Sloat Lawsuit

1
2
3
4
5
6
7
8
9
10
11
12
13
14
'is
16
17
18
19
20
21
22
23
24
25
26
27
28
Jesse Ortiz (CA Bar Assn. No. 176450) ,.... \
jesse@jesseortizlaw.com
Ben Williams (CA Bar Assn. No. 284884)
ben@jesseortizlaw.com
Jesse Ortiz Law
917 7th Street
Sacramento, CA 95814
Telephone: (916) 443-9500
Facsimile: (916) 443-9501
Attorneys for Plaintiff .
RHONDASMIRA and ORLEANS CONSLUTING GROUP, LLC
SUPERIOR COURT OF THE STATE OF CALIFORNIA
OF SACRAMENTO
) Case No.
)
)
COMPLAINT FOR DAMAGES:
RHONDA an indi viduc:.J.;
)
ORI.:ENJS CONSLULTING GRO'JPI LLCI
}
1.Violation of Business &
a California Limited Liabilit'i' }
Professions Code 17200;
Company,
)
) 2. Declaratory Relief;
3. Violation of the Political
Plaintiff,
Reform Act;
vs,
4. Wrongful Termination in
Violation of Public "
KEVIN SLOAT, an individuQl;
Policy; and
SLOAT HIGGENS JENSEN &
S. Defamation
ASSOCIATES, LLC
r
A ifornia
Limited Liability Company, and
DOES 1 through 50, inclusive,
Defendan:.s.
I
I
I
Plaintiffs, RHONDA SMIRA and ORLEANS CONSULTING GROUP, LLC
r
hereby complain and allege as follows:
PARTIES
1. Plaintiff, RHONDA SMIRA (hereinafter "Plaintiff"
and/or "SMIRA") is, and at all times herein mentioned was, an
individual residing in Sacramento County, California.
2. Plaintiff, ORLEANS CONSULTING GROUP, LLC (hereinafter
"ORLEANS" and/or collectively referred to as "Plaintiffs") is,
Complaint for Damages-1
1
2
3
4
5
6
7
B
9
10
11 .'
12
13
14
15
16
17
16
19
20
21
22
23
24
25
26
27
28
and at all herein mentioned was, a California Limited Liability
Company.
3. Defendant, KEVIN SLOAT (hereinafter "Defendant" and/or
"SLOAT") is, and at all times herein mentioned was, an
individual residing in Sacramento County, California. SLOAT is a
registered lobbyist and is bound by the laws and regulations of
the California Political Reform Act of 1974 ("PRA"). SLOAT is
the principal and founder of SLOAT HIGGINS JENSEN &ASSOCIATES,
LLC.
4. As a registered'lobbyist and the'owner of a registered
lobbying firm, SLOAT attended regular Ethics Training courses on
the laws and regulations.of the PEA. The Ethics Training courses
cover the laws and regul.ationsof lobbyists making and arranging
gifts and the illegality of lobbyists and lobbying firms making
campaign contributions.
5. SLOAT is one of the most connected and powerful
political figures in California and has been ranked as one of
the 100 most powerful people in California politics.
6. Defendant, SI,OAT HIGGINS JENSEN' & ASSOCIATES, LLC,
(hereinafter "SHJ" and/or collectively referred to as
"Defendants") is, and at all times herein mentioned was, a
California Limited Liability Company.
7. SHJ is a registered lobbying firm headquartered in
Sacramento, California and is bound by the laws and regulations
of the PRA. Plaintiff is informed and believes and thereon
alleges that all directors, officers and shareholders of SHJ
reside in Sacramento County, California and that all of its
substantive operational decisions are made in Sacramento County.
8. SHJ is one of the largest lobbying firms in
California. SHJ is consistently one of the top five lobbying
firms in California as measured by annual billings. The firm is
1
2
3
4
5
6
7
8
9
10
11
.12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
paid millions of dollars by Fortune 500, energy/utility, and
insurance companies. SHJ clients have contributed millions of
dollars of campaign contributions to candidates and elected
officials.
9. There exists, and at all times herein mentioned there
existed, a unity of interest and ownership between defendants
SHJ and SLOAT, such that any individuality and separateness
between them have ceased, and defendants SHJ is the alter ego of
defendant SLOAT in that Plaintiff is informed and believes and
thereon alleges SLOAT: (a) commingles and uses assets and funds
of SHJ for his personal use. without adequate consideration
and/or recordkeeping; (b) uses.SHJ.as a mere shell,
instrumentality and conduit to carryon his personal business
and exercises complete control .and.dominance over SHJ to suchan
extent that any individuality and separateness between SHJ and
SLOAT does not, and. at allrelevant times herein mentioned did
not, exist; and (c) fails to adhere to and disregards corporate
governance, recordkeeping and .formalities obligations.
10. Plaintiffs are ignorant of the true names and
capacities of the defendants sued herein as DOES 1-50,
inclusive, and therefore sues these defendants by such
fictitious names. Plaintiffs will amend the complaint to allege
their true names and capacities when ascertained. Plaintiffs are
informed and believes and thereon alleges that each of the
fictitious named defendants are responsible in some manner for
the occurrences herein alleged and that Plaintiffs' losses are
herein alleged were proximately caused by such negligent and/or
wrongful conduct.
FACTUAL ALLEGATIONS
11. On or about January 1, 2000, SMlRA became an employee
of SHJ. As an employee, Plaintiff's responsibilities included
5
10
15
20
25
1
2
3
4
6
7
8
9
.11
12
13
16
17
18
19
21
22
23
24
26
27
28
registering SHJ as a lobbying firm, compiling and submitting the
registration for SHJ lobbyists, coordinating the of
SHJ clients as lobbyist employers, compiling and filing
quarterly lobbying activities and payment disclosure reports,
and coordinating and filing out the quarterly lobbying employer
reports. Further, Plaintiff was responsible for assuring that
SHJ was in compliance with the PRA.
