Chan accuses Hancock of campaign money no-no

No sooner do I blog about the Loni Hancock versus Wilma Chan race for Don Perata‘s 9th State Senate District seat than the fireworks start up in earnest: Chan today asked the state’s Fair Political Practices Commission to investigate whether Hancock and her campaign violated rules by paying a Senate campaign staffer out of her 14th Assembly District Officeholder Account.

According to Chan’s news release, public campaign filings show Hancock has paid Terri Waller — listed in FPPC reports as a campaign consultant — $15,000 or more from the Officeholder Account since June 2007. FPPC regulations say officeholders can’t use officeholder funds to pay campaign expenses, Chan notes, and Waller has been introduced as Hancock’s campaign manager at one or more Senate campaign forums and is listed as the campaign contact on at least one candidate questionnaire. Read Chan’s full complaint here. [And scroll down through the updates for an expert’s review.]

“A year ago, Loni Hancock was touting the virtues of campaign finance reform on her blog,” Chan spokesman David Chilenski said in the release. “Today, it looks like she could be misusing campaign funds and may be circumventing the rules for her Senate campaign. It’s ironic to see her champion clean money reform in her speeches and then turn around and act in a way that seems contradict these values.”

Waller is listed on Hancock’s office Web site as Hancock’s district coordinator, and a Web search shows she has served in that capacity for years. Campaign-finance printouts attached to Chan’s complaint show Waller was paid from the officeholder account for various office expenses, but also several times under the notation “campaign consultants.”

I couldn’t immediately reach Hancock’s campaign spokespeople, but I’ll keep trying…

UPDATE @ 9:35 P.M. MONDAY: And the word from Hancock campaign spokesman Cliff Staton is “bogus.”

“Terri Waller has been the Campaign Manager for the Hancock campaign since the beginning of March. The last period for which she was paid from the Officeholder Account ended in February. The East Bay Young Dems meeting was on March 6. The Nate Miley endorsement interview was on March 22,” Staton says. “This is another desperate attempt by the Chan campaign to distract attention from their big loss at the Democratic Convention over the weekend.”

In fairness, Staton got back to me quickly; this update has been delayed because I was out of pocket for a few hours.

UPDATE @ 10:15 A.M. TUESDAY: I just got off the phone with Staton, who explained that several “campaign consultant” payments made to Waller before she became Hancock’s Senate campaign manager were for various political but non-campaign functions she served while in Hancock’s employ.

“It’s simply the way that they list it on the officeholder account,” he said. “It’s not campaigning… It’s not about running for election, it’s simply that as a politician you’re in a political environment and there are things you have to do.”

So if Waller went to a purely political event on Hancock’s behalf – maybe a labor council dinner, for example – Hancock would pay her out of the officeholder account rather than from state funds, Staton said. “Loni has always determined those kinds of things are not part of the state, the taxpayers should not pay that.”

“They were on a fishing expedition,” he said of Chan’s complaint. “There’s absolutely no substance to that.”

Staton is angry that I posted this last night before he could get back to me with his comments; he said I’ve given Chan’s campaign fodder for a direct-mail hit piece. I responded that when a former lawmaker and current candidate files an official complaint with a state agency – a matter of public record, not just a verbal accusation – I think it’s newsworthy.

And if it turns out to be bogus, a cheap campaign tactic as Staton says, that’s newsworthy too.

Just so the process is clear: I received the release and complaint from Chan’s campaign at 5:47 p.m. I left voice-mails for Staton at his office and home, and e-mailed him at his office; I left a voice-mail and an e-mail for one of his associates; and I left a voice-mail for a Hancock campaign worker whose cell number I obtained from the campaign office. I had to be away from my phone and computer for a while, and updated the blog item as soon as I returned.

Staton also asked me to pull this item off the blog at least until I’ve “had a chance to evaluate its validity.” As I told him, it’s up to the FPPC to evaluate the complaint’s validity.

UPDATE @ 1:40 P.M. TUESDAY: One of the state’s top authorities on campaign finance, law and ethics has just told me that if there’s any violation at all here, it’s “trivial.”

“This is the first time I’ve ever seen a complaint like this — I’ve never seen them complain about officeholder funds versus campaign funds,” said Center for Governmental Studies President Bob Stern, who authored the Political Reform Act of 1974 and was the FPPC’s first general counsel from 1974 to 1983. “It just seems like overkill, even if it were true.”

By state law, candidates who voluntarily choose to limit their spending in state Senate campaigns may spend no more than $724,000 in a primary election and $1,086,000 in a general election. Stern said Chan’s complaint would only have any consequence if Hancock accepted these limits (which she has, while Chan has not) but then used the payments at issue to dodge the limits. Judging from her campaign finance reports, it doesn’t look as if she’s anywhere near those limits.

Even then, Stern said, it would depend on whether Waller clearly represented herself before March 1 — at events for which she was reimbursed from the officeholder account — as representing Hancock as a Senate candidate rather than as an Assemblywoman. And even then, he said, “it’s more of a bookkeeping thing.”

“They have met the standards of saying there might be a violation, but it certainly doesn’t seem like a very earthshaking one even if the facts are true,” Stern said.

UPDATE @ 3:55 P.M. THURSDAY: Chan’s campaign filed an addendum to its complaint today with the FPPC.

Josh Richman

Josh Richman covers state and national politics for the Bay Area News Group. A New York City native, he earned a bachelor’s degree in journalism from the University of Missouri and reported for the Express-Times of Easton, Pa. for five years before coming to the Oakland Tribune and ANG Newspapers in 1997. He is a frequent guest on KQED Channel 9’s “This Week in Northern California;” a proud father; an Eagle Scout; a somewhat skilled player of low-stakes poker; a rather good cook; a firm believer in the use of semicolons; and an unabashed political junkie who will never, EVER seek elected office.

  • Here’s a “dirty trick” on the other side.

    A couple of days ago, I received a “hit piece” aimed at Loni Hancock. The piece accused her of having lowered educational standards, supposedly making it harder for children to reach their chosen career. I found the logic of the piece hard to follow, and it was sent out by an independent expenditure committee with the odd title of “Education Leaders for High Standards Independent Expenditure Committee.”

    I learned today of an FPPC website where you can find information on recent expenditures and contributions for such committees. With this opportunity, I decided to investigate. Looking up this committee on the webside, I found that it’s only expenditure was in this race, and the expenditure was totally funded by another committee, entitled, “California Tribal Business Alliance,” to the tune of about $49,000. In otherwords, the “education leaders” committee was serving as a front.

    I could find no details on the Secretary of State’s website about where the “California Tribal Business Alliance” gets its money, but by its name, my guess would be it comes from indian gaming interests. I’d further guess that the expenditure probably is probably related to Loni Hancock’s opposition to the proposed expansion of the indian casino in San Pablo and the proposed new indian casino at Point Melote in Richmond.

    I’m not taking any position here about tribal gambling in the East Bay, but I do think it’s highly deceptive for a group to call itself “education leaders”, when it’s really about tribal gambling. On it’s face, at least, the group has no connections to Wilma Chan’s campaign. I would hope she would strongly repudiate the flier and ask it’s sponsors to “butt out”. In any case, I have to confess the flier makes me much more prone to support Loni Hancock.