State panel clears O.C. sheriff

There was insufficient evidence that Orange County Sheriff Michael S. Carona knew that a Newport Beach businessman allegedly funneled illegal donations to his 2002 reelection campaign, according to a Fair Political Practices Commission letter released Wednesday by the sheriff’s campaign.

In a separate case, Carona agreed to pay $15,000 for violating election laws eight times by billing his election committee for $130,000 in non-itemized expenses, which he listed vaguely as “loans” in campaign reports filed between 2001 and 2003, according to a proposed settlement between the campaign and the commission.

The proposed settlement has yet to come before the panel for consideration, and the recommended fine is much lower than the allowable maximum penalty of $40,000 for the violations in question.

Both the state commission’s letter and proposed settlement were released by Michael Schroeder, Carona’s political consultant.

Commission spokesman Roman Porter said he could not comment on the proposed settlement because “nothing is public on our end yet.”

The board could vote on the matter at its next meeting Aug. 16.

In the illegal campaign contribution investigation, the commission reviewed allegations that Carona knew that money had been funneled into his 2002 political campaign by CHG Safety Technologies. Carona has repeatedly denied knowing anything about the illicit contributions.

The owner of the firm, Charles H. Gabbard, was seeking Carona’s support for a laser device he designed to help police stop fleeing vehicles.

In 2000, Gabbard asked investors in his company to allow $1,000 of their stake to be diverted to Carona’s campaign.

In some cases, the privately held company offered investors 1,000 shares of stock in exchange for a donation to Carona.

The alleged scheme did not become public until 2004, soon after Carona fired George Jaramillo as an assistant sheriff.

Jaramillo worked as a paid consultant to CHG.

Last year, the commission accused CHG of violating campaign laws more than two dozen times by steering at least $25,000 from its investors to Carona’s campaign account, and proposed levying up to $54,000 in penalties against the firm for the alleged violations.

Gabbard, through his lawyer and in court papers filed in a legal battle over ownership of his company, has said that Carona was aware of the stock scheme -- an allegation Carona has said is false.

The commission has closed its investigation of the CHG matter, saying it “produced insufficient evidence to establish” that Carona or his campaign committee violated the Political Reform Act, according to a June 14 commission letter.

In the unresolved matter involving violations on contribution reports, the FPPC credited the campaign committee for its attempts to fully disclose how the money was spent, and found the violations were largely attributable to the treasurer’s inexperience with the reporting requirements of the Political Reform Act.

“Although the dollar amounts misreported were not insignificant, there is no evident to suggest that the violations were the result of intentional or deliberate conduct, or that they were the result of an improper effort to gain political advantage,” the commission wrote in the proposed settlement.

In an interview with The Times last year, the sheriff’s campaign treasurer, Lesley Stoll, said Carona would give her cash and credit card receipts for a variety of out-of-pocket expenses, including a $2 parking fee, expensive meals and hotel bills.

She would tally the receipts, report the total as a loan, then cut Carona a reimbursement check from the campaign.

Stoll said she was told the reporting method was valid, because in effect Carona was making a loan to the campaign by advancing his own money on legitimate officeholder expenses.

But under state law, individual expenses of $100 or more must be reported with the payee’s name and address, the precise amount and a brief description of the purchase.

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christine.hanley@latimes.com