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Legal defense funds restricted

State ethics commission rules that such accounts cannot be used for political purposes.

November 22, 2007|Patrick McGreevy | Times Staff Writer

SACRAMENTO — In the year since state Sen. Ron Calderon won election in a vote recount, the legal defense fund he set up to pay his costs in the dispute has gone on to raise $160,000.

Using that fund, the Democrat from Montebello has paid $11,200 for a fundraiser at Edgewood Tahoe Golf Course, $5,880 to Bandon Dunes Golf Resort in Oregon, a $333 tab at Makena Golf Course in Hawaii and $10,000 to private airplane service Tower Aviation.

Last week, the state's ethics watchdog agency put an end to such spending, adopting strict rules to limit the use of such funds to "reasonable" attorneys' fees and related legal costs.

The Fair Political Practices Commission banned use of legal accounts for fundraising, mass mailers, dinners, political consultants, contesting vote recounts and paying fines for campaign finance violations.

Calderon employed an attorney to monitor the recount process. But state officials say a recount is an administrative action that is outside the courts.

Starting around the first of the year -- after the California Secretary of State publishes the new regulations -- officials will be required to disclose the legal issue that prompts the creation of a defense fund. They will have to close the account within 90 days of the issue's resolution. And money not needed for defense purposes must be returned to contributors.

"This regulation does a whole lot to reign in abuses," said Commissioner Robert Leidigh, a former deputy state attorney general. "I think it's really important that we do that, because these are dollars that are not subject to limits."

Unlike legislators' campaign committees, which may not accept individual contributions of more than $3,600, legal defense funds may receive unlimited donations. Calderon's golf and dining tabs were covered by big checks from special interests, including $25,000 from Hollywood Park Land Co. and $20,000 from the union representing prison guards.

Defense funds were authorized by California voters in 2000 when they approved Proposition 34, allowing officials to raise money for costs involving civil, criminal or administrative actions against them. At least 10 other elected state officials besides Calderon have created legal funds since the law was changed, including Atty. Gen. Jerry Brown, Senate President Pro Tem Don Perata (D-Oakland) and former Secretary of State Kevin Shelley.

Ross Johnson, a former state senator who chairs the FPPC, declined to talk about use of the funds by specific officeholders. But he described as inappropriate certain expenses that have been billed by some lawmakers in the past.

"Hiring a political consultant or hiring a public relations firm or a publicist or putting on major fundraisers -- those are not related to legal defense," Johnson said. He called the new rules "a significant reform."

Calderon said he welcomed the new requirements for clarifying what can and cannot be done with the funds.

"It creates an even playing field," he said.

He defended his expenses, including the golfing fees and dinner tabs. The expenditures included $832 for two fundraising events at Ruth's Chris Steak House, and $300 paid to a firm called Twisted Entertainment for fundraising.

"It's difficult to just call somebody and say, 'Give me $25,000.' It's easier to network with people at a fundraising event and ask for smaller amounts," Calderon said.

He also defended the more than $15,000 he spent on a political consultant as necessary for advice that helped him defend his election against the recount challenge.

Calderon said he would have preferred that the FPPC give officials 120 days to close their accounts. He said he continued fundraising after the recount was resolved because he received some legal bills as long as 65 days later.

Sen. Jim Battin (R-La Quinta) also has a legal defense fund. He has been raising money for it, and spending from it, since an administrative law judge in August 2006 dismissed FPPC allegations that he violated campaign finance laws.

He accepted some contributions more than 90 days after the settlement, including $5,000 each from the Pechanga Band of Luiseno Indians, which operates a casino in Temecula, and the California Dental Political Action Committee.

"I didn't raise money until after I won," Battin said. Regarding the new 90-day rule, he said: "I have no problem with that."

Assemblyman Lloyd Levine (D-Van Nuys) formed a fund to defend himself against an FPPC accusation that he violated campaign law in accepting a loan from his parents. That case was settled last year when he paid $12,000 in fines.

With some legal expenses still unpaid, Levine now must decide whether to apply to the FPPC's executive director for an extension. In such applications, officials must provide copies of outstanding legal bills.

Robert Stern, president of the Center for Government Studies in Los Angeles, said the new rules were necessary because what was intended as a legal way for politicians facing lawsuits to raise defense money has turned into a way to skirt fundraising limits imposed by California voters.

"You don't pass regulations unless there have been past abuses," Stern said.

patrick.mcgreevy@latimes.com

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