 5(b). See also Whiley v. Scott, 79 So. 3d 702 (Fla. 2011). w . As a Floridian, Petitioner has standing to bring this action. MacNamara v. Kissimmee River Valley Sportsmans’ Ass’n, 648 So. 2d 156, 164 (Fla. 2d DCA 1994)(“[A]ctions in the nature of quo warranto to question the authority for the exercise of rights, privileges[,] and powers derived from the state can be brought by any person.”) COMMON ALLEGATIONS 6. For all times material hereto, Respondent has exceeded the authority granted to the OAG under the Florida Deceptive and Unfair Trade Practices Act (hereinafter “FDUTPA”), specifically the authority granted under Fla. Stat. § 501.2076). 7 For all times material hereto, and pursuant to authority granted to it under Fla. Stat. § 501.207(6), the OAG has investigated, and continues to investigate, businesses, whether as persons or as entities, suspected of engaging in deceptive and or unfair trade practices while conducting business activity involving Florida citizens, businesses and or interests within or corresponding to the sovereignty of the State of Florida.8. For at times material, and pursuant to authority granted to it under Fla. Stat. § 501.207(6), Respondent has at times offered businesses being investigated for suspected FDUTPA violations a written settlement offer called an “Assurance of Voluntary Compliance” (hereinafter “AVC”) agreement, which is aimed at resolving the OAG’s investigation while addressing particular business practices. 9. Entry of an AVC agreement typically ends the OAG’s investigation of the subject business and often conditionally suspends any prosecution by OAG against said business, pending the latter’s completion of various obligations set forth in the AVC agreement. 10. For all times material hereto, on its “Consumer Protection Division” tp www my floridalegal.com/pages )O4EC4E7, Respondent states that it has “resolved 568 investigations and generated $9.8 billion that has been returned to the benefit of Floridians since 2011” through its enforcement powers granted by Fla. Stat. § 501.207(6). 11. Upon review of said 568 investigations, Petitioner submits that 445 investigations were handled by the OAG’s Consumer Protection Division, if counting the number of investigations by the business being investigated.12. Of the 445 investigations, 167 resulted in lawsuits, judgments and non- AVC settlement agreements while the remaining 278 were resolved through AVC agreements. 13, After reviewing the 278 AVC agreements, the obligations set forth within any AVC typically involve the following: a. promise or promises by the business to cease specified conduct; b. when applicable the business shall take remedial measures; c.pay a sum of attorneys’ fees to the OAG’s office; d. when applicable pay a fine or fines; ‘emake a contribution to charity. See Exhibit A for the list of the 278 AVC agreements since 2011. 14. Of the 278 AVC agreements, fifty-five (55) such agreements required the business being investigated to contribute money to a charity or charities as part of a resolution to end the OAG’s investigation. 15. After reviewing the 278 AVC agreements available for public viewing through information supplied in the public domain by the OAG, the following language routinely appears in the AVC agreement: The [business being investigated] is “entering this AVC without an admission that they have violated Florida's Deceptive and Unfair Trade Practices Act, or any other law, and solely for the purpose of resolution of this matter with the Department. The Department, by and through the undersigned Associate Deputy Attorney General, accepts this AVC and agrees to the termination of this investigation, pursuant to Section 501.207(6), Florida Statutes, and by virtue of the authority vested in the Department by said statute.” See Exhibit B, AVC agreement with Texaco Xpress Lube.16. As noted above, the authority to formulate AVC agreements in which the business being investigated is directed to make a contribution to a charity arises from Florida Statutes § 501.207, entitled “Remedies of enforcing authority,” which states in pertinent part, the following: (6)The enforcing authority may terminate an investigation or an action upon acceptance of a person’s written assurance of voluntary compliance with this part. Acceptance of an assurance may be conditioned on a commitment to reimburse consumers or governmental entities, make contributions, pay civil penalties, pay attomey’s fees and costs, or take other appropriate corrective action. An assurance is not evidence of a prior violation of this part. However, unless an assurance has been rescinded by agreement of the parties or voided by a court for good cause, subsequent failure to comply with the terms of an assurance is prima facie evidence of a violation of this part. Such assurance is not a limitation upon any action or remedy available to a person aggrieved by a violation of this part.