A Republican candidate for state controller and his legislator wife have funneled campaign money into each other's consulting firms, in effect boosting their income through political donations, campaign finance reports show.
Over a little more than five years, Tony Strickland and his wife, Audra, who replaced him as a member of the state Assembly, paid more than $138,000 raised by their supporters to businesses owned by them and a staffer living in their Moorpark home. An additional $20,000 in campaign money was deposited into a nonprofit organization run by Tony Strickland.
The Ventura County couple say they did nothing improper and that investigators have cleared them of wrongdoing.
Strickland, who as controller would manage and audit the state's finances, produced a June 2004 letter from Ventura County prosecutors saying they looked at the transfers and found no evidence of criminal activity. The district attorney's office review was set in motion by a citizen complaint.
"There was an investigation and they sent us a letter of resolution saying the case was closed," Tony Strickland said.
Ventura County Chief Deputy Dist. Atty. Jeffrey G. Bennett said such a letter was sent but would not comment on Tony Strickland's assertion that prosecutors are no longer investigating the couple's campaign finances.
The Stricklands' political opponents say a dependence on donors not only to win the campaign, but also to increase their income, is a clear conflict of interest, even if not illegal.
"How could people be so arrogant to blatantly transfer money like this?" asked Jere Robings, a Republican activist from Thousand Oaks. "It is obvious they are trying to circumvent the law," he said.
The cash transfers add a new wrinkle to what has become a routine practice in Sacramento -- politicians steering campaign cash toward businesses owned by a spouse. In this case, since both husband and wife are political figures with campaign accounts, they were able to transfer funds to each other.
"I've never seen both spouses being paid to work on each other's campaign," said Robert Stern, president of the Center for Governmental Studies in Los Angeles.
The back-and-forth payments began in April 2001. At the time, Tony Strickland was an assemblyman and his wife was a teacher. With his chief of staff, Joel Angeles, she had started a fundraising and political mailing firm called Golden State Strategies. A close friend of the couple and their rent-paying houseguest from 2001 to last year, Angeles became Audra Strickland's chief of staff when she took over her husband's seat.
Tony Strickland said that when he hired the firm, it already had experience raising money for other Republicans, including former Assembly Speaker Curt Pringle, and was qualified to do the same for him.
"The bottom line is that my campaign did far better when they were doing the fundraising than when anyone else was," Tony Strickland said.
Angeles said Audra Strickland sold her interest in the firm to him in December 2002. By that time, it had received more than $54,000 from her husband's campaign account.
Audra Strickland's statement of economic interest filed with the state showed that she had received between $10,000 and $100,000 from the firm in 2003, money Angeles said was owed her from work done before she sold her share.
Audra Strickland was on vacation and not available for comment, Angeles said.
While Angeles was the sole owner of the firm, he was paid $68,600 for organizing fundraisers for Tony Strickland, according to campaign finance reports filed with the state.
As the Stricklands' political circumstances changed, the flow of campaign dollars reversed. In 2004, term limits prohibited Tony Strickland from running for Assembly and his wife was campaigning aggressively for his seat. That September, with his final term coming to an end, Tony Strickland became president of the California Club for Growth, a nonprofit group that works to elect anti-tax lawmakers.
Campaign finance records show that one of the first major donations to the club, in October 2004, was $20,000 from his wife's campaign.
Strickland said none of that money made it into his pocket -- and that his net earnings from the club over the last 18 months amount to less than $10,000. "I do this because I believe in the cause," he said.
In June 2005, Audra Strickland's Assembly campaign fund paid $15,000 to a public relations firm owned by her husband. Campaign reports said the sum was for "consulting." Four days later, Tony Strickland put $25,000 into his own race for controller.
Campaign finance limits prohibit Audra Strickland's political fund from donating more than $13,200 to her husband's campaign account. She had already lent him $6,600. Candidates can contribute unlimited amounts to their own campaigns.
Angeles, speaking for the couple, denied that Tony Strickland's public relations firm was used as a conduit to avoid contribution limits. He said the payment from his wife was for legitimate public relations work.
"We hired Tony Strickland to assist us," Angeles said. "Did he have a job to do? Yes. Did he do it? Yes."
The June payment was the last the couple would transfer between a campaign and a business account. Golden State Strategies went out of business within a year of Audra Strickland's departure. And Angeles said Tony Strickland is not taking clients while he runs for controller.
"We don't plan to hire Tony again," Angeles said. "He expects to win his primary and become controller. I believe he gave up all his clients because of his plans to be controller."
His opponent in the GOP primary is state Sen. Abel Maldonado of Santa Maria.Copyright © 2015, Los Angeles Times