Documents provided to the San Bernardino American News reveal that the California Fair Political Practices Commission has an open investigation into whether two members of the Hesperia City Council, Rebekah Swanson and Paul Russ accepted campaign funds from a purported non-existent entity, Mountain States Consulting Group.
According to a February 7, 2017 letter from the Fair Political Practices Commission (FPPC) addressed to Hesperia Residents Al Vogler and Paul Bosacki, an investigation was opened over a year ago into Mountain States Consulting Group for potential campaign money laundering.
California Government Code Section 84301 makes it illegal to make campaign contributions “in a name other than the name by which such person is identified for legal purposes” and a violation is a misdemeanor.
San Bernardino American News conducted a search of the websites for the secretary of state of California, Delaware and Nevada attempting to identify a legal entity for Mountain States Consulting Group without results. Additionally, a search conducted at San Bernardino County Assessor-Recorder-County Clerk’s website for a fictitious business name for Mountain States Consulting Group found “no record.”
A call made to the FPPC by San Bernardino American News to determine whether Mountain States Consulting Group had a campaign identification number for Mountain States Consulting Group determined no record of a campaign identification number required if an individual or entity is a major donor contributing more than $10,000 annually. According to campaign statements for Russ and Swanson, Mountain States Consulting Group donated and loaned $8,300 total.
The campaign statement for Rebekah Swanson for Hesperia City Council 2016 for the period of July 1, through September 24, 2016 revealed Mountain States Consulting Group with a street address of 12127 Mall Blvd, Ste 188, Victorville, CA 92392-7665 loaned Swanson $1,800 for her campaign on September 13, 2016.
Hesperia Resident Al Vogler attempting to determine the identity of Mountain States Consulting Group searched for 12127 Mall Blvd, Suite 188 in Victorville finding it belonged to The UPS Store at The Mall of Victor Valley.
According to campaign records for Rebekah Swanson for Hesperia City Council 2016, the campaign received an additional loan in the amount of $1,500 from Mountain States Consulting Group between the periods of September 25 through October 22, 2016, totaling $3,300 in loans from Mountains States Consulting Group.
Subsequently, Swanson for Hesperia City Council 2016 paid $500 toward her unpaid balance between October 23 and December 31, 2016, leaving an unpaid balance of $2,800.
In response to a request for all campaign statements from 2014 through 2016, San Bernardino American News from the City of Hesperia did not provide a campaign statement for January 1 through June 30, 2016.
San Bernardino American News requested a comment from Swanson via email to the city clerk and later an email to Swanson’s email detailing the issues was not responded to by press time.
Hesperia City Council Member Paul Russ through his campaign for county supervisor received a $4,000 campaign contribution from Mountain States Consulting Group in Victorville without providing a street address as indicated on the campaign statement for the Russ for Supervisor 2016 during the period of May 22 through June 30, 2016.
Over a year later on July 10, the Russ for Supervisor 2016 campaign statement reflects two campaign donations from Mountain States Consulting Group, one for $200 and one for $800, totaling $1,000.
In response to an inquiry about the status of three investigations, one into Mountain States Consulting Group, another into Russ for Supervisor 2016 as well as Holland for Supervisor 2016, FPPC Communications Director Jay Wierenga confirmed, “All remain open cases.”
Both Hesperia Council Members Paul Russ and Bill Holland ran unsuccessfully for the First District County Supervisor seat against incumbent Robert Lovingood in the 2016 primary election.
When contacted by San Bernardino American News, Russ claimed not to know who was associated with Mountain States Consulting Group theorizing the contribution may have come in the mail.
Russ expressed confidence that Mountain States Consulting Group was a legal entity while admitting that he doesn’t routinely check his contributors to ensure they are a legal entity while suggesting most corporations are registered in the States of Nevada and/or Delaware.
Russ explained he is pro business and development because it creates jobs, provides higher wages and support for families saying he is honest with his contributors and advises them if the purpose of the contribution are to advance a personal agenda he tells them “don’t donate.”