12. Defendants regularly hosted elaborate fundraisers at
SLOAT's mansion on the exclusive Crocker Road in Sacramento,
California, in the SHJ offices, and at a local wine bar where
Defendants have a wine locker stocked with thousands of dollars
of rare wines. The elaborate events were almost exclusively
limited to Defendants' clients and contributions were made to
the candidates by both the Defendants' clients and Defendants.
13. SLOAT, acting as the owner ofSHJ, and at his sole
discretion chose which candidates and-elected officials
Defendants would host fundraisers for. Defendant would consider
several factors when identifying which candidates and elected
officials he would host events and make contributions to. If an
elected official was a member of a committee that would hear
bills sponsored by, supported by, or opposed by Defendants'
clients would make contributions to the elected officials. If an
elected official were in a special position of power such as
Senate and Assembly leadership pos.ts or if an elected official
was just considered a "friend" of the firm, SLOAT would host a
fundraiser where Defendants as well as Defendants' clients would
make a contribution to the elected official. Occasionally,
elected officials would even ask SLOAT to host events and would
solicit contributions from Defendants and Defendants' clients.
14. The fundraisers were always attended by SHJ's clients
and the candidates received campaign contributions in exchange
complaint for Damages-4
1
2
3
4
5
6
7
8
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
for attending the fundraisers. In many cases, SLOAT was meeting
the candidates for the very first time at the hosted fundraiser.
15. Once SLOAT decided to host a fundraiser, SMIRA was
directed to reach out to the elected official or candidate to
coordinate schedules, arrange logistics, and establish an
understanding as to how much money the .candidate or elected
official could expect to receive by attending the fundraiser. A
typical evening at Defendant's mansion would result in between
$10,000 and $50,000 for an elected official.
16. Defendants would pay SMIRA to reach out to
Defendant's clients to notify the clients of the event and tell
the client how much the client is expected to contribute to the
elected official. Defendants had a static list of approximately
30 clients that Plaintiff was 'directed to invitetoevery.
fundraiser hosted by Defendants. This list was a partial list of
SJH clients who were told on multiple occasions by Defendants
that Defendants would host private fundraisers for candidates
and the clients were expected to contribute and attend each
event. In exchange, SJH clients were promised exclusive access
to the Governor, legislators or candidates.
17. Defendants were very clear with SMlRA that she was
only to invite clients on the list because SLOAT said they were
his "go to" clients ad their campaign contribution budgets were
actually "his" to distribute at "his" discretion. Plaintiff is
informed and believes, and thereon alleges that the clients on
the list were the clients SLOAT Saw as unsophisticated and
clients who did not ask why they were making contributions to
the candidates. The more sophisticated clients who required
background or some rationale as to why Defendant was asking them
to contribute were only rarely invited.
complaint for Damages-S
III
1
2
3
4
5
6
7
8
9
10
II
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
18. Once the attending clients were determined, SMlRA
would then reach out to the elected official's representative to
provide a list of all clients who would be attending the event
as well as how much each client would be contributing. Plaintiff
would then send invitations to the fundraiser to the designated
list of clients. Of the hundreds of invitations sent to
candidates since early 2000, none met the current disclosure and
notification laws set forth by the Fair Political Practices
Commission ("FPPC") regulations.
19. At these fundraisers, SMlRA would hire a caterer,
develop a menu, sample the caterer's cooking, purchase cases of
expensive wine and alcohol, purchase decorations, and spend
hours at the mansion prior to the event making sure the details
of the event were all in order. Plaintiff would then attend the
fundraiser as an employee to help manage the caterers, act as a
hostess to the clients and the candidates.
20. After the event,S M I R ~ would coordinate the clean-up
of the event, make sure staff was paid or invoices were
submitted, would follow up with Defendants' clients to make sure
campaign contribution checks were delivered to the elected
official's representative. Plaintiff would spend between 10-15
hours at each fundraising event at a cost to Defendants of
approximately $1,000.
21. At each fundraiser, Defendants would spend between
$1,000 and $2,000 on expensive bottles of wine for the events.
In addition, Defendants would expense decorations, flowers,
imported cigars and high-end cognac, scotched and whiskeys.
These expenses were all paid for with SHJ funds.
22. Defendants would never charge a rental fee to the
elected official's campaign for the cost of hosting the event at
SLOAT's mansion.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
23. The expenses associated with hosting the fundraiser
are considered non-monetary campaign contributions. Neither
Defendants, nor the elected officials, would declare the non-
monetary contributions to the FPPC and/or the Secretary of
State.
24. On numerous occasions, SMlRA notified Defendants of
her understanding that providing thousands of dollars in wine
and alcohol, expensive cigars, paying for catering and rentals,
utilizing her time as a SHJ employee, as well as providing,
SLOAT's personal residence without charging a'rental fee, were
all illegal, non-monetary campaign contributions.
25. Due to her growipg concerns regarding the likely
impropriety being committed by Defendants, Plaintiff solicited
and received several legal opinions from Legal Counsel for
Defendants regarding the illegality of the non-monetary campaign
contributions Defendants were making.
26: Legal Counsel confirmed the impropriety of the non-
monetary campaign contributions.
27. SMlRA, in light of her investigation and research,
opined that under the PRA, SLOAT and SHJ could not make any
campaign contributions, either monetary or non-monetary.
Further, SMlRA contended that DefendaI'l:ts must charge a "rental"
fee to the client for some portion of the mortgage on his
mansion because as the sole owner of a lobbying firm, he could
not provide a free venue for a fundraiser. By not charging a
rental fee, defendants were making a non-monetary contribution
to an elected official.
