The Orange County Water District earlier this year secretly hired a lobbying firm to push for a change in how the state enforces campaign finance law regarding board members’ acceptance of campaign contributions from water district contractors.
Water district spokeswoman Gina Ayala confirmed the lobbying contract, which was with Sacramento-based Platinum Advisors, but did not respond to a request to clarify exactly how the water district wants the law changed.
Other sources with knowledge of the situation said the lobbying firm was hired at the behest of a few elected board members who want to be able to collect larger campaign contributions from agency vendors without triggering conflict of interest restrictions. Those members include Denis Bilodeau, Stephen Sheldon and board President Shawn DeWayne, according to a source close to the district.
Bilodeau, Sheldon and DeWayne did not return phone calls or emails for comment.
The law in question is the Levine Act, which was passed in 1982 after a Los Angeles Times investigation showed that a Los Angeles city councilman was leveraging his appointed position at the California Coastal Commission to obtain campaign contributions from commission applicants.
It stipulated that a member of a local board — excluding boards with all directly elected members — must abstain from votes involving individuals or entities that contributed more than $250 to the board member's election campaign.
The California Fair Political Practices Commission has interpreted that restriction to apply to boards that include both elected and appointed members. The Orange County Water District board is one of a handful in the state with this unique composition.
Orange County Water District board elections are not usually well financed. Nonetheless, Sheldon in particular would have much to gain if sought-after changes in the law’s interpretation become reality.
Candidates can use campaign contributions to pay off campaign debt, and Sheldon’s campaign has $54,000 in outstanding loans to his government relations and lobbying firm, The Sheldon Group, according to campaign finance disclosure forms.
Furthermore, the records show that Sheldon has been hit with hundreds of thousands of dollars in federal and state tax liens. Most recently, the state Franchise Tax Board placed a Nov. 1, 2013, lien on Sheldon’s property for $117,000 in unpaid taxes.
Campaign finance disclosure forms filed by Sheldon show several $249 campaign contributions and a $200 contribution from Holly Fraumeni-DeJesus, a lobbyist working for Platinum Advisors.
In 2012, Voice of OC reported that the water district was using lobbyists to advocate for exempting its elected board members from this restriction at the behest of Sheldon and Bilodeau. A good-government expert at the time said using taxpayer resources to advocate for weakening campaign finance law is an abuse of public funds.
The author of the law, former Assemblyman Mel Levine, had said it was accomplishing exactly what he intended — preventing politicians such as Bilodeau, who is also an city councilman in Orange , from raising campaign cash from water district vendors and then using that money to run for another office.
Water district officials had argued that the interpretation disenfranchises the public, because it forces sitting water board directors to recuse themselves from votes involving any individual or business that gives more than a nominal amount to their campaigns.
Specifically, Bilodeau had said having the $250 restriction apply to elected members like him is unfair, because members of all-elected boards can raise campaign funds from vendors and still vote on their contracts.
He had also claimed the taxpayer-funded lobbying effort to change the law was minimal and therefore not of public concern.
Michael Markus, the district's general manager, first hired Platinum Advisors under a $5,000 monthly retainer solely for the purpose of changing the campaign finance restriction. The contract, which was never approved in public, was signed Feb. 1 under Markus’ limited authority to OK contracts without bringing them before the full board.
On Feb. 25, Markus approved an expansion of the contract to include lobbying for other state legislative bills that affect the district. The monthly retainer was increased to $10,000 per month.
Water district board members reached for this article knew little of Markus’ actions to approve funding for such a lobbying effort. And at least one said it was an inappropriate use of taxpayer funds.
“What in the hell is the water district doing trying to change that?” said board Director Jan Flory, who is also a Fullerton city councilwoman. She added that changing the Levine Act’s interpretation “creates fertile ground for a conflict of interest. I think our ratepayers are suspicious enough of their electeds.”
“I could not support that at all,” she said.
Flory later said that the Platinum Advisors contract has since been cancelled. In an email to Markus and Voice of OC, she said the general manager agreed to bring such matters to a full, public meeting of the board.