Opinion No. 98-08CP and 98-09CP

MAURICE WASHINGTON, incumbent Republican candidate for Nevada Senate District 3; and

MAURICE WASHINGTON, incumbent Republican candidate for Nevada Senate District 3,

This Opinion is in response to requests for opinion filed pursuant to NRS 294A.345 and 281.477 with the Nevada Commission on Ethics (Commission) by Maurice Washington against James Spoo (Request No. CP98-08) and by Mr. Spoo against Mr. Washington (Request No. CP98-09). A hearing on the opinion requests was held on October 29, 1998, in Reno, Nevada. Mr. Washington was represented by Timothy Post, and Mr. Spoo was represented by Barbara Gruenewald. The Commission heard testimony from Mr. Washington, Mr. Spoo, Doyle Brown, Greg Evangelatos, Lynn Atcheson, and Cecelia Coiling, received some evidence by offer of proof, and received several exhibits. At the conclusion of the hearing, the Commission deliberated the matter and reached a decision. The Commission now issues the Findings of Fact and Opinion which follows.

1. Mr. Washington is the incumbent and the Republican candidate for Nevada Senate District 3, and Mr. Spoo is the Democratic candidate for the same Senate seat

2. In campaign mailers, Mr. Spoo made the following statements regarding Mr. Washington:

Washington claimed and received public assistance, Medicaid and Child Care payments on behalf of a close relative.

Washington personally benefited from affirmative action as an apprentice electrician. He received four years of paid schooling and on-the-job training.

Washington is using his tax exempt church (Center of Hope Christian Fellowship) as a campaign office. He lists the church's phone number (331-3826) as his campaign number. These ads are potential violations of law and may threaten the church's tax exempt status with the state and with the IRS.

FACT: Maurice Washington voted AGAINST prohibiting kids from smoking on school grounds, AGAINST prohibiting certain advertising of tobacco products near schools, and AGAINST requiring health officials to study factors contributing to tobacco use by kids.

In a radio advertisement, Mr. Spoo also made the following statement regarding Mr.

On the floor of the State Senate on April 3, 19971 Maurice Washington had to choose between the rights of tobacco companies and the health of our kids, and he decided to go with "Big Tobacco." Even thought Nevada is suing the tobacco companies for over 400 million dollars, Washington voted against prohibiting kids smoking at school and against stopping tobacco companies from advertising near our schools. And guess what, In Washington's bid for re-election, he's accepted $2,250 from "Big Tobacco.”

3. Mr. Washington has never received AFDC payments. Mrs. Washington did agree to take her nephew as a foster child, and Mrs. Washington was ultimately awarded guardianship of her nephew. Under Nevada's foster care program, the nephew was automatically entitled to Medicaid coverage, and Mrs. Washington was entitled to receive approximately $300 per month in foster care payments. Neither Mr. Washington nor Mrs. Washington were required to apply for either of these benefits because they mandatorily ran to the nephew's benefit by statute.

4. In 1978, Mr. Washington enrolled in an apprenticeship program sponsored and administered by the International Brotherhood of Electrical Workers Local No. 401 (IBEW). The apprenticeship program contained equal employment opportunity and affirmative action provisions. Mr. Washington testified that he applied for and was accepted into the apprenticeship program the same as any other applicant and that he was not granted any special privileges or access to the program because he is an African-American. Mr. Washington completed the four-year apprenticeship, during which he was paid for his on-the-job training.

5. Mr. Washington is the pastor for the Center of Hope Christian Fellowship in Sparks, Nevada. Mr. Washington displayed one of his campaign signs in front of the church building. Additionally, Mr. Washington has displayed his campaign literature and the campaign literature of other candidates on a table in the church building. The telephone number shown on Mr. Washington's campaign literature is the church's telephone number. The telephone is answered by church employees. According to Mr. Washington, the church employees are instructed to refer campaign related calls to Mr. Washington's campaign consultants in Reno. But according to Mr. Spoo the telephone was answered with the indication that the number was both the church's number and Mr. Washington's campaign number. Before running this portion of his advertisement, Mr. Spoo spoke with accountants and pastors, and he was told by the people he spoke with that Mr. Washington's use of his church and church office for campaign purposes was "very risky" and might well jeopardize the church's tax-exempt status.

