Vargas, Gloria Returning Campaign Donations Funneled Illegally From Mexican Businessman
Originally published January 22, 2014 at 3:55 p.m., updated January 26, 2014 at 8:15 p.m.
Interim San Diego Mayor Todd Gloria on Wednesday returned a $500 donation that was made to his 2012 San Diego City Council reelection campaign by a man charged with conspiring to funnel money from a foreign national into San Diego area elections.
Meanwhile, Rep. Juan Vargas, D-San Diego, said he would return any donations from individuals who were named Tuesday in a federal complaint.
Vargas would have to pay back $3,500, according to various news reports.
According to the complaint, Ravneet Singh and former San Diego police Detective Ernesto Encinas conspired to direct $500,000 of illegal foreign money into San Diego municipal and federal campaigns, primarily in 2012 and last year.
U-T San Diego reported that federal investigators were looking into donations to disgraced former San Diego Mayor Bob Filner, two-time mayoral candidate Nathan Fletcher, District Attorney Bonnie Dumanis and ex-Councilman Carl DeMaio, who is running for Congress this year.
Singh, 41, is a self-styled "campaign guru" who is the proprietor of Washington, D.C.-based ElectionMall Inc., a company that provided social media services and other campaign and election products to political candidates throughout the world, according to court documents.
Encinas, the owner of a San Diego-based private security and consulting business, oversaw the protection detail of a person identified in the complaint only as "the Foreign National."
KPBS has confirmed the "Foreign National" as Jose Susumo Azano Matsura, a Mexican businessman.
Between 2011 and 2013, Singh and Encinas allegedly helped the foreign national illegally donate hundreds of thousands of dollars to a series of candidates for elected office, including during the 2012 San Diego mayoral election, a 2012 congressional campaign and the 2013 San Diego special mayoral election -- up to, but not after, last month.
Under federal law, foreign nationals are prohibited from making any contributions or expenditures in connection with any American electoral campaign, whether at the federal, state or local level.
Gloria had his campaign treasurer return a donation from Encinas, according to the mayor's office. He became interim mayor after Filner -- plagued by allegations of sexual harassment and under investigation for possible misuse of city funds -- stepped down Aug. 30.
Vargas said he was "shocked at the claims" and "offended by the actions of these individuals," if the allegations prove true.
"If any contributions did not come from the disclosed source, I was not aware of it," Vargas said. "Upon reading the Union Tribune, I immediately contacted the (Democratic Congressional Campaign Committee) and, out of an abundance of caution, urged its leaders to return funds received from those listed in the complaint. I have also requested that if any funds have been contributed to my past or current campaigns from said individuals, they be immediately returned."
Dave McCulloch, a spokesman for DeMaio's congressional campaign, said they also returned a donation.
"In light of the serious allegations made against the individuals named in the complaint, we searched our campaign database of over 9,000 donors and found a single $500 contribution from Ernesto Encinas dated in 2013," McCulloch said. "Because we believe it may be the same person, we opted to immediately return the contribution."
On Tuesday, Fletcher said he had no contact with the people named in the complaint, while a Dumanis campaign spokeswoman said their donation may have gone into a separate expenditure account, not the campaign. She is running for reelection in June.
Singh and Encinas are accused of knowingly using a series of increasingly complex techniques to hide the fact that the unnamed foreign national was the true source of illicit campaign funds.
The complaint alleges Encinas, 57, helped mask the foreign national's contributions through the use of shell companies, among other devices.
Similarly, Singh allegedly used his expertise to facilitate the donation of social media services to political candidates the foreign national favored.
The complaint alleges that those contributions -- sometimes classified as "in-kind contributions" -- were not reported in any campaign filings and totaled nearly $300,000.
Court papers allege Encinas wanted the next mayor to fire the chief of police and replace him with a person of Encinas' choosing in exchange for the foreign national's financial help.