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Wednesday's Internet Edition, October 08, 2008.
Campaign finance war in Galt
City ordinance at center of brewing controversy
By Rachael Ackerman
Herald Editor
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What started out as an urgency ordinance designed to make small town campaigns safe from outside influences has resulted in a war being waged in Galt over how to legally finance a campaign for a candidate, or an issue in the city.
At the heart of the brewing controversy is the city of Galt’s Campaign Contribution Limitation Ordinance, which was approved by the voters as Measure Q in 2002.
Proposed and championed by Galt City Councilman Tim Raboy, Galt’s campaign contribution limitation ordinance is recognized as one of the most restrictive in the area, and it’s those restrictions that are fueling the fire of the campaign finance war in Galt.
Currently, much debate and heated correspondence centers on notice of violations and enforcement of the city’s ordinance when violations are suspected and/or reported.
The language of the ordinance states that ‘any person who knowingly or willingly’ violates the ordinance is committing a misdemeanor punishable by law, up to and including fines, and dismissal of elected officials who are found guilty of violating the law.
While not directly connected to Galt’s ordinance, things got started in May when Businesses United for Good Government, a former Galt District Chamber of Commerce PAC, received a $39,000 Fair Political Practices (FPPC) fine for campaign contribution/expenditure filing violations in the 2000 campaign, based on a detailed anonymous complaint filed shortly after that campaign season ended.
Things heated up in August when City Clerk Elizabeth Aguire issued a letter to Protect Galt Area Future (PGAF), filed first with the secretary of state as a county general purpose committee, advising them that a reorganization of that committee to a primarily formed committee in May, caused them to be subject to the restrictions and reporting obligations of the city campaign finance ordinance.
In her letter, Aguire requests the PGAF “immediately” comply with the ordinance mandates on campaign contributions, expenditures and filing requirements, after City Attorney Steve Rudolph rendered his opinion that PGAF, as a primarily formed committee “must comply” with the requirements of Galt’s campaign finance ordinance.
Aguire’s letter was rebutted by attorney for PGAF Brian Hildreth in a letter dated Aug. 29, detailing how, in his opinion, PGAF is not subject to the city’s campaign finance laws.
“Because the committee is a County General Purpose Committee as defined in the California Government Code, the committee’s filing responsibilities are with the County of Sacramento, not the city of Galt,” wrote Hildreth.
PGAF treasurer Jim Ferguson responded for PGAF on Tuesday.
“The city ordinance has draconian finance provisions that would make any type of effort to change direction of the city nearly impossible,” said Ferguson. “The city restrictions also appear to be enforced only against those who oppose entrenched incumbents, some who got there by knowingly violating the city campaign finance restrictions in the first place.”
To date, according to Aguire, PGAF has failed to comply with the city’s campaign finance ordinance with regard to filing, contributions and expenditures, as per her letter.
“Based on the advice of our counsel, PGAF is focused solely on issues and does not provide support to any candidate running for any city position,” said Ferguson, who explained that, upon advice from counsel, an initial plan to support individual candidates in the 2008 campaign had been changed to a campaign on issues with community education as the backbone of the PGAF campaign. “Our funding sources are a matter of public record and our reports are available in accordance with the law. Providing those reports to the city clerk would be construed by some as agreeing to be bound by the city ordinance, so we have declined to do so.”
Now, in a separate action, six Galt residents, including Galt City Council candidate Rodney Stanhope, and Protecting Galt Area Future, and/or Protect Galt Area Future Recall Committee members Dick Smith, Orvelle Fletcher, Jim Ferguson, Carl Bonar and David Bramwell, have retained Hildreth’s services, as individuals, to represent them in a complaint against Cosumnes Communities Together (CCT), a state PAC, alleging CCT committed certain campaign finance violations in the 2006 campaign season.
Hildreth said that attorney/client privilege prohibits him from revealing who is paying him, but he did say his firm is an hourly firm with rates of no less than $200 per hour and no more than $500 per hour. He also said if funds to pay for his services were coming from PGAF, they would certainly have to be disclosed at the next regular filing period.
The complaint, filed with the city last week, seeks a special independent prosecutorial investigation into CCT and its treasurer Lori Heuer, by both the city attorney and the district attorney of Sacramento County.
The complaint alleges Heuer, and CCT, “repeatedly ignored” the provisions of the city campaign finance ordinance in soliciting and receiving contributions in support of city council candidates Andrew Meredith, Don Haines and Thomas Malson, in 2006 by “erroneously” registering the committee as a general purpose “state committee.”
The complaint further alleges that Heuer, by filing contribution and expenditure reports with state offices, “deceived” the voters of Galt of the true source of funds in that city council race.
