Congressional hopeful Justin Fareed should disclose ranching and oil ties, watchdogs say

Washington D.C. ethics watchdogs say Congressional candidate Justin Fareed, pictured during a February 2016 debate, left out required information about his family’s ranching business on his financial disclosure forms. The omission, one legislative expert said, obscured his family’s ties to the oil industry.
Washington D.C. ethics watchdogs say Congressional candidate Justin Fareed, pictured during a February 2016 debate, left out required information about his family’s ranching business on his financial disclosure forms. The omission, one legislative expert said, obscured his family’s ties to the oil industry. jjohnston@thetribunenews.com

Santa Barbara congressional candidate Justin Fareed claims he’s a “third-generation rancher” who oversees the family’s cattle business, but for nearly five years he has failed to report that position on federal financial disclosure forms — omissions one expert says obscures his family ties to Big Oil.

The well-funded Republican is again running for the 24th Congressional District seat now held by his one-time opponent, Democratic Congressman Salud Carbajal.

In addition to working for his parents’ athletic equipment company, Fareed, 29, calls himself a rancher and says on his latest online bio that he “maintains a devotion to overseeing” his family’s cattle ranching business in Kern County. He has not publicly shared details about what he does at the ranch, or even the business’ name.

But that’s a position he’s required to report if he actually does any work there, according to experts contacted by The Tribune.

The House of Representatives requires that all non-federal positions held — paid or not — be reported on the forms to ensure candidates and members don’t have conflicts of interest or other ethical or legal issues.

Fareed told The Tribune on Wednesday that he didn’t think he needed to report his position with the ranch, a limited liability corporation, but said he’ll have his legal counsel look into the matter.

The House Ethics Committee won’t comment on whether Fareed’s omission of that information on his federal financial disclosure report means he violated House rules, but three nonprofit government watchdog organizations based in Washington, D.C., say committee officials should investigate the three-time candidate’s disclosures.

“It appears that Justin Fareed is either lying about his business ties on his promotional biographical material or lying about his business ties on his personal financial reports,” said Craig Holman, a government affairs lobbyist with the ethics group Public Citizen.

Had Fareed listed the family ranch it would have shown that his mother manages or managed several businesses with Fareed’s aunt, who was formerly married to a California oil heir.

An investigation by The Tribune found that Fareed’s former uncle is Howard Brighton Keck Jr., grandson of the late founder of Superior Oil; the company was bought by what is now Exxon Mobil for a reported $5.7 billion. Among his own business enterprises, Keck Jr. is listed with the state as doing business with oil leases.

The Trump administration’s Department of the Interior — headed by Secretary Ryan Zinke, who fundraised for Fareed last year — announced in January its plans to open 90 percent of federal waters to offshore oil drilling, including swaths of open ocean off of what could become Fareed’s district.

Last year, Carbajal introduced an unsuccessful bill to permanently ban offshore drilling off the California coast.

Asked about his relationship to Keck Jr., Fareed says he doesn’t have one; Keck Jr. and Fareed’s aunt divorced “when (Fareed) was very young,” he said.

Fareed said he has “no connection at all” to his former uncle despite accepting a campaign donation from him in his first run in 2014.

The $2 million man

Fareed, who lives in Goleta, has twice run for the House of Representatives seat previously held for nearly 20 years by retired Democratic Congresswoman Lois Capps. He came within 7 percentage points of beating Carbajal in 2016, carrying San Luis Obispo County by 3 points.

The UCLA alum officially works as president of his parents’ therapeutic athletic bands company, ProBand Sports Industries Inc., overseeing four part-time employees and reporting he earned $60,000 in salary from the company in 2016.

Fareed told The Tribune on Wednesday that he “oversees the business side of the operation” at his family’s ranch. He said he doesn’t earn a salary and he’s not there daily, but he does do hands-on work there.

“I more oversee, you know. We move the cattle out, and bring cattle in when we get the feed,” he said.

Fareed’s only other professional experience is as an assistant football coach at UCLA and as legislative aide to former Kentucky Congressman Ed Whitfield. He held the latter job for 14 months.

“I did enough time in D.C. to know how the place works,” Fareed says in one of his TV ads, “and to know how to make it work a lot better.”

