Lawyers representing Todd Gloria and the San Diego Democratic Party filed legal briefs in court this week declaring that Gloria is a candidate for both re-election to the Assembly and for San Diego Mayor, directly contradicting Gloria’s own statements that he’s only running for Mayor.

Gloria, a local Assemblyman and declared candidate for San Diego Mayor, was sued last week over the use of campaign funds he holds in a campaign committee opened for his re-election to the Assembly.

The lawsuit sought a temporary restraining order (TRO) to stop Gloria from spending the disputed campaigns funds on the Mayor’s race until a final decision is made on the legality of using them.

In briefs filed before the hearing in San Diego Superior Court on Thursday, Gloria’s lawyer and lawyers for the Party argued that state law allows a person to run for two offices at the same time as they defended Gloria’s use of over $300,000 he still has in a committee for re-election.

Both lawyers directly contradicted Gloria’s previous public statements about only running for Mayor.

Gloria, it seems, may have lied to the public, but the lawyers couldn’t lie to the court.

When media reports, including La Prensa San Diego, highlighted his two open campaign committees two weeks ago, Gloria publicly declared that he was only running for one race.

“Some news reports have suggested that I am seeking re-election to the Assembly. I want to be clear: I am not running for the Assembly, I am running for Mayor,” Gloria posted on Twitter in August 15.

During Thursday’s hearing, Gloria’s lawyer agreed they would not spend the funds until the matter is resolved, therefore removing the need for a TRO.

Although the judge did not issue a TRO, he left the door open for the plaintiff to file an injunction, a more involved court process that could put a permanent hold on the campaign funds until a final determination is made.

The hearing was in response to the lawsuit filed last week in San Diego Superior Court against Gloria and the San Diego County Democratic Party seeking a TRO to stop Gloria from spending money from his Assembly 2020 campaign directly or indirectly on the Mayor’s race until the court or the Fair Political Practices Commission (FPPC) can rule on the matter.

The lawsuit plaintiff is Mat Wahlstrom, a member of Rescue Hillcrest, a community group focused on land use and housing issues in central San Diego, and long-time critic of Gloria.

Wahlstrom’s lawyer also reported Gloria to the FBI, the District Attorney, and the San Diego City Attorney over the growing controversy regarding a campaign committee he opened in March seemingly for re-election to the State Assembly while also campaigning for San Diego Mayor.

Gloria, 41, is currently serving his second term in the California Assembly, representing the San Diego areas of Downtown, North Park, Balboa Park, and all the beach communities to Del Mar.

In two separate letters on August 14 and August 15, lawyer David E. Kenney asked law enforcement agencies to investigate and prosecute Gloria for a variety of suspected violations of the California Political Reform Act (PRA), as well as money laundering and mail fraud connected to his campaign expenditures.

The issues revolve around a campaign committee created in March of this year called Todd Gloria for Assembly 2020 presumably to seek re-election for his current Assembly seat.

Gloria created the new committee and transferred $293,078.05 that remained in his 2018 Assembly campaign committee after the November 2018 election. He has since raised more than $25,000 in that committee.

According to the California Fair Political Practices Commission (FPPC), Gloria could have maintained that committee as an “office holder” account and used the money for expenses related to his office for the remainder of his term which will end in December 2020. ­He could have also donated funds to the Democratic Party, a charity, other candidates, or returned it to donors before the end of March.

Gloria instead transferred the money to the new Assembly 2020 committee and closed out the Assembly 2018 committee on March 19.

The new Assembly 2020 campaign committee allowed him to continue to keep control over the $300,000 he had raised while he is also actively running for San Diego Mayor.

The letters from Kenney point out that Gloria failed to file a Candidate Intention Statement form, called Form 501, for his Assembly campaign that must be filed before a candidate can legally raise or spend any money through a campaign account.

“[Gloria] repeatedly violated PRA section 85200 by soliciting and receiving multiple contributions to his Assembly 2020 committee before filing a statement of intent to run for the Assembly in 2020,” the August 14 letter states. “[Gloria] violated PRA sections 84301 and 85701 by using his Assembly committee as the nominal donor to pass through donations to other candidates and to the San Diego County Democratic Party in violation of the rules against campaign money laundering,” the letter concludes.

