Friday, October 23, 2020

Assemblyman Todd Gloria Accused of Money Laundering in Letter Seeking Prosecution

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A lawyer for two community activists is demanding that the city and county “civilly prosecute” Assemblyman Todd Gloria for alleged violations of the state’s Political Reform Act — accusing the San Diego mayor candidate of money laundering.

Attorney David E. Kenney of Pico Rivera said he was representing Kathryn Burton and Mat Wahlstrom of San Diego.

“My clients have reason to believe that there is a conspiracy to launder campaign money from an illegal campaign committee controlled by Mr. Gloria to the San Diego County Democratic Party, to a candidate to replace Mr. Gloria in the Assembly, and to several sitting members of the Assembly,” Kenney said in a 1,300-word letter to District Attorney Summer Stephan and San Diego City Attorney Mara Elliott (who in May endorsed Gloria for mayor).

In a brief phone interview Wednesday night, Burton, 64, confirmed her involvement but directed questions on the letter to Kenney. She chairs the Coastal Act watchdog group Spotlight on Coastal Corruption. Burton also chairs the Torrey Hills Community Planning Group and was co-founder of the Torrey Hills Community Coalition.

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She once worked in the San Diego City Attorney’s Office, but is now listed as inactive by the state Bar. (In 2008, she gave $1,500 to the San Diego County Democratic Party, according to opensecrets.org.)

Hillcrest resident Wahlstrom, 53, is office manager at Roberts Electric Service, according to his LinkedIn profile, and is a former board member of the Uptown Planners and a listed board member of the Save Our Heritage Organization.

Related:Grand jury indicts ex-state assemblyman, Terrence Goggin in retail fraud scheme

Founder of Rescue Hillcrest, he’s been a member of the Preservation Action Committee, said another profile.

In his three-page letter, Kenney told Elliott and Stephan that if their offices do not prosecute, “my clients intend to prosecute pursuant to PRA section 91007(a).” (That section of “Procedure for Civil Actions” stipulates that before filing a civil action, someone must first file a “written request for the civil prosecutor to commence the action.”)

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The letter comes on the heels of press coverage of Gloria filing a state form in which he certified “on penalty of perjury” that he’s a candidate for the 78th Assembly District — his seat since being elected in 2016.

Nick Serrano, a spokesman for the former councilman and interim San Diego mayor, didn’t immediately respond to a request for comment on the Kenney letter. But earlier Wednesday he explained that Gloria filed his “candidate intention statement” for Assembly on Tuesday “to come into compliance per the FPPC.”

Gloria contends he’s running only for mayor, despite the Assembly filing.

“You heard directly from the FPPC [that] this is legal and quite common,” Serrano said via email.

Tom Shepard is a strategist for Councilwoman Barbara Bry, Gloria’s main mayoral rival. He said her campaign had no comment on the letter aside from saying it wasn’t “apprised before it was filed.”

It was Bry who first raised the Assembly 2020 issue, asking Gloria in her closing statement at last Friday’s debate what seat he was running for.

In his letter, Kenney noted that Gloria transferred nearly $300,000 from his Assembly 2018 committee to his Assembly 2020 committee a few days before those funds would have become “surplus” under law.

“The problem is that Mr. Gloria did not file his declaration of intent to run for re-election to the Assembly in 2020 until August 13, 2019, which is one day after the first article on this subject ran,” Kenney wrote. “The PRA and the Fair Political Practices Commission both prohibit him from soliciting or receiving contributions into his Assembly 2020 committee without first filing his declaration, known as Form 501.”

Kenney said it was clear that Gloria created the Assembly 2020 committee for the “sole purpose of extending the expiration date on the money left over from his Assembly 2018 committee and allowing him to continue to raise money from sources who would not be qualified to donate to his mayoral campaign and in amounts exceeding city limitations.”

“Because it was illegal for him to receive money into his 2020 Assembly committee prior to August 13, 2019, it was also illegal for him to use the money for any candidate-related purpose,” Kenney wrote.

Kenney said Gloria gave $4,700 to Councilman Chris Ward — a candidate for Gloria’s Assembly seat.

Related: Feds charge Assemblyman Joseph Errigo with Bribery

“Mr. Ward knew, at the time he received the donation from Mr. Gloria’s Assembly 2020 committee, that he was receiving funds from an illegitimate committee controlled by a non-candidate,” Kenney wrote.

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He added that “tainted money” was received by incumbent Assemblywoman Tasha Boemer Horvath of North County and fellow Democratic Assembly members Christy Smith of Santa Clara, Cottie Petrie-Norris of Irvine, Rebecca Bauer-Kahan of San Ramon, James Ramos of Rancho Cucamonga and Sabrina Cervantes of Corona.

“They too knew that they were illegally receiving money from a non-candidate,” Kenney alleged.

On May 23, 2019, he said, Gloria “appears to have made a down-payment toward a mayoral endorsement by the San Diego County Democratic Party. That is when he delivered $5,000 to the party as evidence that he would transfer the remainder of his Assembly 2020 committee funds to the party if it endorses him for mayor.”

Kenney closed by saying: “Please respond to this letter within 120 days as required by PRA section 91007(a).”

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