Justin Fareed Letter
Congressional candidate Justin Fareed Laura Dickinson ldickinson@thetribunenews.com

In his first run for Congress in 2014, he came within 615 votes of defeating fellow Republican Chris Mitchum in the June primary to challenge Capps in her then-ninth full term. Two years later, he went on to defeat a crowded field of candidates — effectively ending the political career of former Assemblyman Katcho Achadjian, a popular San Luis Obispo County moderate — and raising more than $2 million before the end of what was one of the most expensive congressional races in the country.

‘Very little disclosure’

When candidates run for the U.S. House of Representatives, they are required to submit a financial disclosure report to the House Office of the Clerk, including assets they hold, as well as their earned and “unearned” income.

The form also requires candidates to list any non-federal position they held during the year, whether or not it’s a paid position, according to the Ethics Committee’s 2016 instruction guide for financial disclosures.

Positions requiring disclosure include officers, representatives, employees and consultants for corporations, firms and limited liability companies. Fareed’s form only lists his position at ProBand Sports Industries.

Asked whether Fareed should have listed his ranching position on the form, Tom Rust, chief counsel and staff director of the House Ethics Committee, said the body does not comment to the media about Congress members’ or candidates’ disclosures as a matter of policy.

Rust did, however, point to news releases from past Ethics Committee investigations, one of which states that errors on financial reports are “not uncommon,” and “between 30 and 50 percent of all statements reviewed by the committee each year contain errors or omissions.” Most result in a simple correction, the release states.

Aaron Scherb, director of legislative affairs for the Washington, D.C.-based nonpartisan watchdog group Common Cause, said the problem with congressional financial disclosures is that “there’s very little disclosure” and “almost no enforcement.” Those caught skirting the rules, he added, “receive, at most, a slap on the wrist.”

Scherb reviewed Fareed’s statement and other records at the request of the Tribune.

“Members frequently disclose as little as possible, which appears to be the case with this candidate,” Scherb said. “Even if he didn’t violate the letter of the law, he’s certainly violating the spirit of the law.”

Meredith McGehee, executive director of the nonpartisan political reform organization Issue One and strategic adviser for the Campaign Legal Center, also reviewed the same records gathered by the Tribune.

“It seems pretty clear to me it’s something he should have included,” McGehee said. “It needs to be corrected, and it needs to be corrected expeditiously.”

Holman, the public affairs lobbyist for Public Citizen, said that if Fareed is indeed “overseeing” the family ranch as he claims, then he’s required by law to report the affiliation.

“If Fareed in fact has no business relationship, overseeing or otherwise, with the family cattle ranch ... then it need not be reported on his personal financial forms, but then Fareed would be lying about it to the public on his promotional materials,” Holman said.

Asked about his disclosure Wednesday, Fareed said: “I’m not sure what it is I would report, but I’ll certainly talk to my attorneys.”

The Keck connection

Had Fareed listed the name of the ranch business on his disclosure, a search of the LLC would have shown that his family is in business with members of the Keck family.

According to California secretary of state records, Fareed’s mother, Linda Fareed, manages rental property LLCs with her sister, Denise Pagliuso Keck.

Linda Fareed’s ranch businesses — PFK Kern Properties LLC, which she described as “farming and ranching” in 2014 and as a “cow-calf and dry farming operation” in a 2016 filing — formerly listed members of the Keck family as managers or employees.

Keck Jr. is the grandson of oil tycoon and philanthropist William Myron Keck, who founded Superior Oil Co. in 1921. His son, Howard Brighton Keck, sold the family business to Mobil Corp. (now Exxon Mobil) in 1984.

Keck Jr. serves as director and member of the executive committee for the W. M. Keck Foundation, which has provided tens of millions in donations to benefit institutions and projects across the country, such as the Keck School of Medicine at University of Southern California and the $70 million Keck I Telescope at the summit of Hawaii’s dormant Mauna Kea volcano.

The foundation lists more than $1 billion in assets on its website.

But Keck Jr. is also still involved in the oil industry; he’s listed as president of Keck Natural Resources LLC, which was formed in 2006. In a 2011 California state secretary filing, Keck Jr. described his business as “receipt of oil leases.” A subsequent 2016 filing listed the business as agriculture.

There is little information about the business online, and it’s unclear what Keck Jr.’s role is with oil leases or who he does business with. The Tribune could not reach Keck Jr. for comment.

Asked about Keck Jr., Fareed initially said he didn’t know anyone by that name. After he clarified that Denise and Howard Keck Jr. divorced long ago, he said he knows nothing about his aunt’s ex-husband’s businesses.

“It’s not germane because I don’t have a connection to him at all,” Fareed said. “It has nothing to do with my stance on issues, it has nothing to do with my campaign … and it certainly has, today, nothing to do with my family.”

