• *A summary breakdown of each Alhambra City Council candidates campaign funds can be read at the end of this article. 

      Alhambra elections (Photo - Frank Qiu).

      Alhambra elections (Photo – Frank Qiu).

      It’s no secret that Alhambra elections are an unregulated smorgasbord for moneyed interests and establishment elites who, depending on the outcome of the election, have so much to gain or lose monetarily.

      By Sean McMorris

      At-large elections and a lack of donor limits and transparency laws foster this corrupting electoral environment in Alhambra; a City that has seen its fair share of political scandals, dirty politics, and cronyism over the decades.

      Alhambra’s 2018 city council elections are especially important since three city Councilmembers are terming out. As a result, the power structure of the city council could change completely after November. This is a welcome prospect for many, but a dire prospect for those inside and outside of the City who have benefited monetarily over the decades from Alhambra’s entrenched political establishment (city contractors, developers, consultants, lobbyists, corporate interests, etc.).

      Public records make clear that Alhambra’s political power brokers and special moneyed interests want business to continue as usual at Alhambra City Hall, and they are willing to pump tens of thousands of dollars into the 2018 Alhambra elections to ensure that it does.

      Enter the dark side: money in politics

      Simple transparency is one of the easiest ways to check unbridled money in politics. The California Political Reform Act attempts to ensure that residents have access to donor information by requiring that all California politicians and political candidates file reports with the Fair Political Practices Commission (FPPC) that reveal basic information about the people and entities donating more than $100 a year to a candidate’s campaign. The idea is that this type of information will provide voters insight into the type of politician a candidate will be based on the people and organizations funding them. This is relevant, as research strongly suggests that politicians vote in line with what their big donors want, not what is most popular.

      Knowing that voters take this into account, candidates and large donors will often try to hide their true identity and connection to a candidate by donating through shell companies or multiple of many companies they own and/or operate. For instance, in 2016, Arman Gabay, a developer with a large commercial project in Alhambra, gave two Alhambra City Council candidates $5,000 each, but under a different company name than the company he used to seek entitlements for his project with the City. Gabay owned both companies, but the public was only privy to the one he used when he filed his project with the City. While not illegal, this practice makes it very difficult for voters to connect the dots. Special interest donors know this, as do candidates who accept their large donations. The Alhambra City Council later voted to approve Gabay’s development project. Throughout the entitlement process, Gabay employed the consulting services of former Alhambra Councilman, Mark Paulson. Gabay is currently awaiting trial for a felony charge of bribing a Los Angeles County employee in exchange for leases and other benefits.

      Candidates may also falsely report or leave out required information about donors on their campaign finance reports. Not reporting correct donor information makes it much more difficult, if not impossible, for voters to determine who a donor is and why they may be supporting the candidate. This could simply be error on the candidate’s part, but if it happens consistently, then a candidate could be doing it on purpose, knowing that few people check these reports or know what donor information a candidate is required to supply.

      In 2017, the FPPC fined former Alhambra City Councilman, Gary Yamauchi, for not reporting required donor information on $3,200 in donations.

      Candidates may also decide to simply not file their campaign statements on time. Filing late, especially close to an election, deprives voters of important information. Yet, a seasoned politician may decide not to file and risk a fine. This is especially true of candidates with large campaign coffers who can use the very donations they did not report to pay off the fine.

      The L.A. County Registrar’s Office fined former Alhambra City Councilman, Steven Placido, $950 in 2017 for filing campaign finance reports 95 days late during the heart of an election season. Those reports covered the period one month prior to the 2016 primary state and county elections. Placido did not end up filing the reports until Jan. 30, 2016—nearly three months after the election in which he won a seat on the San Gabriel Valley Municipal Water District Board of Directors.

      Another way candidates and their donors attempt to circumvent transparency is through primarily formed and general purpose recipient committees, also known as political action committees (PACs). These committees, which form to either support or oppose one or more candidates or measures in one or more elections, make it more difficult for voters to follow the money because political donations are not going through the candidate’s campaign account,  but a third party’s campaign account.

