Assembly candidate submits murky donor reports

Dinged in the past for failing to report political contributions, Cupertino Mayor Barry Chang could be facing another set of election troubles in an eight-way primary race for the District 24 state Assembly seat.

In recent campaign contribution filings, Chang reported dozens of large donations made nearly a year ago that were supposed to be disclosed much earlier. About two weeks ago, his campaign submitted an omnibus late contribution report that listed $289,000 in donations, the bulk of his war chest.

The donations are made up almost entirely of $4,200 payments, the maximum contribution allowed under state elections rules for Assembly candidates. Nearly 70 payments were made in that maximum amount, but many contributors actually gave more. In almost every single instance, these large contributors made two $4,200 donations on the same day to Chang’s campaign.

Candidates are allowed to collect separate donations for the primary and general elections. The maximum $4,200 amount is enforced only for each election, according to rules by the Fair Political Practices Commission.

But for Chang’s campaign, the rub is that donors writing two checks totaling $8,400 to his campaign on the same day trigger the need to disclose the payments almost immediately upon receipt. According to state elections rules, candidates for state office are supposed to file a special disclosure form within 10 days after receiving any cumulative contributions from a single donor that surpass $5,000.

Speaking to the Voice on Monday, Chang explained that he had made an extra effort this campaign cycle to adhere to elections rules, which he described as “complicated.” He pointed out that these large donations had been included in his committee’s standard campaign-finance report submitted last month.

According to Chang, he retained a Sacramento accounting firm about three months ago to serve as treasurer and to handle his campaign filings. Around that time, his treasurer notified him he needed to file extra paperwork for his large donations.

“I’m glad I had (my accountant) because she’s the expert,” Chang said. “To the best of my knowledge I filed them, and I filed them correctly. But she said we had to file them again.”

Some other problems also emerged after his accountant prepared his campaign filings. In April, Chang’s campaign returned $8,400 in donations to Welkin International Industrial, a Saratoga-based development firm, after it was discovered the company had months earlier given almost $17,000.

Some of Chang’s large donations came from an associated group of people involved in the same business. For example, Chang received a string of donations last year totaling $42,000 from the Campbell firm South Bay Construction, as well as three of the company’s partners and a consultant.

Under certain conditions, these donations coming from an affiliated group may be required to be bundled and treated as one lump donation, said Jay Wierenga, a spokesman for the Fair Political Practices Commission, the California agency that enforces campaign rules. If any single partner controlled a majority of South Bay Construction, for example, then the company’s donation would be treated the same as his or her own personal donation.

Companies are expressly forbidden from requiring their employees to make political contributions or “laundering” contributions by reimbursing workers for making independent payments to a campaign.

“Generally speaking, people can give because everyone has a right to participate in an election,” Wierenga said via email. “The instructions given to committee treasurers is to question contributions that may raise concerns, such as numerous contributions from one firm.”

Wierenga said that he couldn’t speak to the specifics of Chang’s campaign, but could discuss campaign regulations. The agency can’t comment on individual political campaigns because it could be seen as prejudicial to any future investigation, he said.

FPPC fines

In March, the FPPC penalized Chang for problems associated with his 2014 campaign for the Cupertino City Council. The agency found that Chang had failed to report 160 contributions totaling $24,280. His campaign report also failed to disclose dozens of his contributors’ occupations and employers, which were listed only as “TBD.” In a settlement agreement, Chang agreed to pay $3,500 in fines.

Chang has said the errors in his last election were due to his committee’s volunteer treasurer, who lost his full-time job midway through the campaign and neglected to file the paperwork properly. That experience became a “headache” of sifting through old contacts and emails trying to track down old donors’ information, Chang said. It was the reason that, for this 2016 election, he said he decided to hire professional help.

Nevertheless, the Chang campaign’s latest filings show some of the same problems as before. One large contributor’s occupation and employer are still listed as “TBD.” This column is left blank or only partly filled in for other individuals’ entries, as well.

With the June 7 primary election just weeks away, Chang has a sizable cash advantage over his rivals, who include Palo Alto Councilman Marc Berman, attorney Vicki Veenker and Mountain View council members Mike Kasperzak and John Inks. Yet the 65-year-old Cupertino mayor is also facing a revolt in his hometown, with a coalition of residents recently filing papers to recall him from office in the November election. Among their complaints, his opponents have pointed to Chang’s knack for fundraising as a sign he has been too cozy with developers and other special interests.

Asked about this, Chang said his fundraising base is driven primarily by small donors giving whatever they can spare, not big contributors. His average donation is just $75, he said. He described the need to solicit campaign donations as a necessary evil, but he said he would greatly prefer it if political contests were publicly funded.

“It’s always hard when you ask people for money. Anybody who says politics is easy, I tell them: ‘Try it yourself,'” he said.

Was Chang worried that he could face more penalties from the FPPC?

“It could be because I didn’t understand the law,” he said. “But I know I haven’t done any wrongdoing at all, so I’m not worried.”