Campaign finance reform has been bubbling as an issue for a number of years.  And any time someone manages even a small step forward, you know you’re going to have the big money corporations, the Club for Growth, and all other manner of rich righties lining up to defend their right to freely spend their money on as much questionable propaganda as they can muster.  Normally the battle lines are pretty clear on this, ideologically speaking.  That is, of course, unless you subscribe to Sen. Carole Migden’s particular brand of “progressivism”.

After the Fair Political Practices Commission barred her from accessing more than $640,000 from an old campaign account because, well…she didn’t transfer it out of her Assembly campaign account before she left the Assembly (whoops), she sued to get it back.  Free political speech, her argument goes, trumps playing by the rules.

And today, a District Court judge agreed.  U.S. District Court Judge Edmund Brennan granted a temporary injunction against the FPPC’s locking of the account:

“I think serious questions have been demonstrated here as to the constitutionality, as to the manner in which the statute is being applied” by the FPPC, Brennan said at the end of an hour-long hearing.

Migden’s attorneys claim the regulation is to prevent termed-out legislators from plundering their campaign funds for personal use, saying “Migden ‘is not here asking the court, ‘Please allow me to use campaign funds on a new car.'”  (Nevermind that you never know when she might need a new car)

The FPPC claims that she still won’t get her mitts on the money because she’s violated other regulations too (specifically, multiple bank accounts for one campaign committee).  Migden’s lawyers shot back that they’ll just keep suing until they get the money, a plan which, I’m sure, won’t add any motivation to the FPPC’s $9 million countersuit against Migden for assorted sketchy (and allegedly not allowed) finance issues.

So our saga continues.  After getting her CDP endorsement shot down convincingly (71.3% of the floor) on Sunday, Migden has a brief glimpse of a recovery thanks to throwing campaign finance regulation under the bus for her personal benefit.  One thing that struck me about her, ahem, perplexing implosion over the weekend was that it was the worst possible time for it.  2,000 delegates trapped together in San Jose for two days is not the time to give people something to talk about.  Right after being repudiated by those same people seems an odd time to throw progressive principles by the wayside in the name of political survival.

Hot on the heels of the record $350,000 fine levied against Sen. Migden, the Fair Political Practices Commission is now suing her for $9 million “for her consistent and deliberate failure to follow California’s campaign laws.”

The commission’s filings indicated that Migden’s actions hid the true nature of her campaign accounts from state regulators, potential opponents, the media and the public generally. She failed to report a number of large transactions entirely, while reporting other large transactions which simply never occurred.

“For years, Senator Migden has been deceiving the voters of California by filing inaccurate campaign statements, fabricating the elimination of committees and concealing campaign funds,” said FPPC Chairman Ross Johnson. “The sophisticated and pervasive pattern of deception by her various controlled committees has been ongoing for more than five years.”

Earlier this month, Migden was fined $350,000 by the commission and admitted to 89 violations of the Political Reform Act. During the months-long investigation that resulted in that record fine, the enforcement division also uncovered multiple illegal transfers of approximately $1 million of surplus campaign funds that occurred over several years and were funneled through multiple committee accounts controlled by the senator. Additionally, the investigation found the filing of untrue campaign statements and a pattern of concealment through consistent misreporting of campaign information.

The commission maintains that nearly $1 million in Migden’s 2000 Assembly re-election committee became surplus by operation of law when she left the lower house in December of 2002 and are not legally available for her to use in her current Senate re-election campaign. The surplus funds law has been on the books for nearly 30 years; however, Migden sued the FPPC arguing she should be allowed to use $647,000 of those funds that remain.

This is a countersuit to the Migden lawsuit noted in the last paragraph. Obviously this isn’t good news for her, coming on the heels of that already-substantial fine. And this is going to make what was an uphill campaign that much more difficult for her to win.  

Carole Midgen already has paid the most fines of any sitting Senator to the FPPC (the state version of the FEC).  It looks like she will be significantly adding to that $100k fines total.  The FPPC is looking into what could end up being several hundred thousand dollars in fines and bar her from over a million in contributions she has that she has allegedly transferred illegally from other campaign accounts.  Her consultant Ritchie Ross has already confirmed that the complaints are “absolutely legitimate”.

There are two pieces to this puzzle

1. Much like Joe Lieberman did a year ago, Midgen has $381k in unitemized expenditures.  By law, campaigns have to report what exactly they are spending their money on.  It is a basic piece of disclosure, so the public can be assured that it is not buying votes or engaging in other dirty campaign tactics.  Midgen has been charging a lot of things on to her campaign credit card and failing to disclose each of those individual payments.  The $381k adds up to 25% off all the money she spent.  This is not an isolated incident and this type of disclosure is a routine activity of campaigns.  There is no legitimate excuse for her not to itemize and the public deserve the right to know what these candidates are doing.  Under state law she could face fines up to $5,000 for every single individual expenditure over $100 and she could be sued up for up to three times the amount of the value of the undisclosed expenditures.  Right now we do not know how many different things they charged on the credit card, but it could easily add up to the tens if not hundreds of thousands of dollars in fines.  And of course three times $381k is $1.143 million.  It is rare that the FPPC issues the maximum fine, but they could still be significant totals in the end.
2. According to a complaint by the Leno campaign, Midgen has transfered over $1.3 million from her State Assembly Campaign Committee and Board of Equalization Campaign Committee accounts into her State Senate Election Committee account.  The Board of Equalization account should have been closed years ago, since it has been a long while since she has held that office.  Obviously if the FPPC blocks her access to that significant amount of money, it will make her re-election run all that more difficult, not to mention any fines she would receive on top of that.

Midgen’s books are notorious for being a mess.  It appears that it is her consultant’s tactic to do a poor job of reporting, then go back and pay the fines by fundraising more after the election.  That will not be able to work this time, since action is being taken now before her next campaign.  The FPPC responded to the Leno complaint in record time.  blog.sfweekly.com:

Jeffris’ employer, John Whitehurst (of the highly connected City consulting firm Barnes, Mosher Whitehurst Lauter & Partners), has said he’d never before seen a letter from the FPPC acknowledging an investigation was under way in more than 20 years in the state’s political trenches.

All of which begs the question: Did someone light a fire under the FPPC’s bottom?

Not exactly, according to Roman Porter, the FPPC’s Sacramento-based communications director. Since the Leno campaign’s filing was a “formal complaint” – complete with oaths sworn under penalty of perjury – Porter notes that the FPPC was under a statutory obligation to respond within 14 days.

But this wasn’t 14 days. It wasn’t even two.

“Well,” deadpanned Porter, “I guess we beat the statutory limitations.”

The response from the FPPC indicated that the complaint was already under investigation.  They will take their time digging through the Migden records before their staff comes up with a recommendation for a fine.  Then the Commission will vote on accepting that recommendation or not.  Only then would the lawsuit over the unitemized contributions be allowed to proceed. 

This is getting a decent amount of press in the district (see this Marin IJ article) and is hampering Midgen’s ability to talk about other issues, especially in the wake of her car accidents.  If the FPPC comes back with a strong ruling, then it has the potential to be a game changer in this election campaign.  The fines likely will not add up to anything really really major (relatively speaking), given the historical precedence in previous FPPC rulings, but the money transfers are a huge deal.  It just isn’t that easy to make up for a million dollars that you already have in your accounts.