BEFORE THE DIVISION OF CONSUMER PROTECTION OF THE DEPARTMENT OF COMMERCE, OF THE STATE OF UTAH In the matter of the application of: NOTICE OF DENIAL OF PROJECT VERITAS CHARITABLE ORGANIZATION PERMIT APPLICATION Applicant. CP Action No. 73928 TO APPLICANT: Pursuant to its authority granted by Utah Code Ann, §§13-2-1, 13-2-6, the Division of Consumer Protection intends to deny your Charitable Organization Permit Application on finding that itis in the public interest and for the following reasons: 1. According to Utah Code Ann, §13-22-12(1)(a); the application for registration or renewal is incomplete or misleading as the applicant’ previous application was denied by the State of Utah on August 20, 2013 (reference page I, item 7B of the URS) and the applicant failed to disclose that James O’Keefe has been convicted of a misdemeanor or felony (refence page 2, item 14(B) of the URS). 2. Applicant failed to provide the Name, address and telephone number of the organization's registered agent. 3. Applicant failed to provide a copy of the organization’s fundraising contract agreement with American Target Advertising. 4, According to Utah Code Ann. §13-22-12(1)(b)(ii)); the applicant or registrant or any officer, director, agent, or employee of the applicant or registrant has been enjoined by any cour, or is the subject of an administrative order issued in this or another state, ifthe injunction or order includes a finding or admission of fraud, breach of fiduciary duty, material misrepresentation, or if the injunction or order was based on a finding of lack of integrity, truthfulness, or mental competence of the applicant; and 5. According to Utah Code Ann. §13-22-12(1)(b)(iii); Applicant has been convicted of a crime involving moral turpitude. 6. According to Utah Code Ann. §13-22-12(1)(b)(iv); Applicant has obtained or attempted to obtain a registration or a permit by misrepresentation. Please be advised that charitable solicitation to Utah consumers prior to receiving registration approval from the Director of the Division of Consumer Protection is a violation of the Charitable Solicitations Act U.C.A. §13-22-S, which carries both civil and criminal penalties.You may challenge this denial by requesting a hearing within thirty (30) days of the date of this notice. The hearing shall be conducted as an informal hearing under Title 63, Chapter 4, Administrative Procedures Act. According to UT Admin. Code R151- 46b-10(10), you have the burden of proof at the hearing. The request for hearing shall be made in writing and shall be delivered to: Hearing Officer Utah Division of Consumer Protection 160 East 300 South P.O. Box 146704 Salt Lake City, UT 84114-6704 Facsimile No. (801) 530-6001 IF YOUR REQUEST FOR HEARING IS NOT TIMELY MADE, THEN THE DIVISION SHALL ISSUE ITS FINAL ORDER CONSISTENT WITH THIS NOTICE AFTER THIRTY (30) DAYS OF THE DATE HEREOF. Please be advised that all inquiries, correspondence or other contact concerning this notice, with the exception of any written request for hearing as set forth above, should be directed to: Shauna DeWolf, Administrative Assistant/Licensor Utah Division of Consumer Protection 160 East 300 South P.O. Box 146704 Salt Lake City, UT 84114-6704 Telephone No. (801) 530-6601 Dated this YH say ot__Docember, 2014 UTAH DIV. OF CONSUMER PROTECTIO! DeWolf, Administrative Assistant/Licensor East 300 South, PO Box 146704 Salt Lake City, Utah 84114-6704 Telephone: (801) 530-6601MAILING CERTIFICATE. Thereby certify that 1 have this thy o¢ Do amber, 2014, served he foregoing Notice upon the parties of record in this proceeding set forth above by mailing a copy thereof, properly addressed by first-class mail with postage prepaid, to: JAMES O*KEEFE PROJECT VERITAS 1214 W BOSTON POST RD NO 145 MAMARONECK NY 10543 1a DeWolf, Administrative Assistant/LicensorBEFORE THE DIVISION OF CONSUMER PROTECTION OF THE DEPARTMENT OF COMMERCE, OF THE STATE OF UTAH FINDINGS OF FACT, CONCLUSIONS In the matter of the application of: ‘OF LAW. AND RECOMMENDED PROJECT VERITAS, ORDER Applicant. CP Action No. 63879 This matter came before Angela Hendricks, the person designated as the presiding officer by the Director of the Division of Consumer Protection (“Division”), in a hearing held on July 9, 2013, The Division was represented by Shauna DeWolf, Licensor and Cameron Dibb, Auditor. ‘The Respondent was represented by Daniel Francisco, Executive Director and James O'Keefe, Director and President. After reviewing the evidence presented, the presiding officer makes the following findings of fact, conclusions of law. and recommended order. FINDINGS OF FACT ‘The presiding officer finds the following by substantial evidence, Uta Cope ANN. § 13- 2-6(3)(4), 1 Project Veritas is a non-profit organization established for a charitable purpose that solicits or obtains contributions from the public for the charitable purpose. Project Veritas has been registered in the state of Utah with a permit to conduct charitable solicitations within the state since August 16, 2011 2. The stated mission of Project Veritas is to achieve a more transparent and ethical Findings of Fast, Conclusions of Law, and Recommended Order Page 1 of 10society by investigating and exposing corruption, dishonesty, self-dealing, waste, fraud and other misconduct in public and private institutions. In order to accomplish this mission, Project Veritas conducts investigations into possible official corruption and misconduct, publicizes the results of such investigations, and presents workshops to train citizen journalists to conduct similar investigations in their communities. 