6. In radio advertisements, Mr. Washington made the following statements regarding Mr. Spoo:

When asked about removing the wall Maurice Washington's opponent said "We don't want to throw good money after bad money." And now he's taking credit for redevelopment?

In the early nineties the economy was down, the state was laying off workers. Maurice Washington's opponent had just been appointed executive director for the commission of economic development. He decided, on his own, to give the M.G.M. Grand a 2.5 million dollar tax deferral. The problem is, he didn't have the authority to do it! Only the commission as a whole, in conjunction with the state tax commission, have that authority. Maurice's opponent also had a problem with accountability for the state's foreign trade offices. He could not immediately quantify the benefits of the agency's operations in Japan, Taiwan and South Korea, resulting in his being grilled at the Nevada legislature by Senate Finance Chairman, Democrat Nick Home who told him, Quote, "We are not out to get you, but what we have here is a credibility gap," unquote. Soon after the legislature ended. Spoo resigned his position as Executive Director at the Commission on Economic Development.

7. In 1981, a raised planter was constructed as a decorative divider between the lanes of B Street as it ran through downtown Sparks. Mr. Spoo was mayor of Sparks from 1983 to 1990. The planter became known as "the wall" and was unpopular. In an article in the Sparks Tribune dated January 6, 1986, Mr. Spoo was quoted as saying, "We don't want to throw good money after bad money," meaning that the "wall" had already cost the city considerable money to construct and that it would cost considerably more money to remove it only five years later. Nonetheless, in 1986 the Sparks City Council voted to remove the "wall." In 1987, the first phase of the "wall's" removal was done, and Mr. Spoo was present when the demolition work was begun. At hearing, Mr. Spoo claimed that much of the redevelopment work and most of the special events in Sparks occurred during his tenure as mayor.

8. In 1990, Mr. Spoo became the Executive Director of the Nevada Commission on Economic Development (NCED). When he became NCED's Executive Director, the NCED had already established foreign trade offices in places such as Japan, Taiwan, and South Korea. Mr. Spoo testified that he was displeased with the operation of the foreign trade offices, but that the offices continued to operate for some time because he had "inherited" them. While the Executive Director, Mr. Spoo granted a tax-deferral to the MGM Grand's theme park. According to Mr. Spoo, the policy in place at the time he became Executive Director was that the Executive Director could grant tax deferrals without approval from the NCED and that he granted this particular deferral because he had been asked to do so by Governor Miller. Mr. Spoo testified that his resignation as Executive Director of NCED had nothing to do with his management of the foreign trade offices or the granting of the MGM's tax deferral, but was, instead, a personal decision that came primarily from his frustration with managing an agency that was, in his opinion, underfunded to do the mission it had been provided.

The Commission has jurisdiction over this matter and these parties pursuant to NRS 294A.345 and 281.477 because they are both candidates as defined in NRS 294A.005.

1. A person shall not, with actual malice and the intent to impeded the success of the campaign of a candidate, cause to be published a false statement of fact concerning the candidate, including, without limitation, statements concerning:

(g) The record of voting of a candidate if he formerly served or currently serves as a public officer.

According to NRS 281.477(7), the person who makes the bears the burden of proving the elements of the offense under NRS 294A.345 by clear and convincing evidence.

Because there were so many statements and because each statement stands on different facts, we will analyze each allegation separately, starting with Mr. Washington's allegations against Mr. Spoo.

Mr. Washington complained that Mr. Spoo's statement regarding the Washingtons' receipt of foster care payments was intended to indicate that Mr. Washington was a hypocrite because he was a proponent of welfare reform while receiving “welfare" himself. Mr. Spoo argued that his statement about Mr. Washington was true because foster care payments are considered "public assistance" under the Nevada Revised Statutes and that it was a fair assumption that the public would consider all "public assistance" to be "welfare."

Mr. Washington did admit that he told a reporter, "Welfare is wrong." This statement is certainly capable of a broad, unqualified reading that would fairly open Mr. Washington to the criticism that he is a hypocrite. On the other hand, Mr. Spoo overstated Mr. Washington's private actions in an attempt to make more of Mr. Washington's potential hypocrisy than the facts support.

