Former rival antes up for Ted Lieu’s campaign

Rivals not long ago, two 2010 Democratic primary candidates for state attorney general are apparently on much better terms today.

Chris KellyFormer Facebook Chief Privacy Officer Chris Kelly of Palo Alto – who spent $12.3 million of his own money on his primary campaign last year, only to place third behind winner Kamala Harris and second-place finisher Alberto Torrico – gave $3,900 Monday to the state Senate campaign of Ted Lieu, the termed-out Assemblyman from Torrance who finished fourth in last year’s AG primary.

Lieu is running in the 28th State Senate District’s special election, necessitated by the Oct. 20 death of Sen. Jenny Oropeza, D-Carson. The special primary is scheduled for Feb. 15; if nobody gets more than 50 percent of that vote, there’ll be a special general election April 19.

Also running are Republicans Martha Flores Gibson, an educator from Long Beach, U.S. Customs and Border Protection retiree Jeffrey Fortini of Hawthorne, Lomita attorney James Thompson, and businessman/attorney Bob Valentine of Manhattan Beach; Democrat Kevin McGurk, a Venice attorney; Libertarian Peter “Pedro” De Baets, a small-business owner from Los Angeles; and nonpartisans Mark Lipman, a publisher and community organizer from Mar Vista, and Venice community activist Michael Chamness.

Ted LieuThe 28th District’s voter registration is 48 percent Democrat, 25 percent Republican and 22 percent decline to state, so Lieu – as the best-known Democrat in the field – looks like a presumptive front-runner.

Kelly’s olive branch is a tiny fraction of the whopping $320,538.12 in contributions that Lieu logged this week. Well-known Democratic contributors include former state Controller and 2006 gubernatorial primary candidate Steve Westly, campaign consultant Garry South, and state Senators Joseph Simitian, D-Palo Alto; Mark Leno, D-San Francisco; Elaine Alquist, D-Santa Clara. Lieu also got money from corporate entities including Visa U.S.A., Microsoft and Anthem Blue Cross, as well as from unions including the California Professional Firefighters, the State Building and Construction Trades Council and the American Council of State, County and Municipal Employees.


A musical primary post-mortem

When I’m having a good day, or sometimes when I’m down, I sometimes give myself a gift on the limited budget available to me as a reporter: a 99-cent splurge on new iTunes song for my iPod. And so as the primary election winners strut and the losers lick their wounds, here are a few suggestions for songs they might want to add to their playlists:

Meg Whitman, the billionaire former eBay CEO who spent $71.1 million out of her own pocket to buy the Republican gubernatorial nomination: “Money” by Pink Floyd, or “Killer Queen” by Queen

Steve Poizner, buried under Whitman’s $71.1 million and a 37-percentage-point deficit in the election results: “Wipeout” by the Surfaris

Chris Kelly, who spent $12 million out of pocket to lose the Democratic primary for Attorney General to San Francisco District Attorney Kamala Harris by 17 percentage points; PG&E President and CEO Peter Darbee, whose company spent $46.4 million on the unsuccessful Proposition 16; and Mercury Insurance Group President and CEO Gabriel Tirador, whose company spent $15.9 million on the unsuccessful Proposition 17: “Can’t Buy Me Love,” by the Beatles

Carly Fiorina, who as the GOP nominee for U.S. Senate has had the last laugh after people snickered at her “demon sheep” ad attacking rival Tom Campbell: “Sheep” by Pink Floyd

Abel Maldonado, the appointed incumbent who – despite winning the GOP’s nomination to try to keep the lieutenant governor’s office – knows his party wants him and needs him but there ain’t no way it’s ever gonna love him: “Two Out of Three Ain’t Bad,” by Meat Loaf

Gavin Newsom, the San Francisco mayor who won the Democratic nomination for lieutenant governor but might have his own words from 2008 on same-sex marriage come back to haunt him in November’s general election: “Like It Or Not,” by Madonna

Steve Cooley, the Los Angeles District Attorney who broke from California tradition by being a moderate capable of winning a Republican primary: “Middle of the Road,” by the Pretenders

Tom Torlakson, the Antioch Assemblyman who placed second and so will go to a November runoff – at which time he’s likely to pick up a lot of the Democratic votes that went yesterday to third-place finisher Gloria Romero, along with stronger Democratic turnout overall – against former school district superintendent Larry Aceves for state Superintendent of Public Instruction: “Time Is On My Side,” by the Rolling Stones

Mike Villines, the Clovis Assemblyman and former Assembly Republican Leader widely berated within the GOP for OKing a budget deal with tax hikes last year, who now is eight-tenths of a percentage point – 11,204 votes – behind political unknown Brian FitzGerald, an Insurance Department attorney from Napa who raised no money, in the GOP primary for Insurance Commissioner: “Living on the Edge” by Aerosmith

Brian FitzGerald, who might want to ask himself, “Well, how did I get here?” : “Once in a Lifetime,” by the Talking Heads


Chris Kelly puts another $2.45m into AG’s race

Former Facebook chief privacy officer Chris Kelly has put another $2.45 million of his own money into his campaign for the Democratic nomination for state Attorney General, bringing his total out-of-pocket spending so far to $12,056,000.

