According to documents obtained by The Voice/Black Voice News, the California Fair Political Practices Commission opened an investigation on February 7, 2017, into what appears to be campaign money laundering involving two members of the Hesperia City Council, Rebekah Swanson and Paul Russ.
The loans and campaign contributions made to the two candidates by an unknown entity reported as Mountain States Consulting Group are alleged in complaints made by Hesperia residents Al Vogler and Paul Bosacki, to be illegal campaign money laundering.
California Government Code Section 84301 prohibits making campaign contributions “in a name other than the name by which such person is identified for legal purposes” and a violation is classified as a misdemeanor.
A search of corporations, limited liability companies or limited partnerships at the California, Nevada, and Delaware Secretary of States’ websites for Mountain States Consulting Group found no such entity. A search for a fictitious business name of Mountain States Consulting Group at the San Bernardino County Assessor-Recorder-County Clerk’s website found “no record.” An inquiry made by The Voice/Black Voice News of the California Fair Political Practices Commission (FPPC) found no record of a campaign identification number for Mountain States Consulting Group.
As shown on the Rebekah Swanson for Hesperia City Council 2016 campaign statement for the period of July 1 through September 24, 2016, Swanson received a loan on September 13, 2016 in the amount of $1,800 from Mountain States Consulting Group with a street address of 12127 Mall Blvd, Suite 188, Victorville, CA 92392-7665. According to Vogler, a search for that address led to The UPS Store at The Mall of Victor Valley.
During the period of September 25 through October 22, 2016, Rebekah Swanson for Hesperia City Council 2016 received another $1,500 in loans totaling $3,300 from Mountains States Consulting Group, according to campaign statements.
Between October 23 and December 31, 2016, Rebekah Swanson for Hesperia City Council 2016 paid $500 toward its outstanding loan balance leaving a balance of $2,800.
The campaign statements provided by the City of Hesperia to The Voice/Black Voice News for Swanson did not include a campaign statement for January 1 through June 30, 2016.
A request for an interview with Councilmember Swanson sent via email to the city clerk, and subsequently to Swanson’s email with specific issues, went unanswered as of press time.
The campaign statement for Russ for Supervisor 2016 for the period of May 22 through June 30, 2016, indicates a $4,000 contribution on June 30 from Mountains States Consulting Group with no street address as required law.
The Russ for Supervisor 2016 campaign statement for the period July 1 through December 31, 2017, indicated two contributions from Mountain States Consulting Group, one for $200 and one for $800 on July 10.
In response to our inquiry about the investigations into Mountain States Consulting Group, Russ for Supervisor 2016 and Holland for Supervisor 2016, FPPC Communications Director Jay Wierenga confirmed, “All remain open cases.”
In response to questions from The Voice/Black Voice News, Russ claimed he did not know who was associated with Mountain States Consulting and believed the contribution may have come in the mail. “I don’t routinely make sure the paperwork is in order for my contributors,” Russ admitted. “I’m sure they are a legal entity.” Russ opined that most legal entities are registered in Nevada and/or Delaware.
Russ explained individuals and businesses contribute to his campaign because they support his philosophy to “support business and development” because that is “what creates jobs, grows wages and allows people to support their families,” and he is straightforward with his contributors that “if their contribution is specifically for a special interest, they may be disappointed.”
In an interview with The Voice/Black Voice News, Vogler, whose wife Rita served as a city councilmember and/or mayor from 2002 until 2010, explained his interest in reviewing the campaign statements of members of the city council started in the year 2000 when he observed what he believed was a tie between campaign donations and votes for development projects by certain city council members.
“Since that time, we have raised the issue several times in city council meetings about whether or not that comprises a conflict of interest,” Vogler voiced explaining, “And the general response by the Hesperia City Council has been that it’s not a conflict of interest. That they would never vote in a way that I was suggesting they would vote.
“Well the example of that is when Paul Russ last ran for office either for city council or supervisor, he took a donation of over $4,000 from Advanced Disposal and last year in 2017, an item came up in front of the Hesperia City Council to increase the rates in favor of Advanced Disposal.
