Signature-Gathering Lawsuits Bring Some of the Industry’s Biggest Tensions to Light

Signature-gathering companies are the backbone of California’s direct-to-voter brand of democracy, a system that allows the public to make its own policy decisions.

But pay disputes and complaints of fraud often plague the industry. Three lawsuits — involving the San Diego Convention Center and the Chargers stadium ballot measures — filed in San Diego against a high-profile signature-gathering company are now bringing some of the regular tensions to light.

The backers of hotel tax initiative that would have expanded the Convention Center and paid for homeless services sued Rancho Cordova-based Arno Petition Consultants in Sacramento Superior Court back in December, accusing the firm of misrepresenting the number of signatures it had gathered and how many gatherers it had hired. The measure did not qualify for the ballot in time, embarrassing the mayor and his allies who were part of the Yes for a Better San Diego campaign.

Signature requirements vary by municipality, but in the city of San Diego, an initiative must receive signatures from at least 10 percent of the number of voters registered in the last general election to qualify for the ballot.

Earlier this year, Samuel Craig, a former Arno Petition Consultants contractor, accused the firm in a lawsuit filed in San Diego Superior Court of using an outdated voter database while gathering signatures in 2016 for the Chargers stadium initiative. That could be problematic, because workers are typically paid per signature.

As a result, Craig argued, the firm was invalidating legitimate signatures gathered out in the field and thereby undercutting employees’ pay.

To back up his complaint, Craig provided the court with copies of emails showing that he questioned Arno’s executives about how they were verifying some signatures in June 2016. He also complained that one signature-gatherer had been cheated out of nearly half her pay.

Craig claimed each gatherer was to be paid $15 per signature if at least 70 percent of the signatures they gathered could be verified. In total, he said, his crew of about 15 people is still owed $7,000, although some did receive compensation after they complained directly to the firm’s top officers.

Voice of San Diego asked several political operatives with experience in the ballot process to review Craig’s lawsuit, and they expressed skepticism of his claims.

For instance, one political consultant, Ryan Clumpner, said if Arno intentionally used an outdated database, the firm would have essentially underpaid itself, and not just its workers. Unless, that is, the firm has run two separate verifications — one to deprive signature-gatherers of the pay they are owed and the other for the actual verification of signatures to be turned in to the Registrar of Voters.

“That seems like a very cumbersome and time-consuming form of wage theft,” Clumpner said, “but anything is possible.”

It also wouldn’t be beneficial for Arno to burn bridges with signature-gatherers, he said, because the industry relies heavily on relationships, and there’s a big incentive for a firm to keep skilled gatherers for future projects.

Craig, who said he’s worked in the signature-gathering industry since the mid-1980s, initially sued in small claims court in 2016, then re-filed the case in civil court in San Diego County at the beginning of this year.

Kellen Arno, who is the son of owner Mike Arno and is named in the lawsuit, declined to comment on the case or provide contact info for the company — the number is disconnected — but he defended the integrity of the firm. He also argued that Craig, who was a subcontractor and not an employee, is embellishing his role in the company.

In any case, Craig is the only plaintiff on the Chargers stadium case but one of his former signature-gathering crew members is attesting to the validity of his complaint. Mike Jones, who worked as a signature-gatherer with Craig but got out of the business after 2016, said he collected about 50 to 60 signatures for Arno on the Chargers stadium initiative and “never got a dime.”

“I was furious,” he said. But he said he hesitated to complain because he knew the company had legal representation.

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Arno came back into the public spotlight last year when a new group of officials hired it to collect signatures for a ballot initiative that would increase San Diego’s hotel tax from 12.5 percent to as high as 15.75 percent for downtown rooms to finance an expansion project for the San Diego Convention Center as well as homeless services and road repairs. That initiative failed to qualify for the November 2018 ballot in August when it failed a random check of the signatures gathered to make sure they were legitimate, triggering an extensive count of the tens of thousands of signatures collected by the campaign.

The Convention Center initiative backers vowed to sue the Arno firm, alleging they spun signature reports out of thin air.