28. Plaintiff also communicated on several occasions
directly to Defehdant that Defendants could not use SHJ paid
employees to arrange, staff, and support the fundraising
activities. Defendants' paid employee's time results in a non-
1
2
3
4
5
6
7
8
9
10
11
12
. 13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
monetary contribution to the elected official. SMIRA further
warned that the wine, alcohol, catering, cigars or any other
expense associated with the private fundraisers would constitute
a violation of the PRA.
29. Any expenses associated with the fundraising events
were paid for either with the SHJ's credit card or with SLOAT's
credit card. SLOAT's personal credit card was and is completely
paid for directly from SHJ's accounts.
30. After being fully briefed by SMIRA on multiple
occasions, Defendants continued to hostfundraisersand give
,illegal,in-kind contributions. Plaintiff repeatedly
commun'icated how un.eomfortable she.was in participating in the
illegal campaign contributions. In response, Defendant bluntly
stated that it was part of her.job and that if' she could not
perfor)11 her job the he would find someone else who could.
31. Over the course of several years, SMIRA repeatedly
voiced her concerns. about the illegal contributions prior to
each fundraising event at SLOAT's private residence. On every
occasion, she was reprimanded by Defendant and was finally
directed by Defendant to "never talk to him again" about her
concerns. On one occasion,Defendant was so upset that he did
not talk to Plaintiff for over .a week.
32. In or about.2010, SMIRA notified Defendants that she
was very concerned about utilizing SHJ corporate credit cards to
make all the purchases that amounted to illegal campaign
contributions. Rather than heed her warning, SLOAT.told
Plaintiff that she would no longer use the company credit card
for the purchases but that she would now use her own credit card
for the expenses and then she would be reimbursed by SHJ.
Plaintiff is informed and believes, and thereon alleges that
this was Defendants' attempt to hide expenses from any future
1
2
3
4
5
6
7
8
9
10
11
12'
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
audits as well as punishment for her repeated warnings. In so
doing, Defendants were making it more difficult for Plaintiff to
do her job.
33. subsequently, SMIRA conducted more inquiries and
investigation regarding Defendants' illegal contributions. After
Plaintiff notified Defendant of what she found, SLOAT would not
speak to SMIRA for several days and would occasionally ask other
lobbyists in the office if they.needed to hire another "support"
person.
34. In or about 2010, . after'receiving continued
complaints from SMIRA, SLOAT directed SMIRA to start asking
.candidates to pay for catering and use the candidate's.campaign
account to make deposits for catering; However, Defendants
continued to use Plaintiff's time as'an employeeof SHJ, provide
thousands of dollars of wine, cigars, scotch
r
and other
alcoholic aswell as utilize SLOAT's personal
residence to host the fundraiser.s without charging.a rental fee.
While Defendants changed some of their activities, they
continued to illegally make in-kind c6ntributions.
35. Since 2000 to the present, defendants have hosted
hundreds of fundraising.eventsin .which Defendantsillegally.
contributed hundreds of thousands of dollars to dozens of
elected officials, including but not limited to, 11 Senators, 26
Assembly men/women, and various other high ranking public
officials and representatives.
36. In addition .to being forced to participate in the
delivery of illegal campaign contributions, Plaintiff was
constantly expected to arrange illegal gifts as an agent of
Defendants.
37. Defendants have season tickets to the Sacramento
Kingsprofessional basketball team. These tickets currently
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
include two floor seats and in years past, as many as six lower
level or floor seat season tickets. In addition, Defendants have
a VIP parking pass for each home game. Defendants pay for the
season tickets with SHJ funds. Each individual floor seat ticket
has or had a face value of well over $300.
38. From 2000 to the present, Defendants often gave the
floor seat tickets to Senators, Assembly Members, legislative
staff or administrative staff as gifts. SLOAT would personally
offer Senators, Assembly Members, legislative staff or
administrative staff the tickets. Defendants gave away illegal
tickets on such a regular basis.that some
Legislative staff, and Administrative staff eventually contacted
SMIRA and Defendants to request Kings' tickets.
39. For every Kings game that a Senator, Assembly Member,
legislative staffer, or member of the Governor's staff attended,
SMIRA was expected to perform all or some of the following
actions: contact the recipient of the Kings tickets to confirm
their attendance at the game, make arrangements to deliver the
tickets if the recipient was not driving to the game with
defendant, and schedule attendance at future games with the
recipients.
40. SMIRA wa.s . specifically directed by defendants to
never notify the recipients of tickets that attendance would
constitute a "gift" nor put it on his calendar for a written
record. Plaintiff was very uncomfortable with participating in
this process. If she voiced her concerns, she was "frozen out"
by SLOAT and left to feel as though her job was in jeopardy.
Eventually, Defendant asked other staff of SHJ to deliver the
tickets to the Legislators and staff.
41. SMIRA advised Defendants that providing the tickets
to Senators, Assembly members, legislative staff or staff to the
1
2
3
4
S
6
7
8
9
10
11
12
13
14
lS
16
17
18
19
20
21
22
23
24
2S
26
27
28
Governor was a violation of the laws limiting gifts between a
lobbyist or lobbying firm and a Legislator.
42. Defendants have represented an Indian Tribe which
owns a casino as well as one of the top ranked golf courses in
Northern California.
43. From 2008 to present, Defendants hosted countless
legislators, legislative staff and administrative staff on
expensive golf outings on the Tribe's golf course.
44. On most occasions, SLOAT or another high level SHJ
employee ("Employee"), would offer to take the legislator,
legislative staff or administrative staff golfing at the award
winning golf course. If accepted, Defendant or Employee would
then have SMIRA make the necessary arrangements. Plaintiff was
expected to do some or all of the following: Contact the golf
course and speak directly to the head golf professional to
notify them that a dignitary was coming out, schedule the tee
time (schedule the delivery of the gift), confirm the date/time
of the tee time with the recipient of the gift, make any special
arrangements with the tribe as directed by Defendant of Employee
'(some legislators wanted discounted rooms at the hotel/casino).