3. Project Veritas submitted a Unified Registration Statement (hereinafter “URS") to the Division on December 31, 2012 to renew their charitable solicitations permit, Item 14 (B) of the URS inquires wither any officers, directors, or principal executives have been convicted of a misdemeanor or felony. Project Veritas responded to this inquiry affirmatively and attached an explanation. 4. The explanatory attachment indicated that James O’Keefe (hereinafter “O’Keefe”), President and Director of Project Veritas, “agreed to plead guilty as charged to the one-count Bill of Information charged with misdemeanor entry, or causing entry, by false pretenses to real property of the United States”. Exhibit 7. 5. ‘The Division responded to the URS submitted by Project Veritas in a letter dated January 29, 2013. The correspondence indicated that the filing was incomplete end requested additional information and documentation, including “an explanation of the nature of the proceeding, date, location, sentence, current status and copy of the order” regarding O°Keefe’s conviction. Exhibit 2 6. Project Veritas provided a stipulated statement of factual basis in response. The statement of factual basis indicated that on January 25, 2010, O’Keefe and two (2) colleagues Findings of Fact, Conclusions of Law, and Recommended Order Page 2 of 10entered a federal building in New Orleans in which the offices of United States Senator Mary Landrieu were located. O’Keefe’s colleagues were disguised as telephone repairmen with a digital recording device mounted to a hard hat, O’Keefe’s colleagues represented to the Senator's staff that they were there to perform repairs on the telephone system, O’Keefé was present in the office dressed in plain clothes under the guise of waiting for a friend and intended to record the interactions of his colleagues with the Senator’s staff. O’Keefe’s colleagues were directed to the General Services Administration (hereinafter “GSA”) office where they were asked to produce credentials and work orders, They told the GSA representative thet the work order and credentials were in their truck. They were then escorted out of the building. O’Keefe left the building shortly thereafter. O’Keefe had arranged and orchestrated this attempt to record interactions with Senator Landrieu’s office in meetings with the other participants in the week prior to their entry into the federal offices. Exhibit 3. 7. The statement of factual basis was signed by O’Keefe on March 24, 2010. He entered a plea of guilty to a Class B misdemeanor offense on May 26, 2010. Ia. 8. The Division issued a Notice of Denial of Charitable Organization Permit Application on February 26, 2013. The notice indicated that the Division intended to deny Project Veritas’ renewal based upon O’Keefe’s conviction of a crime involving moral turpitude and the entry of an order including a finding or admission of fraud, breach of fiduciary duty, material misrepresentation, lack of integrity, truthfulness, or mental competence. to deny was conducted upon 9. An administrative hearing on the Division’s n¢ Applicant’s request. At the administrative hearing on the matter, O’Keefe explained the Findings of Fact, Conclusions of Law, and Recommended Order Page 3 of 10circumstances surrounding his conviction. 10. O'Keefe represented that his attempt to record interactions within the Senator’s office were no different than other investigative journalism conducted using pretenses to gather information. Such investigative journalism has been recognized with Peabody and Pulitzer awards and he had conducted dozens of similar investigations that had won journalism awards. Further, O'Keefe maintained that he did not employ false pretenses because he and his colleagues had shown their true and actual drivers licenses to pass through security to enter the building. O’Keefe explained that he was the victim of a corrupt political prosecution under an obscure and seldom used statute and that he had done nothing wrong or immoral. CONCLUSIONS OF LAW 11. The Division has jurisdiction over the subject matter and parties under UTAH Cope ANN. § 13-22-12(1) because Applicant submitted a request for agency action in the form of an application for a charitable solicitations permit pursuant to UTAH CODE ANN. § 13-22-5. 12, UTAH CobE ANN. § 13-22-12(1)(b)(ii) provides that the director may deny a charitable organizations permit application upon a finding that such is in the public interest and the applicant or any officer, director, agent or employee has been convicted of a crime involving moral turpitude. The language is permissive and allows the director to make a case-by-case determination with respect to each application. “Considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer, and the principle of deference to administrative interpretations has been consistently followed”. Chevron USA. Inc. v. Natural Resources Defense Council, Inc., 104 8.Ct. 2778 (1984). Findings of Fact, Conclusions of Law, and Recommended Order Page 4 of 1013. Inthis case, a director and the president of the applicant organization has been convicted of entering real property belonging to the United States by fraud or false pretense. Moral turpitude means conduct which ‘is done knowingly contrary to justice, honesty or good morals” Jn re Pearce 136 P.2d, 969, or “has an element of falsification or fraud”. UTAH ADMIN. Cope § R722-310-2. The conduct of O°Keefe and his colleagues was contrary to honesty and had an element of falsification, and the crime he was convicted of specifically mentions fraud as an element of the offense. 