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.
This year, both mayoral candidates, Dick Murphy and Ron Roberts, have proposed versions of a revived ethics committee along the lines of the one that the present city council has repeatedly rejected. At least until after the election, though, those proposals will remain campaign promises. Meanwhile, the cost of city campaigns -- which require increasingly expensive purchases of television and radio advertising time, highly paid political consultants, and direct-mailings to sway voters -- is soaring. And, according to disclosure records on file at city hall, hundreds of campaign donors from all over the United States have been rushing to funnel a total of more than a million and a half dollars into the race.
Will San Diego's history of laundered contributions repeat itself this year? A computer analysis of contributions to Murphy and Roberts reveals that each has collected multiple contributions from employees of the same firm, their spouses, and other relatives -- which is legal as long as they have not been reimbursed. A small sample of these individuals was contacted by phone and each who agreed to be interviewed denied that he had been reimbursed. Others hung up the phone or failed to return phone calls. Of historical note is the fact that lawyers for Frank Gatlin, the Wal-Mart developer who in 1996 admitted laundering funds to city-council races, denied he had laundered money. The denials came during a 1994 interview by a reporter who first discovered and reported their suspicious giving patterns.
As of this June 30, the most recent date for which campaign disclosures are available, the two finalists for mayor, Dick Murphy and Ron Roberts, reported having raised about $1.5 million between them. County Supervisor Roberts, a former architect and a prodigious fundraiser ever since his first successful race for San Diego City Council in 1986, has collected about $1.1 million since forming his mayoral finance committee in December 1998. Murphy, a Superior Court judge on leave from the bench (who was not widely expected to make it into the general election past his better-funded opponents), has collected far less, a reported $467,464.
With a judge in the race who may soon return to the bench, it might not seem surprising that lawyers have contributed heavily. But it turns out that the city's big-name law firms have split their donations, favoring Murphy by about 60 percent to 40 percent. Murphy has also collected at least $18,000 from those who list their occupation as "judge." Roberts got only about $1200.
Roberts, on the other hand, did well with employees of companies that have had business before the board of supervisors. An example is SAIC (Science Applications International Corp.), a La Jollabased thinktank and defense contractor unafraid to throw its political influence around.
At the beginning of 1999, as Roberts began to collect contributions to his campaign for mayor, the county proposed to "outsource" its data-processing system to a group of private contractors. The move would cost 300 county workers their jobs, but the board of supervisors said it would save tax dollars. The employees' union, Service Employees International Local 2028, countered that the private contract would end up costing taxpayers more, not less.
Despite the critics, the board of supervisors proceeded with what was to become a seven-year, $650 million contract with three one-year options to revamp and operate the county's confusing maze of computer and telecommunications systems. The board began recruiting bidders for its so-called "Information Technology Outsourcing Program" on February 24, 1999, and by that May was reviewing four proposals.
Meanwhile, the companies competing for the lucrative data-processing deal were fighting their own battles against one another for the favor of the county supervisors. Each of the four leading bidders -- EDS, CSC, IBM, and Lockheed -- had formed partnerships with locally based companies. Electronic Data System had joined with cell-phone giant Qualcomm and Gateway Computers, a recently arrived transplant from South Dakota. CSC paired with Science Applications International. Also in the Computer Science Corporation's consortium, which called itself "The Pennant Alliance -- San Diego's Home Team Advantage," was Pacific Bell and Lucent Technologies.
When the winner was announced on October 15, 1999, few insiders were surprised. Computer Science Corporation's Pennant Alliance had carried the day, some said, by virtue of its aggressive lobbying. When the final contract was ratified by the supervisors on October 26, suspicions were fueled when the board voted 4-0 to approve the plan without question or discussion. According to an account in the next day's Union-Tribune, "Supervisor Ron Roberts acknowledged the lack of questions, but said he and other supervisors had closely tracked the yearlong process and had asked questions behind closed doors."