Employee or Defendant would then pay-for the entire foursome's
round on Defendants' credit cards so there was no expense paid
by the gift recipient.
45. Defendants and Employee provided so many free rounds
of golf, that eventually, gift recipients began contacting
Defendants' offices directly and requesting tee times. Each
round of golf is valued at well over the $10 gift allowed by the
PRA. Many Legislators or candidates received golf as a gift on
multiple occasions.
46. SMlRA was expected to process the payments and record
them in SHJ's QuickBooks ledger as a ftbusiness expense" for tax
.Complaint for Damages-ll
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
29
purposes. plaintiff was specifically directed by SLOAT to never
record who was in attendance.
47. In addition to golf, the Casino offers regular music
concerts as part of their entertainment offerings at the hotel
and casino. Defendant provided concert tickets, free of charge,
to numerous legislators, legislative staff, and administrative
staff.
48. SLOAT would regularly check the Casino Resort's
website for a listing of upcoming events. If Defendant saw
events he thought a legislator, legislative staff member, or
administrative staff member would be interested in, he would
either contact them directly or direct an employee to contact
them directly and offer free tickets.
49. Once contacted by SLOAT, SMIRA was expected to make
all arrangements, including, confirming attendance with the
recipient, providing directions to the venue, purchasing the
concert tickets on the Defendants' credit card, providing
confirmation to the recipient that the tickets would be held at
will-call for them.
50. SMlRA was expected to process the payments and record
them in SHJ's QuickBooks ledgers as a "business expense" for tax
purposes. Defendant specifically directed SMlRA to never record
who was in attendance.
51. On or about October 7, 2010 to October 28, 2010,
Defendants were provided free tickets to all of t ~ San
Francisco Giants' home playoff games by one of Defendants'
clients. Defendants then provided every ticket to Senators,
Assembly members, and legislative staff.
52. SMlRA was directed by SLOAT to confirm directly with
the legislator, or legislative staff of their intention to
attend, coordinate the delivery of the tickets to the gift
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
29
recipient, and report to the recipient of the gifts.
Plaintiff was so uncomfortable with this illegal activity that
she approached the SHJ employee ("SHJ Employee") responsible for
the client account, to state her concerns. SHJ Employee agreed
with SMIRA and asked that Plaintiff not have the client send any
tickets to the SHJ offices but rather mail or overnight the
tickets directly to the recipient of the gift.
53. SMIRA repeatedly objected to the arranging,
coordination and delivery of the gift as illegal. Defendant
reprimanded Plaintiff and stated that client could give a gift
to a reportable individual. Plaiptiff stated that it was the act
of SHJ and a Lobbyist arranging, confirming attendance, and
facilitating the delivery of the gift that was illegal
case. Defendant told Plaintiff it was none of her business and
,that she better do as she was told.
54. Defendants have represented the San Francisco 4gers
(4gers). The 4gers retained Defendants to assist with issues
regarding the development of a new stadium. Defendants suggested
to the 4gers that hosting legislators, legislative staff and
administrative staff at games was a great way to build a
relationship with influential political figures. The 4gers
agreed to provide tickets to SHJ for SLOAT to dispense as he saw
fit. The 4gers refused to provide the tickets complimentary, so
Defendant told the 4gers that Defendants would take any elected
official's credit card information and then pass it on to the
4gers front office personnel.
55. Defendants would personally invite legislators,
legislative staff, and administrative staff to 4gers home games
and home playoff games. Once Defendants extended the invitation,
SMIRA was expected to make all arrangements, including,
confirming attendance with the recipient, providing directions
I '1"1 r
1
2
3
4
S
6
7
8
9
10
11
12
13
14
lS
16
17
18
19
20
21
22
23
24
2S
26
27
28
to the venue, providing confirmation to the recipient that the
tickets would- be held at will-call for them, or even make
arrangements for the delivery of the tickets.
56. SMIRA was to obtain credit card information from the
recipient of the gift then pass the credit card information on
to the 4gers to complete the purchase of the tickets. Defendant
stated to Plaintiff that she must feel happy that SHJ wasn't
actually paying for the tickets. Plaintiff took this as a direct
jab at her constant complaints about defendant's illegal actions
pertaining to gifts. Defendant even mentioned to Plaintiff that
.while he was uncomfortable charging legislators for tickets, he
did likethat fact that if anyone ever asked, he could deny that
he had anything to do with the tickets.
57. SMIRAwaseven directed by SLOAT to attend one home
playoff game on or around January 22, 2012, between the 4gers
and the New York Giants. Defendant wanted Plaintiff to attend
because he wanted to make su=e one of the attendees, Senator "A"
",as "completely taken care of.' SLOAT directed SMlRA-to make
sure Senator "A" had, "anything he needed." The Defendant even
had Plaintiff make arrangements with the 4gers to get Senator
"AU onto the field and into the owner's suite.
58. Additionally, SLOAT made several political junkets to
Cuba. In order to have the trips approved by the U.S.
government, Defendants described the trips as charitable
mis.sions and artistic research trips. SLOAT purchased thousands
of dollars of art while on his trips and he eventually
befriended several local Cuban artists. In several occasions in
2010 and 2011, SLOAT invited and paid for the artists to travel
to his personal residence in the United States. SLOAT used SHJ's
money to pay for the travel. The artists brought art to show and
possibly sell. Defendant made arrangements for Assembly member
5
10
15
20
25
1
2
3
4
6
7
8
9
11 .
12
13 .
14
16
17
. 18
19
21
22
23
24
26
27
28
"A" to at tend this private event in which no member of the '
general public was allowed to attend.
59. SLOAT, acting as an agent of SHJ, made arrangements
with the artist to sell Assembly member "A" a particular piece
of art at a deep discount from the asking price. Asa favor to
Defendants, an agreement was made to sell Assembly member "A"
the art at nearly 50% below the asking price. The price was not
available to any member of the general public.
