Campaign records contradict lawsuit against top lobbyist

Never let the facts get in the way of a good lawsuit.

In a wrongful termination lawsuit filed on Christmas Eve, Rhonda Smira, a former employee of the powerhouse lobbying firm Sloat Higgins Jensen and Associates, claims that her former employer, Kevin Sloat, routinely violated state campaign finance laws by failing to report fundraising events “to dozens of politicians — including nearly a third of the Legislature.” Smira says that she was fired in 2012, after years of protesting the practice.

But state campaign finance reports dispute some of the allegations against Sloat Higgins Jensen and Associates. An analysis of campaign finance records shows that dozens of state campaigns and political action committees reported thousands of dollars in payments to Sloat for hosting fundraising events. There also isn't much mystery about the politicians involved; 18 state officials reported payments to Sloat Higgins Jensen and Associates in state campaign finance reports for various purposes, including hosting fundraising events.

Allegedly unreported fundraising was reported by 18 politicians

Much of the lawsuit's intrigue arises from the mysterious identities of the state officials involved.

“Since 2000 to the present, defendants have hosted hundreds of fundraising events in which defendants illegally contributed hundreds of thousands of dollars to dozens of elected officials, including but not limited to, 11 Senators, 26 Assembly men/women, and various other high ranking public officials and representatives,” Smira alleges in court documents filed in Sacramento Superior Court.

Smira's attorney, Jesse Ortiz, did not provide a comment to CalWatchdog.com. However, he told News 10 that the legislators “will be identified” later in the case.

At these fundraising events, Smira alleges Sloat spent lavishly on wine, decorations, flowers, imported cigars and high-end cognac. According to the lawsuit, “Neither Defendants, nor the elected officials, would declare the non-monetary contributions to the FPPC and/or Secretary of State.”

Yet, campaign reports refute Smira's account of widespread reporting problems by the lobbying firm. More than two dozen state officials have reported reimbursements to Sloat for fundraising events. Those reporting payments to Sloat for various campaign activities include former Gov. Arnold Schwarzenegger, Lt. Gov. Gavin Newsom, Senate President Pro Tem Darrell Steinberg, state Sen. Kevin de Leon and more than a dozen other legislators.

Inconsistency on lawsuit's timeline

Payments to Sloat for fundraising events range in value from a few hundred to a few thousand dollars, and in some cases, include more detail than is commonly found on state finance reports. On Sept. 3, 2008, Sloat hosted a fundraising dinner for the campaign of state Sen. Alex Padilla, which cost $444.92 for the event's 10 guests.

Just a month later, Sloat reported $444.91 in expenses for “fundraising events” for then-Assemblyman Felipe Fuentes, now a member of the Los Angeles City Council. In November 2008, Sloat hosted a more lavish fundraising event for the campaign of Assemblyman Jose Solorio, D-Santa Ana, that cost $2,611.59.

The three fundraising events appear to have been properly reported in a timely manner — identifying the cost of the event with reimbursements to the host for out-of-pocket, in-kind contributions. Moreover, the dates of the Sloat fundraising events contradict the timeline presented in Smira's lawsuit, which alleges such events were unreported prior to 2010.

“In or about 2010, after receiving continued complaints from SMIRA, SLOAT directed SMIRA to start asking candidates to pay for catering and use the candidate's campaign account to make deposits for catering,” the lawsuit alleges.

Sloat spokesman: Desperate legal maneuver

A spokesman for Sloat released a statement to the media that dismissed the allegations as “a desperate legal maneuver.”

“While we have not yet seen the full complaint, we are not at all surprised that the plaintiff, a former bookkeeper for the firm, has resorted to such a desperate legal maneuver,” said Stevan Allen, a  spokesman for the firm.  “Because the case against our former bookkeeper remains active, we are unable to provide any additional comment at this time. However, we look forward to sharing more information at the appropriate time.”

Sloat Higgins Jensen & Associates, which reported $3.47 million in lobbying fees for the first three quarters of 2013, lists dozens of top corporations, major associations and government agencies as lobbying clients. The clients include Anheuser-Busch, Anthem Blue Cross, City of Anaheim, Pacific Gas & Electric and Verizon.

The lawsuit takes a direct shot at undermining the firm's relationship with its clients by alleging that Sloat classified some clients as “unsophisticated.”

“Plaintiff is informed and believes, and thereon alleges that the clients on the list were the clients SLOAT saw as unsophisticated and clients who did not ask why they were making contributions to the candidates,” the lawsuit claims. “The more sophisticated clients who required background or some rationale as to why Defendant was asking them to contribute were only rarely invited.”

Thomas Murphy of Hunton & Williams LLP told Law 360 in 2009 that high-profile employment cases can undermine a company's reputation even if it ultimately prevails in court.

“Bad allegations will hurt the brand, no matter what,” Murphy said. “We know Andy Warhol's 15 minutes of fame starts running at the beginning, not the end, of a case.”

FPPC: No comment on lawsuit

Gary Winuk, chief of enforcement for the California Fair Political Practices Commission, told the Sacramento Bee that directing campaign contributions is a routine practice for lobbyists.

“The law currently allows lobbyists to connect people to other people,” he told the Bee. “It happens every day.”

However, Winuk declined to comment to CalWatchdog.com on the case.

In a written statement on behalf of the lobbying firm, Allen said that no private plaintiff can bring claims under the Political Reform Act without prior approval of the Fair Political Practices Commission. “No such permission has been given to the plaintiff in the lawsuit against our firm,” he said.

Past and current state officials and groups that have reported payments to Sloat Higgins Jensen and Associates on campaign reports include:

* Gov. Arnold Schwarzenegger;

* Lt. Gov. Gavin Newsom;

* State Sens. Joel Anderson, Anthony Cannella, Kevin de Leon, Ted Lieu, Christine Kehoe, Alex Padilla, Michael Rubio, Darrell Steinberg and Juan Vargas;

* Assembly members Toni Atkins, Bob Blumenfield, Felipe Fuentes, Isadore Hall, Mary Hayashi, Jose Solorio and Jim Silva;

* The Association of California Life and Health Insurance Companies PAC;

* Democratic State Central Committee of California.