The Morning Report
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Friday, August 19, 2005 | Four Score and Seven Companies Can’t Buy Political Ads. A politically conservative business group is challenging in federal court parts of San Diego’s election ordinance that restrict businesses and individuals from pooling funds to independently spend money in the city’s elections.
The Lincoln Club of San Diego’s complaint seeks to allow groups of businesses and individuals to freely combine their resources in order to independently promote candidates in city elections.
“This suit is about freedom of speech and challenging the city’s restrictions that we think are unconstitutional,” said Chris Niemeyer, the organization’s executive director.
A single individual is allowed to independently spend an unlimited amount of money to support a candidate for election through direct mail, billboards or radio ads, but when individuals pool their resources together, independent expenditures are limited to a rate of $250 per person.
Additionally, a single business is also allowed to spend an unlimited amount independent of a specific candidate’s campaign, but is prohibited from pooling with other businesses or persons to fund the same thing.
Niemeyer gave the example that three combinations of funding could go toward independently paying for a $10,000 billboard promoting a city candidate or proposition: an individual who spends $10,000, a business that expends $10,000, or a group of people – such as a labor union – where at least 40 people gave a maximum of $250 each.
Essentially, one business could foot the bill for the advertisement on its own, but could not receive help from another firm to fund the independent expenditure.
City Attorney Mike Aguirre said he thought the precedent case the local group was basing their suit on, which dealt with a Lincoln Club in Orange County and the city of Irvine, didn’t apply to San Diego.
“The defect that was in Orange County was more pervasive than ours,” Aguirre said. “People can pool their funds, but they have to limit them to what they can contribute to a campaign. You can’t contribute unlimited sums of money.”
Individuals can also contribute up to $300 to campaigns for candidates vying for citywide office, such as mayor or city attorney, and a maximum of $250 for City Council contests for each election cycle.
Irreconcilable Differences. The city of San Diego’s dispute with its insurer in the Rocque de la Fuente case has become irreconcilable, Aguirre said, meaning that the multi-million dollar case will return to a state appellate court because the insurance firm has refused to pay the full amount of the city’s settlement to de la Fuente.
American International Group, Inc., was charged with insuring the city in the event that de la Fuente won his case against the city, Aguirre said, and that a judge reaffirmed AIG’s responsibility to pay the settlement in January.
In 2001, a jury ordered the city to pay de la Fuente $94.5 million for violating a 1986 development agreement that allegedly ruined his Otay Mesa business park. With interest, the judgment against the city now totals $110 million or more, Aguirre said.
The city attorney said he was disappointed that the firm is “not meeting the responsibility it has to the city,” but vowed that AIG will still be on the hook for paying the settlement fees.
“AIG is likely to be liable for any injuries we suffer,” he said.
They’re All In. All 26 San Diegans who returned papers to the City Clerk’s Office last Friday to run for the two vacant council seats have qualified for the Nov. 8 ballot, it was announced Thursday.
A lottery will be held tomorrow to determine the order in which the candidates’ names appear on the ballot. The Nov. 8 election will also feature the mayoral runoff between Councilwoman Donna Frye and former police Chief Jerry Sanders as well as several statewide ballot initiatives.
Read more about who is running to replace convicted Councilmen Michael Zucchet and Ralph Inzunza.
Bafflin’ Bill baffled by ‘sweetheart deals.’ Colorful activist Loch David Crane is suing the Fairbanks Ranch Country Club and the city’s real estate manager for a controversial agreement the city has with the San Dieguito-area club.
Crane – who has run for mayor several times and is a magician who goes by “Magic Santa Claus” and “Bafflin’ Bill Cody” – wants to intervene as a third-party taxpayer to the agreement with the hope that the Superior Court rules that the country club must vacate the 270-acre swath of land. Crane and attorney Shawn McMillan, who placed seventh in the July 26 mayoral election, said the cash-starved city should be generating more revenue from real estate as prime as Fairbanks Ranch.
“The lease is, and always has been, a sweetheart deal – an absurdly one-sided giveaway in favor of the club and against city taxpayers, who have never seen any return on a rent-free lease of land which is probably the most valuable real estate owned by the city,” reads the lawsuit, which was filed last week.
Crane pointed to a 2001 report by PriceWaterhouse Coopers, who estimated that the city was shortchanged by at least $23.5 million in lost revenue.
The City Attorney’s Office has formed a task force to investigate the city’s real estate deals, such as the country club, Naval Training Center, Qualcomm Stadium and the San Diego Sports Arena.
“Under the California Constitution, you can’t give away public resources, and any giveaway of public resources is void from the beginning,” McMillan said Thursday. “This is just the first domino to fall.”
– EVAN McLAUGHLIN, Voice Staff Writer
Please contact Evan McLaughlin directly at