Mr. Spoo stated that Mr. Washington "claimed and received public assistance, Medicaid and Child Care payments on behalf of a close relative." (Emphasis supplied.) This is not true. Neither Mr. nor Mrs. Washington ever "claimed" any public benefit because the benefits were automatic by statute when they accepted Mrs. Washington's nephew as a foster child. Moreover, technically Mrs. Washington, not Mr. Washington, receives the benefits on behalf of her nephew and ward.

Furthermore, the way Mr. Spoo structured the mailer, it is clear that Mr. Spoo intended to link the Washingtons' legitimate receipt of foster care benefits with ‘welfare," a term that has lately become pejorative. Mr. Washington's welfare reform bill -- to which his overly broad statement was addressed -- did not affect the foster care system. In essence, Mr. Spoo was actually comparing apples and oranges while publicly portraying that he was comparing apples with apples. As the testimony and argument in this matter showed, welfare is not welfare is not welfare, contrary to the overly simple analysis of newspaper pundits and the statement of Mr. Washington. In perpetuating the pundit’s unfairly simplified analysis, Mr. Spoo unfairly portrayed Mr. Washington as receiving “welfare" benefits that Mr. Washington had not received, but we cannot find Mr. Spoo’s statements to be actionably false under NRS 294A.345(1).

Mr. Washington objected to Mr. Spoo’s claim that Mr. Washington "personally benefited from affirmative action as an apprentice electrician." (Emphasis supplied.) By his own admission, Mr. Washington did participate in the IBEW’s apprenticeship program. The evidence showed that the IBEW’s apprenticeship program included equal opportunity and affirmative action components.

The record does not support Mr. Spoo's assertion that Mr. Washington personally benefited from the affirmative action component of the IBEW’s program. No evidence was presented to support the conclusion that because Mr. Washington is an African-American and because the IBEW had an affirmative action component to its apprenticeship program. Mr. Washington was accepted into the program solely or largely because he was African-American. Mr. Washington testified that he had to qualify for the program like any other applicant, regardless of his skin color. Mr. Spoo had no evidence to the contrary. Mr. Spoo's statement that Mr. Washington "personally benefited- from an affirmative action program is false.

Mr. Spoo's false statement cannot be as easily dismissed as Mr. Spoo would have it because the only intended inference of Mr. Spoo's statement is viciously unfair. Without any supporting evidence, Mr. Spoo asserted that Mr. Washington was accepted to the IBEW’s apprenticeship program only because Mr. Washington is African-American. This unsupported and false assertion is and was intended to be demeaning, offensive, and hurtful. It may be that at this date, Mr. Spoo could not possibly prove that Mr. Washington was or was not given entry into the IBEW’s apprenticeship program twenty years ago solely or largely because of Mr. Washington's ethnicity, but that is no excuse. The responsible, legally mandated, and decent response to this absence of proof would be to state what could be supported by the knowable record, not to spew into the public discourse a damaging, unsupported statement. The simple dictate of NRS 294A.345(1) is, "If you can't prove it, don't say it." Mr. Spoo violated this simple rule with his statement about Mr. Washington's participation in the apprenticeship program, and we must find that Mr. Spoo’s statement is false.

Regarding the issue of Mr. Washington's use of his church office as his business office and campaign office, Mr. Washington and Mr. Spoo essentially disagreed over the interpretation and applicability provisions of the IRS code. This Commission is not the proper forum to determine whether Mr. Washington's dual use of his church office threatens his church's tax-exempt status. What the record clearly showed is that Mr. Spoo's statements regarding Mr. Washington's dual use of his church office were true. Mr. Washington admitted as much in his testimony. Mr. Spoo's carefully worded statements regarding Mr. Washington's use of his church for campaign purposes are true and do not violate NRS 294A.345(1).

Mr. Washington stated that Mr. Spoo's tobacco statements misrepresented Mr. Washington's voting record on a 1997 bill addressing the use of tobacco. At hearing, Mr. Spoo admitted that his representations regarding the particulars of SB33, the bill that was the source of Mr. Spoo's advertisements, were incorrect. Mr. Spoo explained that he got his information regarding the bill's particulars from the Democratic Caucus of the State Senate and that the Caucus had received erroneous information from Senator Ernie Adler, the bill's sponsor, that the Caucus had then passed on to Mr. Spoo. Mr. Spoo stated that he pulled the advertisements when he was informed by Mr. Washington that the advertisements were in error. Thus, we find that while the statements made by Mr. Spoo were partially erroneous, we find that Mr. Spoo acted reasonably and fairly by pulling the advertisement as soon as he became aware of the errors and that he did not violate NRS 294A.345(1).