But was merit the only thing that Science Applications had in its favor? Less than a month after the final vote to approve the Pennant Alliance contract, records show, SAIC employees began to contribute heavily to the Roberts campaign for San Diego mayor. Campaign disclosure records show that on November 11, 1999, two weeks later, William Roper, Jr., the company's chief financial officer, gave $250 on the same day founder J. Robert Beyster gave $250, as did two other SAIC workers and their wives. No Science Applications employees gave to Roberts's opponent, Richard Murphy.
The photos and names of many of the Roberts donors can be found on the website of the Pennant Alliance. Richard Jennings, a Computer Science Corporation senior systems scientist who gave Roberts $250 on December 9 of last year, is listed as the alliance's "lead executive." Edward Timmes, a Science Applications employee who contributed $250 on March 3 of this year, is listed as an alliance "executive," along with another SAIC employee, Michael Moore, who is listed by the Roberts campaign as having contributed $250 on January 17, 2000.
Shila Patel, whose photo appears on the website under the title "business unit account executive" and is listed on Roberts's disclosure as a CSC employee with an address in Corona, gave $250 on May 23, 2000. Louis Poanessa, also pictured and listed with the same title as Patel, gave $250 on the same date. Another account executive, Computer Science Corporation employee Kristine Buitenhek, along with Peter Buitenhek, listed as "retired" at the same address, each gave Roberts $250 on December 26, 1999. A fourth account executive and Roberts donor -- whose photo appears in the website gallery next to Patel, Poanessa, and Buitenhek -- raises other questions.
Larry Aker, for many years a high-ranking county administrator who had headed a nine-member task force to expedite the board of supervisors' desire to put government services up for bid, left his job with the county in May 1998. At the time, Aker was said to have accepted a position "managing investments and acquisitions for a venture capitalist," according to an announcement by thencounty Chief Administrative Officer Larry Prior, as reported by the Union-Tribune.
But by January 17, 2000, when he and Hazel Aker at the same Poway address were each listed as giving the Roberts campaign $250, Larry Aker was working as an "account manager" for Science Applications. The Pennant Alliance website says he is in charge of "Public Safety" for the county data-processing project. Aker gave Roberts another $250 on May 23 of this year.
In all, 16 Science Applications employees, along with four relatives, had by the end of this June contributed a total of $5391 to the Roberts campaign. Additionally, five employees of CSC, SAIC's partner in the county venture, and one of their relatives gave another $1500, for a total of $6891. Science Applicationsrelated donors included the company's longtime "government affairs" vice president Kathy Holladay, engineer Mo Oloumi, vice-president Nancy Pabers, senior vice presidents Thomas Dillon and Owens Alexander, Jr., as well as board member and stockholder 79-year-old Barry Shillito, a one-time assistant secretary of the Navy, and the company founder and CEO, J. Robert Beyster, 76.
John Gulick, a CSC employee who is public affairs director for the Pennant Alliance, was another donor to Roberts. "Yes, I gave him a check," Gulick says. "I got to know Ron real well here, and he's a guy to look up to. I wrote a personal check to Ron, and it had nothing to do with the Pennant Alliance." Asked if he was reimbursed, Gulick says, "Oh, no, we can't do that legally. I did it on my own volition." Asked if he had attended any Roberts fundraising events, he replied, "I'm trying to think if I had gone to a fundraiser. I think I went to one fundraiser for him. I forgot who sponsored it."
Another large group of Roberts donors are also associated with a government contractor based in San Diego, ADCS (Auto Document Conversion System), Inc. According to its website, the company "specializes in data capture and conversion, document conversion, document management systems, data warehousing, information assurance, imaging software and training." Customers are said to include the Veterans Administration and the U.S. General Services Administration.
The president of Auto Document Conversion Systems is Brent R. Wilkes of Poway, who, according to the firm's website, was once a "tax manager in the Washington, D.C., office of the international accounting firm of Deloitte, Haskins, & Sells," and currently "is also president of the Wilkes Group, a California corporation that provides general management and government-relations consulting to businesses across the United States." It adds that Wilkes himself "has been instrumental in introducing [digital document] technology to the Department of Defense."
