Thursday, Oct. 18, 2007 | With a televised campaign debate approaching, Supervisor Bill Horn needed a suit to wear. His suits were either blue or gray, and his advisors wanted him in black. It was June 2001, and Horn’s 2002 reelection campaign was gearing up.
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Late on a mild June afternoon, Horn went to Nordstrom Rack in Mission Valley in search of a discounted suit. He wanted something cheap, he later told an investigator. He settled on a $200 Kenneth Cole suit, size 50, and a $90 pair of brown trousers.
He charged the garments to his American Express and tucked away the receipt in an envelope. The total bill came to $318.69.
Within a month, Horn’s reelection committee paid the credit card bill. Horn later submitted the receipt to the committee and was again reimbursed.
Not only had Horn’s reelection campaign paid for the suit, it had also reimbursed the Republican supervisor directly for the same suit. He ended up with a free new suit, a free new pair of pants and an extra $318.69, courtesy of campaign donors.
The shopping trip was among several questionable expenditures that eventually surfaced when the state Franchise Tax Board, which collects taxes from residents and businesses, conducted a random audit of Horn’s 2001 reelection campaign. Horn received double reimbursements for almost $1,200 in meals and clothing. The audit revealed dozens of other accounting mistakes. Horn did not dispute most mistakes, later blaming some on a stolen briefcase, others on sloppy bookkeeping, a job that he was performing for his campaign.
But the audit was just the beginning of a string of troubles for Horn. When it was completed, the Franchise Tax Board sent the concise four-page report to the Fair Political Practices Commission, the state agency responsible for enforcing state campaign finance laws. An investigation was soon launched.
The hundreds of documents the FPPC generated during its two-year-long inquiry offer a glimpse into the case against the local supervisor, the multitude of mistakes Horn made and why he ended up reimbursing the people of California for — among other things — a $140 meal at Ruth’s Chris Steak House.
The documents pull back the curtain on a murky side of campaign finance: How donations are spent. Horn’s donors replaced a tie he stained with egg during a campaign-related breakfast. They paid for what he remembered as an $80 golf lesson designed to keep him, a non-golfer, from looking foolish in a tournament.
The investigation ultimately led to a $12,851 fine against Horn for violating the state’s Political Reform Act, legislation designed to make political campaigns transparent. Though the settlement with Horn included the fine, it was much less than an $80,000 penalty that had been threatened.
In the end, the FPPC case directly fined Horn just $851. His reelection campaign paid the $12,000 majority, as well as the bill for $41,000 in legal fees from a San Francisco election law firm.
Conflicted Interest
The first hints that Bill Horn was on the Fair Political Practices Commission’s radar came in late March 2006. Horn was in the midst of a bruising reelection campaign against former Assemblyman Bruce Thompson.
Ian Trowbridge, a local activist, revealed that Horn had failed to disclose $349,000 in income from his chief of staff, Joan Wonsley. She gave the supervisor — her boss — the money as a down payment on a Carlsbad home he owned. At the same time, Horn had increased Wonsley’s salary 45 percent between 2000 and 2005, putting it on par with other supervisors’ chiefs of staff.
While county ordinances required Horn to make salary decisions regarding Wonsley, state law also required him in annual conflict-of-interest statements to disclose the money Wonsley had given him. The disclosures are mandated by state law, a tool designed to insure that politicians don’t make decisions from which they can benefit financially.
When media outlets began reporting on the Horn-Wonsley connection, Trowbridge told reporters that he’d filed complaints with the Fair Political Practices Commission. Trowbridge sent two complaints to the commission — among five it received about Horn between 2005 and 2006.
What neither Trowbridge nor the public knew then: Horn was already under investigation and had been for more than a year. In fact, an FPPC accounting specialist had interviewed Horn two months earlier regarding the campaign audit.
That interview took place in January 2006. Six months after the Franchise Tax Board audit landed on his desk, FPPC accounting specialist Bob Perna flew from Sacramento to San Diego to talk to Horn. The supervisor cleared his calendar for the day.
Perna showed up in Horn’s third-floor bay-front county office at 10 a.m., speaking simultaneously with Horn and Wonsley. Back then, the Horn-Wonsley housing connection had not yet been uncovered. Perna focused only on the irregularities in Horn’s 2001 campaign: The questionable expenses and double reimbursements.
