Wednesday, May 1, 2002
Holden’s Treasurer Tells Panel Computer Problems Caused Campaign Violation
By KIMBERLY EDDS, Staff Writer
Glitches in a computer database program Councilman Nate Holden’s campaign used to track contributions to his 1999 re-election effort caused the campaign to accept excessive contributions, the councilman’s treasurer told the city Ethics Commission yesterday.
“Money given in 1998 were not in the program for 1999 and that caused some problems,” Anne Froehlich, Holden’s treasurer, testified during the third day of the commission’s hearing on charges she and the councilman violated city campaign finance laws during his last reelection bid.
Without being able to keep track of the 1998 contributions, the campaign had no idea if contributions made in 1999 exceeded the $500 per person for each election, Froehlich said. That same computer program also did not provide a way for her to keep track of the matching funds, she said.
“I only found out late the 98 contributions weren’t put on the list for the whole election,” Froehlich said. “I didn’t know until much later.”
The commission began hearing closing arguments from both sides at 5 p.m. yesterday.
Holden and Froehlich are charged with 31 violations, including accepting $5,150 in contributions that exceeded the $500 per-donor city limit. The commission also alleged that the pair submitted 20 additional matching fund claims for contributions that had already been matched with public money, resulting in an award of $2,720 in excess matching funds.
Each violation could result in a penalty of up to $5,000. If all the accusations are sustained, the figure would be $155,000.
During the hearing Holden and Armen D. Ross, the councilman’s 1999 campaign manager, attempted to portray the re-election campaign as one that was still stinging from the heavy fines suffered in Holden’s 1995 campaign. With that in mind extensive attempts were made to correct the mistakes at every turn, including ordering an extensive self-audit, Holden testified.
Five days before the 1999 general election Holden agreed to pay the highest fine ever assessed in Los Angeles for campaign finance violations in which he, his campaign treasurer, two campaign accounts and his officeholder account were fined $27,500 stemming from 41 overpayments related to the councilman’s 1995 re-election campaign.
Holden claimed the commission specifically targeted him and his campaign, while giving just cursory looks at the campaigns of other candidates.
Ross, Holden’s current assistant chief deputy, said he met with the councilman and Froehlich after the 1999 election to discuss how to avoid the pitfalls that led to the $27,500 in fines. The campaign acquired a computer program two weeks after the general election that allowed Holden to cross-check donations by running the names, addresses, and businesses of contributors.
When it was found that some donations could be disputed, the majority of those checks were returned, Ross said.
“Because of 1995, I wanted a perfect record,” Holden said.
Holden’s self-audit caught every violation except for three, which were revealed when the commission conducted its audit, the councilman said.
Froehlich testified she returned all of the excess contributions except for four. She said she kept those four only after she examined the contributions and contacted the contributors and found them to be acceptable.
Cal-Net Legal Advertising, which is owned by Grace Communications, Inc., is one of the excess contributors. Grace Communications also owns the Metropolitan News-Enterprise.
In addition to Froehlich’s review of the contributions, Ross said campaign staff reviewed checks before even giving them to Anne for obvious campaign finance law violations.
“We attempted during the campaign to return the contributions to the contributors before we gave it to Anne any check where we knew the contributor had already contributor,” Ross said.
“I never tried to claim something twice if I knew about it,” Froehlich maintained.
Contributions which were missing complete contributor information were deposited while Froehlich attempted to track down the missing information, she said.
“I deposited it because I expect to get the information,” Froehlich said. “Especially when you’re in a campaign you need every penny.”
It could take several weeks to track down some of the information, she said.
“In the Korean community some people don’t understand much English and more importantly they don’t like to be asked about things like that,” Froehlich said.
Holden asked to have all the counts against him and Froehlich because the commission failed to present enough evidence to show that any violations occurred.
“This hearing has been framed in such a way that all I had to do is say guilty, guilty, guilty, okay let’s all go home,” Holden said.
But the commission heartily disagreed and refused to grant a dismissal.
“I’m fully satisfied these claims were paid twice,” commission President Miriam Krinsky said.
Holden blamed the commission for making mistakes in paying the campaign matching funds twice for checks that were submitted to them twice. He argued that the commission should have known better and rejected the second submission.
“Why was it yes sometimes when it should have been no,” Holden said.
Bruce Aoki, acting director of enforcement, testified Holden’s campaign submitted claims to the commission that already been submitted and rejected by the commission without labeling them as resubmissions. Without that label, certain processes that would have been used to review resubmitted claims were not put in place.
Copyright 2002, Metropolitan News Company