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Carona Spent Without Offering Details

O.C. sheriff reported expenses as loans to his election fund without itemizing. Legally, outlays of $100 or more must be detailed.

January 22, 2006|Paul Pringle and Christine Hanley | Times Staff Writers

Orange County Sheriff Michael S. Carona has been paid as much as $110,000 by his election committee for meals, travel and other unidentified expenses that his campaign disclosure statements do not itemize, The Times has found.

The statements describe the expenses vaguely as "loans" and repayments rather than listing them as actual expenses.

The sheriff's campaign treasurer, Lesley Stoll, said Carona would typically turn in receipts for out-of-pocket expenses, which would first be reported as loans made from Carona to the campaign. The committee later repaid Carona.

Stoll said she was told the reporting method was valid, since in effect Carona was making a loan to the campaign by advancing his own money on legitimate officeholder expenses.

But under state law, individual expenses of $100 or more must be reported with the payee's name and address, the precise amount, and a brief description of the purchase.

The sheriff's representatives said they did not know if all the claimed expenses -- which were incurred from 1999 to 2003 -- were for less than $100. But they said they did not think the payouts had to be itemized.

They declined to provide The Times with access to receipts for any of the expenses.

Questions about the expenses come at a time when Carona is plagued by a series of scandals and controversies.

Two of his former aides face criminal prosecution, federal authorities have subpoenaed his financial and administrative records, and the state is investigating allegations that he sexually assaulted a woman and harassed another.

Carona, who declined to be interviewed for this article, has denied any wrongdoing.

The law generally requires that cash outlays for officeholder expenses be identified as such. But Carona advisor Michael Schroeder and an attorney for the committee said treating the expenses as loans was permissible.

Campaign watchdog groups disagree. They say reporting officeholder expenses as loans creates the potential for abuse, because it doesn't show how the funds were spent.

"The danger is he's not using the money for legitimate campaign purposes," Steve Levin, project manager for the Center for Governmental Studies, said of Carona. "It makes it much more difficult to audit, to keep track of the records."

Levin also said that his organization had never heard of an officeholder claiming such a large amount of money in expenses without itemizing any of them.

"It's hard to say with a straight face that all of these were under $100," he said.

Kathay Feng, executive director of California Common Cause, said the sheriff's disclosure statement "raises eyebrows."

"I'm really at a loss as to why he could file these as loans," she said.

In 2004, on the advice of an attorney, the Carona committee halted the practice of reporting the expenses as loans, Stoll and Schroeder said.

"There was a lot of things happening in terms of investigations," Stoll said. "Legally, that's all I'm allowed to say."

The state Political Reform Act allows campaign committees to reimburse officeholders who use personal funds on political, governmental or legislative activities.

Such expenses could include the cost of taking a lawmaker to lunch, conference fees, and noncampaign travel.

Stoll said Carona would give her cash and credit card receipts for a variety of expenses, including a $2 parking fee, expensive meals and hotel bills.

She said she would tally the receipts, report the total as a loan, then cut Carona a reimbursement check from the campaign.

In 2003, Carona reported loans of $4,000 every other month for the first half of the year, and $2,000 for every other month during the second half.

That puzzled experts on campaign law.

The attorney for the Carona committee, Charles Bell, said the even numbers resulted from Stoll doing "a little bit of rounding off."

Bell said the state Fair Political Practices Commission, which enforces the Political Reform Act, had told him that reporting the expenses as loans was an allowable option.

"In-kind loans have been a common way of doing things in the past," he said.

The attorney conceded, however, that reporting expenses as expenses, not loans, is a "cleaner way to do it." He said he had advised the Carona committee to itemize any officeholder expenses that were $100 or more.

FPPC spokesman Jon Matthews said the agency could not comment on the specifics of Carona's disclosure statements.

But Matthews reiterated that the Political Reform Act requires officeholders to report expenses as expenses. The section of the act that addresses officeholder expenses does not mention loans as a disclosure alternative.

Carla Wardlow, chief of the commission's technical assistance division, said some officeholders used to report out-of-pocket expenses as loans because of "confusion" over the rules.

But a reform package adopted in 1990 made clear the reporting requirements, she said.

"After this law was passed, we would advise [officeholders] to report them as expenses," Wardlow said.

David Gould, president of the California Political Treasurers Assn., said he gives his clients the same advice.

"That is definitely not kosher," he said of reporting expenses as loans. "What are you hiding?"

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