The interview summary and details in the FPPC’s investigative file offer a window into a rarely seen aspect of campaign finance.
Look at a campaign’s quarterly reports and you should find the name, employer and title for donors. But how that money is used — and what constitutes a campaign-related expense — is murkier.
Example: Horn spent $43.85 in campaign funds on a new tie, despite state prohibitions against buying clothing. He told Perna that he was in Sacramento meeting with members of the Legislature, hoping to get endorsements. At breakfast with legislators, Horn spilled egg on his tie. So he went to a store across the street from the capital called Vanini European Tailor and snagged a new one.
Example: Horn spent $80 on golf. He told the investigator he may have paid for someone else’s round, or “maybe he was practicing for a tournament so he would not embarrass himself because he does not play golf.”
Anyone studying Horn’s campaign finance disclosures would not have seen the items, only an American Express bill.
Making things murkier: The FPPC said Horn didn’t disclose all the required information from his donors. His finance records didn’t provide full information — including their employers or occupations — for 37 donors. In an early draft of a settlement offer to Horn, the FPPC dubbed his errors “abundant and serious,” threatening an $80,000 fine.
At the end of his three-hour interview with Perna, Horn apologized for his sloppy bookkeeping.
“Before the audit they did not pay any attention to the State [campaign finance] rules because they have such restrictive County rules it was all they really paid attention to,” Perna wrote in his interview summary.
Two years later, those state finance rules would cost Horn more than $12,000.
Whittling Down
When the Fair Political Practices Commission first threatened to fine Horn, the tab was $80,000 for 20 counts.
Horn responded in November 2006 through his San Francisco-based attorney, Kevin Heneghan. The attorney characterized Horn’s mistakes as inadvertent and the FPPC’s proposed fines as excessive, accusing the FPPC of being “inflammatory.” But he did not dispute many of the FPPC’s findings, such as Horn’s Nordstrom Rack trip or his lack of disclosure on his conflict-of-interest statements.
The two sides did argue about the Horn-Wonsley connection. The two had signed agreements agreeing to share ownership of their Carlsbad home. The FPPC requested the documents, which Horn had refused to release to the media. His attorney fretted that the FPPC would allow them to become a public record.
Horn’s attorney finally sent the documents — with conditions. The FPPC had to agree never to release them. The state agency was also prohibited from making photocopies of the agreements.
The FPPC attorney who received the documents refused the conditions. “If we are unable to settle this matter, please note that the FPPC may subpoena the Agreement,” the state attorney replied. He returned the agreements without photocopying them.
But during the next few months, Horn’s attorney and the FPPC worked toward a settlement and Horn ultimately signed it in July 2007. His campaign had to pay $12,000 and he had to write an $851 check to the state’s general fund, a reimbursement for nine meals he ate in early 2002 for which his campaign had improperly reimbursed him.
In the settlement, Horn acknowledged that he had failed to disclose the $349,000 payment from his chief of staff and rental income from tenants of an Escondido apartment he owned. He agreed to four charges related to the campaign audit and its shoddy bookkeeping.
The settlement made no mention of Horn’s Nordstrom suit or his brown trousers.
Though the shopping trip had been included in the list of violations the FPPC initially lodged against Horn, it and 13 other violations were left out of the settlement — a process that happened behind closed doors.
Roman Porter, the FPPC’s spokesman, would not comment specifically on the settlement, but said the commission tries to settle cases without having to take officials to court, a potentially lengthy process.
“We try to strike a balance between providing full disclosure to the public and having a punitive penalty,” Porter said, “with an effort to have full disclosure as soon as possible.”
Bob Stern, a former FPPC attorney and president of the Los Angeles-based Center for Governmental Studies, said the Horn settlement — and the elimination of the other charges — was common.
“This is very normal,” Stern said. “The $12,000 is still a lot of money. It’s a significant fine. They always have a lot more violations. That’s what the settlement is all about.”
Horn no longer works as his own treasurer, having hired an Encinitas firm to do the work.
“The apology was to get and hire professionals to do it,” said Wonsley, his chief of staff. “The best way to acknowledge it is to correct it, and he’s done that.”
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