Carona Donor Broke the Law

A Newport Beach company violated campaign laws more than two dozen times by steering $25,000 from its investors to the 2002 election committee of Orange County Sheriff Michael S. Carona, a state commission has ruled.

The Fair Political Practices Commission has proposed that CHG Safety Technologies Inc. pay up to $54,000 in penalties for the violations, according to a decision written by the commission’s executive director, Mark Krausse.

By diverting investors’ money to the sheriff’s war chest, CHG hid itself as the true source of 25 donations of $1,000 to the Friends of Mike Carona campaign, and twice failed to report itself as a major donor, the commission concluded.

The findings come about two years after local prosecutors referred the case to the commission, and add another chapter to the saga of an ex-con’s dream of striking it rich with a laser device he designed to help police put an end to high-speed chases.

“It is a very, very tangled web,” said CHG lawyer John Gladych.

At the time of the donations, Charles H. Gabbard, a felon who once ran for City Council in Newport Beach, was trying to win the support of police agencies to help him promote his high-tech invention.

He is also a key witness in the criminal case against former Assistant Sheriff George Jaramillo, who is facing bribery charges. Gabbard says he paid the former lawman thousands to help market the laser device.

The commission ruling does not say what Carona’s campaign should do with the tainted donations.

But Gabbard, who still holds the patent for his invention, believes he is entitled to the funds to pay CHG’s overdue federal taxes, Gladych said. Gabbard, though, can’t afford to argue his case unless the company that insures CHG agrees to pay his legal fees, Gladych said.

Gabbard had until Tuesday to request a hearing before the commission but was still waiting to hear back from the insurance company, Gladych said. As a rule, the board can proceed with any action it deems fit when nobody requests a hearing.

Michael Schroeder, a spokesman for Carona’s campaign, did not return a phone call Tuesday. When the controversy first surfaced, he said questionable contributions would be put aside in a special account until state or local investigators decided whether the money should be returned to donors or deposited in the state’s general fund.

A spokesman for the board said he could not comment on any open cases.

The allegations against CHG date to 2000, when Gabbard was promoting a laser device that would allow police to disable the engine of a speeding car by shutting off its electrical system. Gabbard wanted law enforcement officials to endorse legislation that would require every new car in the state to be equipped with the product.

That same year, Gabbard would later acknowledge, he persuaded dozens of investors in his company to contribute up to $1,000 to Carona’s 2002 reelection campaign in exchange for company stock.

Carona and other law enforcement officials signed a letter asking the Legislature to support the underlying technology in Gabbard’s device. The Sheriff’s Department, like law enforcement agencies elsewhere, also staged demonstrations of the product.

“Everyone who invested in this company was betting that the legislation would pass, first in California and then spread across the country,” Gladych said Tuesday.

“If the legislation passed, it would have been worth untold millions.”

It didn’t. And today, CHG is broke, and Gabbard is in a legal battle over ownership of the company and a central witness in the Jaramillo corruption case.

Gabbard, who spent 12 years in and out of California prisons on drug, robbery and other charges, has been granted full immunity in the stock scheme in exchange for his testimony against Jaramillo, who was working as a paid consultant while he was second in command of the Sheriff’s Department.

Jaramillo, widely considered Carona’s likely replacement before he was fired in 2004, has been charged with taking bribes, obstruction of justice, misuse of public funds and other counts related to his work for CHG. He denies all of the allegations.