Legal fees center of Diels campaign inquiry
City Treasurer Steve Diels. Courtesy City of Redondo Beach
California’s body overseeing election and campaign finance law has said it will investigate alleged campaign spending violations made by Redondo Beach City Treasurer Steve Diels in the run-up to the March 2019 election, in which he defeated resident Eugene Solomon.
The Fair Political Practices Commission confirmed that it would begin an investigation in a letter, dated Oct. 8, to complainant Sara Burns. The letter takes care to state that the FPPC has “not made any determination about the validity of the allegation(s)…or about the culpability, if any, of the person(s) you identify in your complaint.”
Burns accused Diels of violating four sections of California Election Code by failing to file campaign statements; failing to accurately report campaign spending; failing to report non-monetary campaign contributions; and failing to create a campaign bank account.
Ultimately, Burns states that Diels accrued $36,707.50 in campaign-related expenses in legal fees, well beyond the FPPC’s required reporting threshold of $2,000.
Burns said she began investigating after finding it unusual that Diels did not file campaign finance report forms, FPPC Form 460, during the 2019 election cycle.
“He has a track record of filing forms in the past. I found it quite odd that this campaign, he failed to meet his obligations,” Burns said.
“I did not file the usual forms this year because I didn’t meet the spending requirements,” Diels said. “However, because Eugene lied on his ballot statement and refused to change his ballot statement — even without going to court, because he was offered that — he created…legal expense. My legal expenses are not borne by me, but by him.”
The filing, Diels said, is out of “embarrassment” on Solomon’s part — and Burns, he said, is acting as a “shill” on Solomon’s behalf, echoing another recent Redondo Beach election lawsuit. (Solomon was not able to be reached for comment.)
Burns rejects Diels’s accusation, suggesting Diels may be “projecting his values.”
“This is not personal. It’s just me trying to send a message that we need clean politicians in Redondo Beach, and I’m going to be on the cleanup team,” Burns said.
Last year, Diels sued Redondo Beach City Treasurer Eleanor Manzano and Los Angeles County Recorder Dean Logan, naming Solomon as a “real party in interest.” The lawsuit argued that Solomon designated himself in a false or misleading way, and included false, misleading or prohibited statements in his candidate statement. The judge in the case found largely in Diels’s favor, requiring Solomon to change three of four challenged statements.
Challenger Eugene Solomon. Image via SolomonForTreasurer.com
Diels initially filed the lawsuit in pro per, representing himself, then hired the representation of Bradley Hertz, of Sutton Law Firm. Hertz is locally known for representing residents Arnette Travis and Chris Voisey in a losing campaign finance lawsuit against Mayor Bill Brand, Councilman Nils Nehrenheim and activist organization Rescue Our Waterfront. His clients, Voisey and Travis, were called “shills” for Redondo Beach Waterfront, LLC, which quietly paid the costs of the lawsuit. (Hertz did not respond to requests for comment for this article.)
In July, well after the election was decided (Diels won 65 percent of the vote), Diels filed a motion to collect attorney fees, which Burns stated she used to gather public information.
In her complaint, Burns presents a narrative implying that Diels was at times negligent — if not dishonest — with his campaign reporting. One item notes that Diels had filed a campaign statement promising that he would neither spend nor receive more than $2,000 in campaign-related expenses “despite having already incurred $27,182.50 in legal expenses,” Burns wrote.
The FPPC has long held that legal expenses made during a campaign cycle are reportable on a candidate’s campaign statement.
“Although payments for the costs of litigation are not generally thought of as having any connection with political campaigns…the litigation costs are just as key to the success of the campaign as traditional campaign costs, such as mailings and media advertisements,” FPPC Chairman Tom Houston wrote in May 1979, in what is known as the Buchanan opinion.
“We are not suggesting that legal expenses should not be declared,” Diels said, considering Buchanan. “But since Solomon’s dishonesty and intransigence caused all of this, he owes it and he should declare it.”
“He’s got to be embarrassed…once Eugene lied on his ballot statement, that pretty much became the campaign, so he shot himself in the foot before he got out of the gate,” Diels said. “He spent tens of thousands of dollars, got labor union endorsements, tons of money…but that doesn’t cover the fact that you’re dishonest while asking to manage the public’s money.”
The FPPC doesn’t conduct its investigations quickly; it may be months before the commission’s investigators put this case, and any questions of honesty, to rest.