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Wednesday, Jan. 25, 2008 | The legal defense fund recently set up by Council President Ben Hueso is the first created for a San Diego Ethics Commission investigation in the short history of the funds.

Earlier this week, Hueso filed paperwork with the City Clerk to create a legal defense fund to raise money for expenses stemming from a complaint against him that the commission investigated and dismissed.

Hueso declined to answer questions about the investigation, but a redacted Ethics Commission case log indicates the complaint involved “Alleged Participation in Municipal Decision Involving Economic Interests.” Though the name of the subject of that complaint is not revealed in the case log, the case number matches the one Hueso provided on the paperwork to start his legal defense fund.

By waiting to set up his fund until after his case was finished in November 2008, Hueso has a shorter time period in which to raise money, but he does so in a more powerful position that could make people more likely to contribute.

In San Diego, legal defense funds were created in large part out of concern about the cost of Ethics Commission investigations. But the funds have been used mostly for criminal or civil legal proceedings in state and federal court, with the exception of two random campaign audits conducted by the commission.

Since the funds were allowed in January 2005, only four elected officials have set them up: Councilwoman Donna Frye, former Councilmen Brian Maienschein and Michael Zucchet, and former Mayor Dick Murphy.

Frye and Murphy both created accounts for multiple proceedings, mostly lawsuits related to their disputed 2004 mayoral election. Each also had an account to pay for expenses from audits by the Ethics Commission. Campaign committees are picked at random for an audit using a lottery.

By contrast, commission investigations like that of Hueso are prompted by a specific complaint alleging a violation of city law.

The other officials who have set up defense funds did so for court cases: Zucchet in his federal court case and Maienschein for a challenge to his ballot designation as an attorney in the recent race for city attorney.

When legal defense funds were created, the impetus stemmed not from court proceedings but from Ethics Commission investigations. Ethics commissioners heard complaints from officeholders that the cost of defending themselves was a financial hardship, said Stacey Fulhorst, the commission’s executive director.

Aside from paying for a lawyer out of their own pockets, officeholders had only two ways to fund them: They could use leftover campaign money, which was rare. Or if they had already started a campaign committee for an upcoming election, they could use that money.

Candidates argued that an unscrupulous candidate could take advantage of the process by filing a complaint against a rival that would tie up the opponent’s campaign funds on a defense.

Ethics commissioners recommended guidelines for legal defense funds that the City Council approved in 2004, to go into effect in early 2005.

Fulhorst said while concerns were raised about an officeholder collecting money while in office, they were outweighed by the recognition that people deserved the right to legal representation.

“Everything is really a balance,” Fulhorst said.

A legal defense fund is one of two ways a sitting politician can raise money that goes directly into his pocket because fundraising can go toward covering expenses that the official has already incurred.

Fulhorst noted the city code governing ethics contains several measures meant to guard against people who might seek to influence officeholders by contributing to legal defense funds. Namely, individuals who contribute to an officeholder’s fund must disclose any pending business before the official’s agency. Contributions are capped at $500 a year, and accounts must be closed six months after a proceeding or audit has ended, unless a candidate is granted an extension.

The investigation into Hueso started in May 2007 and was dismissed in November 2008. About two months later, he filed the paperwork to open his legal defense fund.

By waiting to open the fund, Hueso has less time to raise money for his defense before he hits the six-month deadline in May. He also can collect less money per person than if he had opened his account in 2007, since the $500 contribution limit applies to each calendar year. (The limit was recently raised from $270 a year.)

But waiting has its advantages. For one thing, the news that there was an investigation wasn’t disclosed until it had been dismissed. Hueso may also be able to raise more money as council president, a post he has held since December.

It’s unclear how much Hueso accrued in legal expenses. His committee must keep documentation of the expenses but doesn’t have to turn them over unless there’s an audit.

Fulhorst said she’s not sure how common it is for the subjects of an investigation to hire an attorney, saying the frequency likely depends on the length and complexity of an investigation.

In a written statement to voiceofsandiego.org, Hueso gave this reasoning for hiring an attorney: “Though I could have handled the situation without legal assistance, my time is already committed to City business, my work as a Coastal Commissioner, and my family.”

Councilman Tony Young said he did not retain an attorney during an Ethics Commission investigation in which he was fined $10,000 for failing to pay campaign debts within 90 days.

“I definitely didn’t have the resources to do that,” Young said of hiring a lawyer. “It might have been a good idea to do that.”

Young said most officeholders simply want to get the investigation over as quickly as possible and worry about prolonging an embarrassing investigation. Though Young said he didn’t know what Hueso’s investigation concerned, Young said Hueso was “brave to kind of push back.”

“I’m glad that Ben actually did get someone to fight back,” Young said. “It probably helped the situation.”

Please contact Rani Gupta directly at rani.gupta@voiceofsandiego.org with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.

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