Shelley Retreats as Legal Storms Brew

As California prepares for a complicated and expansive ballot Tuesday, the carefully constructed world of Secretary of State Kevin Shelley has collapsed into a scandal that could imperil his stewardship.

In recent weeks, the state elections chief who maintained such a high public profile during the gubernatorial recall election a year ago has become almost invisible. He has been hunkered down -- often working from home -- taking solace from friends and fighting allegations that he accepted questionable campaign contributions and misused his state staff.

“Clearly, he is going through lots of personal troubles and is distracted,” said Conny McCormack, registrar of voters for Los Angeles County. “I beseech him to please step up to the plate ... and deliver a message that will assist voters [and] avoid lines forming.”

The once-voluble Shelley has been silent, even after his predecessor recently asked him to step aside for Tuesday’s election and a fellow Democrat declared her candidacy for his job. Before he cut off media interviews, Shelley vowed: “Your reputation is what you live for. I am determined to survive this.”

In a statement last week, Shelley’s office said he was concentrating on ensuring a “successful and secure election” by maintaining contact with local registrars and federal authorities responsible for homeland security.

Last week, Shelley’s office projected that a record 12 million Californians would go to the polls Tuesday, using a hodgepodge of voting machines. Nearly two-thirds live in counties with optical-scanned paper ballots, and almost a third in counties with electronic voting machines. A much smaller number will vote on the older punch-card systems.

For the 48-year-old Shelley, the election represents an untimely convergence of his official duties and mounting legal problems, which have been time-consuming and disruptive not only for him but also for his staff.

Late last week, Shelley promoted several longtime state employees to top jobs -- a reorganization that sources say was designed partly to improve staff morale damaged by office turmoil and his management style.

An exacting boss, susceptible to angry outbursts, Shelley is an intense man even on his best days, according to people who have worked for him. And he has controlled nearly every detail of his office.

Only a few employees were allowed to answer his special hotline. The thermometer on his desk had to show 70 degrees. He wanted a certain brand of blue pen and color-coded folders for every task. There had to be a glass or bottle of water handy at all times.

Shelley had to have the latest hand-held and laptop computers. “Time is my most precious commodity,” he said in a four-page memo on how to communicate with him.

Personality Contrasts

In his own office, Shelley also valued loyalty and imbued in his staff a sense of their important mission. He hugged employees when they had a success. He could be charming and, to some, charismatic.

He cut them slack when they had health or family problems. He also could be playful -- jokingly diving under a table during a meeting with registrars.

But more than a dozen former and current employees described a boss who also could explode in angry swearing, slam doors and then praise them the next day. It was not uncommon, they said, for Shelley to upbraid employees in front of one another. Some were brought to anger or tears.

“He truly could not help himself,” said former Deputy Secretary of State Fred Hamdun, who said he left the job this year over professional differences with Shelley. “Outside of work, he was a kind, gentle, respectful guy.”

In the past, Shelley has blamed his temper on stress and intense pain from a neck injury in a 1986 diving accident.

During his first year as elections chief, three female employees filed formal complaints alleging verbal abuse. One of them, a former executive assistant, also claimed that Shelley engaged in crude locker-room behavior during a conference call with his division chiefs and asked her sexually inappropriate questions.

Shelley has acknowledged that he had a temper problem but has emphatically denied sexually harassing anyone.

The state personnel board is examining his office’s handling of the complaints -- two of which, sources say, were never formally investigated by Shelley’s office.

While running a department with 450 employees, he carved out time for fundraising and other political activities. The Times recently reported that members of his state-paid staff were directed to pick up donations from a campaign mailbox and assigned to attend partisan political events.

His calendars show that Shelley sometimes combined state business trips with political contacts.

For example, when he went to Southern California to meet with county election officials in August 2003, he stayed at the Manhattan Beach hotel where state labor leaders were taking positions on the recall. He met in the morning with two who were among his biggest campaign supporters.

Money Questions

That evening, he huddled at the hotel bar with another major contributor before dining with a Republican friend, former Los Angeles Municipal Court Judge Sheldon Sloan. “I think the world of him,” Sloan said recently.

Shelley’s recent troubles began in August when the San Francisco Chronicle reported that several individuals and companies had donated $125,000 to his 2002 campaign -- after receiving payments from a $500,000 state grant that Shelley had helped arrange as an assemblyman.

