Friday, Sept. 12, 2003 | 5:33 a.m.
WEEKEND EDITION: Sept. 14, 2003
SAN DIEGO -- San Diego businessman Ted Roth holds an opinion shared by City Hall insiders that what three indicted city councilmen are accused of doing falls into a grey area that has to do with the way San Diego campaign contributions are made.
City election laws allow individuals to contribute up to $250 to a candidate for each primary and general election. Donations from companies and political action committees are prohibited.
But businessmen acting as individuals give contributions in San Diego with the expectation that the candidate will support their issues. They may encourage their employees to contribute as well.
It is a quirk in San Diego campaign finance law that while companies cannot give money to candidates, they can host political fund-raisers, where scores of $250 checks are written.
Some people don't see the difference between those fund-raisers and what the councilmen are accused of doing. Indicted Councilmen Ralph Inzunza, Michael Zucchet and Charles Lewis, all of whom Roth knows personally, have declared their innocence and have stated that they have reported all campaign contributions legally.
"I'm willing to say they're innocent until proven guilty," Roth said. "Based on what they did, I have not yet seen any evidence that they improperly received campaign donations.
"All three are intelligent and competent. I haven't agreed with all of their votes but I have a lot of respect for them."
Part of the federal case rests on allegations that Las Vegas businessman Michael Galardi made illegal campaign contributions through the use of his employees. He is the owner of the Cheetahs nude strip club in San Diego that allegedly had illegal dealings with the councilmen in an effort to relax a city ordinance banning touching between dancers and customers.
Galardi, who pleaded guilty to conspiracy to commit wire fraud, admitted that he "unlawfully reimbursed 'straw' contributors in order to disguise the true source of the money and circumvent campaign financial reporting requirements." The indictment alleges that the councilmen received more than $25,000 from Galardi and his cohorts.
City Hall insiders say that to be competitive in San Diego city elections, mayoral candidates need at least $500,000 and council hopefuls need at least $250,000. Whereas a Las Vegas politician can get a $5,000 donation from a single source, a San Diego candidate would have to hit up 20 donors at $250 apiece to raise the same amount.
Longtime San Diego political consultant Tom Shepard said that the scandal likely will compel the City Council to revisit its campaign finance laws.
"Even before the probe there was speculation that there needed to be a change in the limit," Shepard said. "This will put additional pressure on the council to take another look at the limit. California's Fair Political Practices Commission has stated in enforcement actions that many of the campaign violations in San Diego were because of the low contribution limit."
Eugene "Mitch" Mitchell, lobbyist for the San Diego Regional Chamber of Commerce, said the question a jury would ask is whether the indicted councilman took part in a campaign contribution process that was either "unusual or standard."
"A lot of people will tell you what they did was standard," Mitchell said. "From what we know the councilmen were having discussions with the industry (Cheetahs) about changing a law. Changing laws and creating new laws are things that are discussed every day. In terms of candidates, the building industry gives money. People hold fund-raisers for candidates hoping to raise their profile with those candidates."
Donald Cohen, director of the Center On Policy Initiatives, a pro-labor think tank in San Diego, is on a first-name basis with the three indicted politicians. He maintains that they hadn't done anything wrong.
"Everyone I know who gives money represents a special interest group," Cohen said. "People give money to council members to get things on the council docket. Everyone does it. It's a standard way to operate here. We'd all be in jail if the indictment holds up.
"What this will do is make donors more skittish about giving money and it will silence people if they think they will be taped."
San Diego attorney J. Michael McDade, chief of staff to former Mayor Roger Hedgecock in the 1980s, has long believed that the $250 donation limit is too low.
"It causes people to go to extremes to raise money," McDade said. "I've always believed we should go to alternative financing. Perhaps there should be a public match so you don't have to spend so much time fund-raising."
Ben Haddad, chief of staff to former Mayor Susan Golding, also said the campaign donation limits are "unreasonably low."
"At $250 a clip it's difficult to amass a significant campaign fund," Haddad said. "It may tempt somebody to cut corners."
archive
