Migden sues the FPPC

› jesse@sfbg.com

Barack Obama and Hillary Clinton aren’t the only Democrats beating each other up this campaign season. The race for California’s third senate district has turned into a nasty three-way donnybrook, with incumbent Carole Migden fighting for her political life against San Francisco Assemblymember Mark Leno and former North Bay Assemblymember Joe Nation.

Now, to save her campaign from possible financial ruin, Migden has taken on yet another adversary: state campaign finance regulators.

On March 3, in a stunning move, Migden filed a lawsuit in federal court against the Fair Political Practices Commission, challenging its decision to strip her of nearly $1 million in campaign funds. A hearing is scheduled for April 1.

If Migden loses, it could leave her with very little money to spend in the heat of an expensive primary battle — a situation that might seriously hurt her chances for reelection.

"This lawsuit is very unusual," government scholar and former FPPC general counsel Bob Stern told the Guardian. "I can’t remember the last time a legislator sued the FPPC. Usually it’s the other way around."

Last October, after several months of investigation, the FPPC barred Migden from accessing $997,340.28 in her reelection accounts. She had transferred the cash to her current campaign from an account dating back to her days in the State Assembly. California’s "surplus funds" law, which Migden’s suit seeks to overturn, says public officials running for a new office must move old campaign funds into new accounts before they leave their original office. Migden did not move the money until October 2006, four years after she left the assembly.

After it was filed in the federal court for the Eastern District of California, the senator’s lawsuit provoked an angry response from the commission’s chair, Ross Johnson. In a statement, he said Migden was attempting to "bully" and "distract" the FPPC. Johnson, who pledged to "enforce the law," also asserted that Migden had already spent "nearly $400,000" from her assembly campaign. That could mean big trouble for the senator: by law, she might be liable for up to three times that amount in penalties, as well as additional fines. In recent weeks, FPPC commissioners have met several times in closed session to discuss an unnamed matter that many observers guessed was her case.

Last week, the commissioners met in secret again — and after they adjourned, they disclosed that they were in fact consulting with their attorneys about Migden. Given their actions both before and after the senator filed her suit, the buzz around Sacramento was that it was only a matter of time before the regulators started formal proceedings against her.

By beating them to the punch and challenging the law in the federal system, Migden may be trying to head off disaster. Polls show her currently running third behind Nation and Leno. In such a tight race, a large fine would cripple her campaign. And even if the FPPC didn’t choose to fine her, she still desperately needs the cash that they forbade her from spending — not just for the election, but also for a slough of legal expenses she’s racked up defending herself against regulators. As the text of her lawsuit states, her lost assembly funds, "could well make the difference in the June primary election."

Migden’s lawyer, James Harrison, called her campaign’s failure to properly transfer the money from her assembly accounts "a technical glitch" caused by a volunteer staffer. Why the senator would trust a volunteer to make sure such a huge sum of money was moved legally from one account to another has people in and around the capital scratching their heads.

"It’s mind-boggling to me," Stern said. "This is an awful lot of money to entrust to a volunteer. How long has she been in the Legislature?"

Migden told us by phone that at the end of 2006, after she was fined nearly $100,000 for other violations by the FPPC, she initiated a "top-to-bottom audit" of her finances. During the audit, she said, "We discovered that we had problems that exceeded the [abilities] of volunteer staff, so we brought in experts." Migden herself is now listed as the treasurer of her reelection campaign committee as well as her legal defense fund. But these staffing changes, she said, came after the assembly money had been transferred.

Whether or not the faulty funds transfer was caused by an innocent mistake, Migden is taking huge political as well as legal risks by challenging state law in federal court. Her lawsuit cites a controversial 1976 Supreme Court case, Buckley v. Valeo, which holds that the First Amendment’s right to free speech protects political campaign expenditures. That decision has been used by many — mostly conservative — opponents of campaign finance reform. In other words, Migden, a liberal lawmaker in one of the most liberal districts in the state, finds herself arguing from a conservative viewpoint against a key campaign finance law. Moreover, Migden publicly supported a 2000 ballot initiative, Proposition 34, which reaffirmed the surplus funds statute — the very law she now says is unconstitutional.

Reached by phone, her opponent Leno pounced on Migden’s apparent flip-flop on the law she is now challenging. "She never suggested that the [surplus funds] law was unconstitutional prior to breaking it. I wasn’t aware that as citizens or lawmakers, we got to pick and choose which laws we follow."

Migden would not address the matter of Proposition 34 with us. "The funds ought to be available to communicate with voters," she argued. "It’s a constitutional protection … whatever we did was lawful, we believe, and therefore we’re asking for a court decision."

For Stern, Migden’s gambit shows that she has nothing left to lose anymore. "It’s obvious that she needs this money desperately because [the lawsuit is] not good press…. She’s probably not going to win [in court], but there’s so much at stake, I can understand why she’s doing it."

Pub date March 18, 2008