O.C. supervisor agrees to fine over donations

Orange County Supervisor Janet Nguyen has agreed to pay $5,000 in fines to settle state and county investigations into an illicit fundraising effort she ran earlier this year in which she collected political donations above the legal limit and tried to avoid disclosing the funds.

In a proposed stipulation between Nguyen, the county and state elections regulators, the county’s newest supervisor admitted violating state and local laws governing donation limits and the handling of political contributions.

The settlement, which must be approved by the state Fair Political Practices Commission, resolves the legal issues surrounding the fundraising effort. The commission meets this month.

Two counts in the settlement stem from Nguyen’s failure to deposit the checks into her campaign bank account as required by state law. Instead, she directed them to her lawyer’s trust account. Four other counts relate to violations of the county campaign finance ordinance, including acceptance of donations above the limit, failing to return the excessive donations within seven days and failing to promptly disclose the return of the contributions.

The commission and the county could have imposed a fine as high as $25,000, but chose the lower amount in part because “the investigation did not produce sufficient evidence to support a finding that the violations were deliberate,” according to commission papers made public Monday.

It also noted the donations were returned once the campaign realized they were illegal.

The investigations were launched in May after the fundraising operation was revealed by The Times. Nguyen was raising the funds to help pay the cost of her legal bills to defend her seven-vote margin of victory in the Feb. 6 election.

In an e-mail solicitation, Nguyen told potential donors they could give unlimited amounts that did not have to be publicly reported as campaign donations. She asked that the checks be mailed to her campaign office but made out to a trust fund maintained by her lawyer to cover the court costs.

Orange County lobbyist Chris Townsend and the developer of the Rancho Mission Viejo planned housing community gave $5,000 each; Parking Concepts, which operates several county-owned parking facilities, including John Wayne Airport, gave $2,500. The legal donation limit was $1,600.

Asked in April and early May about the fundraising effort, Nguyen’s campaign aides said they either did not know anything about a legal defense fund or denied that it existed.

Nguyen did not return several telephone calls seeking a comment about the matter until The Times obtained a copy of the e-mail solicitation sent to potential donors.

Nguyen, her campaign and her lawyer said that the violations were the result of a misunderstanding of campaign finance laws and that they thought they were allowed to raise donations in unlimited, unreported amounts for a “legal defense fund.”

But as the proposed settlement noted, only state officials are permitted to have legal defense funds.

Mike Schroeder, a lawyer for Nguyen’s top competitor in the election earlier this year, said he was pleased to see Nguyen admit violations of the law but was surprised by the relatively low amount of the fine.

“This was an organized attempt to circumvent the law that they repeatedly lied about until they got caught,” Schroeder said. “Accepting that this was just a good faith mistake is just silly.”

A telephone call to Nguyen was returned by her campaign consultant, David Gilliard, who said: “We’re satisfied, especially with the language that points out there was no evidence any of the violations were deliberate. We understand we made a mistake. We’re happy the FPPC recognized it wasn’t egregious and it wasn’t intentional.”

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christian.berthelsen@latimes.com