(emphasis added). 17. Based on information supplied in the public domain by the OAG, during 2011 and 2015 the 278 signed AVC agreements entered into the OAG and businesses it investigated yielded $20,238,249 in forced contributions to charitable organizations, See Exhibit A. 18. Based on information supplied in the public domain by the OAG, the sum of $20,238,249 was paid by 55 businesses! in amounts ranging from $250 to more than $1,250,000. A list of the 55 businesses which agreed, separately, to make contributions to charities pursuant to one or more AVC agreement is attached hereto as Exhibit C. * Some businesses entered into more than one AVC agreement during said period, 519. Significantly, based on information and belief, whenever an AVC agreement involves a business making a contribution to a charity, Respondent selects the charity that will receive the contribution. 20. Based on information and belief, in each of the aforementioned 55 AVC agreements, the business being investigated was directed by the OAG to forward a cashier’s check payable to the charity the OAG selected, along with the businesses signed, notarized acceptance of the AVC. Upon receipt of the signed AVC agreement, Respondent thereafter remitted the contribution check to the designated charity recipient. 21. Based on information supplied in the public domain by the OAG, each charity receiving contributions from AVC agreements requested the Respondent to consider or maintain it as a recipient of such contributions. 22. Based on information supplied in the public domain by the OAG and as a result of AVC agreements formulated by the OAG between 2011 and 2016, fourteen (14) businesses paid a total of $5,538,412 in contributions to 35 unregistered charities. See Exhibit D, list of forced contributions to unregistered charities through AVC agreements. 23. The money being donated to unregistered charities — more than one quarter of the $ 20,238,249 collected by the OAG during said period — violates several regulatory provisions within Florida law.24, Specifically, pursuant to by Fla. Stat. § 496.405, all charities seeking contributions must register with the Florida Department of Agriculture and Consumer Services. The OAG’s own website contains a page entitled “How to Protect Yourself: Charitable Solicitations,” stating in part the following: In Florida, charities must register with the Florida Department of Agriculture and Consumer Services. You can search for a registered charity on CHECK- A-CHARITY on wy Ohelpfla.com. See Exhibit B. 25. Specifically, Fla. Stat. § 496.405(1) states as follows: A charitable organization which intends to solicit contributions in or from this state by any means or have funds solicited on its behalf by any other person, charitable organization, sponsor, commercial co-venturer, or professional solicitor, must, before engaging in any of these activities, file an initial registration statement, and a renewal statement annually thereafier, with the department. emphasis added). 26. Additionally, Fla. Stat. § 496.405(2) states as follows: ‘The initial registration statement must be submitted on a form prescribed by the department, signed by an authorized official of the charitable organization and include the following information: . A copy of the financial statement or IRS Form 990 for the preceding fiscal year. ‘The name of the charitable organization its purpose. The name of the officers who are in charge of solicitation activities. The — answers tothe = 7-— questions. «in Fla. Stats§ 496.405(d)(1),(4)(2).(4)(3),(4)(4).(4)(5).(€)(6) & (€)(7), along with the answers in Fla-Stat§6496.405(g(D, (8X2), (2G), (4). (8G). (B)S)B) & (WHOA). 