Las Vegas Sun

March 28, 2024

Agency sues Bustamante over campaign donations

SACRAMENTO -- Lt. Gov. Cruz Bustamante took $3.8 million above the state's legal campaign limits from Indian tribes in last year's recall election, the state's Fair Political Practices Commission charged in a civil lawsuit Wednesday.

The lieutenant governor could face a maximum potential fine of $9 million, said Steven Russo, chief of FPPC enforcement.

The FPPC's civil complaint, filed in Sacramento Superior Court, alleges that Bustamante mischaracterized 16 contributions he received in the gubernatorial campaign as donations to his 2002 committee for his run for lieutenant governor.

In a written statement, Bustamante referred questions to his new attorney, James Harrison.

"I want to emphasize that, on the face of it, all the allegations appear to be in regard to actions taken on the advice of my campaign attorneys during my campaign for governor and in consultation with the FPPC," Bustamante said in the statement.

Harrison said he hadn't yet reviewed the complaint and couldn't comment.

Russo denied that Bustamante had sought the FPPC's guidance on the contributions' legality.

"They did not commit these violations in consultation with the FPPC," he said.

Candidates with legal questions can write to the FPPC for guidance, Russo said, and that gives them immunity from future enforcement actions.

"That didn't happen with this case and with these violations," he said.

Bustamante drew criticism from Republicans and campaign finance watchdogs when he took millions from Indian tribes, skirting the $21,200 individual contribution limit by accepting the funds for his 2002 campaign committee for lieutenant governor.

That committee was created before California's new campaign finance law took effect, so it wasn't subject to the contribution limits on newer campaign accounts.

The donations were then transferred into Bustamante's recall committee account. He was then sued by Sen. Ross Johnson, R-Irvine, one of the proponents of a 2000 campaign finance ballot measure that set campaign limits.

Bustamante then moved all the money raised above the $21,200 limit to a new committee formed to oppose Proposition 54, a ballot measure that would have banned state and local governments from tracking race. He appeared in the television ads against the proposition.

A judge ordered Bustamante to stop using the campaign finance loophole to collect money in an old campaign committee account and ordered him to return any money above the voter-approved limit.

Bustamante said the money had already been spent on television air time for the anti-Proposition 54 ads and couldn't be returned. He appealed the order and the case is still pending, Johnson said.

"It was blatant money laundering, and an obvious attempt to avoid the contribution limits approved by voters in California," Johnson said.

The FPPC's investigation found that "not only did the lieutenant governor improperly use his old, unlimited committee to raise funds for the governor's race, he also made several expenditures for fund-raising and other expenses for his gubernatorial campaign out of the unlimited committee, in violation of the law," commission Chairwoman Liane Randolph said.

State law says money raised to run for office can only be deposited into an account for that race and the funds spent to run for that office must be from that same account.

The FPPC usually settles complaints with an administrative action, but elected to file a civil suit because of the "extremely serious series of violations," Russo said.

Each violation of the contribution limit can bring a fine of up to $5,000, he said. The FPPC is also charging that Bustamante failed to report about $3.8 million of the contributions for his bid for governor -- both in his paper and electronic filings.

Each of those charges can bring a fine equal to the amount not reported, Russo said, bringing the maximum possible fine to $9 million.

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