The grant went to a San Francisco community center headed by Julie Lee, a Shelley fundraiser who allegedly arranged for the donations.

Federal authorities are investigating. Lee has denied any wrongdoing, and Shelley has repeatedly said he was unaware of any impropriety involving donations.

Shelley also has come under fire for the way his office administered millions of dollars in federal funds designed to improve voter turnout. Records showed that some people who received no-bid contracts had political ties to Shelley or the Democratic Party.

Now, the Bureau of State Audits is examining Shelley’s spending. He has said he chose the contractors for their expertise, not their connections.

During the 2003 recall, Shelley earned praise for his evenhanded handling of the election. But former staff members said he showed partisan tendencies during the earliest stages of the recall movement.

When activist Ted Costa was preparing a recall petition against Democratic Gov. Gray Davis, he needed Shelley’s approval. A delay might have meant that Costa would not have time to collect enough signatures to force a special election in October 2003, and the recall would be postponed until last March’s primary -- where Davis might attract a larger Democratic turnout.

Delays on Recall

Steve Trout, then a lawyer in Shelley’s office, said Costa’s paperwork was held for as long as 10 days on several occasions even though minor corrections were completed within a few hours. Other sources said high-level aides in Shelley’s office discussed trying to extract money in the state budget for more employees from Davis.

Trout said Shelley did not try to impede the recall while the signatures were being counted. And Thomas Hiltachk, an attorney who worked for pro-recall forces and now does work for Gov. Arnold Schwarzenegger, said he thought Shelley backed off after first trying to impede the process.

“I think there was a point where he said the writing is on the wall, and he wasn’t going to risk his career for this governor,” Hiltachk said.

Shelley declined to comment, citing several ongoing investigations.

During his tenure, Shelley has become the most prominent advocate in the nation for requiring a back-up paper record for electronic voting machines -- to avoid vote tampering or inaccurate vote tabulations.

His position has angered county voter registrars who considered the paper trail an untested, impractical and costly add-on.

From the start, Shelley alienated many county registrars. Some say he told them: “There’s a new sheriff in town.”

The registrars also became tired of waiting for the state to reimburse them for last year’s recall election costs.

And during what was billed as a peacemaking meeting in February, some said, Shelley repeatedly used profanity as he defended his position on the back-up paper ballot and criticized the registrars.

Shelley has acknowledged using colorful language, but he denied cursing the registrars. And he has earned praise from reformers for pushing county registrars in a direction they were reluctant to go.

“On voting technology issues, he is a leader to the whole nation,” said Kim Alexander, president of the California Voter Foundation. “He is turning the ship of elections around.”

The controversy enveloping his office has been a remarkable transformation for Shelley, the son of a San Francisco mayor and labor activist in the 1930s. Until this year, Shelley was a fast-rising star in the Democratic Party, having ascended from a San Francisco County supervisor to Assembly majority leader to statewide office-holder within just a dozen years.

“It’s just hard to believe,” said Angela Alioto, a longtime San Francisco politician who has known Shelley for two decades. “You’re not talking about a dilettante. He has worked the vineyards for years. It sounds very much like a full-on attack, and the reasons for that I don’t know.”

Lack of Loyalty

Lately, his associates have been abandoning him. Current and former employees have been willing to leak information about him, and even his friends say Shelley made it easier for them because he has been such a demanding and angry boss.

Shelley’s predecessor, Republican U.S. Senate candidate Bill Jones, has called on Shelley to step aside for the election.

A recall campaign is brewing among Republican operatives. And state Sen. Debra Bowen (D-Marina del Rey) has announced she would challenge him in 2006.

But friends say he seems to be in good spirits and ready to fight. Roberta Achtenberg, a former San Francisco supervisor who served with him, said she spoke recently with him and he sounded “quite committed to making sure the truth came out and he was vindicated.”

Terence Hallinan, a former San Francisco district attorney who also served on the Board of Supervisors with Shelley, described him as a good deal-maker and an “aggressive politician” who “had a tendency to kind of run over people, particularly employees.”

“Lots of politicians do that,” Hallinan added. “But then when he gets damaged, it makes people more reluctant to go to his aid.”