SACRAMENTO — In recent years, the lieutenant governor's office under Cruz Bustamante fell $300,000 behind in office rent, and vendors exasperated by unpaid bills shut off cellphone service, stopped maintaining copy machines and threatened to cancel credit cards.
Aides to Bustamante blame the lapses on the lieutenant governor's former fiscal officer, who used a state-issued credit card to make a down payment on a sports car, travel to Hawaii, buy stereo and computer equipment and rent videos, state documents show. The state has paid those costs.
Bustamante is the Democratic nominee for insurance commissioner, a post with far more responsibility than he has as lieutenant governor. The commissioner oversees a $200-million annual budget, 1,340 employees and an industry that generates $115 billion in annual premiums.
Wealthy Silicon Valley Republican Steve Poizner, Bustamante's opponent in the race for insurance commissioner, cites the episode as a reflection of Bustamante's handling of the lieutenant governor job.
"This is a clear example of how he has been asleep at the wheel," Poizner campaign manager Tim Clark said Friday. "In an office that is not tasked with much to do, he couldn't get that right, and taxpayers had to foot the bill."
Bustamante spokesman Stephen Green shot back: "This happened several years ago. What's new about this? We were the victims of a crime.... [Poizner] is spending millions of dollars on smear ads on television, and now he's trying to make something out of this."
By California standards, the lieutenant governor's office is small, with fewer than 20 employees and a $2.8-million annual budget. One employee was Michael Keolanui, a high school graduate in his 30s. Hired in 2001, Keolanui became the lieutenant governor's fiscal officer in 2002, responsible for part of the office's budget and for ensuring that routine bills were paid.
Bustamante fired Keolanui in March 2004 after aides discovered that several bills hadn't been paid, and he turned the matter over to law enforcement. Keolanui pleaded guilty to federal charges related to embezzlement of $65,000 and was sentenced in 2005 to three months in jail.
"When we became aware, we took action," Green said. "When we started to hear that bills were not being paid and started looking into what he was doing, we contacted" law enforcement authorities.
Keolanui and his attorney declined to comment.