The site goes on to say that "the Wilkes Group has been primarily involved in introducing legislation for defense-related industries. Wilkes has also been involved in International Business Transactions and within this capacity has worked with the U.S. Congress."
In fact, Wilkes, his company-run political action committee, the firm's employees, and members of their families have for the past four years been heavy contributors to federal campaign committees, according to financial disclosure records. From 1996 until this year, for example, Wilkes is listed as personally contributing $40,000 to a variety of congressional campaigns, including those of San Diegoarea Republican congressmen Ron Packard, Brian Bilbray, and Randy "Duke" Cunningham; Democratic senator Daniel K. Inouye of Hawaii; and Democratic Virginia senator Charles Robb. During the same period, Wilkes also gave $10,000 to the National Republican Congressional Committee and $5000 to a political action committee run by ADCS.
In December 1997, the Union-Tribune reported that Congressman Cunningham "helped direct $3.2 million worth of military business to ADCS Inc. -- the company of a campaign contributor -- despite Pentagon assessments that others had superior products." The story detailed charges by Don Lundell, identified as a former executive of Audre Inc., "another San Diego software company, now in bankruptcy proceedings."
Lundell reportedly "scratched [his] head" over the fact that, although Audre's software was ranked significantly higher than the ADCS version, the contract was awarded to ADCS. Wilkes was quoted by the paper as saying, "Audre won in categories I would equate with glove box and tire sizes. But in terms of cost, ease, and speed, we killed them." Cunningham reportedly told the paper that anyone who questioned his actions in allegedly lobbying for ADCS could "go to hell."
Why is ADCS so supportive of Ron Roberts? Does ADCS have an interest in doing business with the city or the county? When Wilkes was contacted by telephone at his office last week and asked about his contributions, and those of his employees and relatives, to Roberts, he said he was in the "middle of a meeting" and would call back. He never did; repeated follow-up calls to his office were not returned.
Earlier this year, the ADCS Inc. political action committee received an advisory notice from the Federal Election Commission telling it that its April filing was overdue. In a letter dated May 15, 2000, ADCS controller Arnold R. Borromeo, who is the action committee's treasurer, responded that "we had some staff turnover in our office, and the filing of this form got lost in the shuffle."
The latest disclosure currently on file with the commission, covering the period between April 1 and June 30, shows that the committee had collected more than $13,000 in contributions for the year to date, of which Wilkes gave $5000, Borromeo $3000, and Joel G. Combs, listed as "Director-Bus. Dev.," $3000. The committee reported having a total of $62,790 in cash on hand. During the disclosure period, it reported making one donation, $1000, to the campaign of Brian Bilbray on June 1.
Individually, Combs has given a total of $25,000 to federal candidates over the past four years. Borromeo has contributed $5000. He and his wife have given a total of $5000 to the ADCS, Inc. political action committee. Other federal contributors over the past year who have listed their employer as ADCS include: Robert G. Wilkes, of Chula Vista and Carlsbad, who gave $5000 to the ADCS political action committee on December 31, 1999, as well as a total of $7000 to six congressional candidates, including Packard, Hunter, and Robb.
Other ADCS donors included Richard and Joan Bliss of Great Falls, Virginia, $6000 to Cunningham and Gilman; Cliff Rittel, San Diego, $2500 to the ADCS committee; Julie Rittel, $2500 to the committee; Summer L. Campos, $750 to the committee; Carlos D. Campos, $750 to the committee; and Mark Adams, of Alexandria, Virginia, $1000 to Robb.
In addition, the wife of Brent Wilkes, Regina, is listed as giving $5000 to the ADCS committee on December 31, 1999, as well as a total of $8200 to Robb, Hunter, Bilbray, and the Republican National Congressional Committee.
Other individuals with the last name Wilkes who have contributed to the ADCS committee include Jeffrey W. Wilkes of Chula Vista, listed as an ADCS employee, who gave the committee $2500 on December 27, 1999. During 1999, he also contributed $6000 to four candidates, including Hunter, Packard, Robb, and the Republican congressional committee.