Asked how long his aunt and uncle were married and when they were divorced, Fareed told a Tribune reporter: “I’m sure — since you’ve gone to the extent to do this kind of due diligence — you can pull that out as well.”

Holman of Public Citizen said he suspects there’s a link between Fareed not reporting the family ranch on his disclosure form and his ties to the Keck name.

“The only reason I could imagine for Fareed not to disclose his business relationship on the ranching LLC would be to hide his family’s association with the oil industry,” he said. “That association would be a particularly potent election handicap in California — especially today, now that Trump has called for oil drilling off the coasts everywhere, except of course near Mar-a-Lago.”

Oil-drilling prospects

The Santa Barbara Channel — offshore from the 24th Congressional District, which covers Santa Barbara, San Luis Obispo and northern Ventura counties — is home to some of the West Coast’s largest offshore oil reserves, but expanding drilling there is controversial, to put it mildly.

A major 11-day oil spill off coastal Santa Barbara in 1969 coated miles of beach, killing birds and other wildlife. It led to the creation of the federal Environmental Protection Agency and the founding of Earth Day.

In 1989, a toxic lake of crude oil formed from leaky pipes was discovered under the community of Avila Beach, displacing residents as cleanup crews removed more than 300,000 cubic yards of crude-soaked earth around Front Street.

In 1994, officials discovered that millions of gallons of oil had leaked from rusty pipes in the Guadalupe Dunes over a period of decades and settled into the sand. The ongoing cleanup and restoration effort there is expected to continue for another decade.

Oil from the May 2015 pipeline spill fouls the shore of Refugio State Beach in Santa Barbara County. Noozhawk.com

In 2015, a Plains All American pipeline carrying crude oil from Exxon Mobil and Venoco’s offshore oil platforms to processing facilities in Santa Barbara County ruptured, blanketing the waters near Refugio State Beach in Gaviota with nearly 150,000 gallons of crude.

Ventura, Santa Barbara and San Luis Obispo county governments have all voiced official opposition to any new offshore oil lease sales or drilling.

In January, Zinke — who co-hosted a private Santa Barbara fundraiser for Fareed in April — announced the Trump administration’s plan to open most of the nation’s offshore oil and gas reserves for exploration and possible extraction, which would be the largest sale of oil leases in U.S. history.

In the 2016 race, Fareed raised at least $47,000 from candidate PACs directly funded by the oil and gas industry, according to records compiled by the Center for Responsive Politics. He accepted $5,400 — the maximum amount an individual can donate — from Greka Group CEO Randeep Grewal in the same race. Greka spilled more than 58,000 gallons of oil in the Cat Canyon Field southwest of Santa Maria in 2007.

BEM proposal
Areas of federal offshore oil reserves proposed for drilling between 2019 and 2024 under a plan announced this month by the U.S. Department of the Interior. Courtesy of BOEM

Endorsed by the party

On Thursday, the San Luis Obispo County Republican Party announced its endorsement of Fareed following a five-minute presentation Wednesday night, said Chair Randall Jordan. The vote was not unanimous, but Fareed enjoyed a “super majority” of support, Jordan said.

Fareed’s only Republican opponent in the race, Morro Bay engineer Michael Erin Woody, skipped the meeting in protest of the short interview format and the party’s decision to endorse a candidate without “extensive vetting” before the nomination period ends in March.

Asked if Fareed’s various ties to the oil and gas industry, including his relation to the Keck family, could impact the endorsement, Jordan said he personally has “no problem at all” and said he didn’t think they would make a difference to the committee.

“We are in favor of offshore oil exploration and drilling,” Jordan said, emphasizing he’s expressing his personal opinion. “Fossil fuels are the best way to be able to run our country right now, until renewable energies are shown to be profitable in equitable ways to supply our energy needs.”

In past public debates and in interviews with The Tribune, Fareed hasn’t stated specifically whether he supports an expansion of local offshore oil drilling. Asked Wednesday about the proposed Trump administration plan, Fareed replied that he’s in favor of “moving towards a decarbonized future.”

“I believe that we need to continue to invest in greater energy efficiency, renewable energies and move in that direction,” Fareed said. “And that we need to practice and have well-monitored and regulated practices as to not have any detrimental environmental impacts. I’ve been pretty consistent with my position on that.”

Matt Fountain: 805-781-7909, @mattfountain1

Related stories from San Luis Obispo Tribune