14, The Division’s determination was based on analysis of information that is required by the Charitable Solicitations Act (hereinafter “CSA”) to be provided to and considered by the Division. The determination by the Division that the crime of which the Director and President of the applicant organization was convicted qualifies as a crime of moral turpitude of sufficient concern to deny the application for a charitable solicitation permit is a permis application and administration of the Charitable Solicitations Act and therefore entitled to deference. 15. ‘The Utah Administrative Procedures Act (hereinafter “UAPA”) affords those subject to adverse action by regulatory agencies to challenge agency actions and rebut the bases, for adverse determinations and actions, The administrative hearing on this matter afforded Project Veritas the opportunity to rebut the Division’s determination that O’Keefe’s misdemeanor conviction for entering a federal building by fraud or false pretense was of sufficient concem to deny the charitable solicitation permit application. Pursuant to UTAH ion in the form of a ADMIN. CODE § R151-4-709, the Applicant seeking action from the Di Findings of Fact, Conclusions of Law, and Recommended Order Page $ of 10charitable solicitation permit “has the burden of proof in a proceeding initiated by a request for agency action.” 16. The evidence presented by Applicant in this matter was not sufficient to meet the burden of proof and rebut the Division’s determination, and served to bolster the finding that it is in the public interest to deny the application of Project Veritas. The public interest is what the Division has been charged to safeguard through enforcement of the CSA by providing “consumer information and education to the public”. UTAH CODE ANN. § 13-2-5. The Division ean only meet this mandate through cooperation with and assistance from the regulated charitable ‘organizations, In providing information and education to consumers about charitable organizations soliciting donations from the public, the Division must rely on filings and information submitted by the applicant organizations and such filings and information must be true and accurate in order to provide consumers the best information and education available to inform their charitable donation decisions. 17. The testimony offered in this matter brought to the attention of the Division additional inaccuracies in the applications and filings submitted by Project Veritas to solicit charitable donations from Utah consumers. O'Keefe testified that he has been an officer and President of Project Veritas since its inception in 2010. However, the initial application filed by Project Veritas on July 18, 2011 did not disclose O’Keefe’s misdemeanor conviction and did not even include O'Keefe on the list of officers, directors, trustees and executives of the organization. 18, The URS instructs filers to attach a separate sheet listing the names of Findings of Fact, Conclusions of Law, and Recommended Order Page 6 of 10individual(s) responsible for fund raising and individual(s) authorized to sign checks, The separate sheet attached by Project Veritas in response to these inquiries listed Daniel Francisco as the only individual in charge of fund raising and the only individual authorized to sign checks. 19. Contrary to the filings submitted by Project Veritas, Daniel Francisco testified that there are only two people in the company authorized to sign checks, himself and O'Keefe, and O'Keefe testified that he was the principal authorized to sign checks on behalf of Project Veritas, Further, O'Keefe testified that one of his duties was to manage the fund raising of the organization, He was not included on the list of individuals responsible for fund raising. The URS was executed by O'Keefe under penalty of perjury certifying that the information contained in the URS and any attachments or supplements was true, correct and complete. 20. Additional misrepresentations made by O’Keefe while offering testimony about the circumstances leading to his conviction of a misdemeanor offense did not provide the Division sufficient assurance that the public interest will be adequately safeguarded by granting Project Veritas a permit to solicit charitable contributions from Utah consumers. When confronted with statements made to the GSA representative about credentials and work orders. outside in a vehicle, O’Keefe testified that those statements were made by two individuals not part of Project Veritas. When the Division pointed out that the factual basis statement recited that (O’Keefe admitted to planning the activity of the other individuals involved, O’Keefe acknowledged that these two individuals were part of that activity but that they went off script when they made the representation about credentials and work orders to the GSA representative. 