10:59 PM PST on Sunday, December 20, 2009

Sacramento Bureau

SACRAMENTO – Nine years ago, Stephen Holgate could have given as much as he wanted to aid the Assembly aspirations of San Jacinto Councilman Jim Ayres. Both men would have been in good company.

But now the two face dozens of charges for running afoul of California’s campaign-finance law. It is at the heart of last month’s 155-count indictment against nine political and civic leaders in San Jacinto, and the basis of last week’s charges against six more people.

The case highlights Riverside County’s role as one of the few — if only — counties in California to prosecute contribution-limit violators, who usually are dealt with by the state’s campaign-finance watchdog agency.

Passed by voters in November 2000, Prop. 34 took effect in 2002 and for the first time capped the amount of campaign donations in state races. It also required faster disclosure of large contributions on the Internet.

Critics have attacked Prop. 34 for failing to reduce the amount of political money and donors’ influence. They point to the explosive growth in campaign spending by independent groups and political parties, which can accept and spend money in amounts far above the contribution limits.

Yet Prop. 34’s donation limits occasionally ensnare, and its latest victims have Inland connections:

Inland car dealer Mark Leggio paid $150,000 in fines to the California Fair Political Practices Commission and settled Riverside County criminal charges arising from his financial support of former Assembly candidate Brenda Salas, one of Ayres’ rivals in the GOP primary for the 65th Assembly District.

Leggio allegedly was the true source of several contributions to Salas, authorities charged. He later reimbursed the donors listed on campaign-finance reporting forms.

Earlier this month, the state’s campaign-finance watchdog agency fined a San Diego lawmaker and a GOP group a total of $49,000 for violating Prop. 34’s contribution limits.

Assemblyman Joel Anderson, R-Alpine, and the Fresno County Republican Party paid up after the Fair Political Practices Commission concluded that Anderson arranged for donors to give large amounts to the county committee, which in turn donated like amounts to Anderson’s campaign account. Anderson is a possible candidate for a state Senate seat that includes southwest Riverside County.

But the most extensive Prop. 34-related case came last month, when Riverside County District Attorney Rod Pacheco unveiled the San Jacinto indictments.

Besides Ayres, 48, and Holgate, 62, others named are San Jacinto Mayor Dale Stubblefield, 41; Vice Mayor John Mansperger, 41; Councilman James Potts, 67; and Ayres’ wife, Nancy Jo Ayres, 44, a San Jacinto Unified School District board member.

Also charged are developers and businessmen Scott Douglas Shaull, 45, of Roseville; Robert Edward Osborne, 69, of Mission Viejo; and Byron Jerry Ellison Sr., 70, of San Jacinto. Shaull and Ellison have developed properties with Holgate.

Last week, Pacheco filed related charges against six more people, all relatives of last month’s defendants. They are Carol Ann Gehrum, John Richard Gehrum, Christopher Ray Mason, Shanda Lynn Mansperger, Marcia Lynn Mathews and Kirk William Mathews.


Candidates for the Legislature once routinely collected five- and even six-figure donations. During the March 2000 primary, the major Republican candidates for the 65th Assembly District — the seat Ayres sought six years later — collected dozens of contributions that would be illegal today.

Then-Assemblyman Rod Pacheco that year collected about $75,000 in donations above today’s legislative limits.

By then, though, Prop. 34 had emerged. The Legislature put it on the ballot to avoid stricter contribution rules making their way through way through the courts. Pacheco did not vote, legislative records show.

Announcing the arrests in the San Jacinto case Nov. 12, Pacheco said “failure to enforce public-integrity laws is a threat to democracy. The public has a right to be free from corrupt individuals and elected officials.”

More than 90 of the counts in last month’s San Jacinto indictment are misdemeanor violations of rules meant to keep donors from giving money in other people’s names.

Those same laws have been the basis of more than a dozen enforcement decisions approved by the Fair Political Practices Commission since Prop. 34 took effect.

The largest was last year’s $150,000 fine against Leggio and his car dealerships.

“In my view, money laundering is one of the worst violations of the Political Reform Act,” said Robert M. Stern, a campaign-finance expert at the Center for Governmental Studies in Los Angeles. That’s because voters don’t know the true source of the donations, he said.

In both the San Jacinto and Leggio cases, more serious felony charges arose from the misdemeanor counts tied to skirting the contribution limits.

Riverside County’s misdemeanor charges led to alleged violations of the California Penal Code: filing a false document — in this case, state campaign-finance reports — and perjury — by signing the reports as “true and correct.” Both are felonies.

The California District Attorneys Association declined to comment on which counties besides Riverside have filed criminal charges over violations of Prop. 34’s contribution limits. Officials at the Fair Political Practices Commission did not know of others.

Some have drawn parallels between the Riverside County cases and the Fair Political Practices Commission’s fines of Joel Anderson, the San Diego County assemblyman.

A spokesman for the San Diego County district attorney’s office declined to say if the office is weighing whether to file criminal charges against Anderson.


In a 2007 report, the Center for Governmental Studies wrote that Prop. 34 had had “virtually no effect on reducing the flow of money to candidates.”

To read entire story click here.