Why are the Democrat and Republican parties of San Luis Obispo County channeling large amounts of campaign cash to candidates over a hundred miles away in Orange County?
They're part of the grand washing machine of big-money politics.
It's a world where corporations, wealthy people and labor unions have crafted a way to give large amounts of money that end up directly in candidates’ campaign accounts.
Yet original donors don’t have to show up in the candidates' disclosures.
And it can all be done legally.
This election season, a Voice of OC analysis found, county-level parties outside of Orange County have gotten big money from well-heeled donors, and pumped over $1.6 million directly to candidates in two red-hot Orange County legislative races.
Among them are the political parties of San Luis Obispo County.
The county's Republican Party has received over $250,000 from the son of billionaire Charles Munger, $80,000 from the tobacco company Philip Morris USA, $70,000 from the San Manuel Band of Mission Indians and $70,000 from Occidental Petroleum, a major oil and gas company.
In all, the county party has raised over $2.7 million this election cycle.
Of that, it’s delivered big bucks to the campaign coffers of two Republican candidates in Orange County – $290,000 to state Senate hopeful Janet Nguyen and $117,000 to Assembly candidate Young Kim.
Democrats also play the big-money game.
The San Luis Obispo County Democratic Party has received at least $198,000 from a series of public employee unions, like the AFL-CIO, Service Employees International Union and Professional Engineers in California Government.
Of the $440,000 it’s raised in total, that party has given $125,000 to Jose Solorio, the Democrat challenger to Nguyen.
Solorio has also received $205,000 from the San Diego County Democratic Party, which has major backing from labor unions.
And Assemblywoman Sharon Quirk-Silva, who’s fighting Kim to keep her seat, has received $186,000 from the Democratic Party in Sacramento County. That party has major funding from the AFL-CIO and the California Teachers Association.
Both of the races are considered critical to deciding whether Democrats get their two-thirds majority back in Sacramento.
Additionally, the four candidates have benefited from over $5 million in spending on their campaigns by state-level parties.
None of their direct funding has come from their Orange County-based parties, according to the official data.
And the outside money’s not just being routed to Orange County candidates.
Millions of dollars have been spent by county and state-level parties on races across California.
California’s campaign finance laws ostensibly limit the influence of big-money political players and make it easy for the public to know who is paying for politicians to get elected.
For example, state legislative candidates can only receive $8,200 from a given donor each election year.
All contributions have to be disclosed, and violations can trigger thousands of dollars in fines.
But the party money approach is allowed because parties are exempt from contribution limits.
In other words, parties can legally receive an unlimited amount of cash from a single donor, and then give an unlimited amount directly to candidates.
It’s legal “as long as there is no earmarking,” said Jay Wierenga, a spokesman for the Fair Political Practices Commission, which enforces California’s campaign finance laws.
But it’s not clear when exactly the “earmarking” line is crossed.
The FPPC has recently gone after county-level parties for political “money laundering.”
Just weeks ago, it announced fines against three county-level Republican parties for acting as intermediaries for contributions over the limit. The alleged violations occurred roughly four years ago.
But until the FPPC gets evidence of earmarking, and gets around to issuing fines, money bundling by parties appears to be allowed.
By adding another layer between donors and campaigns, the parties make it much harder to track who’s really funding candidates up for election.
For example, Solorio’s campaign finance data mentions nothing about the labor-funded group Protect Neighborhood Services Now, just the $229,000 contribution from the San Diego County Democratic Party.
In reality, the party was nearly 8-percent funded by the group. If the party’s money was spent proportionately, that means over $17,000 of the labor group’s money ended up in Solorio’s campaign coffers.
And in Nguyen and Kim’s case, their campaign filings state that Charles Munger, Jr. only gave $8,200 to each of them.
But the candidates have benefited from $2.6 million in spending by the state GOP, whose $23 million war chest is about 20-percent funded by Munger.
That means that if the GOP’s money was spent proportionately, over $500,000 of Munger’s money ended up supporting Nguyen and Kim.
Additionally, as is the case with Munger, donors can give donations to multiple party committees that then give to the same candidate, making it even more difficult to track all the money.
Among the top county parties giving to Orange County candidates, the major donors include some familiar names.
Contributions to the Republican Party of San Luis Obispo County include:
- Charles Munger, Jr. ($257,000)
- Philip Morris USA ($80,000)
- San Manuel Band of Mission Indians ($70,000)
- PG&E Corporation ($75,700)
- Farmers Group, LLC ($75,000) and Farmers Employees & Agents PAC ($35,000)
- Occidental Petroleum ($70,000)
- San Manuel Band of Mission Indians ($70,000)
- BNSF Railway ($70,000)
- Blue Shield of California ($70,000)
- Motor Vehicle Software Corporation ($70,000)
- California Medical Association PAC ($70,000)
- Sempra Energy ($62,000)
- Anheuser Busch ($57,500)
- RAI Services Company ($55,000)
- Valero PAC ($50,000)
- Yocha Dehe Wintun Nation ($50,000)
- California Association of Health Underwriters PAC ($50,000)
- California Hospital Association PAC ($47,500)
Contributions to the San Diego County Democratic Party feature:
- Protect Neighborhood Services Now ($229,000)
- Sycuan Band of the Kumeyaay Nation ($155,000)
- Frank Carillo, President and CEO of SIMNSA Health Plan ($140,000)
- American Federation of State, County & Municipal Employees ($117,000)
- Toni Atkins for State Assembly 2014 ($101,000)
- California Democratic Party ($82,000)
- Oceanside Firefighters Association ($54,000)
- San Diego-Imperial Counties Central Labor Council ($50,000)
Even bigger money is flowing through the state-wide parties.
For Democrats, they include:
- California Real Estate PAC ($1.8 million)
- California Teachers Association ($1.5 million)
- Caring for Californians - Sponsored by SEIU, UHW West and CAHHS ($1 million)
- Pacific Gas & Electric ($850,000)
- AT&T ($720,000)
- Chevron ($620,000)
- Edison International ($405,000)
And for Republicans:
- Charles T. Munger, Jr. ($4.5 million)
- California Realtors Association PAC/CREPAC ($900,000)
- Philip Morris U.S.A. ($874,000)
- New Majority/New Majority California PAC ($704,000)
- Pacific Gas & Electric ($677,000)
- Chevron ($600,000)
- AT&T ($513,000)
- Caring for Californians - Sponsored by SEIU, UHW West and CAHHS ($500,000)
- Michael K. Hayde, CEO of Western National Group ($460,000)
- Walmart ($250,000)
- Edison International/Southern California Edison ($242,000)
In addition, there are times when Republicans and Democrats do seem to be on the same page. Like when it comes to who finances their campaigns.
For instance, both Solorio and Nguyen have received donations from:
- Disney Worldwide Services, Inc.
- Sempra Energy
- Pacific Life Insurance Company
- The oil & gas industry
- Apartment Association of Orange County PAC
- Psomas Corporation or its related company PsomasFMG
- Hospital lobbyists
- Judith Ware of Ware Disposal Co., Inc.
- Leighton Consulting
- Enterprise Holdings, Inc. PAC
And both Quirk-Silva and Kim have received donations from:
- Sempra Energy
- Farmers Employees & Agents PAC
- Prime Healthcare Services, Inc.
- Multi-County Rental Housing PAC, Sponsored by the Apartment Association of Orange County
- Jin Oh Kim, a Garden Grove resident and owner of New Mode Sportswear
- Young Tae An, a Garden Grove resident and owner of New Seoul BBQ Buffet