Melody Gutierrez and Carla Marinucci
Sacramento --
Gov. Jerry Brown and Lt. Gov. Gavin Newsom are among the officials being pulled into a state investigation into whether a powerful Sacramento lobbyist made improper campaign donations, multiple sources said Friday.
The state's Fair Political Practices Commission is expected to announce a fine Monday against Kevin Sloat and his firm, Sloat Higgins Jensen and Associates, while dozens of politicians have been told to expect warning letters for failing to disclose the true cost of lavish fundraisers held at the lobbyist's Sacramento home.
In addition to the civil fine, the allegations against Sloat - whose firm represents the San Francisco 49ers, Pacific Gas and Electric Co. and other prominent clients - have drawn the attention of law enforcement agencies including the FBI, said an attorney for a former employee whose accusations led to the probe.
Brown and Newsom are among the current and former officeholders who are expected to receive warning letters for accepting gifts from Sloat's firm by underreporting the cost of fundraisers, said sources close to the investigation, speaking on condition of anonymity because the commission has not announced its penalties.
Also expected to receive warning letters are state Sen. Jerry Hill, D-San Mateo; state Senate President Pro Tem Darrell Steinberg, D-Sacramento; state Sen. Kevin de León, D-Los Angeles; and state Sen. Roderick Wright, D-Inglewood (Los Angeles County), who was recently convicted of felony perjury and voter fraud in an unrelated case.
Some politicians caught up in the investigation blame the problems on Sloat, for allegedly not telling them how much was being spent on the fundraisers being held on their behalf. Sloat's attorney has not returned calls seeking comment.
Attorney's response
Thomas Willis, an attorney who represents Brown, Newsom, state legislators and the Democratic Party, said in a written statement that he hasn't seen the warning letters and thus would not confirm who would receive them.
"What we can say is that our clients properly paid and disclosed all known expenses," Willis said. "Of course, they did not disclose expenses that they were not made aware of."
One source close to Sloat said the fine against his firm is likely to exceed $100,000.
The probe stems from a lawsuit filed in December by Rhonda Smira, who claims she was wrongfully fired from Sloat's firm after protesting his orders to misreport or underreport political donations.
Smira herself is being investigated for allegations that she embezzled as much as $400,000 from Sloat's firm. Sacramento County prosecutors confirmed Friday that police recommended in November that she be charged and that the case was still under review.
That investigation stems from allegations dating back to December 2012, when Sloat alleged that Smira had embezzled as much as $400,000 from the lobbying firm, sources said. Jesse Ortiz, her attorney, called the allegations "without basis," saying Sloat made the accusations "after he became aware that she would disclose his conduct."
Search warrant
After Sacramento police began an investigation and issued a search warrant in December 2012, Ortiz said, his client "reached out to them" to tell what she knew about Sloat's allegedly improperly reported gifts.
Ortiz said Smira has "fully cooperated" with local law enforcement officials and the FBI, whose agents wanted her records and her work computer. "She has nothing to hide," Ortiz said.
The Sacramento office of the FBI declined to comment, saying agents do not confirm or deny that an investigation is under way.
Smira's wrongful termination lawsuit says Sloat and his lobbying firm deliberately hid the true cost of the fundraisers and regularly arranged perks for politicians and their staffs, including arranging for San Francisco Giants playoff tickets and visits to the field and owner's suite at 49ers games.
California law prohibits lobbyists from making or directing donations to elected officials or candidates, and also prohibits lobbyists from making, arranging or delivering gifts worth more than $10 directly to an elected state official in a single month.
Prohibited donations from lobbyists include "in-kind" gifts, such as flowers, wine, discounts or use of a venue. The law also requires politicians and their campaigns, as well as lobbyists, to submit detailed campaign disclosure data that accurately tallies all costs of putting on an event.
http://www.sfgate.com/news/article/Brown-Newsom-caught-up-in-donations-probe-5215271.php?cmpid=twitter