60. The art was delivered to the SHJ's offices and
Defendant directed SMlRAto contact Assembly member "A" to.let
him know his art was at the office and he could come .pick it up.
SMlRA objected and stated that she believed the deep discount,
as well as the arrangement and e l i v e ~ y of the art would
constitute a violation of the PRA.She suggested that Defendant
contact Legal Counsel to get his opinion of the legality of the
situation. Defendant became very angry and told Plaintiff to,
"just do your job!"
61. Further, Defehdants .regularly hosted expensive
dinners at local restaurants that reportable individuals such as
legislators, legislative staff and administrative staff would
attend. SLOAT, acting as an agent of SHJ, would formally and
informally invite these individuals for private dinners attended'
by the lobbyists employed.by.SHJ. Defendants would almost always
pay with SHJ's credit card and never requested reimbursement for
a "gift" by the legislator. The dinners were always above the
$10 gift limit for a lobbyist.
62. While these dinners were regularly occurring events,
they were not often planned out well in advance. Many times the
dinner occurred the same day the invitation was extended. Once
SLOAT invited a legislator, legislative staffer, or
administrative staffer to dinner, he would call/text SMlRA and
Complaint for Damages-1S
5
10
15
20
25
1
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
direct her to make reservations.Plaintiff was then directed to
confirm with Defendant, the other lobbyists qnd the legislator,
legislative staffer or administrative staffer.
63. SLOAT directed SMlRA to enter the charges for the
- dinner into SHJ"s QuickBooks as regular business expenses for
tax purposes and Plaintiff was directed to never request
reimbursement from the attendees.
64. Plaintiff notified Defendant on many occasions that
this was an illegal action and a-violation of PRA. At first
Defendant told her, ~ i I don't report and there is no written
record and they don't-report it,-then it didn't happen." As
Plaintiff conti?ued to complain, defendant eventually told her
he had enough of her complaints and he directed her ,to hire a
low-level personal assistant to handle the scheduling of these
dinners so he never had to hear Plaintiff complain about it
again.
65. Plaintiff took this as SLOAT's escalation of his
threats toward her employment in retaliation for her complaints.
66. SMlRA notified Defendant of her concerns about the
illegality of making,-arranging and not reporting all of the
above mentioned gifts. Each time, Defendant expressed great
displeasure at Plaintiff for even suggesting he was acting
illegally.
67. plaintiff is informed and believes, and hereby
alleges that Defendant understood_the illegality of his action
because he attended regular Ethics Training courses where the
laws regarding gifts from lobbyists or lobbying firms were
thoroughly explained.
68. In addition to the illegal campaign contributions and
unlawful gifts, Plaintiff was thrust into further illegal
activity by Defendant and Employee.
1
2
3
4
5
6
7
8
9
10
II
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
69. In or around 2010, an Employee of Defendant began
divorce proceedings with his then wife (UEmployee's Wife").
Defendant agreed to help the Employee hide .income from
Employee's wife, the Internal Revenue Service ("IRS") and the
FPPC. They devised a plan to defer all of Employee's bont.,lses
until after the divorce was final. Defendant agreed to hold over
$400,000 in bonus payments until after the divorce was final.
Defendant agreed to then release the hidden bonuses and pay
Employee in two lump sum payments. Defendant also agreed to
allow Employee to utilize the company credit card to. make
personal purchases and not report them on Employee1s W2 as
compensation.
70. Around this time, Plaintiff advised defendant that
Employee's reimbursement check for Employee's leased Audi A7
should be reported on Employee's W2 forms as taxable income.
Defendant directed Plaintiff not to report the reimbursement as
part of Employee's compensation. Employee utilized the compariy
credit card for extensive personal charges including clothing, .
home goods, food, wine, entertainment, etc. all of which are
supposed to be reported to the IRS as income on Employee's W2.
Plaintiff briefed Defendant that these credit card charges
should be reported as income to Employee. Defendant directed
Plaintiff to enter them into the SHJ books as.general business
expenses for SHJ and not as income to the Employee. Fearing for
her job, Plaintiff complied.
71. Defendants concealment of Employee's income from the
IRS, was in addition to the already ongoing concealment of
illegal gifts not reportable as business expenses, from the IRS
and FPPC. These were intentional acts and Plaintiff was given
specific directives by Defendant to enter charges into the SHJ
books in such a way as to deceive the IRS and the FPPC. SMlRA
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
and SLOAT would annually go over the books prior to SMIRA
submitting them to the SHJ accountants.
72. From early 2000 to August 21, 2012, Plaintiff was
directed by Defendant to make illegal or purposefully neglectful
entries into the SHJ books on hundreds of occasions. Each
illegal gift and all illegal campaign contributions were
reported to the IRS as business expenses.
73. The conduct of Defendant caused Plaintiff to lose
sleep, have severe stomach cramps, lose weight, suffer extreme
headaches and even lose patches 'of hair.
74. In 2012, and a result of the extraordinary anxiety
that SMIRP_ was experiencing, Plaintiff refused to continue to
participate in the above mentioned activities. Consequently, on
or about August 21, 2012, Plaintiff received a letter from
Defendants, notifying her of her immediate termination for
undisclosed reasons.
JURISDICTION AND VENUE
75. This Court has jurisdiction over this entire action
because this is a civil action wherein the matter in controversy
exceeds $25,000.00. Venue is proper in Sacramento County
Superior Court since the principal place of business of Both
ORLEANS and SHJ is located in Sacramento County, and both SMIRA
and SLOAD reside in Sacramento County.
FIRST CAUSE OF ACTION
(Violation of Business and Professions Code section
17200, et seq.)
76. Plaintiffs re-allege and incorporate hereby by
reference paragraphs 1 through 75, inclusive, as though fully
set forth herein.
