Chula Vista Politicians Routinely Blow Past Campaign Debt Limits

Politics

Chula Vista Politicians Routinely Blow Past Campaign Debt Limits

Violations of the city’s campaign finance rules are punishable as a misdemeanor. But it doesn’t appear that any candidate or elected official has ever been cited. Politicians and consultants said they believe the rules are unclear and need to be updated.

The Chula Vista City Council
A meeting of the Chula Vista City Council / Photo by Adriana Heldiz

In November 2020, Andrea Cardenas beat incumbent Mike Diaz for a seat on the Chula Vista City Council.

The race attracted a bit of media attention. Cardenas, a Democratic political consultant, had helped elect others across the region. Diaz, a retired firefighter, wound up running as an independent after the Republican Party questioned his conservatism.

In the end, Cardenas didn’t just bring in more money than Diaz. She outspent him, too, and wound up with a lot of debt. Cardenas’s unpaid campaign bills totaled $36,691, more than Diaz had raised from donors over the course of the entire election. He finished with a slight surplus.

Ending a campaign with debt isn’t a problem in many cities. But the Chula Vista Municipal Code states that an “extension of credit … shall be subject to the contribution limit of $360.00 per person.”

As written, the municipal code suggests that if bills aren’t immediately paid off, then they become a donation. But because donations are capped to ensure everyone is competing on an even level, campaign debt above a certain amount could be construed as an illegal means of raising money.

Chula Vista’s elected officials have known about the limits on campaign debt for years and have argued that the rules are unclear. Notably, the municipal code doesn’t actually define an extension of credit or provide a timeframe for when it must be paid off before becoming a donation.

But they’ve also never clarified the city’s municipal code so that everyone has a common understanding of the rules and people don’t leave a trail of invoices on their way to victory.

Cardenas is not an outlier. In Chula Vista, it’s common for candidates who win office to accrue a considerable amount of debt, then raise funds to pay it off post-election.

Councilman John McCann finished his 2014 campaign owing $40,662 for literature and mailers. Two years later, La Prensa took a closer look at the donors who helped McCann pay off his bills and found that several were connected to development companies that had business in front of the City Council.

McCann told VOSD in an email that he complied with the law because “2014 campaign expenses were paid in full and in a timely manner.”

In the same election, Steve Padilla lost to McCann by a mere two votes and wound up owing $28,580 to a legal firm by the time he filed his campaign report.

“The point of the extension of credit rules, as far as I’ve always understood it, is to stop candidates and consultants from gaming the system,” Padilla’s consultant, Dan Rottenstreich, said. “In other words, a lobbyist sends $50,000 worth of mail on behalf of a candidate and says, ‘No, don’t worry, I’ll send an invoice, you can pay me whenever.’ That is something you would want to stop.”

But unpaid bills for goods and services shouldn’t automatically be considered extensions of credit, Rottenstreich said. He also argued that the circumstances underlying Padilla’s debt were unique — he racked up legal bills after Election Day, in preparation for a recount. The city’s campaign contribution limits made it difficult to raise money after the ballots were cast, Rottenstreich said, because many of Padilla’s donors had already given the maximum amount allowed in Chula Vista.

“We couldn’t simply pay the whole bill,” he said. “We just hit a wall.”

Rottenstreich said the city’s post-election campaign provisions are “basically non-existent” and that there was a sense of urgency at the time that every vote be counted. Padilla’s campaign wound up paying off a portion of its legal bills and petitioning the state to close the committee in 2020.

It’s also common for candidates to offer their consultants a financial incentive if they win, as Mary Salas did during her 2012 Council run and 2014 mayoral run. On both occasions, she reported a $10,000 victory bonus owed to her team. Padilla offered his consultants a $5,000 victory bonus in 2020. McCann offered his $5,000 in 2014.

In an interview, Salas described the city’s current rules around credit as “vague” and “complex,” making it difficult for people to understand, but said she paid off her debts in the months following those elections. She agreed, though, the rules deserve another look and possible clarification.

