Lawmakers’ higher office fundraising, spending draws scrutiny

ccadelago@sacbee.comNovember 18, 2013 

State investigators looking into improper campaign spending found an irresistible tidbit among former Sen. Dean Florez’s documents: a grocery receipt for dog food.

Alas, Florez told them, there was no campaign dog to justify the expense.

While the Shafter Democrat avoided paying a fine for that specific purchase, the Fair Political Practices Commission last week approved a record $60,000 settlement with Florez after he admitted using $26,542 from committees he established to run for lieutenant governor and state controller on trips, meals and entertainment. He also failed to refund about $247,000 in general election contributions.

Lawmakers preparing to step down because of term limits have for years created committees to raise money for statewide offices. Many harbor plans to again seek higher office, but whether they actually run or not, creating a statewide campaign committee while they are still in the Legislature allows them to leverage the power of incumbency to stockpile money for the future.

They spend hundreds of thousands of campaign dollars on travel abroad, fine dining and entertainment. State law prohibits such spending for personal use, but politicians only have to state the expenses are reasonably related to political, legislative or government purposes – a definition good government advocates say is too broad.

Dan Schnur, director of the Jesse Unruh Institute of Politics at the University of Southern California, said it was “beyond ridiculous” that lawmakers could solicit contributions for a campaign that may never come to fruition.

In 2009, Florez was serving in the Legislature and raising $60,000 a month to run for lieutenant governor the next year. Among the nearly $1.5 million in campaign contributions, he accepted at least $100,000 from the horse-racing industry while successfully pushing legislation allowing track groups to claim a larger share from wagers to repair facilities and increase the size of purses.

Florez aborted his campaign three months before the June 2010 primary, endorsing San Francisco Mayor Gavin Newsom.

“It’s simply a convenient way for legislators to shake down special interests for even more money than fundraising limits allow,” said Schnur, a former chairman of the FPPC. “Once a donor is maxed out to your state Assembly or state Senate account, you can simply ask them for money for one or two or five statewide office accounts.”

There are few vested interests that could realize a financial gain from the lieutenant governor’s office, Schnur said, “but giving money to a sitting legislator who has a committee open is an ideal way to buy access.”

The laws covering campaign fundraising and expenditures have undergone dozens of revisions since voters passed Proposition 9 in 1974, which created the Political Reform Act and FPPC. One policy that has long been on the books: campaign cash cannot be spent for personal use.

“The basic rule for spending campaign funds is simple: the funds are held in trust, and may only be used to run for office or pay expenses associated with serving in office,” said Steve Churchwell, a Sacramento attorney.

After finishing behind Bill Lockyer in the Democratic primary for attorney general in 1998, former Sen. Charles Calderon of Whittier acknowledged tapping his statewide committee for more than $3,000 to buy a skirt and sweater for his wife and a “casual ensemble” and two business suits for himself at Nordstrom. Payments were made with separate personal credit cards. The next month, Calderon directed his attorney general account to pay the bills for him and his wife.

His $18,000 FPPC fine also cited a family vacation to Lake Tahoe and a rented limousine for a premiere of the Jim Carrey comedy “Liar, Liar.”

Scrutiny doesn’t always spur a penalty. In 2009, Republican Sen. Jim Battin closed his 2010 lieutenant governor’s committee following charged trips to China, Japan and Hawaii. Battin, who represented parts of Riverside County for 14 years in the Legislature, dined on a $220 meal at the Aberdeen Angus Steak House in London and attended a $17,000 campaign strategy event at Disneyland.

He defended the activity – often involving meeting with donors and political strategists – as campaign-related.

Battin told The Bee the committee had been audited and cleared by the Franchise Tax Board. His campaign committee’s expenses, he said, were all related to his job as a possible candidate or helping elect fellow Republicans. He never ran for statewide office.

Phillip Ung, policy advocate with California Common Cause, suggested a raft of fixes to help guard against questionable expenditures – limit public officials to one future committee; enact stricter definitions for political, legislative or government purposes and make contribution limits the same for statewide and legislative office. At present, lawmakers can solicit up to $4,100 per election from each donor to a legislative committee, while the limit for statewide office (other than governor) is $6,800.

“What you have is people raising a ton of money, spending it on a host of things that I think voters would say don’t pass the smell test, but writing it off as campaign expenses because they took a trip or had a dinner with a campaign consultant,” Ung said.

Since the dawn of term limits in 1990, lawmakers including former Assembly Speaker Willie Brown and former GOP leader Jim Brulte kept open statewide committees as limitless repositories. Before terminating his committee in 2006, Brown donated much of the money to civic organizations while Brulte, who closed his committee last year, donated to several candidates and civic causes, giving more than $710,000 to the newly established Inland Empire Foundation.

A $25,000 donation from the group was dedicated to the family of a slain San Bernardino County sheriff’s detective.

Former Assembly Speaker Fabian Núñez has amassed more than $4.3 million in his state treasurer committee while former Assembly Majority Leader Dario Frommer is sitting on $675,000 in his committee for controller. Neither Los Angeles Democrat is raising money now, but both make use of the accounts to dispense campaign contributions.

Núñez, who is not a registered lobbyist but works as a partner in the high-powered advocacy firm Mercury Public Affairs, is not ruling out a return to the political arena some day. “Last time I checked with him, he was still hoping to run for office at some point in his life,” said Steve Maviglio, a spokesman.

Frommer, a partner at Akin Gump Strauss Hauer & Feld in Los Angeles, said he had yet to make a decision on his future. “I’m assessing my options right now,” he told The Bee.

How Florez spent the money from his statewide accounts raised the suspicions of auditors, and documents provided by state investigators offer a glimpse at the length politicians go to justify their spending.

Florez used campaign money for a family ski trip to Utah, including chartering a private jet. He paid $1,460 for furnishings from Ikea and Beck’s Furniture, $1,415 on items at Best Buy and Bed and Bath & Beyond and $840 for concert tickets. Another $6,780 went to personal gasoline, $5,200 to monthly parking passes and $685 for internet, phone and cable bills.

Florez, who negotiated without a lawyer and paid the fine with personal funds, told state investigators he needed the cable television to watch programs on Public Broadcasting Service, Fox News, CNN and C-SPAN – “a minimum prerequisite to keeping informed on up to the minute political news.”

Asked how often he watched news programming in 2011 and 2012, Florez said four hours a day during the week. “On some weekend days this number could be higher,” he wrote in a memorandum to investigators.

“A lot of these expenses went toward things that appeared to be used for day-to-day living,” said Gary Winuk, chief of enforcement for the FPPC. “That’s not what campaign funds are allowed to be used for, or should be used for.”

Florez did not return messages seeking comment, but he told investigators his parents prepared all of his committee’s campaign statements. A campaign credit card was sometimes used for personal expenses, he said.

After leaving the Legislature, Florez became president of the 20 Million Minds Foundation, a nonprofit that works to reduce the cost of textbooks. The organization’s 2011 filing lists his total compensation at $250,000.

Call Christopher Cadelago, Bee Capitol Bureau, (916) 326-5538. Follow him on Twitter @ccadelago. Jim Miller of The Bee Capitol Bureau contributed to this report.

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