Contributions to California congressional candidates disclosed

Campaign contributions are flowing briskly to candidates in some of California's hottest congressional races, including two of the most vocal proponents of getting money out of politics.

Incumbents in races in the Sacramento area, Central Valley, Bay Area and Riverside and Ventura counties each have raised more than $1 million to fend off vigorous challengers.

And in San Diego County, freshman Democratic Rep. Scott Peters and his main opponent, Republican Carl DeMaio, were nearly neck and neck, with Peters taking in nearly $1.8 million to DeMaio's almost $1.5 million.

Candidates and their operatives were busy scrutinizing their rivals' financial disclosures Wednesday, hours after the midnight Tuesday filing deadline at the Federal Election Commission.

Peters' campaign pounced on a $2,500 contribution to DeMaio from a Koch Industries Inc. political action committee, saying in a fundraising email that it upends DeMaio's claim of being a moderate.

Billionaire industrialists Charles and David Koch — conservatives who were early backers of the small-government tea party movement in the GOP — have become a favorite target of Democrats in this year's campaign.

"Scott Peters has embraced the hypocrisy and double standards of Washington politics," Dave McCulloch, spokesman for the DeMaio campaign, responded in an email to The Times. "Scott Peters is just desperate to distract voters from the millions in big business and special interest money he has taken."

Peters' campaign spokeswoman MaryAnne Pintar retorted: "The Kochs bankroll the tea party, and they're bankrolling Carl DeMaio because he shares their extremist values."

The race is emerging as one of the nation's most expensive House contests this year. Another sure-to-be-costly race is the one to succeed Rep. Henry A. Waxman (D-Beverly Hills). His Jan. 30 retirement announcement unleashed a crush of candidates for his coastal-Westside 33rd Congressional District seat.

Former Los Angeles City Controller Wendy Greuel, a contestant in that race, reported raising $672,214 — less than the $964,385 collected by no-party-preference candidate Marianne Williamson. The spiritual teacher and bestselling author began raising money when she jumped into the race last fall.

Defense attorney and first-time candidate David Kanuth, a Democrat, also outraised Greuel, reporting $798,453 in contributions by the March 31 end of the accounting period.

But Greuel collected more than other prominent Democrats in the race: state Sen. Ted Lieu of Torrance, who raised $566,762, and author and radio talk show host Matt Miller, who took in $517,822. Businessman James Graf, also a Democrat, reported lending his campaign $1 million but spent little and does not appear to have done much campaigning.

Greuel's strategists picked apart the reports and issued their own detailed spin on the fundraising race, parsing debts and expenditures and calculating how much of each main candidate's take could be spent in the primary.

Because of limits on how much donors can contribute toward a given election, excess funds are set aside for possible use in the fall by any candidate who finishes first or second in the June 3 primary.

Greuel's campaign calculated that her main rivals all had significant amounts that they could not use in the primary, while she had the smallest amount ($10,400) of contributions that must be saved for a fall campaign.

Williamson and Miller both have made overhauling the nation's campaign finance system a central theme of their congressional bids. But both have acknowledged needing to raise money to be viable candidates. Once elected, they say, they can change the laws governing money and politics.

All of Williamson's listed contributions came from individuals, including entertainer Nancy Sinatra, who gave $1,100, and Leslie Sword of Naples, Fla., who gave $2,600 — the maximum allowed. Sword gave her occupation as "joy seeker."

Williamson's contributions ranged from $10 and $50 to the limit, and some donors also gave money that could be used only for a fall campaign.

The vast majority of Miller's contributions also are from individuals. And the day before Tuesday's filing deadline, he released a proposal for revising campaign finance rules. His proposals include barring lawmakers from taking contributions from industries they regulate and strengthening disclosure rules.

Significant campaign finance overhaul has proved to be a tough sell in Congress.

Prodigious fundraising was reported in other races as well. Among the candidates who have collected the most are Rep. Ami Bera (D-Elk Grove), with just over $2 million, and Rep. Michael M. Honda (D-San Jose). Honda has raised $1.9 million but faces a challenger from his own party, former Obama administration official Ro Khanna, who took in much more: $3.67 million.

Khanna reported $1.9 million in cash on hand, compared with Honda's slightly more than $1 million.

In an Inland Empire race to succeed Rep. Gary G. Miller (R-Rancho Cucamonga), Redlands Mayor Pete Aguilar and Colton attorney Eloise Gomez Reyes, both Democrats, led in fundraising among the four Democrats and three Republicans who are running.

