Sacto Political Rivals Mired in Funding Spat

SACRAMENTO, Calif. (CN) — Former California Senate leader Darrell Steinberg dodged state fundraising laws and illegally transferred $220,000 from his defunct lieutenant governor campaign to his current bid for Sacramento mayor, a rival candidate claims.

Sacramento Councilwoman Angelique Ashby sued Steinberg's mayoral campaign on Friday in state court, accusing him of bloating his campaign's coffers with outside money that was initially donated to his cancelled campaign for California lieutenant governor.

The five-year Sacramento councilwoman says Steinberg should be forced to return over 100 statewide contributions that he transferred to his Sacramento campaign war chest because it gave him a decided fundraising advantage over other mayoral candidates who were held to strict fundraising rules.

"Instead of refunding the general election campaign funds he raised for the lieutenant governor 2018 race, Steinberg improperly funneled the funds to the Steinberg Mayoral Committee in violations of state law," the complaint states.

Steinberg served a combined 14 years in both California statehouses, including a six-year stint as Senate President pro tempore that ended in 2014. The former administrative law judge and Democrat ended his short break from politics by announcing his bid for Sacramento Mayor last fall.

The accomplished politician is considered the heavy favorite to replace current Sacramento Mayor Kevin Johnson and has received endorsements from many of his former colleagues, including Gov. Jerry Brown and California Lt. Governor Gavin Newsom.

Ashby's lawsuit comes less than a month before the mayoral election and her campaign has blasted Steinberg for transferring "outside money" into the Sacramento race. She had previously challenged Steinberg's $1.4 million in campaign transfers, but they were deemed legal by the Sacramento city attorney.

While her initial claims were rejected by the city, Ashby's latest challenge centers on just 15 percent of the funds transferred to Steinberg's mayoral campaign. She claims Steinberg's campaign violated the California Political Reform Act by closing down his statewide lieutenant governor campaign in April and transferring specific funds meant for the 2018 general election to his mayoral account.

Ashby notes the case of former state Sen. Dean Florez, who was fined $60,000 by the California Fair Political Practices Commission in 2013 for not returning nearly $250,000 in funds raised for a lieutenant governor campaign that he abruptly cancelled.

Along with the lawsuit, Ashby says she hopes Steinberg will be investigated by the regulator and that the "FPPC will take appropriate action."

"In short, it appears that the Steinberg Mayoral Committee has leveraged the statewide committee's technical reporting requirement into a vehicle for accepting more money than it otherwise could have accepted if it were only attributing money to contributors who actually gave money to the state committee," the 12-page complaint states.

Steinberg's campaign says the lawsuit is a desperate, last-minute attempt to sway voters and that the transfer was deemed legal by every "expert."

"Now, they've reversed course and admit that 85 percent of the transfer was perfectly appropriate while quibbling over 15 percent, despite an unequivocal legal opinion from state authorities saying it is also perfectly appropriate," Steinberg spokesman Jason Kinney said in an email. "It's more a political stunt than a valid legal claim and underscores the desperate state and dire straits of the Ashby campaign."

The councilwoman, also a Democrat, maintains the lawsuit is not about influencing voters but about preventing Steinberg from using funds generated on an uneven playing field.

"This lawsuit isn't about politics, it is about protecting the integrity of local elections and holding Steinberg's campaign accountable to the same rules all other candidates are following," Ashby's spokesman Josh Pulliam said.

Ashby wants Steinberg permanently barred from using the disputed funds. She is represented by Andreas Rockas of Sacramento.

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