Question for Whitman: When is a campaign a campaign?
When Meg Whitman wanted the rights to Internet addresses she would later use in her campaign for governor, she hired a top-notch law firm to pry them from the Santa Monica man who owned them.
She took her fight with him to a United Nations arbitrator. And she sued him in federal court.
Whitman obtained the names in a settlement early last year as she was raising campaign money, and she linked them to her campaign website. Now the leading Republican candidate for governor, she has refused to reveal how much she spent on the protracted legal effort, saying campaign disclosure laws don’t apply.
Her aides contend that Whitman’s pursuit of Web addresses, including megwhitmanforgovernor.com, whitman2010.com and meg2010.com, had nothing to do with politics. Rather, they say, it was a trademark issue: She was protecting her “internationally famous” name, her lawyers said in court records.
For more than a year before formally announcing her candidacy, Whitman, the billionaire ex-chief of EBay, was also spending money on political consultants and research — what her lawyer called “a whole host of political activities and thoughts” — that she did not report. Whether those activities made her a candidate, and thus subject to state disclosure laws, is rooted in the public’s right to now about politicians’ actions.
The law defines a candidate, in part, as anyone who raises or spends money “with a view to bringing about his or her nomination or election to office … whether or not he or she has announced his or her candidacy or filed a declaration of candidacy at such time.” It requires disclosure of $1,000 or more in expenditures by, or contributions to, a candidate “for political purposes.”
Some experts say Whitman’s activities met those tests, and she should have reported what she spent. Transparency in the financing of political campaigns allows voters and law enforcement to check that candidates are raising and spending money legally, deters corruption and gives the public insight into would-be leaders, said Jessica Levinson, director of political reform at the Center for Governmental Studies in Los Angeles.
“It actually gives the public a great deal of information about their candidates,” she said.
Whitman has contributed a record-breaking $59 million to her campaign since declaring her candidacy in February 2009. Her aides maintain that before then, she had not made up her mind to be a candidate, and her expenditures mostly related to her work on the 2008 presidential campaign.
In 2008, Whitman retained consultants, including some of those now working for hundreds of thousands of dollars to get her elected. She also paid for research into her prospects and vulnerabilities in California and for analysis of state policy issues, in addition to beginning the acquisition of the domain names, according to her campaign aides and others familiar with her activities.
Whitman had hired public relations strategists, Mitch Zak and Jeff Randle of Randle Communications, and consultants Mercury Public Affairs, including partners Adam Mendelsohn and Steve Schmidt, principals with the two companies have said in interviews. She hired another consultant, Rob Stutzman, in early 2009 before declaring her campaign, Stutzman said.
In a November 2008 interview with The Times, three months before she announced her candidacy, Zak said Whitman was “actively considering” a run for governor.
“Our role is to ensure that once she does make a decision, she is in a position to move forward aggressively,” said Zak, who then arranged a conversation between a reporter and Henry Gomez, a former EBay executive who was studying state policy issues on Whitman’s behalf.
Whitman’s campaign officials say she needed consultants then because she was aiding Republican presidential candidates Mitt Romney and John McCain in their efforts, not because she intended to run for governor.
“As a result of many months of national political activism for McCain and Romney … it shouldn’t surprise anyone that she sought out some political advice,” Whitman spokesman Tucker Bounds said in a recent statement.
Thomas Hiltachk, Whitman’s election lawyer, had worked for her before she began reporting expenses. He said she wasn’t required to report them until she formed her campaign committee — unless she was trying to directly influence voters by such means as advertising, poll questions that mentioned her as a candidate or fundraising solicitations.
But Lance Olson, an election lawyer who works for Democrats, said the definition of a candidate requires her to report anything intended to advance her political ambitions.
“I think what it comes down to is: Why did she hire all these high-priced political consultants if not to run for governor, or if not to consider her option of running for governor?” Olson said.
Whitman’s campaign declined requests by The Times for documents or other details showing what the consultants did for her in 2008, or what they earned before her announcement. Since then, she has paid nearly $2 million to Randle, Zak and their firm, Gomez, Stutzman and Hiltachk’s law firm. That sum is part of the $46 million her campaign has reported spending between February 2009 and mid-March of this year.
Court records show that Whitman began pursuing the Web addresses as early as June 12, 2008, eight months before she declared her run for governor. That day, her lawyers sent a letter to Santa Monica resident Thomas Hall demanding the domain names Whitman wanted.
On Dec. 1, an arbitrator at the World Intellectual Property Organization in Switzerland, a division of the United Nations, rejected Whitman’s trademark claim. At the end of that month, she filed her federal suit, accusing Hall of “cyber squatting” on the potentially valuable Internet addresses. On Jan. 29, 2009, the day after her public filings say she raised her first $1,000 from outside sources, Whitman settled with Hall. Both parties have declined to comment on the size of the confidential settlement, or who paid whom.
The Fair Political Practices Commission, the state agency that enforces campaign law, has given written advice to potential candidates stating that some exploratory expenses — for traveling to meet supporters or polls that do not reference a person’s qualifications for office, for example — need not be reported initially. But they must be reported if the person ultimately runs for office, the advice letters say.
Last year, the commission declined to investigate a complaint, made by an ally of Whitman’s Republican primary opponent Steve Poizner, that accused her of failing to report campaign expenses, among other things. The complaint cited news reports mentioning her political activities.
The panel does not accept newspaper articles as evidence, said Executive Director Roman Porter. In a letter, Porter told complainant Thomas Hudson that the information he provided was “insufficient to establish a violation” but invited him to submit another complaint if he gathered more.