Mr. Spoo complained that Mr. Washington's statements about Mr. Spoo's involvement with the "wall" on B Street in Sparks falsely represent Mr. Spoo's record and accomplishments regarding Sparks' downtown redevelopment during Mr. Spoo's tenure as Sparks' mayor. Mr. Spoo and Mr. Evangelatos both testified that Mr. Spoo played a large part in Sparks' redevelopment efforts during his tenure as mayor, including the construction of certain structures, the bringing in of certain special events, and the destruction of the "wall" on B Street. Mr. Spoo did concede that five other mayors also contributed to Sparks' redevelopment efforts to greater or lesser degrees. Mr. Spoo also admitted that he did make a statement attributed to him by a reporter that removing the "wall" would be "throwing good money after bad."

Mr. Washington's statements regarding Mr. Spoo's record on redevelopment, and especially the "wall," create at least one impression, namely that Mr. Spoo was misstating and/or overstating his accomplishments relating to Sparks' redevelopment, and, based evidence presented to us that impression created by Mr. Washington's statements is false. Based upon the record, though, we cannot conclude that Mr. Washington's statements contain false statements of fact required for a finding of a violation of NRS 294A.345(1).

For example, the statement about which Mr. Spoo complained the most, namely that he referred to removal of the “wall" as "throwing good money after bad," was actually made by Mr. Spoo in 1983 and was accurately quoted by Mr. Washington. We do find that Mr. Washington's statements conglomerately can create what may be an unfair representation of Mr. Spoo’s record regarding Sparks' redevelopment. However, this conclusion is only one possible conclusion and is a matter of opinion. This matter does not present a situation in which the only conclusion of fact, not opinion, to be drawn is that Mr. Spoo lied about his accomplishments. Therefore, Mr. Washington's statement does not rise to the level of a violation of NRS 294A.345(1).

Mr. Spoo's complaint about Mr. Washington's statements regarding Mr. Spoo's record while he was the Executive Director of the NECD are similar to Mr. Spoo's complaints regarding Mr. Washington's statements that were just previously analyzed. Mr. Spoo complains, essentially, that Mr. Spoo's statements conglomerately create a false impression of Mr. Spoo's record as Executive Director of the NECD and the reasons why Mr. Spoo left his position. Unfortunately for Mr. Spoo's position, Mr. Washington's statements are each individually true (albeit slanted) and do not lead reasonably to a single knowably false conclusion.

The record showed that it was true that Mr. Spoo granted the MGM Grand's theme park a $3.5 million tax deferral. Mr. Spoo admitted as much, but explained that it was the NECD's policy at the time to allow the Executive Director to make recommendations regarding tax deferrals without involving the NECD board. Whether this policy was wise or legal according the statutes applicable to the NECD is not a question that can be answered by this Commission, but we can say that Mr. Washington's statement that Mr. Spoo "didn't have the authority" to make the tax deferral without the approval of the "commission as a whole" is a fair reading of the statutes governing the NECD's granting of tax deferrals. Mr. Washington's statements regarding Mr. Spoo's granting of a tax deferral to the MGM Grand's theme park are true and fair based upon the record before us.

It is also true, as evidenced by Mr. Spoo's O'M1 testimony, that the foreign trade offices maintained by the NECD were ineffective and not cost effective. Mr. Spoo explained at hearing that he had "inherited" the foreign trade offices from his predecessor and that he took action during his tenure as Executive Director to close the offices. Mr. Spoo did admit that during a budget appearance before the legislature he was asked difficult questions by senators, including Senator Home, regarding the operations of the NECD, and that Mr. Washington's statement contained an accurate quote from Mr. Home.

Finally, Mr. Spoo admitted that he left his position as Executive Director shortly after the close of the legislative session, just as Mr. Washington stated.

