State pays $106,173 to settle dispute over $1 fine

Gov. Jerry Brown on Friday approved a $106,173 payment to former San Jose Mayor Chuck Reed to settle claims in a dispute over a $1 fine levied against Reed by the state.

The state Fair Political Practices Commission had fined Reed $1 after determining he had unintentionally violated the law by redirecting $100,000 from a political committee he controlled to the reelection campaign of a City Council candidate. Reed went to court to challenge the decision, saying the law used is unconstitutional because it suppresses free speech.

A judge agreed, and Reed demanded the FPPC pay his attorneys fees in the case.

The payment approved by Brown on Friday settles the claim over the attorney costs.

Also Friday, Brown approved a $24-million payment to California First LP to settle its lawsuit alleging the state had backed out of the sale of 11 surplus properties that the firm agreed to buy.

The firm had won a bid to buy the properties for $2.3 billion, and sued to compel the state to proceed with the sale or pay monetary damages and other relief totaling $1 billion.

The settlement calls for the state to pay the firm $24 million in exchange for a release of all claims.

A spokesman for the Brown administration said the settlement was warranted.

“The Schwarzenegger administration’s short-sighted plan to sell state buildings would have cost taxpayers billions of dollars and was a bad deal from the start,” said Brian Ferguson, a spokesman for the state Department of General Services. “This puts an immediate end to a prolonged, frivolous legal dispute.”
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