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Lobbyist faces record $133,500 fine for improper payments

Lobbyist faces record $133,500 fine for improper payments
Members of the legislature listen as Jerry Brown, governor of California, delivers the State of the State address at the State Capitol last month. (Ken James / Bloomberg)

SACRAMENTO -- A prominent lobbyist and his firm have agreed to pay a record $133,500 fine to California's ethics agency for making improper campaign contributions to some 40 politicians, including Gov. Jerry Brown and the Democratic leaders of the state Senate and Assembly, according to documents released Monday.

In addition to improperly providing expensive wines, liquor and cigars at fundraisers, Kevin Sloat and his firm also improperly arranged for gifts including sports tickets for some lawmakers, according to a settlement agreement signed by Sloat and Gary Winuk, the chief of enforcement for the state Fair Political Practices Commission.

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"State law has strict rules regarding lobbyists making contributions," Winuk said Monday. "The FPPC enforces those rules vigorously and this proposed fine is the largest ever for a lobbyist case in the history of California."

The agreement is expected to be ratified Feb. 20 by the commission.

Sloat and his firm Sloat, Higgins, Jensen & Associates ran afoul of the state Political Reform Act's ban on lobbyists making campaign contributions to candidates for state office that the lobbyist is registered to influence and providing gifts of more than $10 per month.

"Respondents violated the Act by making non-monetary contributions to elected state officers and making and arranging gifts to state officers that exceeded the ten dollar gift limit," according to a settlement agreement signed by Sloat and the chief of enforcement for the state Fair Political Practices Commission.

Sloat admitted to 26 counts of  improper campaign contributions and four counts of making illegal gifts to state legislators and another official. The non-monetary contributions made illegally included "wine, spirits, beer, soft drinks, and water, " and "floral arrangements for decoration at the fundraisers" and cigars, the agreement says.

The FPPC staff decided to provide warning letters, not fines, to elected officials who benefited from Sloat fundraisers including Democratic Gov. Jerry Brown, Lt. Gov Gavin Newsom, former Republican candidate for governor Meg Whitman, Senate leader Darrell Steinberg (D-Sacramento), Assembly Speaker John Perez (D-Los Angeles) and the two Republican leaders, Sen. Bob Huff of Diamond Bar and Assemblywoman Connie Conway of Tulare.

"What we can say is that our clients properly paid and disclosed all known expenses," said Thomas Willis, an attorney representing Brown, Newsom and some lawmakers on Friday. "Of course, they did not disclose expenses that they were not made aware of."

Others getting warning letters include Democratic Sens. Roderick S. Wright of Inglewood, Alex Padilla of Pacoima, Jerry Hill of San Mateo, Kevin de Leon of Los Angeles, Leland Yee of San Francisco, and Ted Lieu of Torrance.

"There was no evidence that any of the candidates or elected officers who benefitted from the fundraisers were notified or made aware that they received contributions from Respondent Sloat, and all other expenses from the fundraisers were properly disclosed by the candidates or elected officers," the agreement said.

The firm's clients include Anthem Blue Cross, Verizon, the San Francisco 49ers, Anheuser Busch Companies, Cisco and Direct TV.

Sloat and his firm also improperly helped arrange gifts to lawmakers, according to the agreement, including two tickets worth $258 provided by the San Fransciso 49ers to a football game for former Assemblyman Jeff Miller, and $420 in tickets to a Kings basketball game provided by the Yocha Dehe Winton Nation to Sen. Jim Nielsen (R-Gerber), the agreement says.

Assemblyman Jim Frasier's chief of staff, Debra Gravert, received two tickets to a football game from the 49ers that were improperly arranged by Sloat, the agreement says. Sloat also exceeded the gift limit by purchasing a $52.36 lunch for former Assemblyman Joe Coto when he was in the Legislature, the agreement says.

In seeking fines of $4,500 each for most of the counts, just shy of the maximum $5,000 fine, the FPPC staff said the activity undermined a system aimed at providing integrity in government.

"Contributions and gifts from lobbyists may influence an official to make decisions based on the interest of the lobbyist's clients, instead of, and potentially in conflict with, the interests of the public whom the official represents," the agreement says. "In light of all these factors, a penalty at the maximum amount permitted by law is justified to appropriately punish Respondents and deter similar violations in the future.

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