Federal Panel Clears Korman of Campaign Law Violations : Investigation: Former GOP congressional candidate says the complaints about his election finances turned into a political dirty trick.

Former Republican congressional candidate Sang Korman did not violate federal campaign law in his failed attempt to unseat Rep. Elton Gallegly (R-Simi Valley) last June, federal election regulators have ruled.

In a Dec. 3 letter, the Federal Election Commission told Korman it had closed its investigation of a complaint filed against him in late May by Stephen R. Frank, a conservative GOP activist and political consultant from Simi Valley.

Korman, an affluent businessman who lives in Calabasas, said Frank turned the complaint into a political dirty trick by leaking the document to local newspapers a week before the election.

“That kind of person should be disappeared from politics. He’s misleading the people,” said Korman, who has spent about $554,000 of his own money in unsuccessful campaigns against Gallegly this year and in 1988.

Gallegly defeated Korman by a margin of more than 2 to 1 in the June primary. Gallegly later beat his November general election opponent, Democrat Richard Freiman, to retain his seat in the 21st Congressional District, which covers northern and western Los Angeles County and south-central Ventura County.

Frank, who said he was not working on Gallegly’s behalf, had charged that a $12,000 debt Korman owed to his 1988 campaign consulting firm, Marathon Communications, constituted an illegal corporate contribution to Korman.

Frank also claimed that in the 1988 primary, Korman did not appear to have enough money to have loaned $286,000 to his campaign and still buy “a million-dollar home, a couple of Mercedes-Benz cars and other highly expensive items” shortly after the election.

But FEC Associate General Counsel Lois G. Lerner said the $12,000 debt to Marathon cannot be considered a contribution because Korman plans to repay it by the end of this year and because the firm has made efforts to collect its money.

Lerner said Korman told the FEC that he sold a Mercedes in 1987 and hasn’t owned one since. He also said he agreed to buy his Calabasas house in April, 1987, and closed escrow on it shortly before the 1988 primary.

Frank complained that Korman bought $55,000 worth of cable television time the day after his campaign committee reported a cash balance of $4,400, suggesting that Korman’s campaign committee had the money on hand but did not report it. But Korman told the FEC he dipped into $200,000 in loans he made to his own campaign to buy the TV time, Lerner said.