77. From 2000 to the present, Defendant regularly hosted
elaboratefundraisers for various elected officials at his
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2S
26
27
28
mansion. At these fundraisers, Defendants made contributions to
elected officials by providing catering, expensive wine,
decorations, flowers, imported cigars and high-end cognac,
scotches and whiskeys. Further Defendants did not charge a
rental fee to the elected official's campaign for the cost of
hosting the event at SLOAT's mansion nor did Defendants charge
for the costs of labor to set-up, host, and clean-up
fundraisers. The costs of the fundraisers were all in excess of
$500.00.
78. By making these contributions, Defendants made non-
monetary campaign contributions in violation of Government Code
Sections 85702 and 91005.
79. From 2000 to the present, Defendants provided
Sacramento Kings' tickets, San Francisco Giants tickets, San
Francisco 4gers tickets, rounds of golf, and concert tickets,
valued in excess of $10.00, to the Governor's staff, Senators,
Assembly members, and/or legislative staff. Defendants further
arranged for the delivery of the tickets, delivered the tickets,
made scheduling arrangements and confirmed attendance, all acts
performed were in violation of Government Code section 86203.
80. In 2011, Defendants arranged for a 50% discount for
the price paid for a piece of art bought by a legislator, a
discount not available to the general public. Such act being in
violation of Government Code section 86203.
81. From 2000 to the present, Defendants have regularly
invited, arranged, scheduled, and paid for meals in excess of
$10.00, -all acts done were in violation of Government Code
section 86203.
82. Plaintiffs are informed and believe and thereon
allege that Defendants performed the above-mentioned acts for
the purpose of injuring Plaintiffs and other competitors.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
83. Defendants continue to perform the above-mentioned
acts in violation of California Government Code sections 86203,
85702, and 91005. By performing said actions, Defendants are
engaging in an unlawful business practice and are therefore in
violation of sections 17200, et seq. of the California Business
and Professions Code.
84. As a proximate result of the above-mentioned acts of
Defendants, ORLEANS has been deprived of the patronage of a
large number of its actual and potential customers, at to its
damage in an amount in excess of the jurisdictional minimum of
the Court according to proof.
WHEREFORE, Plaintiffs pray for judgment against
Defendants as follow:
1. For an order requiring Defendants, and each of them,
to show cause, if any they have, why they should not
be enjoined as set forth below, during the pendency
of this action;
2. For a temporary restraining order, a preliminary
injunction, and a permanent injunction, all
enjoining Defendants from making campaign
contributions, hosting fundraisers at Defendant's
mansion, residence, or office, making or arranging
gifts including meals, tickets to events, or any
other legally defined gift;
3. For disgorgement of Defendants' profits for the
period of liability;
4. For civil penalties pursuant Business and
Professions Code section 17206;
5. For treble damages;
6. For costs of suit, including reasonable attorney's
fees;
Complaint for Damages--20
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
7.For any other and further relief as the Court deems
appropriate.
SECOND CAUSE OF ACTION
(Declaratory Relief)
set forth herein.
86. By making campaign contributioristo elected
officials, Defendants were in violation of Government Code
sections 85702 and 91005.
87. By making, arranging, and delivering gifts Defendants
were in violation of Government Code section 86203.
88. By arranging for a discount on a rare piece of art
not available to the general public the Defendant was in
violation of Government Code section 86203.
WHEREFORE, Plaintiffs seek judgment as follows:
1.For a declaration that Defendant's actions are in
violation of state law;
2.For such other and further relief as the Court deems
appropriate.
.THIRD CAUSE OF ACTION
(Violation of Political Reform Act of 1974)
set forth herein.
90. From 2000 to the present, Defendants intentionally or
negligently violated reporting requirements of the Political
Reform Act of 1974 by failing to keep detailed accounts,
records, bills and receipts, of payments made and expenses
incurred in connection with activities which are reportable,
including but not limited to following payments and expenses:
1
2
3
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
cash contributions; rental fees to host fundraisers; employee's
labor costs to set up, host, and clean-up fundraisersi the cost
of catering, decorations, flowers, expensive wine, alcohol, and'
cigars at fundraisersi cost of Sacramento Kings' floor tickets;
costs of rounds of golf; costs of San Francisco Giant's ~ n San
Francisco 4gers' playoff tickets; cost of arranging sale of fine
art at a substantial discount; and the costs of expensive
dinners.
Defendants' failure to keep detailed accounts,
records, bills, and receipts was in violation of Government Code
section 86110.
negligently violated reporting requirements of thePRAby
failing to provide all of the information required as to
activity expenses, including without limitation, rental fees to
host fundraisersi employee'slabor costs to set up, host, and
clean-up fundraisers; the cost of catering, decorations,
flowers, expensive wine, alcohol, and cigars at fundraisers;.
cost of Sacramento Kings' floor tickets; costs of rounds of
golf; costs of San Francisco Giant's and San Francisco 4gers'
playoff tickets; cost of arranging sale of fine art at a
substantial discount; aIld the costs of expensive dinners.
Defendants' failure to provide all of the information required
as to activity expenses was in violation of Government Code
section 86110.
negligently violation the reporting requirement of the PRA by
failing to include on invitations to candidates fundraisers,or
letters attached to the invitations, the statement"attendance
at his event by a public official will constitute acceptance of
a reportable gift." Defendant's failure to include this
Complaint for Oamages-22
1
2
3
4
5
6
7
8
9
10
11
12 "
13
J.4
15
16
17
18
19
20
21
22
23
24
25
26
27
28
statement on invitations was in violation of section 86112.3 of
the Government Code.