Larry M. Wilkes of San Diego, listed as an employee of Foodmaker, gave $2500 to the ADCS committee on December 31, 1999, and a total of $4000 to Robb, Hunter, and the Republican congressional committee. Similarly, Marilyn Wilkes of Provo, Utah, listed as an employee of Seven Peaks Development, gave $2500 to the ADCS committee on December 27, 1999, and a total of $4000 to Robb, the "Lewis for Congress Committee," and a committee called "A lot of People for Dave Obey."
Though many of these ADCS-associated congressional campaign donors live hundreds and in some cases thousands of miles from San Diego, all of them -- along with additional ADCS employees, their spouses, and relatives -- have also chosen to contribute to the Ron Roberts for Mayor campaign. Though limited by the city's maximum contribution limit of $250, at least 25 ADCS-associated individuals gave a total of $9750 to Roberts through June 30, 2000, the latest date for which information is available.
For instance, Joel G. Combs is identified on the ADCS website as the company's "Director of Business Development." According to the website, "prior to his role in business development, Combs acted as liaison to the National Imagery and Mapping Agency (NIMA) and was directly involved with a $600-million federally funded NIMA program to digitize satellite images and paper maps."
On October 29, 1999, and again on June 7, 2000, Combs gave Roberts $250, one contribution for the primary election and one for the general, as permitted under the law. About two weeks later, on June 26, 2000, Frank and Patricia Combs of Tucson, Arizona, each contributed $250. According to Roberts's campaign report, Frank runs an insurance brokerage and Patricia works for Mervyn's. Records show that Joel Combs has in the past lived at their address.
Other $250 Roberts donors of the same date as the Arizona Combs family include Ryan Wilkes, a manager at Cost Co. in Sandy, Utah; Richard and Joan Bliss (he is listed as an ADCS employee in Virginia); Jeffrey Wilkes; Bryan Wilkes, a Pacific Bell technician from Chula Vista; Leo Dipilla of Waldorf, Maryland; and Frances Snoots-Dipilla, of Waldorf, listed as an ADCS employee.
As is the case with Science Applications, it appears that nobody associated with ADCS has provided financial support to the Murphy mayoral campaign.
One Wilkes employee, Mark Adams of Alexandria, Virginia, who is listed as "vice-president" of the "Wilkes Corporation," did agree to talk. Adams said last week in a telephone interview from his home that he had been introduced to Roberts "through my business affiliations." Though he lives 3000 miles from San Diego, Adams maintained, "I provided money to the campaign because I like Roberts's policies. I like his honesty." Asked if he had been reimbursed by anyone for his contribution, Adams replied, "That's against the law. Of course not."
Several other ADCS employees hung up the phone when asked about their contributions.
Employees of at least one company doing business with ADCS have also been encouraged to support Roberts. According to a sales executive with an Orange County computer-hardware maker, employees at that firm were repeatedly solicited for funds by ADCS executives. Richard Creighton, a Costa Mesa resident who is employed by Procom Technology of Tustin, said in a telephone interview last week that he had been invited to a fundraiser sponsored by ADCS president Brent Wilkes.
"I got something in the mail to come to a fundraiser. I'm not really that politically savvy. I know nothing about San Diego politics," said Creighton. "All I know is, ADCS is a customer of ours. They sell computer products to the government. Our company makes computer products. They use our products to satisfy their bid. When they win a bid from the government to do a job, they go out and buy hardware and software, and they buy some from us. We make storage devices and most of what they do involves storage."
Along with Creighton and his wife Avie, four other Procom employees and their spouses, all residents of Orange County, gave the maximum contribution to the Roberts campaign, for a total of $2250. All but one of the contributions was recorded as being made on June 6, 2000. When combined with the directly traceable ADCS contributions, ADCS has been responsible for raising a total of at least $12,000 for Roberts.
Creighton said he had not been reimbursed for his contribution.