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Rick Kriseman ordered to give limited deposition in online travel tussle

10

November

The battle over taxing online travel companies continues to heat up as Rep. Rick Kriseman, D-St. Petersburg, was ordered by a judge on Wednesday to follow through on a giving deposition, sought by lawyers for Expedia. The judge, however, said it will be extremely limited.

This morning Kriseman sent the following letter to his fellow House members:

Members,

By now, some or all of you may have heard that I have been subpoenaed for a deposition by Expedia.  House General Counsel has responded on my behalf, which I will talk about a little later in this email.  However, before I do, I felt it was important to review how things got to this point.

During last session, we considered HB 493, the bill entitled “Tax on Sale, Use and other Transactions”, also known as the Expedia bill or OTC bill.

The bill sought to change the law regarding the manner in which the State of Florida collects, or doesn’t collect, taxes from online travel companies (OTC’s), such as Expedia.

On the morning the bill was to be heard on the floor of the House, my office received copies of several documents which were extremely relevant to HB 493. 

These documents included a memorandum from the lawyers for Expedia, Holland & Knight, and the accountants for Expedia, Price Waterhouse Coopers.  Both 2003 memos advised that under Florida law, Expedia was required to pay taxes on the amount charged to the consumer, not the amount Expedia paid to the hotels for the rooms. 

In the event you no longer have these documents, I am attaching them to this email for your reference. Because their own internal documents reflected that Expedia and the other OTC’s owed the full amount of taxes to the State, I prepared a summary of the contents of the documents and provided that summary, along with a copy of the actual documents, to each of you prior to the start of session on that day.

These memos were vitally important as they went right to the heart of the bill which was to be debated. Most importantly, none of us that I am aware of, including the bill sponsors, had this information or were aware of the opinion of the OTCs’ own experts regarding this obligation to the State of Florida.

Unfortunately, because of the late hour at which these documents were provided to you, many of you never had an opportunity to review these documents prior to casting your vote on this bill, and as such, the bill passed the House.  

As many of you may know, I have continued to be very vocal in asserting my belief that the OTC’s have failed to remit the proper amount of taxes due and owing to the State of Florida. I have written three letters to the Attorney General asking that she pursue the lawsuit filed against the OTC’s by then-Attorney General Bill McCollum, and have highlighted the Department of Revenue’s penchant for pursuing Floridians who have failed to remit the proper amount of taxes (some for as little as $8,000.00), while failing to pursue Expedia and the other OTC’s for the same thing (which amounts to more than half a billion dollars in taxes collected and unpaid.)

In performing my legislative duties, it appears that I have angered the folks at Expedia, Priceline.com, and the other OTC’s, and as a result of this anger, my district aide and I both were served with subpoenas to appear for a deposition by the OTC’s.

Additionally, prior to serving me with the subpoena, my office received two public records requests for all of my emails, correspondence, or other documents reflecting communications with anyone regarding this issue. The attorneys for the OTC’s have indicated that their purpose for taking my deposition is to discover how I came into possession of the memorandums,despite the fact that the emails provided in response to the two public records request clearly disclosed how I came into possession of the memorandums, and despite the fact that the attorney who provided these documents to me admitted in open court to having done so.

On October 31, 2011, House General Counsel George Levesque, who, as General Counsel represents all of us in the Florida House, filed a Motion to Quash the Subpoenas. 

General Counsel Levesque asserted that my aide and I had disseminated the records in our “official roles as a member and employee of the House of Representatives and used in legislative advocacy”.   He further stated that these depositions were “intrusive” and would “have a chilling effect on a legislator’s advocacy on behalf of constituents.”  

General Counsel Levesque went on to assert that “if Florida Legislators and staff may be subpoenaed before Florida Court to be questioned about their legislative duties….Members of the Florida Legislature would have to take to the road, becoming witnesses on one side of a case or another,…” As a result of the filing of this motion and communications between General Counsel Levesque and counsel for the OTC’s, the depositions scheduled for November 4, 2011 were continued pending disposition of the Motion.

On November 4, 2011, my office received our THIRD public records request from the attorneys for the OTC’s.  This time, not only did they ask for all emails, correspondence or other documents relating to the OTC tax issue, they also asked for “Any and all documents, including emails, sent to Representative Kriseman by any natural person or entity registered with the State of Florida as a lobbyist …”

On November 8, 2011, the hearing was held on the Motion to Quash.  Thanks to the excellent work of Counsel Levesque, the Court partially granted the Motion, stating that if Counsel for the OTC’s were to be allowed to depose me and my staff, they were to be severely limited in the questions they could ask.  Specifically, there were only being allowed to ask if I received any documents from any of their agents or representatives or whether I have had any communications with any of the OTC’s agents or representatives. 

Despite the limitation place on the OTC’s by the Court, counsel for the OTC’s appears to be intent on moving forward with the deposition and is in communications with General Counsel Levesque regarding a date and time.

Members, there can be no other reason for initially subpoenaing me, for continuing to fight to take this “intrusive deposition”,  and for sending public records request after public records request, other than to harass and attempt to intimidate me and my staff.   

What has happened here is not partisan. Neither is my position on this issue. 

Democrats and Republicans both have questioned the position taken by the OTC’s.  What is important here, and the reason I am sending you this email, is that our institution is under attack.  If a group like the OTC’s could do this to me, any other company, organization or group that did not like the way you, as a legislator, debated an issue on the floor or like how you voted, could attempt to do the same to any of you. It is for this reason that House General Counsel has taken the aforementioned actions on my behalf.

While the purpose of this email is to make you aware of this attack on our institution and what has happened to one of your colleagues, I also want to make you aware of the fine work that Counsel Levesque does on behalf of all of us. We are fortunate to have him. I will keep you informed of this matter as things continue to progress.  In the meantime, please feel free to contact me if you have any questions.  

Thanks.

 

[Last modified: Thursday, November 10, 2011 12:02pm]

    

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