SECRETARY OF STATE : Flores Says Eu Waived Campaign Fines Involving Powerful Figures

Secretary of State March Fong Eu has waived more than $4 million in fines against political candidates and special interest groups over the past six years, including politically connected Lincoln Savings & Loan, Drexel Burnham Lambert and Griffin Homes, according to records and statistics compiled by Republican challenger Joan Milke Flores.

Flores, who obtained the information under the California Public Records Act, charged Tuesday at press conferences in Sacramento and Los Angeles that the four-term incumbent has gone easy on “some major players in the political process.” She also accused Eu of attempting to conceal the records until the final weeks of the campaign.

“After being stonewalled and misled by the secretary of state’s office since the beginning of August and finally having to threaten the secretary of state with legal action, we were allowed to review the central waiver file late last week,” Flores said.

Anthony L. Miller, Eu’s chief deputy who oversees the waiver of fines, said Tuesday that until recently he had been unaware that the staff kept a central file, which consists of handwritten index cards on each fine and waiver dating back several years. He said Eu has treated all violators the same, waiving or reducing fines for offenses that were deemed inadvertent, regardless of the offender’s political connections or influence.

Among other duties, the secretary of state enforces filing deadlines for financial disclosure statements required from candidates, political action committees, major contributors and lobbyists. The official also has the authority to reduce or waive the fees for “non-willful” violations.

On Monday, Eu demanded that the attorney general file criminal or civil charges against Flores for missing a filing deadline for financial disclosure statements. Eu’s campaign accused Flores of filing several days late “in a ploy obviously calculated to conceal for as long as possible” the $418,000 in contributions she collected in October.

Eu, who has reduced fines against her own campaign committees, has argued in the past that she cuts fines because most violations involve innocent mistakes by campaign volunteers who are new to the political process. By releasing information from the central waiver file Tuesday, however, Flores moved to dispel the notion that all beneficiaries of Eu’s policy have been political newcomers.

“There always will be some people who will take advantage of the system, and for those people we need to have fines, and they need to be enforced,” Flores said.

Records released by Flores show that Lincoln Savings & Loan, the insolvent thrift headed by Charles Keating, was fined $2,380 in 1986 for failing to disclose on time $26,500 in contributions made in 1985 to the California Republican Party, Assemblyman Pat Nolan (R-Glendale) and the California League of Savings Institutions.

Eu’s office reduced the fine to $50 after receiving a waiver request from James Grogan, identified as the thrift’s corporate counsel, according to the records.

The records also show that Drexel Burnham Lambert was fined a total of $21,260 between 1986 and 1988 for missing various deadlines, including failure to report on time more than $18,000 in contributions in early 1987 to Los Angeles County Supervisor Deane Dana, Alameda County Supervisor Ed Campbell and others. Eu’s office reduced those fines to $350, according to a tally of the violations compiled by Flores.

Griffin Homes, one of Southern California’s largest developers, was fined $35,348 over the last three years, according to Flores’ research, but the fines were reduced by Eu’s office to $380. Last year, the Fair Political Practices Commission imposed a record fine of $47,000 against the developer for making campaign contributions through its employees and failing to disclose itself as the source of the money.

Miller acknowledged that Flores had found a potentially explosive issue by linking the waivers with such individuals as Charles Keating and “junk bond king” Michael Milken of Drexel Burnham Lambert. Keating faces charges in connection with the failure of Lincoln and Milken pleaded guilty to six felony counts involving insider trading and conspiracy to defraud investors.

“This has become sort of a ‘Willie Horton’ to us because people can point to Charles Keating and others who have gotten off pretty leniently,” said Miller, referring to the celebrated case of Horton, a convicted murderer, which helped derail the presidential bid of Massachusetts Gov. Michael Dukakis.

“This whole flap . . . is going to cause us to re-evaluate our procedures,” Miller said. “The (FPPC) has never said we are not doing the right thing, but clearly maybe we should have been more diligent on some of these folks.”