93. From 2000 to the present, Defendant's intentionally
or negligently violating the reporting requirements of the PRA
by failing to provide the required information as to each
beneficlary of a reportable gift, including without limitation,
the following reportable gifts: rental fees to host fundraisers;
employee's labor costs to set up, host, and clean-up
fundraisers; the cost of catering, decorations, flowers,
expensive wine, alcohol, and cigars at fundraisers; cost of
Sacramento Kings' floor tickets; costs of rounds of golf; costs
of San Francisco Giant's and San Francisco 4gers' playoff
tickets; cost of arranging sale of fine art at a substantial
discount; and the costs of expensive dinners. Defendants'
failure to provide the required information to each beneficiary
was in violation of Government Code section 86112.5.
94. From 2 000 to the present, SLOAT intention"ally or
negligently violated reporting requirements of the PRA by
failing to complete and verify a periodic report which contains
a report of all activity expenses and contributions during the
reporting period, including without limitation: rental fees to
host fundraisers; employee's labor costs to set up, host, and
flowers, expensive wine, alcohol, and cigars at fundraisers;
substantial discount; and the costs of expensive dinners.
Defendants' failure to complete and verify a periodic report
was in violation of Government Code section 86113.
5
10
15
20
25
1
2
3
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
95. From 2000 to the p r s n t ~ SHJ intentionally or
failing to complete and verify a periodic report which contains
a report of all activity expenses and contributions during the
reporting period, including but not limited to: cash
contributions, rental fees to host fundraisers; employee's labor
costs to set up, host, and clean-up fundraisers; the costof
catering, decorations, flowers, expensive wine, alcohol, and
cigars at fundraisers; cost of Sacramento Kings' floor tickets;
costs of rounds of golf; costs of San Francisco Giant's and San
Francisco 4gers' playoff tickets; cost of arranging sale of fine
art at a substantial discount; and the costs of expensive
dinners. SHJ's failure to complete and verify a periodic report
was in violation of Government Code section 86114.
96. From 2000 to the present, SLOAT intentionally or
failing to file a periodic report which contains a report of all
activity expenses and contributions during the reporting period,
including but not limited to: cash contributions; rental fees to
host fundraisers; employee's labor costs to set. up, host, and
flowers, expensive wine, alcohol, and cigars at fundraisers;
golfi costs of San Francisco Giant's and San Francisco 4gers'
i
Defendants' failure to file a periodic report was in viOlrtion
of Government Code section 86116.
I
allege that Defendants, in violation of Government Code section
84300, made cash contributions in amounts of one hundred dollars
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
($100.00) or more. The exact amount and dates of these
contributions are not presently known, but Plaintiff will seek
leave of court to amend this complaint when the exact
information is ascertained.
allege that Defendants, in violation of section 84304 of the
Government Code, made anonymous contributions to a candidate,
committee or any other person totaling one hundred dollars
($100.00) or more in a calendar year. The exact amount and
dates of these contributions are not presently known, but
Plaintiff will ask leave of court to amend this complaint when
the exact information is ascertained.
allege that Defendant, in violation of Government Code section
86203, made gifts to persons aggregating more than ten dollars
($10.00)in a calendar month, including but not limited to:
rental fees to host fundraisersi employee's labor costs to set
up, host, and clean-up furrdraisers; the cost of catering,
decorations, flowers, expensive wine, alcohol, and cigars at
fundraisers; cost of Sacramento Kings' floor tickets; costs of
rounds of golf; costs of .San Francisco Giant's and San Francisco
4gers' playoff tickets; cost of arranging sale of fine art at a
substantial discount; and the costs of expensive dinners. The
exact amount and dates are not presently known, but Plaintiffs
will seek leave of court to amend this complaint when the exact
information is ascertained.
100. Plaintiffs are informed and believe-and thereon
86203, acted as an agent or intermediary in the making of gives
to persons aggregating more than ten dollars ($10.00) in a
calendar month, including but not l i ~ i t e to: rental fees to
1
:2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
host fundraisersi employee's labor costs to set up, host, and
clean-up fundraisersi the cost of catering, decorations,
flowers, expensive wine, alcohol, and cigars at fundraisersj
86203, arranged for the making of gifts by any other person
aggregating more than ten dollars ($10.00) in a calendar month,
including but not limited to: rental fees to host fundraisersi
employee's labor costs to set up, host, and clean-up
fundraisersi the cost of catering, decorations, flowers,
expensive wine, alcohol, and cigars at fundraisers; cost of
Sacramento Kings' floor tickets; costs of rounds of golf; costs
of San Francisco Giant's and San Francisco 4gers' playoff
tickets; cost of arranging sale of fine art at a sUbstantial
discount; and the costs of expensive dinners.
102. Plaintiffs shall make a written request to the City
Attorney of the City of Sacramento, California, that .he file a
civil action for damages based on the violations alleged herein.
WHEREFORE, Plaintiffs pray for judgment as follows:
1.For damages in an amount to be determined at trial,
representing the value of gifts, contributions, and
expenditures not properly reported under the
Government Codej
2.For damages in an amount to be determined at trial,
which is three times the amount of each gift,
contribution, and expenditure made in violation of
the Government Code;
Complaint for
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3.For payment of 50 percent of the damages recovered
to Plaintiff and payment of the remaining 50 percent
to the General Fund of the State of California,
pursuant to section 91009 of the Government Code;
4.For costs of suit, including reasonable attorney's
fees;
5.For such other and further relief as the Court made
deem appropriate.
FOORTH CAOSE OF ACTION
(Wrongful Termination in Violation of Public Policy)
set forth herein.
104. From January 1, 2000 to August 21, 2012, SMIRA was
employed by SHJ as a Managing Assistant. SMIRA's
responsibilities included registering SHJ as a lobbying firm,
compiling and submitting the registration for SHJ lobbyists,
coordinating the registration of SHJ clients as lobbyist
employers, compiling and ~ i l i n g quarterly lobbying activities
and payment disclosure reports, and coordinating and filing out
the quarterly lobbying employer reports. Further, SMIRA was
responsible for assuring that SHJ was in compliance with the
California Political Reform Act of 1974.
