Friday, June 20, 2003 | 9:15 a.m.
Defeated Boulder City mayoral candidate Bill Smith is filing a formal complaint with the secretary of state's office claiming Mayor Bob Ferraro broke campaign finance reporting rules when he failed to list in-kind services provided by the firm that employs his son.
This is the second campaign-related complaint Smith has sent to the secretary of state since losing the June 3 election to Ferraro by 18 votes. The office is reviewing Smith's earlier complaint that a city newsletter mailed to residents in May was designed to help Ferraro and violated state law banning governments from supporting candidates.
In his newest complaint, Smith said Ferraro should have reported the work done by campaign coordinator Joe Demma on the May 27 campaign finance report, which covered contributions and expenses from March 28 to May 22. Demma works for R&R Partners as a manager in the government and public affairs division, which is led by the mayor's son, Greg.
Demma apologized earlier this week for insulting comments he made on an Internet political forum about Smith and some of Smith's supporters.
The mayor and Demma said Thursday that Smith's newest complaint is without merit.
The in-kind donation from R&R -- Demma's services valued at $5,000 -- will be reported on Ferraro's Aug. 15 campaign finance report, they said.
Ferraro did not report the in-kind, meaning noncash, donation from R&R in an earlier report because he had not received a report stating how much the donation was worth, Demma said.
Ferraro, who has said he thought Demma was a campaign volunteer until recently, said he didn't receive any bills or reports from R&R until after the June 3 election.
"I knew I wasn't paying for it," Ferraro said. "I had no idea what kind of arrangement he had with his company."
Ferraro listed a $875 payment to Demma on his May 27 report. But Ferraro said that was to reimburse Demma for a campaign fund-raiser he helped pay for.
Secretary of state spokesman Steve George said under campaign reporting rules a firm providing in-kind services to a candidate is required to give that candidate a report every 30 days showing the value of the services provided so far.
"But on all the reports a candidate can go back and amend it. So if you didn't know about something you could go back and amend the report," George said.
The penalties for knowingly filing a false report include fines of up to $5,000 and perjury charges, George said.
Demma said he didn't know he was supposed to report the value of his services to Ferraro every 30 days, but he said they probably didn't break that rule anyway.
Demma said he worked "seven days a week" on the campaign during the last month or so before Election Day. Before then Demma said he was volunteering his own time to the campaign two or three days a week.
R&R President Mary Ann Mele said Demma started working full time on the campaign on behalf of the company on May 19.
But Smith, in his letter to the secretary of state, said Demma was probably working full time on Ferraro's campaign since the day after the April 8 primary election. Smith beat Ferraro by 134 votes in the primary.
Smith said according to his interpretation of campaign finance reporting requirements, Ferraro should have reported the in-kind contribution as soon as he received it.
In a letter mailed to the secretary of state on Thursday Smith said, "If the reporting requirements are to have any meaning, it is imperative that all contribution and expenses be reported in the period received and utilized."
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