For context, current Attorney General Jerry Brown spent $9,024,118.88 in all of 2005 and 2006 to win the office, the primary and general elections combined.

“California is in desperate straits because of the failure of our existing political system,” Kelly said in a statement issued this morning. “I’ve invested heavily in this race — using some of what California has given to me — because I believe that my mix of experience in law, technology, and public policy can help lead the state in a different direction.”

He said the added money will let his campaign “communicate in the final days of the campaign with voters who face a fundamental choice — will we as Democrats nominate a strong general election candidate who has worked extensively with law enforcement while building one of the most successful technology companies in history, or another failed politician mired in scandal over her unwillingness to follow the law and protect the fair trial rights guaranteed by our Constitution.”

Gee, which of the other six Democratic candidates for AG do you think he’s talking about? Oh, wait, he said “her.”

San Francisco District Attorney Kamala Harris’ campaign issued a statement later this morning saying Kelly “has been dubbed ‘Mini Meg’ by the news media for his attempt to buy the office of Attorney General – a position for which legal newspapers have called him ‘not qualified.’ Kelly’s latest contribution comes in the midst of scathing media attention on Kelly, and as Kamala Harris continues to earn newspaper endorsements around the state.”


More campaign finance fun: Lt.Gov. and AG

In the Democratic primary for Lieutenant Governor, San Francisco Mayor Gavin Newsom far outpaced Los Angeles City Councilwoman Janice Hahn in fundraising during this period from March 18 to May 22. Newsom raised $792,311 and spent $453,291, finishing the period with $770,776 cash on hand; Hahn raised $336,331 and spent $316,670, finishing the period with $315,430 cash on hand.

Mike Trujillo, Hahn’s campaign adviser, called me tonight to note that the two candidates are more evenly matched if you look at contributions since their campaigns began – it looks to me as if Newsom’s at about $1.06 million to Hahn’s $898,000, by that measure – and that about $200,000 of Newsom’s cash on hand is earmarked for November’s general election, while all but $9,000 of Hahn’s stash can be spent in the next 10 days.

In the GOP primary for Lieutenant Governor, appointed incumbent and former state Sen. Abel Maldonado smoked his more conservative rival, state Sen. Sam Aanestad, R-Grass Valley. Maldonado raised $318,898 during this period and spent $121,872, leaving him with $139,060 cash on hand; Aanestad raised $44,470 during this period and spent $44,441, leaving him with $43,297 cash on hand.

In the Republican primary for Attorney General, Los Angeles District Attorney Steve Cooley trumped the fundraising during this period, with $916,066 in contributions compared to $295,302 for former Chapman University Law School Dean John Eastman – including the $25,000 he loaned his own campaign – and $150,294 for state Sen. Tom Harman, R-Huntington Beach. Cooley finished with the most cash on hand, too: $222,280 compared to Eastman’s $158,444 and Harman’s $112,644.

In the Democratic primary for Attorney General, former Facebook Chief Privacy Officer Chris Kelly rules the campaign cash roost only because he put $5.6 million into his own campaign during this period (atop the $4 million he’d put in earlier). His new investment accounted for all but $79,679 of his contributions in this period and he spent $8,953,697, leaving him with cash on hand of $102,984.

San Francisco District Attorney Kamala Harris raised $810,884 during this period and spent $1,546,812, finishing with $636,471 cash on hand; former Los Angeles City Attorney Rocky Delgadillo raised $268,995 and spent $1,251,446, finishing with $149,762 cash on hand; Assemblyman Ted Lieu, D-Torrance, raised $239,162 and spent $671,100, finishing with $577,002 cash on hand; and Assemblyman Pedro Nava, D-Santa Barbara, raised $17,532 and spent $86,956, finishing with $24,534 cash on hand. Assembly Majority Leader Alberto Torrico, D-Newark, had $1,029,186 cash on hand as of March 17, the close of the last reporting period, but hasn’t yet filed this period’s report as of this time; Emeryville attorney Mike Schmier didn’t raise enough to require a report.

UPDATE @ 10:33 A.M. FRIDAY: Torrico raised $180,371.79 in this period, spent $676,560.78 and finished with $522,334.73 cash on hand.

UPDATE @ 9:30 A.M. TUESDAY 6/1: Sorry, my bad: Schmier says he has raised $12,450 to date and has $3,166.88 cash on hand remaining.


