City Beat

Ashby sues Sacramento rival Steinberg over ‘illegal’ campaign cash

Mayoral candidate Angelique Ashby challenges Darrell Steinberg during Monday’s mayoral debate at the University Union Ballroom at Sacramento State University, May 9, 2016
Mayoral candidate Angelique Ashby challenges Darrell Steinberg during Monday’s mayoral debate at the University Union Ballroom at Sacramento State University, May 9, 2016

Sacramento Councilwoman Angelique Ashby is suing her main rival in the mayor’s race, alleging that former state Senate leader Darrell Steinberg “illegally moved” roughly $220,000 from a lieutenant governor campaign account into his mayoral campaign.

In a complaint filed Friday in Sacramento Superior Court, Ashby’s campaign contended that Steinberg illegally kept money he raised for a statewide general election. Her campaign alleges that Steinberg should have refunded $192,000 to donors because he never took part in a general election for lieutenant governor.

That act, her campaign said, ignored “a fundamental campaign law regarding mandatory general election refunds.”

Steinberg reported last month that he moved the entire balance of his lieutenant governor’s account – $1.4 million – into his mayoral campaign. He closed the lieutenant governor’s account in the process. There are no records in state campaign finance records going back to 2011 of Steinberg refunding donations to the lieutenant governor’s account.

Ashby has repeatedly criticized Steinberg for moving the $1.4 million, arguing it has given him an unfair advantage in the campaign. Her campaign also has said city elections code should have limited Steinberg to moving $165,000 from the account, but the city attorney disagreed with Ashby’s interpretation of the code and allowed the full amount to be moved. Ashby is not suing on those grounds.

The issues raised in the lawsuit are new. The complaint is asking a judge to immediately stop the Steinberg campaign from using the $220,000 in question.

“Steinberg’s illegal move has compromised the integrity of this election,” Ashby campaign strategist Josh Pulliam said. “Someone needed to step up to do the right thing and prevent Steinberg from flooding Sacramento with an avalanche of the dirtiest money in politics. The sheer amount of money he is pouring into Sacramento is obscene, and after weeks of hiding this transfer from the public we can now see that Steinberg’s actions have gone from highly unethical to completely illegal.”

Steinberg campaign spokesman Jason Kinney responded in a statement, “Silly-season political stunts born of desperation are expected in other places, but we think Sacramento deserves better.”

“Once again, we’re disappointed by the scattershot negativity of the Ashby campaign, not to mention their fundamental misunderstanding of well-settled law,” Kinney added. “For weeks, her campaign argued that Darrell couldn’t make a full legal transfer – even though every expert including the city attorney said he could. Now, they’ve reversed course and admit that 85 percent of the transfer was perfectly appropriate while quibbling over 15 percent, despite an unequivocal legal opinion from state authorities saying it is also perfectly appropriate.”

The Steinberg campaign provided a 2010 letter written to Gov. Jerry Brown from an FPPC lawyer saying Brown could transfer money from an attorney general election account into his governor campaign, including money raised for a general election race for attorney general.

The suit cites the case of former state Sen. Dean Florez, who was fined by the Fair Political Practices Commission in 2013 for not returning $247,000 in general election contributions he had raised for a lieutenant governor’s race he never took part in. Florez, a Democrat from the Central Valley town of Shafter, was also accused of using campaign money to make personal purchases and was fined $60,000 by the FPPC.

Ashby’s campaign “hopes that the FPPC will take appropriate action in this similar case,” according to the suit.

In addition to the $192,000 in money the lawsuit said should have been returned to donors, Ashby alleged that Steinberg moved $28,000 in “phantom” campaign cash into his mayoral account. The complaint said Steinberg’s lieutenant governor campaign reported roughly $28,000 in what are called “in-kind contributions” – non-monetary donations such as beverages and food served at fundraisers. The value of such contributions from the same donors was reported as cash in Steinberg’s mayoral account, according to the suit.

One of the examples listed was a March 23, 2012, non-monetary contribution from Nike that was moved to the mayoral account as $3,300 in cash.

Ryan Lillis: 916-321-1085, @Ryan_Lillis