Opponents Of Lilac Hills Ranch Face Fines, But Donors To Stay Secret
Friday, December 9, 2016
California’s elections watchdog dings two of the anti-Measure B campaign’s largest donors for not disclosing contributions but mystery behind money remains.
The California Fair Political Practices Commission has reached proposed settlements with two of the largest donors to the successful campaign to defeat Measure B, the countywide referendum that would have allowed construction of the 1,700-home Lilac Hills Ranch development in Valley Center.
The settlements levy $1,500 fines on the donors for failing to disclose contributions they made. The proposal also clears one donor, a nonprofit, of any obligation to disclose the original source of the money it contributed.
The settlements between the FPPC’s enforcement division and California Local Energy — Advancing Renewables (CLEAR) and West Lilac Farms LLC/West Lilac Farms II LLC will likely close the book on a bruising campaign that saw accusations over campaign money — the amount, source and motives behind it — take center stage.
‘It was a technicality’
The proposed settlements stem from two complaints filed by Nancy Layne, a Valley Center real estate agent and Measure B supporter, with the assistance of the company that sought to develop Lilac Hills Ranch, Accretive Investments.
Layne did not respond to a request for comment on the resolution of her complaints.
The complaints centered on three donations made in August and September.
CLEAR made a $110,000 contribution to fellow environmental nonprofit Save our Forest and Ranchlands (SOFAR) on Sept. 12. SOFAR went on to make contributions totaling $55,800 to Citizens and Taxpayers Opposed to Lilac Hills Ranch, the No on B ballot measure committee. Those donations made SOFAR — and by extension CLEAR — the committee’s biggest donor.
West Lilac Farms LLC and West Lilac Farms II LLC each made a $20,000 contribution to Citizens and Taxpayers Opposed to Lilac Hills Ranch, one on Aug. 19 and another on Sept. 22. Those donations made the LLCs’ owner, local farmer and real estate developer Jim Pardee, the third largest contributor to the No on B campaign.
In the proposed settlements, both CLEAR and the LLCs admit to failing to file a report within 24 hours of making those contributions, as required by law.
The FPPC could have fined each donor as much as $5,000. However, the commission’s enforcement division recommended the commission level only a $1,500 fine in each case because both CLEAR and West Lilac Farms promptly filed the reports after being contacted by the FPPC, and the groups had no prior campaign finance violations.
In the case of West Lilac Farms, the FPPC further found that the LLCs did not receive notice from Citizens and Taxpayers Opposed to Lilac Hills Ranch that they were required to file any reports and so “its failure to file the 24-hour reports was inadvertent.”
The commission will consider the proposed settlements at its Dec. 15 meeting.
Pardee told inewsource he didn’t realize he was required to report the contributions because, in addition to not being informed about the requirement, the No on B campaign committee filed its own reports disclosing his donations.
“It was a technicality. The campaign committee submitted it — but it has to be submitted by the major donor, too, which I didn’t realize,” Pardee said. “So that was an oversight on our part but as soon as we realized that was the issue, we reported it immediately.”
Gavin Baker, open government program manager at the liberal advocacy group California Common Cause, praised the FPPC for quickly investigating the complaints against CLEAR and West Lilac Farms.
“I think it’s good that the FPPC moved quickly to address this case,” Baker said. “Clearly, there were filing obligations that the actors didn’t meet and it’s good that even in a busy election year, the FPPC is quickly opening these enforcement cases and taking action to make sure that voters are informed.”
CLEAR won’t have to disclose donors
While knocking CLEAR for failing to report its contribution to SOFAR, the proposed settlement suggests the FPPC has determined CLEAR did not have to disclose any of its own donors.
The complaint filed in October against the group accused it of violating state regulations adopted in 2014 that require politically active nonprofits spending more than $50,000 in campaigns to disclose their donors.
However, the proposed settlement describes CLEAR’s $110,000 donation to SOFAR as coming from CLEAR’s “non-donor funds.” The use of such funds — typically investment income or program service revenue — for political contributions exempts a nonprofit from disclosure requirements.
The decision marks a major victory for CLEAR, which fought off an Accretive-funded lawsuit the week before the election seeking to force it to disclose its donors.
In a brief phone interview, CLEAR CEO Bill Powers described the settlement as “reasonable to us,” fine and all.
“We’re pleased. I think the issue (of) the fine, we now know that you need to report in 24 hours,” Powers said, adding that an FPPC staffer admitted the requirement is redundant because the receiving committee also is required to file a report disclosing the contribution.
However, SOFAR, the group CLEAR made the $110,000 contribution to, was itself the subject of a complaint and eventually paid a $5,000 FPPC fine for, among other oversights, not timely filing a report disclosing CLEAR’s contribution.
SOFAR’s president previously told inewsource that his group tried to follow the campaign finance laws but just didn’t understand all the regulations as the Measure B campaign was the first time the nonprofit got involved in electoral politics.
Powers declined to reveal the source of the non-donor funds.
Baker, of Common Cause, wondered whether the FPPC demanded documentation as to the source of CLEAR’s donation or just took the group at its word.
“I would hope that the FPPC is not simply taking at face (value) the assertion from CLEAR that it’s from non-donor funds because there would be to me a question of ‘Where are the funds from if they’re not donor funds?’ given the information that’s available about what this organization is and what it does and how it operates,” Baker said. The group doesn’t function like a company that makes money selling a product or a service, he added.
The FPPC does not comment on pending settlements but spokesman Jay Wierenga wrote in an email that “the FPPC Enforcement Division gathers as much evidence as it can during any investigation, evidence that includes testimony and documentation, and makes its findings and recommendations based on what it finds, feels it can prove and where the evidence leads.”
Records show that between July 1, 2012, and June 30, 2015, the closing date of the most recent publicly available document summarizing CLEAR’s finances (back when the organization was known as the Southwest Center on Renewable Energy), the organization reported a total of $371 in non-donor revenue. It entered the 2012 tax year with $20,971 in assets.
Unfazed by complaint
The No on B side was out-funded to an extraordinary degree. Campaign finance reports show Accretive pumped nearly $5 million into the campaign while the committee opposed to the measure raised less than $200,000.
It was money down the drain for Accretive. Unofficial results show Measure B losing by a nearly 2-1 ratio.
A spokesman for Accretive Investments declined to comment on the proposed settlements.
Pardee said he was pleased with the results of his $40,000 investment.
“It was a very tough campaign on both sides,” Pardee said. “I mean we do need more housing in San Diego but we need to follow what the supervisors have set up in that area. I think the voters understood that and it’s interesting they voted in such a way. I mean the people really spoke.”
Powers said the FPPC complaint and the lawsuit filed against CLEAR wouldn’t discourage the group from getting involved in future campaigns.
While saying CLEAR didn’t have any specific targets, Powers said the nonprofit would evaluate campaigns on a “case by case” basis.
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