      Recipient committees are handy for candidates and their supporters who don’t want large special interest donations showing up in the candidate’s campaign finance reports, for obvious reasons. Thus, a candidate or his/her supporters might steer large special interest donations to a recipient committee that supports them, allowing the candidate to save face or play dumb about who is supporting them and why. For this reason, negative mailers or “hit pieces” that go after a candidate’s opponents are often sent via recipient committees, not a candidate’s own committee.

      General purpose and primarily formed recipient committees can both donate to a candidate’s campaign committee and spend independently in support of a candidate, but there are strict rules and disclosure requirements for each type of committee and expenditure. If a PAC coordinates its efforts with a candidate or his/her candidate committee then the candidate has to report it on their campaign finance reports. If a PAC does not coordinate its efforts with a candidate or the candidate’s campaign committee then it is less beholden to campaign finance laws. These types of committees are known as super PACs or independent expenditure-only committees.

      And then there’s independent expenditure committees. Independent expenditure committees, as well as their super PAC brethren, evolved out of the U.S. Supreme Court’s Citizens United v. FEC ruling, which held that governments could not impose spending limits upon a person or entities that wished to spend from their personal or general funds in support or opposition of a candidate or measure. Because independent expenditure committees are spending from their personal or general funds (personal bank account, dues, investments, earnings, etc.), and not campaign fundraising coffers, they do not have to reveal who their donors are. Hence, the term “dark money.”

      Super PACs are a little different in that they are actually engaged in political fundraising and therefore their donors must be revealed. That said, super PACs are often used by “dark money” groups and traditional PACs to funnel their donations through. The caveat for both independent expenditure committees and super PACs is that they CANNOT coordinate their support efforts in any way whatsoever with the candidate and his/her campaign, nor can they donate directly to a candidate’s campaign. However, coordination is very difficult to prove and, therefore, not unlikely to occur. But if you get caught, the fine is substantial.

      The FPPC fined current Alhambra City Councilwoman Barbara Messina’s campaign committee $14,000 in 2010 for illegally coordinating with and funneling funds to what was essentially a shell recipient committee/PAC that the Messina’s; current Alhambra Councilman at the time, Paul Talbot; and developer Der-Mean Sun set up to send out smear mailers against Barbara Messina’s opponent during the 2006 Alhambra City Council elections.

      Not in my city…

      Many believe that this “dark side” of money in politics only happens in state and federal elections. Surely super PACs and outside corporate interests would not waste their resources on small city elections, right? Wrong, as the following reports will show. The reality is that unless a city implements campaign finance laws then it is much easier for special moneyed interest entities to operate and spend unrestrained in municipal elections than it is for them to do so in state and federal elections, where campaign finance laws already exist.

      Right now, a person or entity can give more to an Alhambra City Council candidate than they can give to a state or federal candidate. That could potentially change if a current ballot initiative effort to bring election and campaign finance reform to Alhambra in 2020 is successful. Until then, Alhambra elections will continue to be a poster child for the consequences of unrestrained money in local politics. Exhibit A: Alhambra’s 2018 municipal election.

      Special interest real estate groups have spent over $40,000 on one Alhambra candidate

      As of Oct. 20, the National Association of Realtors Fund has spent over $33,498 on “dark money” independent expenditures for campaign mailers and online ads in support of realtor Suzi Dunkel-Soto for Alhambra City Council, District 5.

      The National Association of Realtors Fund lists itself as a nonprofit 527 political organization. They are located in Chicago, Illinois at the same address as the National Association of Realtors Political Action Committee (RPAC). RPAC’s website states, “The purpose of RPAC is clear: REALTORS raise and spend money to elect candidates who understand and support their interests.”

      Dunkel-Soto has also received $9,000 in campaign contributions from the California Real Estate PAC, resulting in $42,498 in campaign support from the real estate industry to date.

      A local PAC forms to support two city council candidates

      The PAC, Alhambrans United to Preserve our Neighborhoods by Electing Dr. Laura Tellez Gagliano and Suzi Dunkel-Soto to Alhambra City Council 2018, was formed in August and has already sent out multiple political mailers, two that were negative. The treasurer and principal office of the committee is Denis Kerechuk. He is the owner of Kerechuk Motor Service in Alhambra and is listed as the past president of the Alhambra Rotary Club. The PAC is completely funded by a handful of developers and city contractors who have given handsomely to current and former Alhambra city Councilmembers.

