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Former city council candidate Phil Thalheimer owes $1.1 million dollars in loans from his 2004 run against former councilmember and current congressman Scott Peters. Luckily for Thalheimer, no collection agencies are after him. That's because the loans came from his own bank account.

A July 31 disclosure shows the flight-school owner and Rancho Penasquitos resident began writing checks to his campaign in May 2003. The loan amounts ranged from $28,000 in May 2003 to $65,000 the following month. In all, Thalheimer wrote 42 checks over 18 months.

Thalheimer's outstanding balance remained throughout the following election in 2008, when he lost to council member Sherri Lightner. Disclosures from that period shows that Thalheimer only paid a total of $2,712 back to his personal account.

And while the flight instructor was not a responsible borrower and not a very successful candidate, he was successful in filing a suit against the City for violating his first amendment rights by prohibiting him and others from contributing to political candidates more than a year in advance.

The case was discussed in a June 2010 memo from program manager for the Election Campaign Control Ordinance, Stephen Ross.

"...[T]he district court’s February 16, 2010, ruling significantly impacted [Election Campaign Control Ordinance] by requiring the City to stop applying contribution limits or source prohibitions to committees that make only independent expenditures to support or oppose a City candidate. Thus, such committees may now accept contributions from individual and non-individual entities in unlimited amounts for purposes of making independent expenditures."

In addition, Thalheimer's lawsuit was the impetus for the recent cap placed on donations to council candidates and the Mayor from outside political parties. Before the lawsuit, the maximum amount that political parties could contribute to city candidates and propositions was $1,000. The amount didn't sit well with Thalheimer and his fellow plaintiffs, which at the time included the Lincoln Club, the Associated Builders and Contractors political action committee, and the Republican Party of San Diego County.

This from the 2010 memo:"...[T]he Thalheimer plaintiffs have indicated that they will challenge the $1,000 limit as being too low. Thus, if the Commission decides to interpret [Election Campaign Control Ordinance] at this time in a manner that does not apply the restrictions of SDMC section 27.2936 to political party committees making independent expenditures in the context of the $1,000 limit, it may wish to revisit the matter if a court ruling results in a significantly higher limit, one that is more likely to create an opportunity for the circumvention of contribution limits."

I expect to hear back from Stacey Fulhorst from the Ethics Commission in regards to the laws for campaign loans.

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