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Hahn complains to FPPC about Gavin’s fundraising

By Josh Richman
Wednesday, March 17th, 2010 at 9:24 am in 2010 election, campaign finance, Gavin Newsom, Janice Hahn, Lt. Governor.

Democratic candidate for lieutenant governor Janice Hahn, a Los Angeles City Councilwoman, filed a complaint today with California’s Fair Political Practices Commission claiming San Francisco Mayor Gavin Newsom, who jumped into the lieutenant governor’s race last week, has violated the Political Reform Act:

Under the unique circumstances resulting from his actions as a former candidate for Governor in this same election, Mr. Newsom, who recently announced his candidacy for Lieutenant Governor, is violating the PRA by raising and spending money in contravention of the contribution and voluntary expenditure limits imposed on candidates for Lieutenant Governor.

The clear intent of Proposition 34, the voter approved initiative in 2000, is to limit the amount of money used to influence candidates. State law imposes a higher $25,900 limit on contributions to candidates for Governor, compared with the $6,500 limit on contributions to other statewide candidates. By raising and spending large contributions up to $25,900 through his gubernatorial committee, spending all of that money, dropping out of the race for Governor, and then raising additional contributions from the same contributors for a down ballot office in the same election, Gavin Newsom has flouted state law in an unprecedented manner.

It’ll be up to the FPPC to decide, but on its face this looks like a technical tactic for a candidate who’s running scared, and something that’s not going to matter a whit to most voters. Until Newsom got into the race last week, Hahn had seemed to have the edge in this race, raking in all the right endorsements and contributions over the other guy in the field, state Sen. Dean Florez, D-Shafter. But polling last month (albeit a poll conducted by a Newsom ally) showed Newsom would lead the pack if he got in, and when he did so last week, Florez dropped out and endorsed him.

UPDATE @ 2:09 P.M.: Attorney Tom Willis responds on behalf of Newsom’s campaign:

“Janice Hahn’s complaint to the FPPC ignores two important things: the law and the fact the FPPC has already rejected her argument.

“When Hahn’s campaign first floated this idea in the press a month ago, a reporter asked the FPPC’s Executive Director Roman Porter whether there was any merit to it. Mr. Porter said no, stating that the Political Reform Act’s contribution limits apply “per candidate, per election – it’s a separate election.” (See CalBuzz, http://www.calbuzz.com/2010/02/gavin-problem-mr-and-the-politics-of-outing.)

“The law and facts could not be more clear: Under the Political Reform Act, a candidate can open separate committees for different offices being voted on at the same election, and each of those committees is subject to separate contribution limits. There is no such thing as an aggregate contribution limit that restricts a contributor’s ability to give to more than one committee of a candidate. If the law where written as Janice Hahn suggests, many past and present candidates and officeholders would have violated the law.

“The fact is that the funds raised by Mayor Newsom for his gubernatorial committee were spent supporting his run for Governor, an election from which he withdrew from in October 2009. Now, five months later, he is running for a different office, involving different issues and different opponents. In fact, as Janice Hahn’s campaign often likes to point out, Mayor Newsom had no intention of running for Lieutenant Governor when he was a candidate for Governor. That puts the lie on her argument that Mayor Newsom was somehow using his gubernatorial committee to advance his Lieutenant Governor campaign.”

Read Hahn’s letter in its entirety, after the jump…

March 17, 2010
VIA FACSIMILE & U.S. MAIL

Gary Winuk
Director of Enforcement
Enforcement Division
California Fair Political Practices Commission
428 J Street, Suite 620
Sacramento, CA 95814

Re: Verified Formal Complaint Against Gavin Newsom and Newsom for California – Lieutenant Governor 2010 (ID# 1325415)

Dear Mr. Winuk:

Pursuant to California Government Code section 83115, we are writing on behalf of the Janice Hahn Lieutenant Governor 2010 Committee to file a formal complaint against Gavin Newsom and the Newsom for California – Lieutenant Governor 2010 committee for violations of the California Political Reform Act (“PRA”). Under the unique circumstances resulting from his actions as a former candidate for Governor in this same election, Mr. Newsom, who recently announced his candidacy for Lieutenant Governor, is violating the PRA by raising and spending money in contravention of the contribution and voluntary expenditure limits imposed on candidates for Lieutenant Governor.

