A civil suit has been filed in El Dorado County against members of a political consulting firm, alleging that they engaged in illegal taxpayer-financed activities to support passage of a special tax measure.
The El Dorado County District Attorney's Office, at the direction of the county grand jury, seeks to recover $10,000 in taxpayer funds from Dan Dellinger and Christopher Alarcon of Dan Dellinger Consulting. The Lotus-based firm was hired by the Pioneer Fire Protection District to provide consulting services related to a special tax measure on the November 2011 ballot.
Measure F passed with nearly 77 percent voter approval.
According to the July 26 complaint filed in El Dorado Superior Court, an initial $29,900 contract between the fire district and Dan Dellinger Consulting included mostly taxpayer-financed campaign activities expressly advocating passage of the tax measure.
Public agencies may use taxpayer funds to provide information on topics related to district finances, revenue sources and intended uses of the proposed taxes, but government code prohibits use of taxpayer money to advocate for a tax measure.
Dellinger said his firm acted properly, providing to the district only informational materials and handling the paperwork necessary to place the measure on the ballot. Voter outreach activities that the firm conducted were covered by private donations to a campaign committee, Save Pioneer Fire, he said.
Dellinger maintains that the complaint is politically motivated. County Auditor-Controller Joe Harn requested the grand jury investigation. Dellinger said Harn and District Attorney Vern Pierson are trying to put him out of business because he has conducted successful campaigns for several political candidates that they did not support.
"This is Chicago-style politics at its worst," Dellinger said. "The public will see through this."
Harn and Pierson denied any political motives.
Pierson responded in a written statement: "Mr. Dellinger can take whatever position he wants, but the facts are that taxpayers were forced to pay for a campaign to raise taxes on themselves. State law does not allow that. Our office, as well as the El Dorado County Grand Jury and El Dorado County auditor all came to the same simple conclusion that Dan Dellinger and Christopher Alarcon violated the law."
For his part, Harn said, "Routinely, I do not look at disbursements for small special districts. A member of my staff brought this to me and said, 'This seems way out of line.' "
Harn said his office raised concerns about certain payments to Dan Dellinger Consulting based on a June 2011 consulting contract with the fire district that appeared to contain services for illegal campaign activities and what appeared to be a promise of a $12,000 bonus for the firm if the measure passed.
He said the district revised the contract to eliminate the "bonus" language, and the auditor-controller's office paid $10,000 in invoices to the Dellinger firm.
Harn said he has refused to pay a remaining fee of $12,000 to the consultants for preparing documents necessary to enable the county to collect the special tax on behalf of the district, calling the amount "outrageous." He said other consultants have charged larger districts less than $400 for the service.
The grand jury report focuses on the activities of the consulting firm rather than the actions of the fire district board that authorized the contract. Deputy District Attorney James Clinchard said the grand jury's order was to recover the money that allegedly was illegally spent by the board.
Ripley Howe, secretary of the fire district board, said he believes the $10,000 was spent on legal informational activities but added that there is a gray area.
"We were completely upfront about all of this," he said. "We weren't trying to hide the fact that we were a public board in favor of a parcel tax measure."
However, Howe said, "I was uncomfortable with how involved the consultants were with the campaign committee."
At one point, Howe said, he asked the consultants not to come to the campaign committee meetings, but they came anyway.
The grand jury recommended that the additional $12,000 not be paid to the consultants pending an audit of allowable vs. illegal payments.
Howe said the board will not renew its request to the auditor-controller to make that payment. The board decided not to have the consultant perform those services which involved identifying developed and undeveloped parcels to determine their tax liabilities after the controversy arose over use of taxpayer funds. Howe said he subsequently learned that the state limits the amount that can be charged per parcel for those services. For the Pioneer District the total is in the range of $800 to $900, he said, not $12,000.
"We're not fighting to pay that bill," Howe said.