Anaheim Council Candidate’s Bankruptcy Draws Scrutiny

Earlier this year, former Anaheim City Council candidate John Karczynski successfully discharged his 2008 campaign debt of $41,585 through bankruptcy, a move that is not only unusual but might also be illegal, said campaign finance watchdog Shirley Grindle.

"It smells funny," said Grindle, adding that she's never seen anything like this in more than 30 years of watching campaign finance.

Karczynski ran unsuccessfully against current Mayor pro tem Harry Sidhu and Councilwoman Lorri Galloway in 2008. He owed Probolsky Research $14,900, Tab Communications $23,163 and AimPoint Inc. $2,096.

Karczynski has not returned calls for comment on the matter.

Grindle reported the action to both the Anaheim City Attorney and the state Fair Political Practices Commission. "If anything, I want to close the loophole, if there is one," said Grindle.

The FPPC does not comment on ongoing investigations and the City Attorney's office did not return calls for comment.

Grindle argues that since he claimed the campaign debt on personal bankruptcy, it is commingling of funds, a violation of state-level campaign finance law. "No contribution shall be commingled with the personal funds of the recipient or any other person," reads the section.

She also says that since the debt was accumulated in the form of services, that it should be counted as non-monetary contributions, in which Anaheim city election codes have a $1,700 cap.

Fines at the state level range from from $5000 to $20,000, depending on the ruling of the FPPC, said Grindle.

If Karczynski is found to be in violation of the city's ordinance, then he could be fined for "...a sum equal to three times the amount by which the contribution exceeds the applicable contribution limit or the sum of $2,500, whichever is greater for each violation," reads the city code.

Adam Probolsky, CEO of Probolsky Research, which did phone polling for Karczynski, said he'd been getting the bankruptcy notices in the mail for months and couldn't understand how the debt was discharged.

Probolsky said he has the same feelings as Grindle. "I don't believe that you can discharge campaign debt through the bankruptcy process," he said.

He also said he doesn't expect to get paid. "He's not the kind of guy that is going to show up at the office with a check."

Another thing that bothers Grindle is that Karczynski listed a man named John Ferguson" as his campaign treasurer on his filings with the city, but then told her when she called him that he was actually the treasurer.

Grindle said it's legal for a candidate to be their own campaign treasurer, but nonetheless is suspicious as to why he would list a different name. "I don't see the reasoning ... it stinks," said Grindle.



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