The clear intent of Proposition 34, the voter approved initiative in 2000, is to limit the amount of money used to influence candidates. State law imposes a higher $25,900 limit on contributions to candidates for Governor, compared with the $6,500 limit on contributions to other statewide candidates. By raising and spending large contributions up to $25,900 through his gubernatorial committee, spending all of that money, dropping out of the race for Governor, and then raising additional contributions from the same contributors for a down ballot office in the same election, Gavin Newsom has flouted state law in an unprecedented manner.

Violation of Contribution Limits

Under the PRA, a person, other than a small contributor committee, may not make to any candidate for Lieutenant Governor, and a candidate for Lieutenant Governor may not accept from any person other than a small contributor committee, any contribution totaling more than $6,500 per election. (Cal. Govt. Code § 85301(b), 83124; 2 CCR § 18545(a) (2).) Contributions from small contributor committees to candidates for Lieutenant Governor are limited to $12,900 per election. (Cal. Govt. Code § 85302(b), 83124; 2 CCR § 18545(a) (5).) An “election” is defined in the PRA as “any primary, general, special or recall election held in this state.” (Cal. Govt. Code § 82022.)

Mr. Newsom received up to $25,900 from contributors to his failed gubernatorial campaign during this same primary election – the maximum amount any person is allowed to contribute to a candidate for governor. (Cal. Govt. Code § 85301(c), 83124; 2 CCR § 18545(a) (6).) Mr. Newsom’s gubernatorial campaign committee, Newsom for California – Governor 2010 (ID# 1308175), reported raising approximately $3.4 million in contributions. As of December 31, 2009, the committee reported only $40,083.18 remaining in cash on hand, and $47,614.68 in debt. This means that Mr. Newsom’s campaign already has spent almost $3.4 million in contributions he received for the June 8, 2010 Democratic primary election.

Mr. Newsom’s latest campaign for Lieutenant Governor, now reports receiving maximum contributions for the same election from some of the largest contributors to his gubernatorial campaign. For example, on Friday March 11, 2010, Newsom for California – Lieutenant Governor 2010 (ID# 1325415) reported receiving a $6,500 contribution on March 10, 2010, from Susie Tompkins Buell, who previously contributed $25,900 to Mr. Newsom’s gubernatorial campaign on October 1, 2009. (See Semi-Annual Report, 7/1/09-12/31/09, Schedule E.) Mr. Newsom has thus effectively received $32,400 from Ms. Buell — and potentially other donors -in the same election, in violation of Government Code section 85301(b).

Potential Violation of Voluntary Expenditure Limit

Unlike other state candidates who have raised money during the same election cycle for multiple offices and then transferred funds from one committee to another using the transfer and attribution rules, Mr. Newsom raised and spent the funds he collected at the higher gubernatorial limit – which no doubt served to benefit his candidacy in the June 8 election. This distinguishes Mr. Newsom from other similarly situated candidates. Because Mr. Newsom is now raising additional money from the same maxed-out donors to be spent in the same election, he is using contributions totaling amounts well in excess of the $6,500 limit.

Moreover, under the PRA, candidates for Lieutenant Governor who accept the voluntary expenditure limit may not spend more than $5,178,000 for the primary election. (Cal. Govt. Code § 85400; 2 CCR. § 18545(b)(4).) Mr. Newsom filed a Candidate Intention Statement (FPPC Form 501) on February 17, 2010 indicating that he would abide by this spending limit, thereby enabling him to place a candidate statement in the state ballot pamphlet. (Cal. Govt. Code § 85601(a).) A copy of the Candidate Intention Statement is enclosed.

There is no question that the money spent by Gavin Newsom in his campaign for Governor has significant residual value in his race for Lieutenant Governor. Having already spent over $3 million in connection with the June 8 primary election from his gubernatorial committee, Mr. Newsom, unlike any other candidate, will be able to spend up to $8.5 million for the primary election, well in excess of the voluntary spending limit. The inequity of this situation, and its obvious affect in subverting the intent of Proposition 34, must be prevented.

The FPPC recently made clear that it will not sanction “candidate behaviors that seek loopholes and are potentially misleading to the public…” (Brown Adv. Ltr. No. A-09-276). For the unique reasons set forth above, Mr. Newsom’s campaign for Lieutenant Governor is impermissibly thwarting state law curbing the influence of contributors on candidates for public office. Therefore, the FPPC should take all necessary action to ensure that Mr. Newsom and his campaign abide by the applicable contribution and voluntary spending limits. Unless the FPPC takes immediate action to investigate these violations and enforce state law, the other candidates in this race will be severely prejudiced by Newsom’s ability to raise and spend money in excess of the limits.

Very truly yours,
Stephen J. Kaufman

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