Aguilar raised $910,730 and had $683,236 in the bank. Reyes collected $710,503 and reported $534,824 in the bank.

Others in hot races who have raised at least $1 million are incumbent Reps. David Valadao (R-Hanford) and Julia Brownley (D-Westlake Village).

jean.merl@latimes.com

richard.simon@latimes.com

Merl reported from Los Angeles and Simon from Washington.

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Ethics a focus for 7 remaining California secretary of state candidates

State Sen. Leland Yee (D-San Francisco) quit the race for California secretary of state after his arrest last month. Above, Yee faces reporters after a court appearance. (Justin Sullivan / Getty Images / March 31, 2014)

SACRAMENTO — The arrest of a front-runner in the race for California secretary of state on corruption charges has made ethics a key issue for the seven candidates still in the contest.

State Sen. Leland Yee (D-San Francisco) quit the race after his arrest last month on charges of taking payments in exchange for official favors and conspiring to illegally traffic in firearms. He has pleaded not guilty.

As the remaining candidates focus on the best way to clean up Sacramento, Yee's stumble has thrown the June primary competition wide open.

AT A GLANCE: Candidates for secretary of state

Yee, whose name will remain on the ballot, was the second-best-financed candidate for the state's top elections job. The contestant with the most money, state Sen. Alex Padilla (D-Pacoima), is favored to grab at least one of the two runoff slots for November.

"With Yee out of the picture, it definitely opens up the race more to the other candidates," said Tony Quinn, an editor of the nonpartisan California Target Book, which handicaps political races.

A recent Field Poll showed Padilla running second to Republican public policy specialist Pete Peterson, whose last quarterly disclosure report showed less than $2,000 in his campaign fund.

The secretary of state, with nearly 500 employees, oversees federal and state elections in California, maintains the public databases that disclose campaign contributions and lobbyist spending, and processes and maintains records related to corporations and other business entities.

Incumbent Debra Bowen, a Democrat, is prevented by term limits from running for reelection.

Besides Padilla, the other Democrats in the race are Derek Cressman, former vice president of the watchdog group Common Cause, and Jeffrey H. Drobman, a computer scientist and engineer.

There are two Republican candidates: Roy Allmond, a program technician in the secretary of state's office, and Peterson, executive director of the Davenport Institute for Public Engagement and Civic Leadership, a think tank at Pepperdine University.

David Curtis, a designer in an architectural studio, is a Green Party candidate. Dan Schnur, on leave as director of the Jesse M. Unruh Institute of Politics at USC, is a "no party preference" candidate.

Padilla has a large advantage in campaign fundraising, having brought in $1.6 million, according to his required filings with the state. Cressman is a distant second in campaign cash, having raised $390,000 and lent himself $100,000.

All of the candidates say the state must upgrade the computer systems that register businesses and tell the public who contributes money to which politicians.

But they have clashed over what to do about the apparent prevalence of corruption in the Capitol as well as over how to handle Yee and Democratic Sens. Ronald S. Calderon and Roderick Wright, who are facing their own criminal charges.

Cressman and Schnur have criticized Padilla for voting last month to impose paid suspensions on the three. Schnur and Cressman said they should have been permanently expelled.

In voting for suspensions, Padilla noted that Yee and Calderon have not yet had their day in court. But he has called on all three lawmakers to resign.

As he has campaigned for secretary of state, Padilla has proposed a blackout on political fundraising for more than three months during the end of each legislative session. That's when special interests seeking favorable votes on bills also flood legislators with campaign cash. The Legislature has not yet voted on his proposal.

Like most lawmakers, Padilla, 41, said fundraising has nothing to do with how he votes on bills.

"But the public perception has gotten to the point where it needs to be addressed," he said. "The perception is that fundraising activity has an undue influence on how decisions are made in the Capitol."

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Using Twitter, California Politicians Join Chick-fil-A Debate

As Congress wrangles over tax cuts and agricultural assistance heading into the August recess, Representative Nancy Pelosi, Democrat of California, took sides in a different fight Thursday.

“What I tweeted was I’m a Kentucky Fried Chicken fan,” the House minority leader told reporters with a grin.

Jim Lo Scalzo/European Pressphoto AgencyRepresentative Nancy Pelosi of California.

Ms. Pelosi, who was referring to a preference she expressed on Twitter last week, is one of the many politicians who have joined the recent debate about same-sex marriage, sparked when the president and chief operating officer of Chick-fil-A said the fast food chain supports “the biblical definition of the family unit.”

