Three Republican central committees have been fined by the Fair Political Practices Commission for admitting to having laundered money during the 2010 election, according to documents released by the FPPC on Monday.
The FPPC has proposed fines of $5000 for the Yolo County Republican Central Committee, as well as the Santa Clara County Republican Central Committee, while proposing a $15,000 fine for the LA County Republican Central Committee for a similar action involving a different candidate and donor.
Implicated in the operations was the Yolo County Republican Central Committee and Yolo County Supervisor Matt Rexroad, acting a political consultant to one of the named parties. Supervisor Rexroad only offered to the Vanguard that he was neither a named party nor fined by the FPPC.
In 2010, Charles and Ann Johnson each wrote a check in the amount of $17,000 to the Yolo County Republican Party. The Yolo County Republican Party accepted the contributions totaling $34,00 and contributed $32,000 to Damon Dunn, the Republican candidate for Secretary of State in 2010, after Ann and Charles Johnson, an owner of the San Francisco Giants, had “maxed out” their contributions, each having contributed $13,000.
These donations are in violation of state laws that regulate the maximum allowable contributions and prohibitions that donations to political parties are not to be earmarked for specific candidates.
The FPPC cites, “The campaign filings of Respondent Yolo County Republican Party reported that they were the true recipients of the Johnsons’ contributions and that they had made a separate contribution to the Dunn committee.”
The respondents, who fully cooperated with the investigation, contend “there is no evidence that the Yolo County Republican Party intended to violate any provisions of the Political Reform Act or FPPC Regulations.”
In April 2011, the FPPC began an investigation of six contributions made by Charles Johnson and his wife Ann to three different county central committees, including Yolo County in 2010.
They stated that they opened the investigation for three reasons. First, they each received $34,000. Second, “soon after receiving the money, the Santa Clara and Yolo central committees appeared to keep a small cut for themselves and forwarded the rest to a committee known as Damon Dunn for Secretary of State 2010—and the Johnsons were maxed out contributors to the Dunn committee.”
Third, a fourth county central committee (the third one involving Dunn), Placer, returned money to the Johnsons.
In 2010, Matt Rexroad, who was elected to the Yolo County Board of Supervisors in 2006, was a partner at Meridian Pacific, which was providing campaign consulting services for Damon Dunn for Secretary of State 2010.
Mr. Rexroad’s role with the Dunn committee was as Senior Strategist or Campaign Manager. Michael Sowers was a political fundraiser for another consulting firm.
The FPPC reports that emails from October 2010 show an attempt to raise substantial sums of money for a TV buy prior to the election, and on October 4, “it appears that the partners of Pacific Fundraising Group potentially were concerned about failing with respect to fundraising.”
The FPPC continues, “Two days later, on October 6, 2010, Mr. Rexroad sent an email to Mr. Sowers with a subject line of ―Dunn Party Money. The body of the email contained the names of two central committees, the Republican Party of Placer County and the Yolo County Republican Party. (These are two of the three central committees described above—each of which ultimately received $34,000 from the Johnsons.) Also, the email contained contact information for the central committees.”
Despite the fact that Charles and Ann Johnson were maxed out as contributors, “emails reflect that in October 2010, Mr. Sowers was trying to raise additional funds from the Johnsons for the Dunn committee.”
Mr. Sowers and Mr. Johnson’s daughter would exchange emails and one indicated, “I know you are extremely busy, but if you have a couple minutes to talk there is another way that you and your Dad can directly help the campaign”
One October 13, “a three minute telephone call was placed from a number belonging to Mr. Rexroad’s firm, Meridian Pacific, to a number belonging to Steve Mullen, Chairman of Santa Clara County Republican Party.”
Three minutes later, “Mr. Rexroad emailed Mr. Sowers. The subject of the email was ―Central Committee.”
According to the report, the body of the email listed the name and contact information for the Santa Clara Republican party. They write, “Approximately three minutes later, Mr. Sowers replied to Mr. Rexroad’s email with a question: The max contribution to each entity is $30K correct?”
The FPPC parenthetically notes, “Mr. Rexroad’s email only mentioned the Santa Clara central committee. However, Mr. Sowers’ use of the phrase ‘each entity’ in his immediate reply strongly suggests that Mr. Sowers and Mr. Rexroad were talking not only about the Santa Clara central committee—but also, they were talking about the other two central committees (Placer and Yolo) that were identified in Mr. Rexroad’s… email of October 6.”
On October 14, 2010, Mr. Sowers emailed the Johnson’s daughter, noting, “There are 3 entities that are trying to help Damon raise as much money into his campaign, and they are listed Below [sic]. $32,400 can be Contributed [sic] to each entity per individual. If I can raise another $100,000 to $200,000 it will give us the TV buy we need and give us the best chance of winning.”
Listed at the bottom of the email are the three counties in question: Yolo, Santa Clara, and Placer.
By October 21, 2010, “Mr. Sowers emailed Mr. Rexroad. The subject of the email was: I need you to call me asap. . . . The body of the email stated: I need to get this done before noon today.” This was followed by a three-minute phone conversation between Mr. Rexroad and Mr. Sowers.
Charles Johnson wrote one check to each of the three central committees described above, and Ann Johnson did the same. Each of the six checks was in the amount of $17,000—for a combined total of $102,000 (or $34,000 for each central committee).
On October 22, 2010, at 12:20 p.m., “Mr. Sowers sent an email to Mr. Rexroad, notifying Mr. Rexroad about where to pick up the checks.”
Karim Drissi, a representative of Mr. Rexroad’s firm, Meridian Pacific, acted as a courier, picking up the checks and delivering them to the various central committee officers. The phone records and text messages show that Mr. Drissi and Mr. Rexroad coordinated to pick up the checks. The FPPC indicates, “During his interview, Mr. Drissi confirmed that he did in fact deliver the checks from the Johnsons to each of the three central committees.”
On October 25, Matt Rexroad “sent an email to all three Chairmen of the central committees discussed above, which contained instructions about how to wire money to the Dunn committee.”
The FPPC reports that, in Placer, the committee voted to use the money to make a contribution to Andy Pugno, a candidate for Assembly and also one of Mr. Rexroad’s clients, “but when Mr. Rexroad found out what Placer intended to do with the Johnsons’ money, Mr. Rexroad communicated with one of the officers of the central committee—and the central committee immediately refunded all of the Johnsons’ money, calling the transaction tainted.”
Both Santa Clara and Yolo County accepted the money and forwarded it to the Dunn campaign.
As the Sacramento Bee summarized the affair on Monday, “The FPPC found that Dunn’s political consultant Matt Rexroad and political fundraiser Michael Sowers played key roles in orchestrating the contributions from the Johnsons to the central committees, and then on to the Dunn campaign.
“The FPPC reviewed emails, text messages and phone records that show how the two men coordinated the plan: Sowers asked the Johnsons’ adult daughter to support Dunn by contributing to the central committees, and Rexroad communicated with the central committees to make sure the money came back to his client. Rexroad sent an employee to pick up the checks from Johnson’s San Mateo office and deliver them to the central committees, an FPPC documents says, and sent an email to the central committees chairmen with instructions on wiring the money to the Dunn campaign.”
—David M. Greenwald reporting