The June 30 report for the Assembly 2020 campaign committee shows it received contributions of $25,246, in addition to the nearly $300,000 he transferred from the 2018 committee. The new contributions all came from special interests, including $5,150 from Native American tribes; $3,000 from new car dealers; $1,500 from the Orange Country Apartment Association; $4,800 from lobbying groups for chiropractors, veterinarians, and firefighters; and one contribution from State Treasurer Fiona Ma’s re-election campaign. No individual contributions were reported. The committee ended the June period with $275,122.24 cash on hand.

Since March, Gloria has spent $44,246.32 from that committee, including donating to other campaigns and organizations. Gloria donated $5,000 to the San Diego Democratic Party; a maximum $4,700 contribution to Councilman Chris Ward’s 2020 Assembly campaign to replace Gloria; $1,500 to the Climate Action Campaign; $1,000 to Kamala Harris’ Presidential campaign; and $1,037.50 to reimburse Lorena Gonzalez’ Assembly campaign for delegate breakfasts at the recent Democratic Party convention, among other expenditures.

The Assembly committee can raise money at a higher $4,700 maximum limit compared to the $1,150 limit for Mayor, and can also accept corporate and Political Action Committee (PAC) funds, which the Mayor’s campaign cannot accept.

Gloria made a $5,000 contribution from the Assembly 2020 campaign to the Democratic Party in May, which Kenney alleges was a “down-payment” on earning the endorsement of the Party for his mayoral campaign.

Last week, Gloria received the endorsement of the San Diego County Democratic Party for his campaign for San Diego Mayor, opening the possibility that the Party may begin spending funds on Gloria’s behalf in the Mayor’s race, including the $5,000 he donated to the Party in May. Gloria could now donate part or all of the nearly $300,000 he still has in the Assembly 2020 campaign committee to the Party.

State law restricts the use of candidate campaign committee funds to be “held in trust for expenses associated with the election of the candidate or for expenses associated with holdings office”, not for contributions to other candidates or the Democratic Party, as Gloria did.

Other types of committees exist which would have allowed Gloria to raise and donate money to other candidate and campaigns. Those committees, called general purpose committees, are less restrictive as to the uses of funds.

The drawback for Gloria had he used a general purpose committee would have been that he could not have transferred the nearly $300,000 he still had from his 2018 campaign. The only way to protect those funds and maintain control of them was to transfer them to a new re-election committee as he did in March 2019, but that required filing a new 501 candidate intention statement. Gloria failed to do so.

Several media outlets that have covered this story have quoted Jay Wierenga, Communications Director for the California Fair Political Practices Commission, as saying it is not unusual for candidates to have multiple campaign committees open at the same time, and Gloria’s campaign has pointed to the quote as vindication.

When pressed by La Prensa San Diego to clarify if his comment was referring to Gloria’s multiple committees for different offices at the same time, Wierenga wrote that his comment “was in response to a totally different situation and again, was purposefully general in nature” and that he was not going “to make any more comments on anything regarding the Gloria matter, as it is now in the Enforcement Division for review.”

A search of the Secretary of State’s online database of campaigns did not reveal any other candidates besides Gloria that have multiple committees open for different offices running at the same time.

Several local elected officials do maintain multiple campaign committees, but for different elections or for different purposes, not for conflicting races.

For example, Senate President Pro Temp Toni Atkins maintains a Toni Atkins for Senate 2020 committee for her next election. She transferred $825,000 that remained in her 2016 committee after her previous election, and she is currently seeking re-election.

Atkins also maintains a Toni Atkins Ballot Measure committee which raises and donates money to support ballot initiatives, including two affordable housing measures that were on the ballot in 2018. This committee is not for her own campaign for office.

Local Assemblywoman Lorena Gonzalez-Fletcher currently has three open committees. She opened her 2020 re-election committee in February of this year when she transferred $586,762.09 that remained after her 2018 election campaign. She is currently running for re-election to the same seat in next year’s election.

Gonzalez-Fletcher also opened a committee to run for California Secretary of State in 2022. That committee currently has over $300,000 on hand for a race that is still over three years away.

She also maintains a ballot measure committee that supported several measures in 2018, including a ballot initiative that would end daylight savings time. That committee raised over $130,000.

Campaign for Mayor

The confusion as to Gloria’s true intentions may have been fueled by Gloria himself on Friday, August 9, when his opponent in the mayoral race, Councilwoman Barbara Bry, raised the issue of the open Assembly campaign committee during a campaign forum.

