San Diego city council donors fined and fined

High-stakes game

— As the debate about expansion of the stadium rages on, callers to radio talk shows have voiced a consistent, plaintive question: "How could the city council have negotiated such a bad deal for taxpayers?" Veteran city hall insiders have a simple reply: "Follow the money."

Over the past two years, records show, every member of the council, whether opposed for re-election or not, along with the city attorney and mayor, has received multiple campaign contributions totalling $42,645 from donors who work for companies with a possible financial stake in the outcome of the stadium debate. If the issue goes to the ballot, as demanded by 59,000 voters who signed referendum petitions, these companies and their clients could lose millions of dollars in consulting and construction contracts.

Whether by coincidence or not, many of those councilmembers receiving the largest total contributions from the stadium-related groups have been among the most vociferous opponents of placing the measure on the ballot. They have also pointedly refused to allow voters to decide whether a city ethics commission supported by the mayor, with subpoena power to investigate allegations of money laundering, should be created.

Councilmembers have denied being influenced by campaign contributions funneled to them from special interests seeking council favors. They have also denied knowing that the money was laundered; thus far no councilmembers have been indicted for corruption.

A spokesman for Luce, Forward has denied that any money given by partners or others working for the firm was reimbursed by Luce, Forward. The other stadium-related firms have also denied laundering money. However, in several notorious cases, other major corporations and developers have been accused by the state Fair Political Practices Commission of attempting to buy influence by laundering thousands of dollars of contributions to councilmembers prior to crucial votes. Each of the accused have been forced to settle the cases by paying large fines.

In September of last year, developer Frank Gatlin and his law firm - Gresham, Varner, Savage, Nolan & Tilden - agreed to pay $420,000 in penalties for making illegally laundered campaign contributions to six San Diego City Council candidates, including 100 separate contributions totaling $27,000 from Gatlin to councilmembers Ron Roberts, Juan Vargas, and Barbara Warden. Gatlin's San BernardinoPbased attorney Mark Ostoich and his law firm admitted they had been the intermediary for 110 separate contributions totalling $29,000 to Roberts, Vargas, Warden, and Judy McCarty and George Stevens. As part of a deal, the FPPC dropped its criminal investigation after the fines were paid. The case, which began after a story about Gatlin's suspicious contributions appeared in the Reader in August 1994, revolved around Gatlin's attempts to get approvals and other city concessions for a series of Wal-Mart shopping center developments.

Last February, the H.G. Fenton Material Company of San Diego paid a $90,300 fine to avoid formal charges that it had laundered campaign money to the council. Six Fenton employees and the wife of one employee were found to have made 53 illegal contributions, totaling almost $10,000, between 1989 and 1993. The company reimbursed the employees after they contributed, violating city and state election laws. Contribution recipients included Juan Vargas, Judy McCarty, Christine Kehoe, and Valerie Stallings.

In November 1995, Cox Cable was slapped with a $42,000 fine for reimbursing employees for 24 laundered contributions totalling $4850 to city councilmembers and other politicians. Councilwoman Valerie Stallings got three contributions totalling $500.

In April 1994, the state Fair Political Practices Commission levied a $93,000 fine against the Yarmouth Group, owner of the Fashion Valley shopping mall, for laundering $11,000 through 44 separate contributors to Mayor Susan Golding and six current and former city councilmembers. Employees of the New YorkPbased Yarmouth made the contributions and then were reimbursed by the company. Golding, who collected $3250 from Yarmouth, told the Union-Tribune she had been hoodwinked by the firm and voiced her indignation: "We're trying to restore the public's trust in government, and then a business does something like this and it hurts the whole effort."

The continuing flow of illegal campaign money to the council revealed in these cases has generated editorial calls for reform and the creation of a so-called public integrity unit in the city attorney's office. However, records show that "bundles" of campaign cash - checks from employees and vendors of the same firm bearing the identical date - continue to find their way into city council campaign coffers. If the contribution is truly made by the donor who signed the check, there is nothing illegal. But critics note that proving reimbursements can be hard to do, even for the best, most honest investigators. And they point out that the city attorney's so-called public integrity unit, funded by the city council itself, is not an independent body and thus can't be expected to investigate its own.

An independent city ethics commission with subpoena power was voted down by the council in December 1995. Proposed by Golding two years before, it was finally brought before council for a vote after published reports said she had abandoned the idea. Although the mayor was in support of putting the ethics commission proposal on the ballot for voters to decide, other councilmembers were not. First District Councilman Harry Mathis said the board would "have the power to damage reputations and heavily influence the outcome of elections."

The measure was rejected 5-4. Voting no were Mathis and councilmembers Christine Kehoe, George Stevens, Barbara Warden, and Judy McCarty. Along with Golding in favor were Byron Wear, Valerie Stallings, and Juan Vargas. Claimed Kehoe: "A well-timed investigation - or even the suggestion of an investigation - three, four, five days before an election, could easily unseat ...a race that's close." A few months later, when a citizen brought the matter up again before the Golding-chaired rules committee, Golding voted against reconsidering it.

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