The politicians of San Diego have a well-earned reputation for laundering campaign contributions. In the past six years, no less than five major funding scandals have erupted, resulting in a series of five- and six-figure fines being levied against companies who evaded the county and city contribution limits of $250 per person, per election. In each case — brought by the state's Fair Political Practices Commission — the offenders have agreed to pay a hefty fine and apologized for their actions, but no one went to jail. The politicians who received the funds all denied they knew that the money had been laundered and agreed to pay to the city treasury a fine equal to the amount of the illegal contributions collected by their campaigns, but they were subject to no other sanction.
In April 1994, the Yarmouth Group, owner of the Fashion Valley shopping mall, was forced to pay a $92,000 fine for laundering a total of $11,000 in the form of 44 separate contributions to Mayor Susan Golding and six former and then-incumbent members of the San Diego City Council, including Ron Roberts, Valerie Stallings, and Ed Struiksma. A spokesman for Yarmouth, which was seeking council approval to expand its mall, was quoted by the Union-Tribune as saying, "We apologize to them (the politicians), and we deeply regret what has happened. But the company does take full responsibility for it, and I think we can be assured in saying it won't happen again." The council later voted to approve the mall expansion.
In November 1995, Cox Communications, the cable-television operator that has lucrative franchise agreements with both the city and county of San Diego, agreed to pay a $42,000 fine for reimbursing seven employees and their spouses, who made a total of $4850 in contributions to San Diego elected officials. Recipients included thencity councilman Ron Roberts and Councilwoman Valerie Stallings. The company issued a statement saying, "Cox Communications takes full responsibility and accepts the consequences of our actions. We are most anxious to put this matter behind us and move forward by continuing to provide quality entertainment to the people in the communities we serve."
In February 1996, H. G. Fenton Material Company of San Diego, a construction-materials supplier, agreed to pay a $90,300 fine for funneling almost $10,000 in illegal campaign contributions in the form of 53 separate contributions through its employees, who were later reimbursed. Recipients included Ron Roberts, Mayor Susan Golding and councilmembers Juan Vargas, Judy McCarty, Christine Kehoe, and Valerie Stallings. Fenton released a statement saying, "The company recognizes that the procedure was ill-advised and illegal and was inconsistent with Fenton's business ethics."
In September 1996, a San Diego shopping-center developer and a San Bernardino law firm agreed to pay a $420,000 fine for laundering more than $56,000 through 210 separate contributions to five San Diego city councilmembers, including Ron Roberts, Juan Vargas, Barbara Warden, George Stevens, and Judy McCarty, as well as losing council candidate Andrea Skorepa. Wal-Mart developer Frank Gatlin and his attorney Mark Ostoich admitted using friends, clients, employees, and business associates to make the contributions, which were later reimbursed. Roberts, who topped the list with $24,750 in illegal contributions, was quoted by the Union-Tribune as saying he had told Gatlin not to launder money to him and was unaware that the money his campaign had collected had been tainted. "On behalf of Gatlin Development Co., I accept full responsibility for my actions and want to extend my deepest of apologies," Gatlin said in a statement.
In December 1998, James Mashburn, former owner of Mashburn Waste & Recycling, a North County trash hauler, admitted laundering $21,400 in the form of 133 separate campaign contributions to city-council candidates in San Diego and six North County cities, as well as the County Board of Supervisors and members of the State Assembly. Recipients of the money -- including supervisors Ron Roberts, Bill Horn, Greg Cox, Dianne Jacob, and Pam Slater, as well as San Diego mayor Susan Golding and Councilman Juan Vargas -- said they had no knowledge of the illegal contributions. Mashburn agreed to pay a $249,500 fine. "I have to take full responsibility for what occurred, and I am extremely sorry for any embarrassment I have caused my family or any elected official," Mashburn was quoted as saying by the Union-Tribune.
After each scandal, many of the local elected officials involved have vowed to clean up their acts through a variety of proposed campaign-finance reforms. In 1996, for example, Ron Roberts said county election laws should be changed to require a warning that laundering of contributions was illegal. His own fund-raising envelopes carry such a warning, he said in an interview last summer.
Other critics say that the law's $250 limit on individual contributions is too low and argue that it actually invites corporations to launder money to their candidates of choice. Still others point out that, no matter how high the individual limit is set, the law's ban on corporate contributions provides a temptation to companies to continue washing campaign money through their employees, vendors, customers, attorneys, business associates, and other friendly agents. Without a vigilant watchdog, they say, corporate donors will continue to flaunt the law.
Many blame lax enforcement of the city's campaign-funding limits on San Diego city attorney Casey Gwinn, who himself has collected thousands of dollars of campaign funds from the city's developers, builders, law firms, and others with business pending before the city. Among Gwinn's donors: Padres owner John Moores and family, now enmeshed in Councilwoman Valerie Stallings's stock-trading investigation.
In September 1996, after the San Diego City Council rejected the creation of a so-called "ethics committee" to monitor campaign law violations, Gwinn announced he had created a "public integrity unit" in his office to root out violators. But in the four years since it was formed, Gwinn's group has thrown the book at just one alleged campaign miscreant, Peter Navarro, a U.C. Irvine professor and one-time mayoral, supervisorial, and congressional candidate much detested by the city's powerful pro-growth lobby. In 1997, Navarro paid a $4000 fine for failing to report loans he had received during his 1992 mayoral campaign.