Bry challenged Gloria about his conflicting campaigns during the debate; “Mr. Gloria, I want to know, what office you are running for?”

Gloria did not respond while on stage, but he later told Times of San Diego reporter Ken Stone that, as the Assembly Majority Whip, he has responsibilities to his party caucus that include setting up ways to support fellow Democratic candidates.

“But at this point my leadership position affords me the opportunity to make sure we can defend and protect and potentially grow our Democratic majority — both in Sacramento and in Washington, D.C., and here locally,” Gloria told Times of San Diego.

Bry says she didn’t know at the time of the debate that Gloria had not filed the required 501 form for the Assembly campaign.

La Prensa San Diego first reported Gloria’s failure to file the 501 on August 12th after asking his campaign manager, Nick Serrano, to verify if the required form had been filed for the Assembly campaign. Serrano could not answer at the time, but committed to seek a response from Gloria. No further calls or messages asking about the form have been received.

The next morning, a 501 form was filed with the Secretary of State’s office in Sacramento, confirming that Gloria had not filed the required form before raising and spending campaign funds.

On August 13, after Gloria’s Assembly 2020 501 form was filed, Times of San Diego reporter Ken Stone posted a copy of the form on Twitter announcing Gloria’s candidacy for re-election to the Assembly. The form, called a Candidate Intention Statement, was signed by Gloria that same day, under penalty of perjury, attesting to the fact that he was a candidate for the Assembly’s 78th District.

In response to Stone’s post, Gloria’s campaign manager, Nick Serrano, posted a Twitter message saying “Nothing has changed, Ken [Stone]. Todd is running for Mayor,” but did not mention the race for Assembly.

The next day, a message posted on Todd Gloria’s own Twitter feed read: “Some news reports have suggested that I am seeking re-election to the Assembly. I want to be clear: I am not running for the Assembly, I am running for Mayor.”

Gloria did file the required 501 form in the San Diego Mayor race in December before he began raising and spending money in that campaign.

His mayoral campaign reported having raised a total of $656,108.28 between January 1st and June 30, and ended the period with $474,735.49 cash on hand.

Adding to the confusion, San Diego Councilman Chris Ward is running to replace Gloria in the Assembly in 2020. Ward filed his own 501 form for the Assembly before beginning to raise money in January. Ward’s 2020 Assembly committee reported having raised a total of $284,393.27 through June 30th.

In another twist, Gloria donated $4,700 from his 2020 Assembly committee to Ward’s Assembly 2020 campaign on March 27.

La Prensa San Diego asked Chris Ward if he believed Gloria was also running for the Assembly when he himself filed to run back in January, whether he would continue running if Gloria was also back in that race, and if he would keep the contribution received from Gloria’s Assembly 2020 campaign committee.

“I am running strong for the AD78 race in 2020, I appreciate Todd’s endorsement and support, and all funds to my campaign were lawfully received and fully reported,” Ward wrote. He did not address Gloria’s recent filing.

Given Ward’s comment, it appears the Gloria has endorsed Ward for the same seat in which he himself is a declared candidate.

Intent is the Question

California Government Code Section 85200, part of the larger Political Reform Act first passed in the 1970s, requires that “an individual who intends to be a candidate for an elective state office” must file a 501 form “signed under penalty of perjury, of intention to be a candidate for a specific office.”

The 501 form must be filed before raising any money for a campaign, even if it’s the candidates own funds. Failing to do so is violation of the Political Reform Act (PRA). Gloria clearly failed to do so.

If Gloria mistakenly failed to file the 501 form in January, as he has stated, and truly intended or intends to run for re-election to the Assembly, his recent filing may be accepted by the Fair Political Practices Commission as a late filing without a fine.

There are several warning letters issued to campaigns in recent years by the Fair Political Practices Commission (FPPC), the state agency that oversees campaigns, where candidates failed to file a 501 before raising money then subsequently did complete their filings. In every one of those cases, the candidates ultimately ran for the seat and appeared on the ballot. No fines were assessed in those cases.

However, there are no FPPC letters listed on the website that deal with candidates that failed to file a 501 and never actually ran for that seat, or filed to run for two different races at the same time. A request for comment from the FPPC’s legal advice office was not answered.