21. The Division offers no opinion on the propriety of operating under false pretenses Findings of Fact, Conclusions of Law, and Recommended Order Page 7 of 10within the context of investigative journalism. Applicant believes and advocates that itis entirely proper and acceptable and does not appear to be attempting to hide these beliefs and practices from potential donors. However, O’Keefe’s explanation of the conviction at issue, attempting to disassociate himself with his colleagues and co-defendants until challenged by the Division, was not sufficient to meet the burden of proving that Project Veritas should be granted a permit to solicit charitable donations from Utah consumers. 22. Further, other information required under the statute was misrepresented or not disclosed on filings submitted to the Division and the Division does have a position that it is not, in the public interest to grant licenses or permits to applicants that submit applications, attachments, supplements and other information executed under penalty of perjury that are not true, complete and accurate, Applicant has demonstrated a lack of careful attention, scrutiny and candor with the Division which compromises the Division’s ability to afford Utah consumers all the information and protections provided by the CSA. Therefore, the Division finds that it is in the public interest to deny the application of Project Veritas for a charitable solicitation permit. RECOMMENDED ORDER 23. Having concluded that the Division’s application and administration of the CSA is permissible and entitled to deference, that Applicant failed to meet the burden required to rebut the Division’s determination, and that itis in the public interest, in accordance with UTAH CODE ANN. § 13-22-12 (1), itis recommended that the application of Project Veritas for a charitable organization permit be denied. Findings of Fact, Conclusions of Law, and Recommended Order Page 8 of 10Dated this 2 day of August, 2013, Ura DIVvIsion OF CONSUMER PROTECTION Telephone No. (801) 530-6601 Findings of Fact, Conclusions of Law, and Recommended Order Page 9 of 10CERTIFICATE OF SERVICE Ieertify that have this 0 day of August, 2013 served the foregoing FINDINGS OF FACT, CONCLUSIONS OF LAW, AND RECOMMENDED ORDER on the partics in this proceeding by mailing a copy, properly addressed by first class mail with postage prepaid, to: DANIEL FRANCISCO PROJECT VERITAS 1214 W. BOSTON POST ROAD #145 MAMARONECK, NY 10543 TRACI PACAILLER HULSE & ASSOCIATES, P.C. 350 PASSAIC AVENUE FAIRFIELD, NJ 07004 And by hand-delivery to: Shauna DeWolf, Licensor Utah Division of Consumer Protection Cameron Dibb, Auditor Utah Division of Consumer Protection Findings of Fact, Conclusions of Law, and Recommended Order Page 10 of 10BEFORE THE DIVISION OF CONSUMER PROTECTION OF THE DEPARTMENT OF COMMERCE OF THE STATE OF UTAH In the matter of the application of: PROJECT VERITAS, Applicant. ORDER OF ADJUDICATION CP Action No. 63879 ‘This matter came before Angela Hendricks, the person designated as the presiding officer by the Director of the Division of Consumer Protection (“Division”), in a hearing held on July 9, 2013. The Division was represented by Shauna DeWolf, Licensor and Cameron Dibb, Auditor. ‘The Applicant was represented by Daniel Francisco, Executive Director and James O’Keefe, Director and President. Afier reviewing the evidence presented, the presiding officer for the Division made her findings of fact, conclusions of law, and recommended order. The findings of fact and conclusions of law are adopted as those by the Division and are incorporated in this Onder of Adjudication by this reference. ‘The Division hereby orders, in accordance with UraH Cope ANN. § 13-22-12 (1), the application of Project Veritas for a charitable organization permit is denied. E OF RIGHT TO ADMINISTRATIVE REVIEW Agency review of this order may be obtained by filing a request for agency review with the Executive Director, Department of Commerce, 160 East 300 South, Box 146701, Order of Adjudication Page 1 of3Salt Lake City, Utah 84114-6701, within thirty (30) calendar days after the date of this order. The agency action in this case was an informal proceeding. The laws and rules governing agency review of this proceeding are found in Title 63G, Chapter 4 of the Utah Code, and Rule 151-4 of the Utah Administrative Code. Please see the enclosed “INFORMATION ABOUT AGENCY REVIEW,” which is also available at http:/www.commerce.utah.gov/welcome.html, by selecting “Agency Review.” Dated this 2° day of August, 2013. 160 East 300 South Box 146704 Salt Lake City, Utah 84114-6704 Telephone No. (801) 530-6601 Order of Adjudication Page 2 of 3CERTIFICATE OF SERVICE Teertify that Fhave this 20 day of August, 2013 served the foregoing ORDER OF ADJUDICATION on the partics in this proceeding by mailing a copy, properly addressed by frst class mail with postage prepaid, to: DANIEL FRANCISCO PROJECT VERITAS 1214 W. BOSTON POST ROAD #145 MAMARONECK, NY 10543 TRACIPACAILLER, HULSE & ASSOCIATES, P.C. 350 PASSAIC AVENUE FAIRFIELD, NJ 07004 And by hand-delivery to: Shauna DeWolf, Licensor Utah Division of Consumer Protection Cameron Dibb, Auditor Utah Division of Consumer Protection Order of Adjudication Page 3 of 3