105. From early 2000 to August 21, 2012, Defendants
continually proposed and insisted that Plaintiff violate the
reporting requirements of the PRA by not keeping detailed
accounts, records, bills and receipts of reportable gifts,~
contributions, and expenses by failing to complete, verify, and
file these reports.
106. From early 2000 to August 21, 2012, Defendants
continually proposed and insisted that Plaintiff violate the
Complaint for Oamages-27
1
2
3
4
5
6
7
8
:I
10
11
12
13
14
15
16
17
18
19
20
21 '.
22
23
24
25
26
27
28
contribution, gift, and expenditure limitations of the PRA by
acting as an agent or intermediary in the making of any gift of
more than ten dollars ($10.00) in a calendar month and by
arranging for the making of any such gift. The gifts that
Defendants insisted Plaintiff act.as agent in the making of or
arranging for the making of include: cash contributions; rental
fees to host fundraisers; employee's labor costs to set up,
host, and clean-up fundraisersi the cost of catering,
decorations, alcohol, and cigars at
fundraisers; cost of Sacramento Kings' floor tickets; costs
rounds of golf; costs of ,San Francisco Giant's and San Francisco
4gers' playoff tickets; cost of arranging sale of fine art at a
substantial discounti and the costs of expensive dinners.
107. Further, beginning in or around 2010, Defendants
continually proposed and insisted that Plaintiff hide and
Employee's income and Defendants' illegal gifts from the IRS and
the FPPC.
108. In or around August 2012, Plaintiff refused to
participate in any manner in the violations of the PRA, as
alleged herein, and refused to participate in the illegal
concealing of income and gifts from the IRS-and the FPPC,as
also alleged herein.'
109. The actions Defendants ordered Plaintiff to engage
in would be in violation of Government Code sections, 86110,
86112, 86112.3, 86112.5, 86114, 86116,- 84300, 84304, and 86203,
the United States Internal Revenue Code, and Government Code
section 83100, et seq.
110. As a proximate result of Plaintiff's refusals and
conduct as set forth above in paragraph lOB, Defendants
terminated Plaintiff's employment on August 21, 2012.
. Complaint for Oamages-28
5
10
15
20
25
1
2
3,
4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
111. As a proximate result of Defendant's conduct,
Plaintiff has suffered harm, including lost earnings and other
employment benefits, humiliation, embarrassment, and mental
anguish, all to her damage in an amount to be established at
trial.
112. In doing the acts set f.orth above, Defendants knew
that the conduct that they would have required of Plaintiff was -
unlawful, and required Plaintiff to choose between violating the
law and losing her job. Notwithstanding this knowledge"
Defendants subject-ed Plainti.ff to cruel and unjust hardship in
conscious disregard of Plaintiff's rights by insisting Plaintiff
violate the law, a!1d terminating Plaintiff's employment when-
Plaintiff refused to do ~ o and castigating Plaintiff in front
of her colleagues and co-workers. This malicious and oppressive
conduct justifies and award of punitive damages in an amount
sufficient to punish Defendants and deter others from engaging
in similar conduct.
WHEREFORE, Plaintiff prays for judgment against
Defendants as follows:
1. For damages for bi,each of contract according'to.
proof;
2. For compensatory damages for lost wages, benefits,
and emotional distress according to proof;
3. For interest on lost earnings and benefits at the
legal rate;
4. For punitive damages in an amount appropriate to
punish Defendants and deter others from engaging in
similar conduct
S. For costs of suit incurred; and
6. For such other and further relief as the Court deems
appropriate.
1
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
FIFTH CAUSE OF ACTION
(Defamation)
113. Plaintiffs r ~ a l l e g e and incorporate hereby by
set forth herein.
114. In or around November 2012, SLOAT spoke the
following words of and concerning SMIRA: that SMIRA had
committed improprieties against Defendants, including felony
theft.
115. The words were heard by prospective employers and
members of the community.
116. These words were slanderous per se as they accuse
Plaintiff of committing the crime of theft.
117. The words uttered were a false statement because
Plaintiff has not at any point committed the crime of theft
against Defendants.
118. As a result of the above-described words, Plaintiff
has suffered general damages to her reputation.
119. As a further proximate result of the slanderous and
untrue statements of SLOAT, Plaintiff has suffered injury to her
business, trade, profession, and occupation according to proof.
120. AS a further proximate case of the slanderous
statements of SLOAT, Plaintiff has suffered extreme emotional
and physical distress according to proof at trial.
121. The above-described words were spoken by SLOAT with
malice, oppression, and fraud in that SLOAT knew that SMIRA haa
not committed theft yet he made the defamatory statements in his
effort to punish Plaintiff and to silence her from revealing the
violations of the PRA as alleged herein. An award of exemplary
and punitive damages is appropriate.
1
2
3
4
5
6
7
8
9
10
11
12
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
WHEREFORE, Plaintiff prays for judgment against
Defendants as follows:
1.For general damages according to proof;
2 . For special damages according to proofi
3 For punitive damages;
4.For costs of suit incurred herein;
5 . For such other and further relief that the Court
deems appropriate.
DATED: December 24, 2013
Je s ~ r Ortiz
Attorneys for Plaintiffs
Rhonda Smira and Orleans
Consulting Group, LLC
DEMAND FOR JURY TRIAL
Plaintiffs hereby demand and request a trial by jury in
this matter.
Dated: December 24, 2013
J ~ e a ~ Law
Jeortiz
Attorneys for Plaintiffs
Rhonda Smira and Orleans
Consulting Group, LLC
., 'f"

Sloat Lawsuit

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sloat Lawsuit

Uploaded by

Copyright:

Available Formats

1

You might also like