The city of San Luis Obispo ruled Friday that former Mayor Jan Marx did not intentionally violate the city’s limits on campaign donations when she accepted two $300 contributions from a company and committee tied to a political consultant who had already donated his maximum amount.
Allegations that Marx and consultant Cory Black, CEO of the political consulting firm Public Policy Solutions, collaborated in an attempt to increase contributions to Marx’s campaign in October were raised in a citizen complaint to the city last week by activist Kevin P. Rice.
Marx lost the mayoral election to challenger Heidi Harmon, also a Democrat, by 46 votes.
Though the city cleared Marx and Black of intentional wrongdoing, Marx will pay $300 and Black will pay $600 to the city’s General Fund.
At issue are three donations Marx received in October. According to her campaign statement, Marx accepted the $300 maximum contribution from Black, $300 from Public Policy Solutions, and $300 from a committee called San Luis Obispo County for Better Government, for which Black listed himself as assistant treasurer.
Rice alleged that Marx violated the city’s election law when she accepted the $600 from the two organizations because of Black’s personal contribution. He sought a civil penalty of $1,800 or three times the amount of the contributions. According to city code, if the city rejects a citizen complaint about campaign contributions, the complainant can then pursue the matter in Superior Court.
In response to Rice’s complaint, San Luis Obispo City Attorney Christine Dietrick wrote that her office investigated it by interviewing Marx; her campaign treasurer; Black; and the treasurer of San Luis Obispo County for Better Government.
Dietrick wrote that the city’s campaign regulations do not address how to determine when or if campaign contributions are to be aggregated, so her office relied on California Fair Political Practices Commission regulations for guidance.
In her findings, Dietrick wrote that Black and Marx should have been aware of the contribution limits; Marx had voted in favor of the city’s election laws five times since 2009. However, Dietrick wrote that Marx had sought clarification from the City Attorney’s Office on whether she could accept the donations, but because the city cannot advise candidates, she was referred to the FPPC.
Records show Marx accepted the donations Oct. 3. In an Oct. 6 email exchange between Black and Marx’s treasurer, Ty Griffin, that was attached to Dietrick’s response, Griffin questioned Black about the donations.
“So my question to you is: Do you personally have a controlling interest in the organization ‘Public Policy Solutions’?” Griffin wrote. “If yes, then we have to treat your contributions and PPS’ contribution as coming from the same person — i.e. you — and therefore can not accept the $300 from PPS.”
The totality of the circumstances suggests that the violations were technical, not intentional.
San Luis Obispo City Attorney Christine Dietrick
In his response, Black wrote that the company is a corporation and that he does not have controlling interest in the business.
Marx sent a follow-up email Oct. 15 to Black and Griffin reiterating her concern about the donations.
“I truly appreciate your support, but I know for sure that I must be super careful, especially after I made a bit of a fuss over a PAC donation to my opponent,” Marx wrote.
Marx was referring to public statements she made when Rice’s Integrity SLO donated $300 to Harmon’s campaign. Harmon later returned the check.
“I am familiar with the rules. This is what I do for a living,” wrote Black, who also serves as vice chair of the San Luis Obispo County Democratic Party and typically consults Democratic candidates and officials. “If you would like to return any or all of the contributions I will be happy to take them back. They are all legal.”
Dietrick concluded that while Black does not have a majority ownership of the company — his wife does — he was in a position to direct and control the company’s decision to make the contribution, and therefore the $300 should have been aggregated with his personal donation. There was conflicting evidence as to whether Black had similar control in the committee’s donation, she wrote.
However, Dietrick noted that the city would be unlikely to win a civil penalty against Marx or Black, and that the time and resources the city would spend to achieve that would far exceed any amount recovered.
“The totality of the circumstances suggests that the violations were technical, not intentional,” Dietrick wrote. “... I find no basis to support the filing of criminal charges against either Ms. Marx or Mr. Black, and, in the interest of justice, will exercise my prosecutorial discretion to decline to file criminal charges.”
Under the city’s findings, Marx will pay $300 to the general fund, the amount Dietrick found to be an excessive donation, and Black will pay $600, or $300 for the excessive donation, and an additional $300, or the amount Dietrick concluded the city would be eligible for if it pursued Black civilly.
Rice, a Los Angeles County firefighter and founder of the politically active nonprofit IntegritySLO, issued a statement Friday claiming the city had responded “favorably” to his complaint.
Rice claimed that San Luis Obispo County Democratic Party leadership has been “fraught with campaign finance violations” against Jan Marx, Black, Grover Beach Mayor John Shoals and others.
“IntegritySLO has supported honest Democrats, including (Grover Beach City Councilwoman) Debbie Peterson, (former District 4 County Supervisor candidate) Mike Byrd and Heidi Harmon.”