Among the politicians who have weighed in is Ed Lee, the mayor of San Francisco, who wrote on Twitter last Thursday that he was “very disappointed” in Chick-fil-A’s stance.

“Closest #ChickFilA to San Francisco is 40 miles away & I strongly recommend that they not try to come any closer,” Mr. Lee wrote.

Ms. Pelosi, whose congressional district includes most of San Francisco, said, “I believe in freedom of expression, but I believe the mayor of San Francisco has freedom of expression as well.” The issue is ultimately up to local officials, she said.

Using social media, thousands of people are planning a “same-sex kiss day” at Chick-fil-A locations Friday.

As liberals expressed their displeasure with Chick-fil-A and threatened to boycott, conservatives rallied to the chain’s defense. Hundreds of thousands poured into locations all over the country Wednesday to show their support at the suggestion of Mike Huckabee, the former Arkansas governor.

No word on whether Ms. Pelosi prefers her KFC chicken Original Recipe or Extra Crispy.

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Obama Touts 'Extraordinary' Accomplishments at California Fund-Raisers

ATHERTON, Calif. – President Obama spent his evening Wednesday trolling for campaign funds amid the cultural and high-tech glitterati of Northern California, arguing that his accomplishments had been “extraordinary” but warning that it may take even beyond a second term to complete them.

Following a fund-raiser in Denver, Mr. Obama flew here for a pair of receptions tapping perhaps the most resource-rich environment for Democrats, his second fundraising trip to California in the past few weeks. If his last visit focused on Hollywood with an event at the house of George Clooney, this one targeted the state’s other elite, the entrepreneurs of Silicon Valley.

His first event of the evening was at the house of Douglas Goldman, an heir to the Levi Strauss fortune and founder of Certain Software, which develops event management software. Among those who joined him in the cathedral tent outside the house, known as Green Shutters, were Jan Brandt, vice chairwoman emeritus of AOL; Dennis Troper and Susan Wojcicki, top Google executives; and Tim Westergren, founder of Pandora Media. Tickets went for $35,800 each.

This being California, a few other celebrities came as well, including the actor Don Cheadle and the musicians Graham Nash and David Crosby, who planned to perform. Mr. Obama teased Mr. Cheadle about a basketball game that evidently went badly for the actor. As for two of the members of Crosby, Stills and Nash, he said, “It’s not every day you get Rock and Roll Hall of Famers strumming their guitars for you.”

Mr. Obama boasted of his record, saying he had turned around the economy, ended the Iraq war, set a path toward ending the Afghan war, tackled fuel efficiency standards and improved America’s image around the world.

“The strides that we’ve made over the last three and a half years have been extraordinary,” he said. “But we’ve still got a long way to go.” He added: “We may not even finish it in five years. But I certainly need another five years to lock in what we’re trying to accomplish.”

He then headed to another event at the Fox Theater in Redwood City, where Ben Harper was scheduled to perform. About 1,100 supporters were expected for tickets starting at $250.

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Fraud case leaves California Democrats scrambling (Reuters)

LOS ANGELES (Reuters) – Stunning accusations that a top California Democratic campaign treasurer looted the war chests of her big-name clients have left candidates across the state scrambling to raise more money as election season looms.

Kinde Durkee, who controlled the funds of roughly 400 candidates and groups, ranging from Senator Dianne Feinstein to local Democratic youth clubs, was arrested in September and charged with fraud.

While the extent of the losses isn't yet clear, the coffers of dozens of Democratic politicians have been frozen, prompting the crippled campaigns to ask the California Fair Political Practices Commission to permit further donations from contributors who have already given the maximum.

Feinstein, seeking re-election in 2012, has been forced to start from "square one" to raise campaign money, said Bill Carrick, political strategist and consultant to the Senator.

But a commission official said it wasn't that simple.

"It's quite clear that we can't just say 'the contribution limit is set aside'," California Fair Political Practices Commission chair Ann Ravel said, adding that the commission's legal team was researching what options were permissible by law.

Feinstein donated $5 million of her own money to her re-election bid after the campaign lost access to an estimated $5.2 million, Carrick said. The senator has sued Durkee for fraud and breach of contract in a lawsuit that also accused First California Bank of aiding that fraud.

Durkee, the 58-year-old daughter of a Hollywood pastor, is accused of co-mingling money in the roughly 400 accounts she controlled at the bank, making it unclear to whom any recovered money actually belongs.

The bank reported $2.5 million in Durkee-controlled accounts, according to court documents, far less than the at least $9.8 million that her clients had raised, according to the Los Angeles County Democratic Party.