5. The payment of the registration fee. For $5,000 raised annually, the fee is $10. $5,001 to $100,000 the fee is $75; $100,001 to $200,000 the fee is $125; $200,001 to $300,000 the fee is $200; $500,000 to $1 Million the fee is $300; $1 Million to $10 Million the fee is $350; for $10 Million and higher the fee is $400. uN 27. As outlined above, the registration requirements for a charity intending to seek contributions in Florida are substantial, of which exemptions donot exist for charities receiving contributions through an AVC agreement formulated by Respondent. See Exhibit D. 28. Ironically, a charity failing to so register is deemed to have violated FDUPTA, as set forth by Fla. Stat. § 496.416: Any person who commits an act or practice that violates any provision of FS 496.401—496.424 commits an unfair or deceptive act, in violation of Chapter 501, part II and is subject to the penalties and remedies provided for such violation, 29. In fact, under certain circumstances a charity seeking contributions without registration may violate Fla. Stat. § 496.417, a third degree felony. 30. None of the aforementioned 35 recipient charities satisfied the registration requirements under Fla. Stat. §§ 496.405(1) and (2). Nor can any be found on the aforementioned CHECK-A-CHARITY website, the very process Respondent recommends consumers use in deciding the legitimacy of a charity. See Exhibit E. 31. Petitioner hired the undersigned counsel and has agreed to pay him a reasonable fee and to reimburse that law firm its necessary expenses. COUNT I Petition for Quo Warranto 32. This is an action for a writ of quo warranto against Respondent for exceeding its statutory authority to force businesses subject to Respondent’s enforcement powers to make contributions to unregistered charities.33. Petitioner avers and re-alleges paragraphs | through 31 above as if more fully set forth herein. 34. Within the 55 businesses which entered into AVCs between 2011 and 2106, fourteen (14) businesses were required to make contributions to the 35 charities which were not registered under Fla. Stat. § 496.405(1) and thus ineligible to lawfully received charitable contributions from any source, including those solicited, secured and or directed by Respondent. 35. A list of the thirty five charities which were not compliant with the aforementioned law concerning registration for charities and otherwise not listed on the Florida Department of Consumer Services “Check-A-Charity at that time each received a contribution through Respondent via a signed AVC agreement is attached hereto as Exhibit D. 36. Through the aforementioned 14 AVC agreements, the 35 unregistered charities received $5,538,412 in contributions directed by Respondent. 37. The 14 AVC agreements resulted in $5,538,412 being contributed to nonprofit organizations which did not have right to accept the same. 38. For all times material hereto, Respondent exceeded the authority granted to the OAG under Fla. Stat. § 501.207(6) by requiring at least 14 businesses which entered into separate AVC agreements to make contributions to 35unregistered charities, acts which violate the FDUTPA as set forth by Fla. Stat. § 496.416. 39. Additionally, through other agreements with businesses it has investigated pursuant to Fla. Stat. 501.207(6), Respondent has directed four (4) contributions totaling $40,000 to be paid to its unregistered charity, the “Florida Law Enforcement of the Year Award”. 40. Respondent exceeds the authority granted to the OAG under Fla. Stat. 501.207(6) whenever OAG enters into an AVC agreement or other agreement that directs contributions from businesses subject to OAG’s enforcement powers to be made to charities not lawfully registered in the State of Florida per Fla. Stat. §§ 496.405(1) and (2). 41. Given the continuity of the OAG’s enforcement of FDUTPA, this Court should exercise its discretion to grant this discretionary writ. 42. A writ of quo warranto is available whenever a public official has acted beyond his or her authority. See State ex rel. Butterworth v. Kenny, 714 So. 2d 404 (Fla. 1998); Austin v. State ex rel. Christian, 310 So. 2d 289 (Fla. 1975). 43. Petitioner submits that adequate proof is contained herein for the Court to exercise its discretion to issue this discretionary writ.WHEREFORE, Petitioner seeks an evidentiary hearing on the allegations set forth above, and thereafter a writ prohibiting the Office of Attorney General from directing any contributions it imposes on businesses alleged to have violated FDUTPA through AVC agreements to be made to any charity that is not registered pursuant to Florida law. COUNT IL Petition for Writ of Quo Warranto 44, This is an action for a writ of quo warranto against Respondent for exceeding statutory authority to force businesses subject to Respondent's enforcement powers to make contributions to its contracted agent, Seniors v. Crime. 