The San Diego Ethics Commission on Thursday rejected complaints filed a day earlier by critics of mayoral candidate Todd Gloria, who alleged the Assembly member was laundering money through the local Democratic Party to benefit his campaign.
Mat Wahlstrom of Hillcrest and Kathryn Burton of Torrey Hills, repeating arguments in a still-pending civil lawsuit, said Wednesday in near-duplicate filings that Gloria set up a fund-raising committee for an Assembly 2020 re-election even though he insists he is not running for that office.
“Through that committee, he is raising money from donors who could not donate lawfully to Mr. Gloria’s mayoral committee,” they wrote. “He is using money from his Assembly 2020 committee and paying it to the San Diego County Democratic Party, which in turn is using money to support Mr. Gloria’s mayoral campaign.”
But in separate letters to Gloria/Democrats and the critics, commission Executive Director Stacey Fulhorst said the actions described in the complaint were permissible under state and local law and didn’t support an allegation that funds were unlawfully “laundered” to support Gloria’s mayoral candidacy.
“In other words, the complaint does not contain sufficient facts to support an allegation that the city’s campaign laws may have been violated,” she wrote. “As a result, I have concluded that the allegations in the complaint do not warrant a formal investigation, and that this matter is not appropriate for consideration by the commission.”
Thursday night, Wahlstrom called the rejection “disappointing but not surprising.”
“There’s no way the commission’s staff could have reviewed all the allegations, evidence and laws even superficially and then spit out a lengthy rejection letter in just a few hours,” he said via email. “Please forgive me for believing that the fix was in and the staff’s denial letter was simply awaiting a complainant’s name and address to slap on top. All the more reason I will have to continue with my lawsuit.”
The original ethics complaints said Gloria and the San Diego County Democratic Party violated the San Diego Election Campaign Control Ordinance. The party endorsed Gloria in August.
Before the Fulhorst letter was sent, Nick Serrano, Gloria’s campaign manager, said: “This is yet another baseless complaint from Mr. Wahlstrom. The FPPC has already reviewed and dismissed these allegations.”
Wahlstrom — in his Wednesday filing — cited that similar complaint with the state Fair Political Practices Commission.
“Video from the FPPC meeting … on November 21, 2019, states that 90% of the money [Gloria] raised is ineligible for transfer to his mayoral campaign,” he said. “But he has spent more than 10% of that money to support organizations that are in turn donating to his mayoral campaign.”
As possible witnesses to the alleged offenses, Wahlstrom listed county Democratic Party chairman Will Rodriguez-Kennedy and “Ryan Trabuco” of the party.
Rodriguez-Kennedy said in a first statement: “The state’s political watchdog, the FPPC, investigated the same complaint last year and dismissed it. Voters will see this for what it is: a flimsy attempt at publicity several weeks before the election.”
Councilman Scott Sherman — a leading candidate for mayor along with Councilwoman Barbara Bry — told Times of San Diego earlier Thursday: “I’m going to avoid the political game and focus on my campaign. The complaint has been filed with the appropriate enforcement agency and I will let them make a determination before offering any comment.”
Hours later, Bry said in a statement:
“It’s clear from public records that Todd Gloria and his supporters are taking advantage of loopholes to launder hundreds of thousands of dollars from PAC and corporate contributors that would be illegal under city law if the contributions were made directly to his campaign.”
She also noted a “deceptive television commercial” by Gloria backers — sponsored by a local labor union — that referred to “hypocribry” instead of “hypocrisy.”
Money behind the TV spot is “hypocritically accuses my campaign of being financed by developers,” she said.
“First off, that’s just not true,” Bry said. “Of the over 2,500 individuals who made legal contributions under the city’s very strict campaign limits to my campaign, only a tiny fraction have anything to do with the development industry. But what’s particularly ironic about their negative commercial is that the largest funders of this commercial — $100,000 – are controversial developers who, in addition, are business partners with one of the largest developers in downtown San Diego. Mr. Gloria and his supporters owe San Diego voters an apology.”
The maximum penalty for violations of the city’s ethics laws is $5,000.
Under the seven-member ethics panel’s procedures, Executive Director Fulhorst conducted a preliminary review to determine whether the allegations fell within its jurisdiction.
In a letter to Burton and Wahlstrom, Fulhorst said: “Nothing in state or local campaign laws prohibits a city candidate from opening a second committee for a different election.”
She added that, although the Ethics Commission does not have jurisdiction over the Todd Gloria for Assembly 2020 committee, state law does not prohibit candidates from using campaign funds to make contributions to political party committees.
“Therefore, it is not necessary or appropriate to refer the allegation to the California Fair Political Practices Commission,” she said.
In Wahlstrom’s civil suit, a case management conference is set for Friday. A motion hearing is set for May 8 before Judge Ronald F. Frazier in downtown Superior Court.
Updated at 8:06 p.m. Feb. 6, 2020