Alleged Quid Pro Quo in 2016 Campaign Donations for County Supervisor
A complaint filed with the California Fair Political Practices Commission by Hesperia resident Paul Bosacki alleged a quid pro quo occurred when current Hesperia City Council members Bill Holland and Paul Russ received campaign donations during their unsuccessful campaigns for First District County Supervisor in 2016. The donations came from four businesses for which no legal entity could be found.
On September 2, 2016, according to documents obtained by The Voice/Black Voice News, the California Fair Political Practices Commission (FPPC) opened investigations into the supervisorial campaigns of both Russ (referenced as file number 16-374) and Holland (referenced as file number 16-375). During a recent interview, FPPC Communications Director Jay Wierenga confirmed the investigations were still open.
In his complaint, Bosacki alleged campaign contributions from Canyon Vista Apartments, Cedar Creek Apartments, Concord Square Apartments and Redlands Tower Square Apartments were actually from Eagle Real Estate Investment Group, LLC, a developer who in late 2015 or early 2016, received a favorable vote from the City of Hesperia for an affordable senior housing project known as The Villas Senior Community. Additionally, the City of Hesperia Housing Authority issued a loan in the amount of $3,831,975 to assist in the cost of building The Villas Senior Community.
Bosacki provided the FPPC with a printout from the Eagle Real Estate Group website indicating Canyon Vista Apartments, Cedar Creek Apartments, Concord Square Apartments and Redlands Tower Square Apartments as being owned and managed by Eagle Real Estate Group.
On August 30, 2017, the City of Hesperia and Eagle Real Estate Group held a ribbon-cutting ceremony to celebrate the opening of The Villas Senior Community in the City of Hesperia.
Bosacki alleged the loan to the Villas Senior Community, paid for with taxpayer dollars, was a quid pro quo for generous campaign contributions as both Russ and Holland received a total of $16,000 each from Canyon Vista Apartments, Cedar Creek Apartments, Concord Square Apartments and Redlands Tower Square Apartments. A quid pro quo is defined as something that is given or taken in return for something else.
When presented with the allegation in regard to the $16,000 in contributions he received for his 2016 campaign for first district supervisor, Russ protested, “That is completely false!” and explained he received the campaign contributions “well after the vote” and if he had taken their money he would “not have voted on the project” even though it is “perfectly legal.”
“I had not even decided I was running for supervisor when we voted on this project,” Russ objected. “These guys had already donated to Bill Holland’s campaign so I asked them to donate to mine.”
He continued, “I cannot speak for anyone else, but my decision was after this project was passed. By the way, it passed as I remember, 5-0, so my support was not the deciding vote.” Russ voiced while touting the project as a unique and very good project for the city.
The Voice/Black Voice News searched the Secretary of State’s websites for California, Nevada and Delaware in search of any legal entities registered under the names Canyon Vista Apartments, Cedar Creek Apartments, Concord Square Apartments and Redlands Tower Square Apartments and found no records.
However, the search did reveal Eagle Real Estate Investment Group, LLC is a Delaware limited liability company, with its managing member and agent for service of process shown as Randall Friend. It is registered as a foreign business entity with the California Secretary of State.
“It was determined to be a paperwork issue,” Hesperia City Council Member Bill Holland told The Voice/Black Voice News and explained his donors did it legally. He further stated his campaign received no fine or disciplinary actions. Holland said he considers the matter closed because he was allowed to close his campaign account. However, despite this assertion and as detailed above, the FPPC said the investigation is still in process.
According to Hesperia City Council Member Paul Russ, the FPPC went through everything carefully and he answered all their questions. Russ added the case was not him but with a donor. Russ revealed he hadn’t heard anything further from the FPPC for a year and a half.
“We have reported the business entities correctly, if they lied to me it’s with the donor,” Russ claimed recalling, “We sent money back because they didn’t do it right, I’m a boy scout, honesty and trust is how I built my career.”
According to campaign statements filed by Russ, The Voice/Black Voice News confirmed campaign donations appeared to have been returned to Pueblo Suburban Development LLC and Pacific Communities Builder.
California state law requires that before transacting interstate business in California an entity must first qualify/register with the California Secretary of State and it is not illegal for a business entity located in another state to contribute to a political campaign.
However, California Government Code Section 84301 makes it illegal to make campaign contributions “in a name other than the name by which such person is identified for legal purposes” and a violation is a misdemeanor. This practice is commonly known as campaign money laundering.
So the allegation that campaign contributions shown on the candidate statements were received from Canyon Vista Apartments, Cedar Creek Apartments, Concord Square Apartments and Redlands Tower Square Apartments when they really came from Eagle Real Estate Group may violate the law.
FPPC Communications Director Jay Wierenga explained, “The basic premise that underlies our system in California [is that the] true source of funds is to be revealed so the public knows who is funding campaigns.”
“Making sure there are real people with real names, real jobs [and] real addresses, goes toward the heart of honesty, transparency and making sure every one plays by the same rules,”Wierenga explained. He added how it is also necessary to track contribution limits to ensure the candidate and donors are adhering to and not violating those limits.
A review of the contributors to Russ’ campaign for county supervisor found a total of 14 business entities listed where The Voice/Black Voice News could not locate where they were registered as a corporation, limited liability company or limited partnership with the Secretary of State in California, Nevada or Delaware and could not verify a fictitious business name with the county recorder’s office in the county where the alleged businesses were supposed to be located.
The business entities that contributed to Russ’ campaign where no legal entity could be located were Endeavor Public Affairs, Lucerne Valley Farms, Inc., Canyon Vista Apartments, Cedar Creek Apartments, Concord Square Apartments, Redlands Tower Square Apartments, High Healing Helpers, I 15 Limited Partnership, Edible Arrangements of Victor Valley, California Land Enterprise, California Pams Enterprise, Affordable Housing Access and NCC, LLC, CA Park West Investment, and Pueblo Suburban Development, LLC.
Alternatively, a review of the contributors to Holland’s campaign for county supervisor found 8 business entities listed where The Voice/Black Voice News could not locate where they were registered as a corporation, limited liability company or limited partnership with the Secretary of State in California, Nevada or Delaware and could not verify a fictitious business name with the county recorder’s office in the county where the alleged businesses were reportedly located.
The business entities contributing to Russ’ campaign where no legal entity could be located were Canyon Vista Apartments, Cedar Creek Apartments, Concord Square Apartments, Redlands Tower Square Apartments, BCA Engineering, Edible Arrangements of Victor Valley, Tapestry Hesperia Venture I, Canyon Vista Apartments, and Affordable Housing Access and NCC, LLC.
Additionally, The Voice/Black Voice News searched the website for the Tennessee Secretary of State for a legal entity entitled Tapestry Hesperia Venture I as their address was indicated as located in Tennessee.
In conclusion, Holland explained due to time constraints, he was not going to be able to provide anything more regarding the business entities that contributed to his campaign.