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Ex-Campaign Worker Accused of Embezzling

Rep. Lois Capps' former finance director is reportedly repaying $200,000.

August 01, 2004|Sally Connell | Special to The Times

The FBI and the Federal Election Commission were told recently that a former campaign finance director for Rep. Lois Capps (D-Santa Barbara) allegedly embezzled $200,000 from the congresswoman's reelection campaign.

Campaign officials with Friends of Lois Capps said they informed the federal agencies as soon as they could confirm the financial discrepancies through an audit. The embezzlement allegedly took place over three years.

Jennifer Severance, a former resident of Santa Barbara who now lives in Boise, Idaho, has not been charged with any crime. But she has repaid $50,000 to Friends of Lois Capps and signed an agreement to repay $150,000 more, campaign spokesmen said.

Her attorney, Tom McCabe, would not discuss details of the allegation but said his client "deeply regrets this situation ever arose, and she entered into counseling to deal with this issue." He confirmed that she has come up with a repayment schedule.

The campaign cut ties with Severance in April, according to Capps' political consultant, Ben Romo, after discrepancies were found in a quarterly campaign disclosure she filed with the Federal Election Commission. Romo said a subcontractor was paid with campaign funds, when the subcontractor should have been paid out of Severance's own stipend.

"We just asked her, 'Have you been doing this?' "

The Ventura office of the FBI will investigate to see if federal laws were violated, said FBI spokeswoman Cathy Viray.

Capps' campaign also sent 15 amended financial disclosures to the Federal Election Commission recently to cover the entire period when Severance was finance director. She started working on Capps' campaigns in 1999 and was promoted to finance director in 2001.

"She was one of the most trusted and respected members of my political family," Capps said in a statement, calling Severance's actions "an act of betrayal."

Romo said it seemed that most of the financial discrepancies involved overuse of the campaign's credit card, or using campaign funds to pay her own private credit card. He said Severance was paid about $5,000 per month.

"She was really exceptional in fund-raising and finance, except for this," Romo said. "The Capps campaign is very much like a family business. And Ms. Severance was a trusted and respected member of that family."

Capps represents a serpentine congressional district that weaves along the coasts of Ventura, Santa Barbara and San Luis Obispo counties. Her district was redrawn before the 2002 election to be safer for the Democratic incumbent. She has served in Congress since a special election in March 1998, when she was elected to replace her late husband, Rep. Walter Capps.

Her Republican opponent in November is Don Regan, an audiologist from Arroyo Grande.

"We will be watching the investigation, and if we feel a need to make comments on any lack of management, we will come forward," Regan said.

Capps has a decided fundraising edge over Regan. Romo reported recently that the campaign had about $400,000 in cash on hand.

Regan said his campaign had $226 on hand.

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