When it comes to campaign cash, Santa Ana has some of the tightest restrictions in all of Orange County.
Candidates for citywide office can’t accept more than $1,000 per donor in each election cycle. And once elected, they’re prohibited from voting on any business that contributors of $250 or more have before the City Council within a year of the donation.
Yet Mayor Miguel Pulido, who is now seeking his 12th term as mayor, might have found a clever way around all of that.
Check the city’s online campaign finance disclosures and you’ll find that as of the most recent filing deadline, Pulido has reported nothing in his 2016 re-election account. This is in stark contrast to 2014 when he raised nearly $50,000 for his re-election effort.
But that doesn’t mean there’s not a well-funded campaign on Pulido’s behalf. In fact, an “independent expenditure committee” dedicated to his re-election and run by one of his longtime political advisors has accepted more than $75,000 this year.
Most of that money, $57,000, has gone toward mailers supporting Pulido. The mayor is also being supported by the city’s police officers’ union, which went into this election with $340,000 in its political action committee.
What all of this means is Pulido can essentially have a well-funded re-election campaign without having to deal with the city’s strict campaign finance laws. There are no limits on contributions to IEs, which is what insiders call independent expenditure committees, so most of the checks to the Pulido account have been for $10,000 or more.
And, perhaps even more importantly, there are no prohibitions against the mayor voting on business involving contributors to IEs.
But by seemingly handing his campaign over to independent groups, Pulido has to walk a careful line. State law makes it illegal for candidates to solicit money for IEs or be involved in deciding how the money is spent. That means, for example, that Pulido can’t have any say in the language of the promotional mailers about him being sent out to voters.
However, recent comments by Pulido overheard by Voice of OC journalists raise questions about whether he has crossed the line.
As a reporter and editor were eating lunch last Monday near Mother’s Market in Santa Ana, Pulido walked by while talking on the phone with an unknown person. Pulido uttered the words “my campaign” and then suggested that the person on the other end of the line “talk to George Urch, who’s running an IE.”
Urch is a longtime Pulido advisor who is listed on the IE disclosure reports as its consultant.
Pulido then walked into a bank. The reporter contacted him by phone a short time later, described what he heard and asked for clarification about what the mayor was saying. Pulido declined to comment on both his phone conversation and the overall issue.
But Urch insists the mayor is not involved in the IE’s activities.
“[There is] definitely no coordination,” Urch said this week. “I’m a very ethical person. [The] independent expenditure committee follows the letter of the law to a T.”
“I think the mayor’s done an excellent job in the city of Santa Ana providing the leadership and stewardship for the city through challenging times, and the city’s getting back on its feet,” Urch added. “A number of years ago I set up an independent expenditure committee with the help of” other people, “and I’m gonna give my best shot to make sure he gets re-elected.”
It’s unclear whether it would be legal for the mayor to carefully suggest that his supporters contact the independent committee to support his campaign.
New state regulations specifically ban candidates from soliciting funds for an IE devoted to electing the candidate, but the meaning of “solicit” isn’t defined.
One campaign finance law expert said the intent of the law is for IE committees to be completely separate from candidates. But, he said, proving that someone actually violated the law is not easy.
“The candidate is not supposed to have anything to do with an IE. That’s why it’s called independent,” said Bob Stern, a co-author of the state’s campaign finance law.
Yet such cases are hard to pursue, Stern added, saying: “It’s difficult because unless you have somebody saying what really happened, everybody’s gonna deny it, and it’s gonna be very hard to show it.”
Pulido’s comments weren’t the first time a Santa Ana council member has sparked questions from comments they made about an IE.
In 2012, while Councilwoman Michele Martinez was running in the June primary for state Assembly, she told someone on the phone during a train ride that she was “working with” a Native American tribe that was “going to come in real big with some IEs,” according to Bob Salladay, who at the time was the managing editor of the Bay Area-based Center for Investigative Reporting.
Martinez, who lost that race and is now running against incumbent Andrew Do for the 1st District county supervisor seat, vehemently denied making that statement and the state Fair Political Practices Commission (FPPC) did not investigate.
Benjamin Vazquez, who is Pulido’s main opponent in the mayoral race, says he’s suspicious about the IE arrangement.
“I’m not sure if he’s coordinating or not, but it appears so,” Vazquez said. “I mean how are you gonna run a campaign with no money?”
In this election, the biggest supporters of the Pulido IE are the local police and firefighters’ unions, and real estate investors. Here is a rundown of some of the largest contributions:
- $20,000 from the Santa Ana Police Officers Independent Expenditure Committee.
- $20,000 from the Orange County Professional Firefighters Association IAFF PAC.
- $10,000 from the real estate investment firm Professional Real Estate Services, Inc.
- $9,000 from Christopher T. Lee, a partner at Arrimus Capital LLC, which has invested in the city’s largest mixed-use real estate development, The Heritage, that Pulido voted to approve earlier this year.
- $5,000 from David Horowitz, a conservative activist and real estate investor who was finance chairman of the California Republican Party earlier this year. He and his wife Michelle have hosted fundraisers at their home for GOP heavyweights like Mitt Romney and Scott Walker.
Adding to the significance of the Pulido IE is the mayor’s history of intermingling his personal business with his official actions as mayor.
In 2006, he voted for a city law requiring stores to restrain their shopping carts, with electronic locking devices mentioned as a preferred method. That same year, he was paid as a consultant by a company owned by Richard John Brandes, who owns a maker of the devices.
Several merchants in the city ended up buying the electronic wheel locks from Brandes’ company, Gatekeeper Systems.
In 2010, then-state Treasurer Bill Lockyer revealed that Pulido was slated to receive a $500,000 fee for helping private investors buy public buildings that then-Gov. Arnold Schwarzenegger was trying to auction off. After the arrangement was made public, Pulido acknowledged its existence but said he would refuse any payments.
And in 2015, following a Voice of OC investigation, he was fined $13,000 for failing to disclose his financial ties to a city vendor, Rupen James Akoubian of NAPA Orange County Auto Parts, and then illegally voting for an increased city contract with Akoubian’s company.
Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at firstname.lastname@example.org.