What Mr. Spoo claims is false about Mr. Washington's statements is that when they are taken together, they imply that Mr. Spoo was not a good Executive Director of NECD and that he left the NECD because of his poor record. We find that Mr. Spoo's reading is a reasonable reading and understanding of Mr. Washington's statements. We find, though, that Mr. Spoo's reading of Mr. Washington's statements is not the only possible or reasonable reading. It is also possible to read Mr. Washington's series of statements and conclude that Mr. Spoo left the NECD because he was frustrated with or disappointed in the job.

Mr. Spoo raised several questions about Mr. Washington's representations about Mr. Washington's record as a legislator. Mr. Spoo’s argument presented a novel question under NRS 294A.345 that merits our discussion.

The legislative history shows that the Legislature intended NRS 294A.345 to address false campaign statements made by one candidate against his or her opponent Toward that end, NRS 294A.345 uses the term "person" to describe the maker of a statement and the term "candidate" to describe the opponent about whom the statement was made.[1] We cannot interpret NRS 294A.345 to require or allow this Commission to examine at one candidate's request the statement made by an opposing candidate about himself or herself. Put simply, NRS 294A.345 was intended to prohibit a candidate from maliciously making false statements about his or her opponent and not to prohibit a candidate from making false statements about himself or herself. Thus, Mr. Spoo’s requests regarding Mr. Washington's statements about Mr. Washington's legislative record and accomplishments cannot properly be before this Commission and must be dismissed.[2]

We have concluded that two of Mr. Spoo's statements against Mr. Washington were false, namely the “welfare” statement and the "affirmative action" statement, so we must now determine whether either of the statements was made with actual malice as defined in NRS 294A.345(5)(a).

On the other hand, Mr. Spoo’s "affirmative action" statement against Mr. Washington was made with actual malice as defined under NRS 294A.345(5)(a). The evidence showed that Mr. Spoo knew at the time that he published the "affirmative action" statement that he could not prove that Mr. Washington was allowed to participate in the IBEW’s apprenticeship program solely or largely because of Mr. Washington's ethnicity and regardless of Mr. Washington's merits. It cannot be truthfully said that Mr. Washington personally benefited from the affirmative action component of the apprenticeship program unless there is some record or evidence of this fact. Mr. Spoo overreached his factual support in his zeal to attach Mr. Washington to the "hot-button" issue of racial quotas, preferences, and set-asides that now load the term "affirmative action," and in doing so he acted with knowledge that his statement was false and with reckless disregard for whether his statement was true or false. Thus, Mr. Spoo violated NRS 294A.345(1) with his "affirmative action" statement against Mr. Washington.

Although we find Mr. Spoo's statement to be a violation and Mr. Washington's statement not be a violation, in considering the overall conduct of each candidate considered in this matter, we find no civil penalty is warranted.

Based upon the record, the Commission concludes that Mr. Spoo violated NRS 294A.345(1) with "affirmative action" statement made in his political advertisement regarding Mr. Washington. Mr. Washington did not violate NRS 294A.345(1) with any of his statements made in his political advertising regarding Mr. Spoo. Even though Mr. Spools "affirmative action" statement was made with actual malice as defined in NRS 294A.345(5)(a), we impose no civil penalty upon Mr. Spoo.

It is specifically noted that the foregoing Opinion applies only to these specific facts and circumstances. The provisions of the Nevada Revised Statutes quoted and discussed above must be applied on a case-by-case basis, with results which may vary depending on the specific facts and circumstances involved.

[1] NRS 294A.345(1) (“A person shall not, with actual malice and the intent to impede the success of the campaign of a candidate..."); NRS 294A.345(1)(a) ("The education or training of the candidate."); NRS 294A.345(1)(b) ("The profession or occupation of the candidate."); NRS 294A.345(1)(c) ("Whether the candidate committed..."); NRS 294A.345(1)(d) ("Whether the candidate has received treatment for a mental illness...); NRS 294A.345(1)(e) ("Whether the candidate was disciplined…); NRS 294A.345(1)(g) ("The record of voting of a candidate…); NRS 294A.345(3) ("Any candidate who alleges that a false statement of fact concerning the candidate has been published in violation of subsection 1…); NRS 294A.345(4) ("A person who violates the provisions of this section is subject to a civil penalty..."). (Emphasis supplied.)

[2] Also dismissed at Mr. Spoo's request is Mr. Spoo's request against Mr. Washington related to Mr. Washington's statement about Mr. Spoo's running for Nevada State Treasurer.