Monday, September 13, 2010

BREAKING NEWS: Perata to Buy Mayoral Election?

By Robert Gammon
Mon, Sep 13, 2010 at 12:38 PM

UPDATED (see below): Don Perata and his political allies in Sacramento may have found a legal loophole that will let the former state senator spend as much money as he wants on the Oakland mayoral election. Normally, Oakland mayoral candidates are prohibited by law from violating the city’s expenditure cap on elections, which currently is about $379,000. However, actions taken by a shadowy political group in Sacramento with close ties to Perata may allow him to spend far more than $379,000 without worry of breaking the law.

In recent days, the group, Coalition for a Safer California, which strongly supports Perata, is run by his friends, and is funded by his employer, sent letters to mayoral campaigns in Oakland, saying it has exceeded the city’s cap on expenditures for so-called “independent expenditure committees.” That cap is currently about $90,000, according to Dan Purnell, executive director of Oakland’s Public Ethics Commission. Councilwoman Jean Quan, who is one of Perata’s main competitors, received one of the letters. It was sent by Paul Kinney, who runs Coalition for a Safer California and is a longtime Sacramento political consultant with close ties to the ex-senator.

The letter, a copy of which was obtained by the Express, states that because Kinney’s group allegedly went over the city’s cap on expenditures for independent committees, then Perata and every other mayoral campaign can now spend more than the city’s $379,000 cap without fear of penalty. Typically, mayoral candidates don’t violate the cap because doing so generates bad press, and it’s expensive. Under city law, candidates can face fines that are triple the amount they overspend. So if Perata were to spend $50,000 more than the cap, he would face a $150,000 fine.

But the ex-senator may now be able to overspend by hundreds of thousands of dollars without fear of fines. The issue is key for him, because as the Express reported last month, Perata had already spent more than $320,000 on his mayoral campaign by June 30, leaving him with virtually no money for the final stages of the race. Now, he may have no such concerns. Indeed, his lavish early spending on expensive consultants indicates that he may have been counting on his friends and the legal loophole all along.

The news also could be prove to be a serious blow to Quan’s campaign — and that of Councilwoman Rebecca Kaplan. Neither had planned to spend more than the city’s cap, and neither can match Perata’s fund-raising prowess. Quan called the move by Kinney’s group a “blatant” attempt to circumvent campaign finance law. She also contends that it violates “the spirit” of the city’s expenditure law.

Purnell of the city’s Public Ethics Commission confirmed that if an independent expenditure committee spends more than $90,000 in the mayor’s race, then Oakland’s campaign finance law allows all other committees, along with the individual campaigns themselves, to spend as much money as they want. Purnell called the loophole a “crude” measure that was meant to help candidates who have been unfairly attacked by soft-money groups that support their competitors. But the loophole also helps a candidate like Perata, who benefits when a group that supports him also overspends on attack ads against his competitors.

In this case, Kinney’s group, Coalition for a Safer California, sent out two hit-piece mailers in June, sharply criticizing Quan and Kaplan for their stances on Oakland police pensions. Both women believe Oakland cops should begin contributing to their retirement plans to help the city balance its budget. The mailers from Kinney’s group were paid for by the California prison guards' union and several of Perata’s top donors. The prison guards' union hired Perata as a "political consultant" in early 2009 and has paid him more than $400,000 ever since.

For her part, Kaplan questioned whether the expenditures by Kinney’s group were truly “independent” as required by law. She noted the many connections between the group and Perata and pointed out that it was primarily funded by Perata’s employer — the prison guards' union. “I think it’s incredibly disrespectful to the voters of Oakland,” she said.

Kaplan also questioned whether the hit-pieces in June qualified as true campaign expenses as required to lift the cap on how much money committees and candidates can spend. Mark Morodomi, a lead attorney for Oakland’s City Attorney’s Office, said that money spent by a group must be clearly for or against candidates in a particular race to qualify as true campaign expenses. But the June hit-pieces never mentioned the Oakland mayor’s race, nor did they tell voters to vote against Quan and Kaplan. In fact, the mailers also criticized other councilmembers — Pat Kernighan, Nancy Nadel, and Desley Brooks — for their stances on police pensions, and none of them are running for mayor.

As a result, if the mailers were not true campaign expenses, then Kinney’s group cannot count them toward the city’s $90,000 cap for independent committees. Consequently, Kinney’s group may not be able to say it has gone over the city’s cap if it’s counting those mailers. However, that may not stop his group from going over the cap in the future with a new round of ads attacking Quan and Kaplan, thus allowing Perata to break the cap, too.

It should be noted that in his letter, Kinney contended that the city's cap for independent committees was $70,000. However, city law requires that the $70,000 be adjusted for inflation because it was established in 1999, Purnell said. He said the real cap is about $90,000 now.

Finally, it should be noted that the June mailers contained numerous factual errors, including falsely claiming that Kaplan voted to lay off police officers. Kaplan, in fact, voted against the layoffs. In other words, Perata and his friends appear to be trying to capitalize on lies spread about the people he is running against.

UPDATE: Kinney just told the Express that he rescinded the letter today because his group has not yet spent more than $90,000. He said he mistakenly thought that the cap was still $70,000 and didn't know about the need to adjust it for inflation.

Kinney also said that he was not counting the two mailers his group sent in June, criticizing Quan and Kaplan. He said he realized that those mailers don't qualify as true campaign expenditures because they did not advocate for or against a candidate or candidates in a particular race.

In fact, he said his group has not spent money on ads at all in the campaign. Instead, he said the $70,000 or so the group has spent has been used for fund-raising and to pay his salary. However, he did not rule out the possibility of the group buying ads in the campaign, which could then put the group over the city's cap and lift the cap for Perata, too.

But he denied coordinating with Perata in any way. Perata has also previously denied working with the group. Candidates are prohibited by law from coordinating with so-called independent committees. "He's doing our thing, and we're doing ours," Kinney said.

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