45. Petitioner avers and re-alleges paragraphs 1 through 22 and 31 above as if more fully set forth herein. 46. For all times material hereto, OAG has directed and continues to direct contributions to be paid to a charity in which it has maintained an impermissible and direct connection, in violation of Fla.Stat. § 112.313.47, Florida Statutes § 112.313 states in pertain part the following: (7) CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.— (@)No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he or she is an officer or employee, excluding those organizations and their officers who, when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, county, or other political subdivision of the state; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his or her private interests and the performance of his or her public duties or that, would impede the full and faithful discharge of his or her public duties. (8)DISCLOSURE OR USE OF CERTAIN INFORMATION.— A current or former public officer, employee of an agency, or local government attomiey may not disclose or use information not available to members of the general public and gained by reason of his or her official position, except for information relating exclusively to governmental practices, for his or her personal gain or benefit or for the personal gain or benefit ofany other person or business entity.(emphasis added). 48. Based on public information, Respondent has had a contract with Seniors vs. Crime for the last 3 years. These contract years are 2014-15, 2015-2016 and 2016-2017. The most recent contract is attached hereto as Exhibit F. 49. Incorporated in 2003 in New Port Richey, Florida, Seniors v. Crime operates as a 501(c)(3) non-profit organization which aims, in part, to promote crime prevention, reporting of criminal activity to law enforcement 2authorities and advocacy for senior citizens in residing or visiting Florida who are or may be victims of crime. 50.For all times material hereto, Seniors v. Crime is a charity registered with the State of Florida and can be found on the aforementioned CHECK-A- CHARITY website. 51. Seniors v. Crime’s contractual obligations to OAG involves in part providing statistical information to Respondent on a periodic basis. 52. In return, OAG pays Seniors v. Crime the sum of $392,945 annually which includes reimbursement for all expenses incurred by said organization. See Exhibit F, OAG-Seniors Contract, page 17. 53. Based on information and belief, Seniors v. Crime has neither been a direct support organization, as defined by Fla. Stat. § 16.616, for OAG nor has it maintained contracts it has entered into with OAG for years prior to 2014. See Exhibit G, 2017 Letter from Nicholas Weilhammer, OAG official. If Seniors v. Crime is a citizen support group pursuant to Fla. Stat. 5 20.058, then its contract with the OAG would cause it to be subject to the conflict of interest rules set forth in Chapter 112, Fla. Stat. 54, However, during the period of 2011 and 2015, Respondent required thirteen (13) businesses, each entering into a separate AVC agreement, to makecontributions to Seniors vs. Crime, with the sum of all such contributions being $485,500. See Exhibits A and D. 55.No other Florida charity received an amount close to $485,500 in contributions from Respondent during the same period? 56. During each of those years, as it has since its inception, Seniors v. Crime has spent over 90% of its annual funding on administrative expenses and salaries, which is typically a ‘red flag’ for most charities. See Exhibit H? National Center_for Charitable Statistics Standards. See also Exhibit I (2011-2015 Revenue and Expenses Summary for Seniors vs. Crime). 