Then there’s the question of enforcement. Violations of the city’s campaign finance rules are punishable as a misdemeanor. But it doesn’t appear that any candidate or elected official has ever been cited. In an email, City Attorney Glen Googins said he couldn’t recall any extension of credit complaints being filed during his tenure.

Shortly after he was elected in June 2010, Googins proposed a more robust enforcement system following years of political campaigns griping at one another.

The current municipal code states that the city’s Board of Ethics shall appoint a panel of outside attorneys in response to any campaign finance-related complaints. If one of the attorneys finds that the complaint meets a “knowing and willful” standard, Googins is supposed to forward it to the district attorney’s office. If the complaint meets a “negligent” standard, Googins is supposed to forward it to another attorney on the panel for further review.

If Googins himself is the subject of any complaints, the city clerk is supposed to assume his duties.

The thing is, Googins ended his first run for city attorney in June 2010 with more than $20,000 in debt — a combination of money owed to other consultants and lawyers — which he paid off before taking office.

“I thought it important — especially as the city’s first-ever elected city attorney — to avoid any appearance of impropriety or undue influence by closing out any and all of my campaign activities prior to embarking on my professional duties,” Googins said. “Other people’s circumstances and approaches on how best to handle campaign debt can reasonably differ.”

He also acknowledged that there are several parts of the city’s campaign finance rules that warrant clarification and added, “I am hoping to work with the City Council to address those areas before I leave office.” He’s termed out in 2022.

California provides some guidance on this issue. The state’s Fair Political Practices Commission, which sets the bar on campaign finance, says unpaid bills become credits subject to contribution limits after 45 days. It also lays out rules meant to ensure that vendors are engaging in good faith and not trying to boost the chances of one candidate over another as a political favor.

In the absence of its own clear definitions, Chula Vista would defer to the state, said Jim Sutton, a political and election law attorney in California. There are legitimate reasons for why a bill might go unpaid in the short term. At the same time, there is a legitimate public interest in making sure campaigns don’t exceed the agreed-upon limits. Cities other than Chula Vista might have more heavy-handed rules, Sutton said, but “it puts candidates on notice: you’ll be personally liable for debt, so be careful.”

Almost everyone I spoke to agreed that Chula Vista’s campaign finance rules need an overhaul.

“I have been advocating for changes to the Chula Vista campaign finance law for years to no avail,” said Bill Baber, a San Diego ethics commissioner who also served as McCann’s campaign treasurer in 2014. “The debt rule is one of many ambiguities in that law. It really needs to be cleaned up.”

Baber offered a suggestion. The city of San Diego has a rule stating that vendor debts must be paid within 180 days. Chula Vista should adopt that model, he said, “or create a blue-ribbon panel to examine the whole law, rewrite it, and put it on the ballot for the voters to approve. Either one of those would solve the problem, but until you solve the problem, it’s gonna be the wild west.”

Cardenas has long worked — and still appears to work — as the director of community affairs for Grassroots Resources, a political consulting firm with deep roots in South Bay. Most of the money she owed after the election was to TMC Direct, a division of Turpin McLaughlin Communications that specializes in printing and mailers.

The two have a financial relationship. Local and federal campaign finance reports show that Grassroots Resources has worked alongside TMC Direct on other campaigns — in at least one case, hiring Turpin McLaughlin Communications as a subvendor — but I couldn’t find any instances of those campaigns owing money to TMC Direct in the end. Only Cardenas.

“While I do believe there is a need to go over the ambiguity of the campaign finance portion of our Chula Vista Municipal Code, I want to clarify that all debts from my campaign have been paid off,” Cardenas wrote in a statement. “This will be shown when our committee’s termination report is filed.”

TMC Direct didn’t return a request for comment.

In the meantime, Cardenas’s opponent, Diaz, doesn’t seem bitter about the outcome of the 2020 election — “the good lord is in charge, not me,” he said — but he is convinced that Cardenas’s campaign debt spending is a direct cause of his losing re-election. He said a lot of candidates have used a similar tactic over the years and it’ll keep on happening until the city puts a stop to it.

“Right now,” he said, “there are absolutely no consequences.”

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