The Newly Elected Scramble to Protect Their Wallets

Government

The Newly Elected Scramble to Protect Their Wallets

Scott Sherman and Bob Filner work to collect contributions and protect their personal accounts from outstanding campaign debts.

 

Elected officials aren’t usually allowed to take campaign money and put it in their pockets. That’s called bribery. While campaigning, they face limits on donations and they must fastidiously account for the money they raise.

But there is one legal way for them to get money from donors and put it in their pockets.

Debt repayment.

Before they storm City Hall, a new class of leaders is scrambling to keep their personal bank accounts strong.

Here’s the rule: If candidates lend their campaigns money, they can collect donations after they’re elected, for up to six months. This is money with which they can pay themselves back.

Money in the pocket.

Or if they end up owing the consultants and vendors who helped them get elected, then they, personally, end up having to pay them off. They have six months after the election to raise money to pay those debts using contributions.

Money stays in their pocket.

Monday, T.J. Zane, an ally of Scott Sherman, who won a City Council seat, took to Facebook to help his friend spare his finances.

Here’s how Zane put it:

“Scott has some significant campaign debt (over $40,000) that MUST be paid off by December 2nd or, as the law in America’s Finest City holds, Scott becomes personally liable for the debt,” Zane wrote.

In the comments, Sherman elaborated:

I have some victory bonuses to pay. We were zeroed out at the end of the campaign. [H]owever I offered an incentive to the staff if we achieved a victory in the primary in the form of a win bonus. Funny thing about giving your employees incentives […] they usually work. Kept our front end expenses down and gave the team even more of a reason to work harder.

This is known as a “win bonus” and it’s hardly Sherman’s innovation. It’s a way to defer payment to high-priced consultants and make sure they finish the job strong.

Now, $40,000 can mean something different to different people. But if I suddenly had to come up with that much money, I know it’d cripple my family.

Every $500 donation to Sherman right now spares him a bit of this pain.

Now, why can’t the debt just be forgiven? San Diego’s election and anti-corruption ordinances are designed to keep elected officials from having to owe people money. Being in debt to someone while in office doesn’t create the kind of environment we’ve decided we want.

Mayor-elect Bob Filner is facing a potentially much bigger shock than Sherman. We haven’t seen the final disclosures yet, but as of Nov. 5, Filner had outstanding debts of $134,046. If he offered similar win bonuses, he could owe much more.

And it’s exactly why labor leader Lorena Gonzalez and businessman Mel Katz have banded together to host a “debt retirement reception” for Filner days after he becomes mayor.

Like Sherman, Filner has six months to pay off his debts or else he’ll have to write a repayment check himself.

It would probably be a painful if not impossible personal debt for him to have to pay.

Filner’s debt retirement reception could just as easily be named “Give the Mayor Money” reception.

This is, after all, the only legal way to give the new mayor money directly. And for those who may not have been as supportive of his candidacy as others were, it’s a chance to make things better.

Update 11:30 a.m.: T.J. Zane has deleted his Facebook post and therefore Sherman’s comments under it referenced above.

Update II: Here’s a PDF of the public Facebook post that was later deleted.

 

I’m Scott Lewis, the CEO of Voice of San Diego. Please contact me if you’d like at scott.lewis@voiceofsandiego.org or 619.325.0527 and follow me on Twitter (it’s a blast!):

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