      Form 497s (reports that a committee must file within 24 hours of receiving a donation of $1,000 or more three months prior to an election) show that the committee raised $17,000 between Oct. 12 and Oct. 15 and another $4,000 on Oct. 29 all from special interests. $3,000 from the Anasazi Corporation; $5,000 from Sherwood Associates Inc.; $2,500 from NIck Reischi; $5,000 from Allied Pacific IPA; $1,500 from GE Property Development, Inc; and $4,000 from companies owned by developer, James Chou.

      The Anasazi Corporation of Tustin, CA, and Sherwood and Associates Inc. of Santa Ana, CA, are hospitality companies run by father and son David and brad Perrin. The Perrins currently benefit from a 50 year no-bid contract with the City of Alhambra for concession services at Alhambra’s golf course. The Perrins, through their many LLCs have contributed tens of thousands of dollars to the campaigns of current and former Alhambra City Councilmembers. In 2016, the campaigns of current Alhambra city councilmemers Maloney and Mejia each received $10,000 from the same four Perrin LLCs that contributed to the “Alhambrans United” PAC (the contributions came either directly and/or through company executives). The Perrins have a long history of spending big to influence city council elections in the region, and they appear to have been rewarded with generous city contracts that don’t always benefit the city involved. The Perrins are a client of former Alhambra Councilman turned consultant, Mark Paulson.

      Nick ReischI is listed as a self-employed investor from San Clemente, CA. Little else is known about him.

      Allied Pacific IPA is an association of independent physicians located in Alhambra. Allied Pacific and its physician owners have numerous real estate and development projects in Alhambra and the region. Part-owners, M.D. Thomas Lam and M.D. Kenneth Sim, are also part-owners of TAG 2 Medical Group, LLC, which was recently granted approval amidst community protest to raze over 200 mature trees for a new development on Marengo Ave. in Alhambra. Former Alhambra Councilman turned consultant, Mark Paulson, was a consultant for this project as well. Lam and Sim, through their many LLCs have given over ten thousand dollars to current and former Alhambra City Councilmembers over the years.

      GE Property Development Inc. is a real estate management and development company with projects in Alhambra. Stephen Chan is the owner and has given thousands of dollars to current and former Alhambra City Councilmembers through his many LLCs.

      Pacific Plaza Elite Group LLC, Pacific Tower LLC, Pacific Place LLC, and Ares Property Investments LCC are all owned by developer James Chou. Each company donated $1,000 to the “Alhambrans United” PAC.

      Alhambra City Councilmembers donate big dollars to three candidates

      Current Alhambra City Councilmember, Luis Ayala, recently gave a $1,000 donation to both Suzi Dunkel-Soto and Luara Tellez Gaglliano’s city council campaigns. Ayala is terming out this year and had over $50,000 still in his campaign account as of June—money he must redistribute before he leaves office in January.

      Current Alhambra City Councilmember, Barbara Messina, gave $1,392 to Ross Maza’s campaign in July, which amounts to all of Maza’s campaign funds except $100. Maza is running unopposed for Messina’s seat (District 2). Messina is terming out for a second time.

      Alhambra Teachers Association more involved this election

      The Alhambra Teachers Association (ATA) is much more involved this year than it has been in recent Alhambra City Council elections. The ATA has endorsed two Alhambra City Council candidates, Adele Andrade-Stadler and Katherine Lee. To date, the ATA PAC has given $2,000 to Katherine Lee’s campaign and $5,000 to Adele Andrade-Stadler’s campaign.

      Suspect slate mailers

      Suzi Dunkel-Soto and Laura Tellez Gaglliano have both paid multiple slate mailer organizations (Budget Watchdogs Newsletter, California Voter Guide, CA Slates) of which Gary Crummitt and Patrick Furey of Crummitt + Associates are the treasurers for. Crummmitt and Furey were responsible for a PAC that sent out a controversial political mailer in Alhambra’s 2014 city council elections. Gary Crummitt and Patrick Furey (as well as Furey’s father who is the mayor of Torrence) have been warned numerous times and fined tens of thousands of dollars over the years by the FPPC for violating the Political Reform Act.