“Paul Russ, of course, was one of the leaders pushing it through. The item did pass and interestingly enough Paul Russ’ employment history prior to working for a local bank was with Advanced Disposal,” Vogler revealed, explaining Russ would defend Advanced Disposal from criticism by residents.
“My attention was gotten by Mountain States, which appears to be a situation of money laundering,” Vogler explained. He even searched out their address in an attempt to find out who they were tied to.
“Mountain States Consulting seems to be a particularly cruel hoax on the public in terms of the responsibilities of the city council candidates or members and the way the law dictates they are to report campaign contribution information,” Vogler explained. “Mountain States Consulting, when reported by Paul Russ, did not have an address. The important point here is that he gave no address and he is supposed to reveal that information.”
“When Rebekah Swanson also had Mountain States Consulting showing on her campaign forms she put down an address,” Vogler said. “The address proved to be, upon my own inspection, nothing more than a mailing box at a United Parcel Service mailing center close to the Victor Valley Mall.”
“It again was an example of using a ploy, an address, to mislead anybody who may care to look up this information, that should be public information. It was an attempt at deception,” Vogler opined. “Because clearly there was no way for me to contact any person for Mountain States Consulting simply by putting a PO Box there.”
Vogler shared the importance of determining the source of campaign contributions early during a campaign to provide pertinent information to the voters, noting the use of post office boxes and fake addresses can delay discovery of the donors’ identity, preventing voters from knowing prior to voting.
Additionally, Vogler spoke of the importance of “being able to utilize the FPPC in a meaningful, timely fashion to investigate quickly during the election period, what it is we are alleging; and if we’re correct in what we are alleging, there is time remaining prior to the voters voting.” He believes if the information learned about these candidates is made public it “could negatively impact the outcome of the election.”
“The way it is now, people have been in office and the FPPC hasn’t reacted,” Vogler complained. The investigation was opened by the FPPC on February 7, 2017, and is still open while the money from Mountain States Consulting by Swanson and Russ was used to help get them elected on November 8, 2016.
“Laundering money is an attempt to deceive where the source of the money is coming from,” Vogler voiced, providing the example of a John Smith who may want to support a candidate but does not want his name anywhere near the candidate for political reasons. John Smith then donates money into XYZ Committee with the specific instruction, of course, that XYZ Committee will then donate the money directly to the candidate.
“I don’t think that it is the intention of our laws and the FPPC to allow money to be hidden by laundering it,” Vogler reasoned. “The intention of campaign laws and rules is that the public should be able to know the source of all of the monies, who the monies came from, when they came, and the person actually responsible for donating the money. Money laundering is a technique to hide the source of the money.”
“If the voters truly knew some of the people that were donating these large amounts of money and then realized some of those same persons had already been quote-unquote convicted and fined by the FPPC, voters would probably be hesitant to vote for candidates that had received money that appears to have been laundered,” Vogler said, explaining that voters may question why the person was trying to hide their identity.
For example, Ontario Auto Dealer Mark Leggio, was convicted of campaign money laundering in 2008, and sentenced to 180 days in jail and three years’ probation for his role in contributing money to Inland Empire Senate and Assembly races.
City Councilman Russ (who is recovering from transplant surgery in December) was defeated in a 2016 bid to serve as supervisor of Riverside County’s 1st District. Russ for Supervisor 2016 received campaign contributions from Christopher Leggio who provided the city of Upland with no street address and an identification number as a major donor—an individual or entity that donates $10,000 or more to political campaigns.
Perhaps the campaign contribution from Christopher Leggio is legitimate, however, due to the appearance of his relative Mark Leggio’s prior conviction for campaign money laundering many voters would have some doubt.
Additionally, Vogler recalled times when they found campaign signs that did not display a campaign identification number for the committee paying for the signs as required by law.
For purposes of this story, The Voice/Black Voice News focused only on the issue raised by the complaint filed with the FPPC, alleging campaign money laundering being conducted by Mountain States Consulting Group submitted by Hesperia Residents.