In South Bay Assembly race, state ethics agency fuels campaign fodder

Reporting from Sacramento —  Most of the back-and-forth in a hotly-contested state Assembly race in the South Bay has been on typical political fare: taxes, education, local jobs. But recently, the race between incumbent Democrat Al Muratsuchi and his Republican challenger, David Hadley, has also featured several cameos by the state’s ethics agency.

Earlier this week, Muratsuchi’s campaign filed a complaint against Hadley, a Manhattan Beach businessman, over a $45,000 contribution made to Hadley’s campaign by a committee called the “Republican Party of LA County - 66th AD.”

Democrats alleged that contribution came, in part, from donors who had already given the legal limit to Hadley’s campaign account and said the contribution was akin to money laundering.

It’s not unusual for campaigns to cry foul or submit complaints about their opponents’ fundraising. But this is the first time the Fair Political Practices Commission took advantage of a new law that allows it to intervene before an election is held.

The agency called on Hadley to return $40,900 of the group’s contribution. Hadley, who used to chair the Republican group, said he believed the committee had qualified as a party committee, which can make unlimited contributions to candidates.

But the FPPC said the group did not qualify as a party committee and therefore was limited to a $4,100 donation to Hadley’s campaign.

Hadley complied Wednesday. “We want to be absolutely clean on this,” he said in an interview. He also noted that Muratsuchi had previously been fined by the FPPC for failing to submit filings online in a timely manner.

Jay Wierenga, spokesman for the FPPC, said the agency acted so promptly to “mitigate public harm” before an election. He said the case is still open and any potential fines are still to be determined.

Residents of the 66th Assembly district are likely to hear more about the FPPC’s action in coming days from the Muratsuchi campaign. Mike Shimpock, a campaign spokesman, said: “We are going to ensure the voters know the truth about what happened with David Hadley.”

Meanwhile, outside backers of Hadley have invoked the FPPC themselves in pummeling Muratsuchi for soliciting nearly $60,000 in “behested payments,” in which donors can contribute to lawmakers’ favored causes. Money solicited by Muratsuchi in 2013 went, in part, to a local middle school and a fund for veterans.

Soliciting such money is legal, but some critics say it offers a new way for donors to curry favor with lawmakers.

Spirit of Democracy, an independent group funded primarily by GOP mega-donor Charles Munger Jr., has sent at least two mailers focused on Muratsuchi’s “behested payments,” including one in the form of a letter from former FPPC Chairman Ross Johnson. The ethics agency is referenced multiple times in the letter.

Johnson, who stepped down from the FPPC in 2010 due to health issues, did not return a call for comment about the mailer; neither did a consultant for Spirit of Democracy, which has spent more than $500,000 on the race.

Wierenga said the agency has “no connection to that letter.”

As for the FPPC’s pre-election actions becoming political fodder, Wierenga acknowledged the agency must strike a balance when deciding when to intervene.

“Obviously it’s a fine line,” he said, adding that the specifics of each case determine the agency’s actions.

“The overall goal is to encourage compliance,” he said.

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