      Candidate reports

      In August I reported on the candidate’s previous campaign finance reports that were due on July 31st. Final reports before the 2018 general election were due on Oct. 25. Here is a breakdown.

      District 1

      Katherine Lee

      Lee’s campaign is mostly self-funded. To date, she has raised $18,200. Her largest campaign donation (other than from herself) is $2,000 from the Alhambra Teachers Association PAC.

      Andrea Lofthouse Quesada

      Lofthouse Quesada’s campaign is primarily funded by donations of $250 or less. Andrea and her father have loaned her campaign $3,200. Andrea’s largest cumulative campaign donation is $1,124 from Alhambra resident, Eric Sunada. To date, Andrea has raised $7,889.

      Laura Tellez Gagliano

      As of Oct. 25, Tellez Gagliano has raised $24,704 for her campaign. Laura has loaned her campaign $11,000. Her largest monetary donation (other than from herself) is for $2,500 from the California Real Estate PAC. Gagliano also received a $1,000 loan from BizFed PAC, and $2,000 from Evike.com, an airsoft gun company in Alhambra. Owner, Evike Chang has donated thousands of dollars to current and former Alhambra City Councilmembers.

      Laura is also the beneficiary of $21,000 in campaign mailers sent out by the PAC Alhambrans United to Preserve our Neighborhoods by Electing Dr. Laura Tellez Gagliano and Suzi Dunkel-Soto to Alhambra City Council 2018. Added together, Gagliano’s campaign is the beneficiary of $45,504.

      District 2

      Ross Maza

      Maza is running unopposed in Dristict 2. His largest campaign contribution is $1,392 from current Alhambra City Councilwoman, Barbara Messina. To date, Maza has raised a total of $1,492.

      District 5

      Adele Andrade-Stadler

      Andrade-Stadler, current Alhambra Unified School District boardmember, has raised a total of $33,656 to date. Her largest cumulative campaign contribution is $6,000 from her Alhambra School Board campaign account. Adele has also received $5,000 from the Alhambra teachers Association and $1,000 from the union, Laborer’s Local #300.

      Julian Reyes

      Rayes has not raised or spent more than $2,000 in campaign funds and, therefore, did not file, nor is he obligated to file, campaign finance reports (Form 460s).

      Suzi Denkel-Soto

      Dunkel-Soto has raised $29,400 to date.  Her largest cumulative campaign donation is $9,000 from the California Real Estate PAC. Suzi has also received a $1,000 donation from BizFed PAC, $2,000 from the Mexican American Bar Association PAC, and a $1,215 non-monetary donation from Almansor Court, one of Bard Perrin’s many LLCs.

      Dunkel-Soto is also the beneficiary of $33,498 in independent campaign advertising from the National Association of Realtors Fund, as well as $21,000 in campaign mailers sent out by the PAC Alhambrans United to Preserve our Neighborhoods by Electing Dr. Laura Tellez Gagliano and Suzi Dunkel-Soto to Alhambra City Council 2018. Added together, Dunkel-Soto’s campaign is the beneficiary of $85,398.

      Takeaways

      Alhambra’s current electoral and political system is expensive. It clearly favors moneyed interest donors and the candidates who cozy up to them. There are multiple candidates who are backed by outside corporate and big business interests. As a result, those candidates have raised more and benefited greatly from independent expenditures. Will big-money win the day (again) in Alhambra’s 2018 city Council Election?

      Vote on November 6.

      [This article has been updated to reflect changes after a new expenditure report came in on Friday for one of the PACs. Nov. 5, 2018, 11:49pm]

       

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      - A Big Yes on 10!

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      Comments

      1. MICHAEL LAWRENCE says:

        Congratulations to Katherine Lee and Adele Stadler. Shocking victory for the residents who rejected the council endorsed candidates backed by dark money and real estate PACs. This time out the pay-to-play system did not work. Time to cut the tax money flow to Alhambra’s Chamber of Commerce and no bid/no audit contracts to campaign donors.

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