"We lost at least $200,000 and the impact of that, for us, is much more immediate than it is for most candidates," Los Angeles County Democratic Party Chair Eric Bauman said.

"We've got more than 50 races on the November 11 ballot. Our ability to support our endorsed candidates in these local elections is significantly affected," Bauman said, adding that the loss represents 90 percent of the party's total funds.

'GOING TO BE TOUGH'

If a donor's campaign contributions were never received, Ravel said, there is a possibility that they could donate again. The commission hopes to decide if and how donors could contribute again by its next hearing on November 10.

That deadline, however, would be too late for local elections slated for the following day, and the sudden loss of funds will be most acutely felt in grass-roots operations.

"It's definitely going to be tough," Carrick said. "It's going to be very difficult for them to replenish that kind of money."

Not everybody is as sympathetic to the sudden fund-raising challenges facing the California Democratic campaigns.

"Most of these Democrats are very influential, powerful incumbents, and the political parties are able to contribute as much as they want to the candidates," said Allan Hoffenblum, a former Republican political consultant.

"I don't think any client of (Durkee's) will lose because of this. There's plenty of money out there," he said

Durkee, who has been called the "Bernie Madoff of campaign finance treasurers" by one former client, Representative Susan Davis of San Diego, admitted to using campaign funds for her own personal expenses, according to court documents.

The mail fraud case against her in federal court alleges that Durkee used campaign donations to make mortgage payments and pay her American Express bills.

"Durkee admitted that she had been misappropriating her clients' money for years and that forms she filed with the state were false," according to an account of an interview by Federal Bureau of Investigations agents in September, according to the federal complaint.

The bank angered clients when it handed over control of the 398 bank accounts associated with Durkee to a California state court on September 23, recusing itself from sorting out how much of the recovered money should be doled out to whom.

"In yet another attempt to escape liability for the fiasco that they helped create, First California Bank has turned most of the accounts that Durkee controlled over to the courts," the Los Angeles County Democratic Party said.

It added that smaller parties who lost funds lack the financial resources to fight in court to get their money back.

First California Bank marketing director Diane Dickerson told Reuters: "It will all come out in time, I promise." She declined further comment.

Durkee is next expected to appear in court in December. Her attorney could not be reached for comment and a phone number listed in court documents as belonging to her appeared to have been disconnected.

(Editing by Dan Whitcomb and Cynthia Johnston)

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California legislators prepare for budget vote (Reuters)

SACRAMENTO, California (Reuters) – California lawmakers prepared on Tuesday to approve a state budget that closes a nearly $10 billion shortfall a day after Governor Jerry Brown and top Democrats unveiled the package.

Democrats, eager to have a budget in place by the start of the new fiscal year on Friday, will be able to approve the entire package because they have majorities in both the state Senate and Assembly.

Brown and fellow Democrats closed the final $10 billion hole with a combination of rosy assumptions for $4 billion in additional revenue, additional cuts to state universities and welfare programs, and deferring payments to schools.

A pickup in the state economy, which still suffers from double-digit employment and a housing market bloated with foreclosures, is replenishing state coffers faster than hoped.

The plan is sound enough to let the state issue $5 billion in debt to cover normal summer cash shortages, the state treasurer's office said.

Votes on the plan are expected to begin at about 4 pm PDT.

But Marilyn Cohen, president of Envision Capital Management in Los Angeles, said the revenue expectation was risky and reminded her of the budget tricks Brown said he would avoid.

"I like to call it the Abracadabra budget," Cohen said. "Abracadabra and the $4 billion magically materializes."

A budget approved and enacted before the start of new fiscal years is a rarity in California, the most populous U.S. state and the biggest issuer in the $2.9 trillion U.S. municipal bond market.

California's budget politics are closely watched in the market, which some analysts say is primed for a wave of state and local government defaults.

Brown, who vetoed a spending plan from Democrats earlier in the month, abandoned his own proposal that the legislature set a referendum on tax extensions.

A measure to put tax extensions on the ballot would have required a handful of Republican votes to reach the two-thirds vote requirement in the legislature for tax issues.

Republicans had blocked tax extensions, prompting Brown to cease trying to win their votes and to partner with Democrats over the weekend to craft the budget package.

The package includes provisions of the Democratic budget he vetoed earlier this month, additional spending cuts, and relies on $4 billion in better-than-expected revenue to help plug the state budget gap. Education will face more cuts if the revenue does not come through.

(Reporting by Jim Christie in Sacramento, editing by Peter Henderson)

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