Two local residents have accused leading mayoral candidate and current state assembly member Todd Gloria of laundering campaign money in violation of state laws.
In letters to City Attorney Mara Elliott, District Attorney Summer Stephan, and federal agents, attorneys representing residents Kathryn Burton and Mat Wahlstrom lay out the alleged violations. The alleged violations were first reported by La Prensa on August 12.
The letters allege Gloria transferred $300,000 in unused campaign money from his 2018 assembly run to a newly formed 2020 assembly committee.
The problem, according to the allegations: Gloria did not file his intention to run for re-election to his assembly seat and instead had been campaigning for mayor.
“My clients have reason to believe that there is a conspiracy to launder campaign money from an illegal campaign committee controlled by Mr. Gloria…” reads an August 14 letter from attorney David Kenney on behalf of his clients.
The call to prosecution alleges Gloria transferred the money from his 2018 State Assembly committee account in order to avoid restrictions on unused money. And, according to the allegations, the way around the restrictions was to form a new State Assembly Committee - this, despite not announcing his run for that office.
In addition, read the letters, Gloria continued to accept donations to his assembly re-election committee and also allegedly paid staff from the assembly re-election campaign despite not planning on running.
“The [Fair Political Practices Commission] manual make clear, he could not lawfully receive funds into his Assembly 2020 committee, not even a transfer from his Assembly 2018 committee,” wrote Kenney.
As for the payments Kenney writes, "some of the expenditures also appear to have no direct relationship to any political, legislative, or governmental purpose related to his fraudulent re-election campaign."
Those expenditures include $500 to his spokesperson as well as paid made multiple expenditures for "staff meetings with the candidate."
But there were other violations, according to Kenney’s letter, including using surplus funds from other committees to support their own local campaigns.
Kenney says that violation was seen in donations that Gloria made, among others, to San Diego Councilmember Chris Ward who is running for the same State Assembly seat that Gloria currently holds.
“It appears that Mr. Gloria as well as Mr. Ward...and someone at the highest level of the San Diego County Democratic Party knew about the illegal nature of Mr. Gloria’s Assembly 2020 committee and the monies they received from it, making them liable for aiding, abetting, and conspiring with Mr. Gloria to violate a long list of campaign-related laws,” reads Kenney’s letter.
Gloria has raised the most of all mayoral candidates, by a large sum. According to local filing statements, Gloria raised over $656,000 in the mayoral race whereas fellow democratic opponent Barbary Bry raised just over $531,000.
As for the allegations, Gloria dismissed the allegations and says the late filing was a mere oversight.
A spokesperson for Gloria sent the following statement from Gloria: “Some news reports have suggested that I am seeking re-election to the Assembly. I want to be very clear: I am not running for the Assembly, I am running for Mayor.”
Added Gloria, “My Assembly committee remains open to fulfill my responsibilities as a member of the State Assembly until the end of my current term. The form filed by my committee [on August 13] simply corrected an administrative oversight that occurred when the original paperwork was filed months ago.”
Gloria's spokesperson added that the assembly member supports city councilmember Chris Ward's run for his current office.
Stacey Fulhorst serves as the Executive Director for San Diego’s Ethics Commission. Fulhorst could not comment on any specific allegations but did say city campaign laws prohibit state candidates from contributing to a local candidate committee. And as for transferring funds from a state committee to a local committee, that is allowed, however, with a contribution limit of $1,150 for a mayoral candidate.
In addition, speaking as to the general law, Fulhorst says candidates cannot use his/her state campaign committee funds to support his/her City campaign.
NBC 7 reached out to the Fair Political Practices Commission. The commission also would not comment on specific allegations but said that “multiple committees are fine as long as they are for what they say they are and proper recordkeeping/reporting is being done.”
The commission spokesperson said Assemblymember Gloria “contacted FPPC Enforcement Division earlier this week to self-report and like any other matter...Enforcement is determining the appropriate actions moving forward.”