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Long Beach candidates await legal opinion on right to use leftover campaign funds

September 20th, 2013 · No Comments · News

Sean Belk
Staff Writer

Candidates running for Long Beach city offices in the 2014 election will soon learn whether it’s legal for them to tap into funds they banked during past city or state campaigns. Some candidates recently brought up the issue and requested that the city attorney’s office look into the matter.
Since Acting City Attorney Charles Parkin is running for city attorney in next year’s election, he has requested that a third-party law firm issue a legal opinion on the query. City officials said the opinion should be released no later than today, Sept. 20.
Long Beach Elections Bureau Manager Poonam Davis said in a phone interview that the Los Angeles-based law firm Burke, Williams & Sorensen is providing a ruling in consultation with the Fair Political Practices Commission (FPPC) to be shared with candidates and their treasurers.
A city memo by Assistant City Attorney Michael Mais sent to City Clerk Larry Herrera on Sept. 6 states that, even though campaign finance law was addressed through legal proceedings more than a decade ago, the City has received inquiries from “several parties” regarding the ability of candidates to transfer over campaign funds in the upcoming election.
Currently, the Long Beach Campaign Reform Act that was passed by voters as Measure M in 1994 prohibits the use of contributions outside of an election cycle in which a candidate is running. “No candidate or officeholder or the controlled committee of such a person shall accept any contribution except during an election cycle in which the candidate or officeholder intends to run for or be a write-in candidate for the office for which the contribution is made,” the code states.
According to the code, individual contributions for mayoral candidates are limited to $750, contributions for city attorney, city prosecutor and city auditor candidates are limited to $500 and contributions for City Council candidates are limited to $350.
The Long Beach code also only gives candidates 12 months before the election to start raising funds.
However, the Long Beach Area Chamber of Commerce sued the City, challenging the legality of its election code. The lawsuit resulted in the Federal 9th Circuit Court of Appeals making a ruling that certain portions of the City’s campaign-finance law were “unconstitutional and not enforceable by the City,” according to the city memo.
Now, some candidates continue to question the legality of the City’s election rules and whether they violate First Amendment rights. Others say money being transferred from one city campaign to another is legal but state campaign funds can’t be moved into city elections because state offices have far less restrictions than city offices.
For instance, in state campaigns for Senate and Assembly, individual contributions are capped at $3,600 and small-contributor-committee contributions are limited to $7,200, while political parties have no contribution limits, according to the FPPC. Individual contributions for candidates running for governor are limited to $24,100. Candidates for state offices also have no set time of when they’re allowed to raise funds.
At the center of the quandary is Assemblymember Bonnie Lowenthal, who announced on Sept. 5 she is running for mayor of Long Beach in the April 8, 2014 primary election. According to the California Secretary of State’s website, Lowenthal, who won her third and final term on the state Assembly last year, has three active campaign-contribution accounts with ending cash balances totaling more than $300,000, which includes more than $29,000 from a campaign for Senate that she dropped out of to run for Assembly.
In a campaign email that included a subject line of “Trying to get around the law,” 5th District Councilmember Gerrie Schipske, who is running for mayor, said allowing state funds to enter a city election would give power to “special interests” and would disregard the City’s established campaign contribution limits.
“If money raised for a state Assembly or state Senate campaign is allowed to be flipped into a local campaign account, then there will be no more limits on how much can be contributed at one time to a campaign for mayor or City Council,” she stated. “And once again, big donors from special interests will control our local elections. The special interests and their candidates are counting on that you won’t notice their attack on our campaign-finance-reform law here in Long Beach.”
Lowenthal’s campaign, however, states that it was never planning on using funds left over from state campaigns.
“We never requested the opinion and never intended on using state funds for this race,” said Mike Shimpock, Lowenthal’s campaign consultant. “As an advocate for and author of campaign-finance reform, Bonnie always intended on following those rules.”
Still, a ruling could change things up a bit in terms of who is leading in contributions for the mayoral race. At the moment, former NFL player and entrepreneur Damon Dunn has led with a total of $241,432 in contributions during the period from Jan. 1 to June 30, with the largest single contribution, $150,000, from himself, as candidates are unlimited in their own personal contributions.
A separate issue, however, is whether a candidate for a city office has a right to transfer funds from one campaign to another campaign for a different office in the same election cycle. Such is the case for James Johnson, who originally raised funds earlier this year for a second term as 7th District councilmember but changed his mind to instead run for city attorney. According to online documents, Johnson had raised a total of $71,297 for the council campaign during the last reporting period.
In a phone interview, Johnson said he believes he has every right to now use that money in his campaign for city attorney since the issue has already been addressed.
“Certainly, it is legal,” he said. “Certainly, I do plan on using that money… For whatever reason, they decided they needed to re-examine the issue.”
Johnson cited a letter from attorney Stephen Kaufman and oral and written opinions from the city attorney’s office in 2010 brought up in questioning Mayor Bob Foster’s transfer of $147,732 in campaign funds from his mayoral campaign to a bid for California State Treasurer in 2014. Johnson noted that proposed transfers from state to city accounts versus city to state or city to city are “more complex,” as they would involve “an analysis of compliance with Long Beach contribution limits.” 
Davis said Long Beach candidates were concerned about Lowenthal, Johnson and Doug Otto, a local attorney and current member of the Long Beach City College Board of Trustees.
Jeff Adler, a Signal Hill-based political consultant, said in a phone interview that he predicts the ruling will conclude that money from past state campaigns to city campaigns will be banned or nontransferable, but he added that, in the long scheme of things, the decision won’t “make or break” the election for any candidates either way.
“I see it as being one small step along a very long campaign trail,” Adler said. “I suspect that money will be banned but it’s certainly not illegal.”

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