57. Consequently, Respondent directed contributions from alleged FDUTPA violators to this non-profit organization it would otherwise not recommend to Florida consumers, if their charity decisions were based solely on the ratio of administrative expenses and salaries to annual revenue. See Exhibit I. 58. Furthermore, the contracts between OAG and Seniors v. Crime occur even though two OAG officers, Nicholas B. Cox, who works as senior prosecutor in the Florida Statewide Prosecutor Office, and Victoria Butler, who directs 2 Contributions directed by OAG to Seniors vs. Crime were as follows: $55,000 in 2011, $26,000 in 2012, $387,000 in 2013, $15,000 in 2014 and $2,500 in 2015. > According to the 2016-2017 contract between Seniors vs. Crime and the OAG, the total budgeted expenses in 2016—2017 for Seniors vs. Crime were $383,982.92. The total revenue for the preceding fiscal year was $360,306.00. See Exhibit K. The $383,982.92 in expenses for Seniors vs. Crime in 2016 included a salary expense for 12 employees of $275,232.92 and Non-Payroll Expenses of $108,750.00. See Exhibit F. 4the Tampa office of the OAG’s Economic Crimes bureau, also has served and continue to serve as directors and or employees of Seniors vs. Crime. See Exhibit J (Seniors vs. Crime’s “2015 Restated Articles of Incorporation” from the State of Florida Division of Corporations website, www.sunbiz. 59. In Seniors vs. Crime’s most recent 2015 Form 990 Tax Return, in Part VII “Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors,” both Mr. Cox and Ms. Butler were listed as employees (receiving no compensation) working 2 hours per week each at Seniors vs. Crime. See Exhibit K. 60. From public records filed in 2015, Mr. Cox and Ms. Butler are listed as ‘Directors’ for Seniors vs. Crime. See Exhibit J. 61. For all times material hereto, and for the benefit of OAG, Nicholas Cox was an OAG public officer who, while acting in his official capacity within the OAG, directly or indirectly procured the contractual services of Seniors v Crime of which he was a director or employee. 62. For all times material hereto since 2013, and for the benefit of OAG, Victoria Butler was an OAG public officer who, while acting in her official capacity within the OAG, directly or indirectly procured the contractual services of Seniors v. Crime of which she was a director or employee.63. The $485,500 in contributions were directed to Seniors v. Crime through 13 AVC agreements, while at the same the OAG had a contractual relationship with said nonprofit organization, and while two public officers of the OAG maintained a level of managerial oversight over said nonprofit organization. 64. For all times material hereto, Respondent has exceeded the authority granted to the OAG under Fla. Stat. § 501.207(6) by ignoring conflict of interest rules set forth in Fla. Stat. § 112.313 vis-a-vis two of Respondent’s public officers. 65. For all times material hereto, Respondent has exceeded the authority granted to the OAG under Fla. Stat. § 501.207(6) by requiring at least thirteen (13) businesses which entered into separate AVC agreements between 2011 and 2105 to make contributions to a charity of which it is contractually bound, in violation of conflict of interest rules set forth by Fla. Stat. § 112.313(3). WHEREFORE, Petitioner seeks an evidentiary hearing on this Count II and thereafter a writ prohibiting the Office of Attorney General from directing any contributions to Seniors v. Crime while (i) it holds a contract with said organization and (ii) any of its officers serve as an director, officer or employee of said organization, or has a relative serving in such capacity or other connection with, Seniors v. Crime.VERIFICATION STATE OF FLORIDA. COUNTY OF ORANGE Pursuant to Fla. Stat. § 92.525(2), the undersigned states: “under penalties of perjury, I declare that I have read the foregoing Verified Petition for Quo Warranto and that the facts stated in it are true.” DAM Aon) 2, 30/7 JOHN D. SMITH DATE ___Scott E. Siverson__ SCOTT E. SIVERSON Fla. Bar No. 58289 121 S. Orange Ave. Suite 1500 Orlando, FL 32801 Office 407-210-6547 scottsiverson@pmail.com Attorney for PetitionerIm be =f Aer Tg ™ moo mw >| INDEX OF EXHIBITS Title List of the 278 AVC agreements since 2011 (6 pages) AVC agreement with Texaco Xpress Lube (14) List of 55 businesses forced to donate to charities (2) List of forced contributions to unregistered charities through AVCs (1) OAG website, "How to Protect Yourself: Charitable Solicitations” (1) 2016-2017 OAG contract with Seniors v. Crime (25) March 22, 2017 letter from N. Weilhammer, OAG official (1) National Center for Charitable Statistics, Standards (1) Seniors v. Crime, 2011-15 Revenue and Expenses Summary (1) Seniors v. Crime, 2015 Restated Articles of Incorporation (5) Seniors v. Crime, 2015 Form 990 Tax Return (7)