If Gloria never actually intended to run for Assembly, and is only using the Assembly 2020 committee to raise and donate money for other uses, or to direct money to the Democratic Party or others to use in supporting his mayoral campaign, he may be in violation of state law, as well as having committed perjury when he filed the 501 on August 13.

Candidate recipient committees are not intended to be used as a pass-through for other campaigns. The committee must be connected to a candidate, which is why a 501 Candidate Intention Statement is required before raising and spending money.

In Gloria’s Own Words

Gloria’s own statements in the past two weeks have added more confusion to the story.

Statements from Gloria that he opened the committee to “fulfill my responsibilities as a Member of the State Assembly” and that failure to file the 501 was “an administrative oversight when the original paperwork was filed months ago” suggest that he opened the committee and intended to file a 501 back in March when the committee was formed. A 501 form is only required for candidates intending to seek election to that office, not simply to serve out the remainder of his term.

Gloria was already a declared candidate for Mayor before the 501 for the Assembly committee would have been filed in March when the committee was formed.

However, Gloria’s own comments following his filing of the 501 form last week contradict the form itself.

If Gloria’s intent was to run for the Assembly at the moment he signed the form under penalty of perjury, or even back in March when he was supposed to file the form, then his public announcement clarifying that he is not running for the Assembly seems to retract his intent, and would then cancel his status as the candidate behind the Assembly campaign committee.

The lawsuit filed last week points to state laws that restrict the use of campaign funds in candidate controlled committees by incumbent elected officials, and do not “permit an incumbent elected officer to make expenditures from any campaign bank account for expenses other than those associated with his or her election to the specific office for which the account was established and expenses associated with holding that office.”

Gloria has specifically mentioned that the campaign committee was necessary to raise and donate money to other campaigns as part of his duties as a member of the Assembly and his role as Majority Whip.

The website for the California Legislature defines the position of Majority Whip as “essentially assistants to the political leadership of each party”, “elected by their respective caucuses, and help count potential votes on matters which present particular party concerns.” None of the definitions of leadership positions outline duties that include raising and donating campaign contributions to other candidates.

An email to Assembly Speaker Anthony Rendon for comment on Gloria’s duties and responsibilities as Majority Whip was answered by Speaker Rendon’s Communications Director, Pablo Espinoza.

When asked if the duties of Majority Whip included raising money for and donating money to other campaigns, Espinoza said the “question involves campaigns and not legislative matters,” and referred the question to Bill Wong, the chief of the Assembly Democrats’ campaign office, not part of the California State Legislature. Wong has not provided any comment.

Penalties of Violations

Violations of the Political Reform Act may first be investigated by the Fair Political Practices Commission, but can also be prosecuted by the California Attorney General, the District Attorney, or the elected City Attorney of San Diego.

A knowing or willful violation of any provision of the PRA is a misdemeanor, punishable by up to a year in jail and a $1,000 fine. Additionally, a fine of $10,000, or three times the amount which was improperly received, may be assessed. Since Gloria raised over $325,000 in the committee before filing his 501 last year, a fine could amount to nearly $1,000,000.­­­

If no action is taken against a violator after 120 days of being reported, a civil lawsuit can be filed by any citizen in the City in what is called a Private Attorney General action to enforce the law.

A violation for perjury, money laundering, or mail fraud would not fall under the authority of the FPPC, and could be charged separately by the US Attorney, California State Attorney General, or the District Attorney in the County where to violation occurred, which may be why Kenney addressed his letters to law enforcement agencies, not the FPPC.

California Penal Code 118 defines perjury as a felony when falsely testifying or signing an untrue statement, form, or affidavit under penalty of perjury. Penalties included jail time of up to four years, plus a $10,000 per violation.

Penal Code Section 186.10 defines money laundering as conducting one or more transactions of $5,000 in a seven-day period or exceeding $25,000 within a 30-day period with the intent to promote, or facilitate the promotion or management of any criminal activity, as a felony with a penalty of up to one year in jail per transaction.

Federal law 18 USC 1341 & 1343 define mail and wire fraud using the mail, courier, or other delivery service to transact unlawful acts across state lines as a felony, and carries a penalty of up to 20 years in prison. Kenney’s letter charges that Gloria both collected contributions sent from other states, and paid expenses to companies in other states, thereby committing interstate crimes.

Repeated contacts to Nick Serrano and Todd Gloria for comment on the issues relate to the 501 form and Gloria’s status as a candidate for Assembly have not yet been answered.