Campaign finance accusation in AG’s race

Chris KellyChris Kelly, the former Facebook chief privacy officer now seeking the Democratic nomination for state Attorney General, violated state law by taking a personal loan and using it pour $9.6 million into his own campaign without reporting the loan’s source, staffers for an electoral rival claimed today.

Lawyers and staffers for the campaign of San Francisco District Attorney Kamala Harris held a conference call today to make the claim, citing a Los Angeles Times report this past weekend and the sworn statement of economic interests Kelly filed with the state. From that LA Times report:

The case of Chris Kelly, a Democratic attorney general candidate who amassed a personal fortune in stock options while an executive at Facebook, has some campaign finance watchdogs stumped.

Kelly has found a way to use his stock options in Facebook to bankroll his political campaign even though the company has yet to go public. He is selling his shares in Facebook to a group of investors in Delaware who are willing to pay cash for Facebook stock options, perhaps gambling that they will increase in value by the time the company goes public.

The question raised by Kelly’s strategy is whether the investors are paying the market price for the options or a higher price in order to do him a favor.

Kelly’s spokeswoman and the owner of the Delaware private equity firm FBI Investments, which bought his Facebook options, both deny that Kelly got any special deal.

The candidate sold his options at the going rate, and he has already disclosed everything the law requires, spokeswoman Robin Swanson said. “Anyone else could buy and sell Facebook stock options this very same way.”

But the law does not require Kelly to disclose how many options he sold or the price. In the absence of any disclosure requirement, voters have no way to confirm his statement.

Harris’ people filed a complaint yesterday with the Fair Political Practices Commission, the state’s campaign law watchdog. Harris campaign strategist Ace Smith said today it seems Kelly’s funding “is based upon receiving a noncommercial loan, essentially a shady infusion of money into his campaign.” Smith said it’s ironic that Kelly is funding his campaign through sales of Facebook stock even as he tries to distance himself from Facebook, now embroiled in privacy concerns.

“Anyone running for AG should be absolutely above question, absolutely above board, and fully transparent,” Smith said.

Harris campaign attorney James Sutton said Kelly’s Form 700 economic interests disclosure shows a loan of more than $100,000 – it’s unknown how large it actually was – from FBI Investments LLC, a Delaware-based private equity firm, “to facilitate stock option exercise.” Proceeds from the sales of that stock went to the campaign.

But “such a loan is illegal,” Sutton said. “The law is as clear as clear can be: that a loan is considered a contribution.”

The only exception would be a loan from a commercial lending institution in the course or regular business at terms available to the general public, Sutton said. FBI isn’t such an institution, and so the contribution should’ve been subject to limits set by law and reported on Kelly’s campaign finance reports.

Sutton said Kelly also didn’t report who bought the stock, and at what price; because Facebook is not a public company, its stock prices are set not by a public exchange but by negotiation between the buyer and seller. Knowing who bought the stock and for how much is crucial to determining whether these were arms-length, above-board transactions or a “sweetheart deal” in which someone was giving Kelly more money than the stock was actually worth.

Kelly’s campaign issued a statement this morning saying Harris’ campaign has “sunk to a new low, with her consultants coordinating a publicity stunt, and that “(i)t’s clear that Chris Kelly has followed the law, while Kamala Harris has failed to uphold the law and the Constitution.

“Last Thursday, a Superior Court Judge in San Francisco ruled that Kamala Harris systematically violated defendants’ civil and constitutional rights, facilitating the release of hundreds — and ultimately perhaps thousands — of criminals onto California’s streets,” Kelly said in this statement, citing the San Francisco Police crime lab fiasco. “This is merely the latest attempt to distract voters from the fact that she’s not qualified to be the Attorney General of our great state.”


Chris Kelly pumps $4 million more into AG bid

Former Facebook chief privacy officer Chris Kelly of Palo Alto announced today he’s putting another $4 million of his own money into his campaign for the Democratic nomination for state Attorney General, essentially doubling his previous investments that had totalled $4,006,500.

Chris KellyThe $8 million total accounts for all but a small fraction of his campaign war chest, as major donors have flocked instead to San Francisco District Attorney Kamala Harris and former Los Angeles City Attorney Rocky Delgadillo, the best-known names in the Democratic primary race. Also in the race are Assembly Majority Leader Alberto Torrico, D-Newark; Assemblyman Ted Lieu, D-Torrance; Assemblyman Pedro Nava, D-Santa Barbara; and Emeryville attorney Mike Schmier.

Kelly’s double-down comes a week after Harris floated results of a poll she had commissioned showing her in the lead at 25 percent, followed by Delgadillo at 9 percent; Lieu, Nava and Torrico each at 4 percent; and Kelly at 2 percent – Kelly’s number being down six percentage points from February despite his self-funding and an aggressive media campaign including efforts to tie Harris to the San Francisco Police crime-lab scandal. Some say that’s because he’s getting dragged down by the sinking reputation of Facebook, where he’d helped formulate some now-unpopular privacy policies.