Misuse of Staff by State Official Alleged

Employees of Secretary of State Kevin Shelley were routinely directed to pick up and process his personal political contributions as part of their state-paid jobs, according to sources familiar with the operation of his branch office here.

Shelley is already the focus of state and federal investigations involving campaign contributions and the way he has administered contracts.

Although it is not known if his use of employees is also under review, using state resources for political purposes is a violation of state laws intended to keep personal campaign work from being conducted at taxpayer expense.

Having a state employee “picking up or processing political checks

The sources, including one former high-ranking official, said that on repeated occasions over the last two years at least four employees were ordered by Shelley or his undersecretary, Mark Kyle, to retrieve contributions and bills from a campaign mailbox and bring them back to the San Francisco office.

The mailbox was a few miles from the office, and the trips began to rankle staff members. Sources said some employees disliked the task so much that they flipped coins to see who would have to go.

“Given the volume of legitimate state work, we had people who were extremely resentful,” said Fred Hamdun, a former Shelley deputy who resigned in May over what he described as professional differences.

One employee, he said, “would throw temper tantrums over it. She hated it.” That employee did not return a call seeking comment Thursday.

Shelley declined an interview request Thursday about the allegations. But his campaign spokesman, Sam Singer, said that “only on rare occasions” would staff members pick up checks from the campaign mail box -- and never while working on state time.

Shelley has been battered by news reports and developments in the investigations. A federal grand jury in Sacramento last week called witnesses who made major contributions to his 2002 campaign after receiving payments from a $500,000 state grant that Shelley helped arrange when he served in the state Assembly.

The Bureau of State Audits started examining Shelley’s handling of millions of dollars in federal election funds after reports that his campaign treasurer, former campaign manager and others with political ties received no-bid contracts. And the State Personnel Board is examining his office’s handling of complaints by three female employees who accused of him of yelling and other abusive behavior.

The campaign mail runs by his staff, however, are especially noteworthy because Shelley is California’s chief elections officer, responsible for enforcing election integrity and expected to maintain the highest ethical standards.

Shelley is a San Francisco native and the son of the late Mayor Jack Shelley. A liberal Democrat, he served as a member of the San Francisco County Board of Supervisors, then in the state Assembly before being elected secretary of state in 2002. After his election, he expanded the office and staff in San Francisco.

The campaign mailbox, at Jensen’s Mailbox and Copy, was in Diamond Heights, near Shelley’s San Francisco home.

One of the proprietors confirmed Thursday that Shelley’s campaign had a box there, and that the secretary of state’s staff came “once a week or so.” When asked the names of the Shelley representatives, he replied, “There were different people every time.” He declined to provide his name or to elaborate.

Sources said the mail was taken to Shelley’s office, where it was opened and sorted. Sometimes the contribution amounts were reported to Shelley, the sources said, then the checks were sent via interoffice mail to Sacramento, where another staff member would forward them to Shelley’s campaign law firm.

Singer, who recently became Shelley’s campaign spokesman, said Shelley never ordered any employees to pick up campaign checks. But Kyle confirmed that he sometimes directed staffers to get the mail -- but not to do it on state time and not to process it. Singer said Shelley noted that he has not been doing much fundraising since his election in 2002, so checks constituted a small part of his campaign mail.

Records show that his Shelley Every Vote Counts committee received $20,100 and spent $92,701 this year through June 30, and his reelection committee received $82,450 and spent $6,752.

According to records and interviews, Shelley also kept a campaign computer in his state office with a database of his contributors, and his state staff attended meetings regarding problems with the data. An entry for Shelley’s 2003 calendar obtained by The Times lists one such meeting as being scheduled to include Shelley and two of his top aides.

Sources said those meetings generally were scheduled after normal working hours. They said the computer was kept in a small office and storeroom used by two employees doing other work. One of them was Andrew Lee, the son of Shelley fundraiser and community activist Julie Lee, who is at the center of the federal and state campaign finance investigations.

Sources said the computer was used to generate a list of Shelley contributors for his state staff so their names would be recognized if they telephoned.

Singer confirmed that a campaign computer and campaign records were stored in Shelley’s office. He initially said it was never used, then after checking with Shelley acknowledged that it was used once to extract contributor addresses.

Stern, the political reform law expert, said that having a campaign computer in a state office would not be illegal but that having state employees devote time to it would be.

In late summer, the computer was turned over to the state attorney general’s office after the agency and the FBI began investigations into Shelley’s campaign finances, Singer said. The San Francisco Chronicle reported that several businesses and individuals who received money from a $500,000 state grant Shelley helped arrange as a state assemblyman were among Shelley’s largest campaign contributors.

Nathan Barankin, a spokesman for Atty. Gen. Bill Lockyer, declined to comment on the probe. He said that in general, use of government staff for campaign purposes is prohibited. A government code section makes it unlawful to use public resources, including “state-compensated time,” for campaign activity. It carries a fine of $1,000 for each day of violation, plus three times the value of the use of the public resources. A felony criminal code makes it illegal to misappropriate public resources.