Aguire responded to the complaint by issuing a letter to CCT dated Sept. 22 where she advises Heuer and CCT that “after reviewing your contributions and expenditures over the last two years, it is clear that CCT was only active within the city of Galt. Therefore you are required to adhere to the city’s filing requirements.”
The letter goes on to say, “from this date forward, you are hereby requested to comply with the filing requirements and contribution limits contained in the Galt Municipal Code.”
Hildreth said he had not seen the letter from the city as of Monday afternoon, but said even if the city does not take up the investigation, the individuals filing the complaint still have options to proceed further. Hildreth said the group can take the complaint directly to the district attorney for consideration, and they can take their complaints about filing violations they believe were committed by CCT as a state PAC to the FPPC for an investigation.
Additionally, Hildreth said on a larger scale, the group may even be able to bring a legal challenge to the ordinance itself based on the United States Constitution, saying that placing spending limitations on expressions related to issues in a campaign, such as measures and initiatives, could be a First Amendment violation of a citizen’s right to free speech.
Heuer responded to the allegations on Tuesday.
“This was a small grassroots group formed to protect the Cosumnes River from development. That was all it was about,” said Heuer. “At the time the committee was organized, we were looking at a river that runs through at least three counties, and felt that the state filing was the appropriate jurisdiction to create the committee. We had no way to pre-determine where we would need to direct our efforts. We could not forecast that the single greatest threat during that election cycle would come from one jurisdiction, Galt. It just turned out that way.”
Heuer went on to say that at no time was the community ever deceived about where contributions to the committee came from, or where the expenditures were made.
“Nothing was ever hidden from the voters. Each item was reported in a timely manner as prescribed by state law and reported in the local newspapers on more than one occasion,” said Heuer. “There was never any attempt to hide who contributed to the committee or how those funds were being spent.”
Raboy responded to public charges made by Ferguson that would not take CCT violations of the city ordinance seriously.
“The public should realize that the recall committee is involved in a typical bait and switch tactic,” said Raboy. “While they continually commit violations of Galt’s voter approved campaign finance initiative, they try to deflect their intentional violations of the law by trying to bring up old information that is not involved in this year’s election. The voters will see through their deception and deceit, and eventually they will pay for their violation of the laws of this city.”
Galt Mayor Andrew Meredith, the subject of a recall by PGAF’s recall committee, also responded to allegations that his 2006 campaign was illegally funded.
“I find the allegations quite interesting. This group, PGAF, in drafting the letter, essentially gave the community a blueprint on how they, themselves, are currently violating our local ordinance. It’s worse than the pot calling the kettle black; it’s like the pot calling the kettle a pot,” said Meredith. “This group is attempting to divert attention away from their own fraudulent campaign activities. They have refused to follow our local guidelines and continued to spend thousands of dollars to bring back a flawed plan of massive residential growth. The committee includes individuals who claim to be concerned citizens of Galt, when actually they are essentially salespersons for a millionaire developer looking to sell Galt down the river. This is special interest politics at its worst.”
Ferguson defended PGAF’s intent.
“We think that the city leadership’s position on overlooking their violations of the city ordinance to get elected, while at the same time agitating before the FPPC to both fine and increase fines against Businesses United for Good Government for a single minor reporting violation shows how hypocritical they are,” said Ferguson. “Furthermore, calling local businessmen crooks while they themselves appear to be crooks according to city code, appears to be counterproductive to efforts to help Galt survive these hard economic times.”
Campaign finance ordinance at a glance
In a nutshell, the city of Galt Campaign Contribution Limitations Ordinance limits contributions to and for local campaigns to a total of $99, per contributor, per candidate or measure. The ordinance requires that any contribution, or expenditure, over $25 be reported in full detail to the city clerk’s office, including the name, address, occupation and employer of the contributor, or for whom an expenditure is made. The ordinance also prohibits making, or keeping, any anonymous contribution in excess of $10.
The ordinance also mandates that any person, or combination of persons, making or receiving any contribution or expenditure over $100 in a calendar year must form a campaign committee subject to full disclosure, and that any committee created with the intent to make independent expenditures on behalf of candidates or measures must also adhere to ordinance contribution and expenditure limits.
As well, the ordinance adds an additional campaign finance reporting period to the state’s mandated reporting obligations for the Friday just prior to the Tuesday vote, and mandates that any independent expenditure made in excess of $100 in support of, or against any candidate or measure, must be reported to the city clerk’s office, and all candidates running for the same seat within 24 hours of making the expenditure. The notification must also contain a copy of any mailing or advertising produced if applicable.
The ordinance does not have the power to restrict the amount of any candidate’s own money that may be spent in a campaign year, so long as the contribution and spending is correctly reported.
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