The Yes for a Better San Diego campaign claimed in its December lawsuit that the Arno firm was contractually required to collect at least 112,000 signatures — at least 72 percent of which needed to be verified by election officials — for a rate of $4.54 per signature. That 72 percent figure was crucial because while the measure needed about 71,000 signatures to make it onto the ballot, a random sample has to project that 110 percent of the signatures are valid to avoid an extensive count of each and every signature. Arno was having trouble collecting signatures throughout the spring, the lawsuit says, and the Convention Center backers hired a second firm to supplement the signature-gathering effort. That firm was able to meet its contract of collecting 10,000 signatures, and Yes for a Better San Diego was able to collect another 2,500 through volunteer efforts, it claims in the suit.

Arno and the Convention Center backers later also agreed to increase the targeted signature amount by 1,000 to help ensure there were enough valid signatures to qualify for the ballot.

The lawsuit claims that just before the day of a highly publicized media event at which backers were set to turn in the signatures to the Registrar of Voters, Mike Arno revealed he “might need a couple more days” to finish the project. Fed up, the organizers decided to count the signatures themselves and found there was a total of about 87,000 – far short of the agreed-on amount of 113,000. And the 87,000 amount included the 10,000 gathered by the second firm and the 2,500 gathered through volunteer efforts, meaning Arno had only collected about 75,000 on its own.

“Campaign officials found information suggesting that the firm fabricated signature reports for months – making apparent misrepresentations about how many signatures had been collected, what the validity rate was and how many gatherers were being paid,” read a statement from the Yes for a Better San Diego Campaign on Aug. 2.

Kellen Arno also declined to comment on that case.

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That’s not the only wrongdoing that the firm is accused of committing during the 2018 election.

In November, before Yes for a Better San Diego campaigners filed its lawsuit, a signature-gatherer filed a suit in San Diego County claiming Election Systems, Incorporated – a company that was functioning as a joint effort between Mike Arno and his brother, Peter Arno – failed to pay him for much of the work he did on the Convention Center initiative. The Arno brothers filed a countersuit against the signature-gatherer, claiming he had not met his end of the contract – functionally, it seems, placing some of the blame for the Yes for a Better San Diego snafu on the signature-gatherers themselves. The signature-gatherer who filed that suit didn’t return calls seeking comment. Kellen Arno also didn’t return a call for comment on the last case.

The previous month, the San Diego County Registrar of Voters determined the initiative had, in fact, reached the threshold of valid signatures to qualify for the ballot, but it was too late for it to appear before voters in 2018.

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Craig has made similar allegations of wage theft and fraud in court in the past. Before working on the Chargers stadium initiative, he worked on another signature-gathering petition for Victory Consultants, and tried to sue that firm in small claims court in 2018 as he was preparing to sue Arno. The Victory Consultants suit was dismissed for lack of evidence.

Jerry Mailhot, a former attorney who worked for Victory Consultants, said Craig’s claims were “all a bunch of nonsense” because all signature-gathering firms get their information from the same place: the Registrar of Voters.

Craig has also been involved in at least two previous failed lawsuits – one in which he alleged his father’s will had been forged, and another in which he alleged his gym had improperly disposed of property he kept in a locker.

But while this may be the first time Arno Petition Consultants has been sued for underpaying signature-gatherers, it’s not the first time the firm has been accused of deception and spotty work.

Backers of a ballot initiative to overturn a payday lending law in Ohio also sued Arno in 2009 for breach of contract and negligence after 13,000 signatures had to be thrown out because the firm failed to file the right paperwork.

The company has also been accused of petition fraud multiple times over the years, including using a “bait-and-switch” tactic in 2005 to trick voters into signing a ballot initiative to ban same-sex marriage in Massachusetts and using a similar tactic in 2007 to get voters to sign a petition that would have allocated a significant chunk of California’s electoral votes to Republican candidates. In 2008, Mark Anthony Jacoby, who’d worked for Arno in 2005 and was involved in the Massachusetts lawsuit, was arrested for voter fraud in California. He later pleaded guilty. And in 2014, signature-gatherers for the firm were accused of lying to voters about the nature of the “Six Californias” ballot measure.