Hesperia Resident Al Vogler, whose wife, Rita Vogler, served as a city councilmember and/or mayor from 2002 until 2010, told the San Bernardino American News that his interest was peaked in the year 2000 when he saw certain city council members voting in favor of development projects proposed by certain developers who had also provided campaign funds to the council member.
Vogler explained he then raised the issues at the City of Hesperia City Council meetings asking if this represents a conflict of interest with members of the city council denying there was any conflict of interest in their voting.
As an example of a potential conflict of interest, Vogler recalled where Hesperia City Council Member Paul Russ accepted a $4,000 campaign contribution from Advanced Disposal and subsequently in 2017 voted in favor of an increase in rates favorable to Advanced Disposal.
Vogler claimed Paul Russ was in favor of the rate increase and helped to garner support for it with the other city council members with the item passing with a majority vote while revealing Russ used to work for Advanced Disposal before working for a local bank. Vogler observed Russ defending Advanced Disposal in response to any criticism by ratepayers.
Vogler explained when reviewing campaign statements he found Mountain States Consulting Group and being unable to determine the identity of the principals Vogler sought out to locate the address provided by Mountain States Consulting Group and found a post office box at the Mall of Victor Valley.
Vogler objected to the fact that Mountain States Consulting Group was hiding their real identity from the public while the law dictates the candidates running for office or city council members are to report campaign contribution information accurately noting on the candidate statements filed by Russ for Supervisor 2016, Mountain States Consulting Group was reported without an address. Russ is supposed to reveal that information Vogler objected.
In comparison Vogler explained Rebekah Swanson did report an address on her campaign statements for Mountain States Consulting Group.
Vogler described the fact that Mountain States Consulting Group is not a legal entity where you could know the identity of the principals and the use of a post office box to hide their identity as deceptive.
The use of post office boxes and false addresses Vogler explained was a method used by those campaign donors wishing to hide and delay discovery of their identity from the voters to prevent them from knowing negative information prior to their vote.
Vogler expressed the importance of being able to file complaints early in the election period with the FPPC in order for the FPPC to investigate quickly before the day of the election to determine whether the allegations are true and in turn timely inform the voters about the integrity of the candidates before they vote explaining the FPPC’s determination could “negatively impact the outcome of the election.”
Over a year later Russ and Swanson currently sitting on the city council were able to use the illicit campaign funds to help their election and the FPPC hasn’t finalized its investigation into whether Mountain States Consulting Group has violated Government Code Section 84301 by hiding their true identity Vogler complained.
Vogler described campaign money laundering as an effort to disguise the source of the money citing a situation where John Smith, the developer, wanting to support a candidate who may vote in favor of their projects, but John Smith doesn’t want the voters to know his association with the candidate for political reasons may donate money to an independent committee instructing the committee to donate the money to the candidate.
Vogler then explained the intention of California’s campaign laws are to ensure the public knows the source of the campaign funds and when they were donated and that campaign money laundering is a method to hide the source of the money and it violates campaign laws.
If the voters knew the people who were donating large amounts of money to a candidate had also been convicted and fined by the FPPC for campaign money laundering Vogler explained, the voters may be hesitant to vote for that candidate receiving that laundered money and may wonder why the person/entity needed to hide their identity.
Vogler recalled the conviction of Ontario Auto Dealer Mark Leggio in 2008 for campaign money laundering where he served 180 days in jail and three years of probation for arranging to have other people contribute money to Inland Empire Senate and Assembly races where he would reimburse them.
Russ for supervisor 2016 received campaign contributions from Christopher Leggio with the campaign statements indicating the city of Upland and no street address with an identification number as a major donor. The fact that Mark Leggio was convicted of money laundering would lead a reasonable person to a question the legitimacy of the campaign contribution from his brother, Christopher Leggio.
Vogler remembered finding campaign signs without campaign identification numbers to identify the committee paying for the signs as required by law.
The focus of this story were the issues brought forth in the complaint filed with the FPPC alleging campaign money laundering by Mountain States Consulting Group submitted by Hesperia Residents Al Vogler and Paul Bosacki. This is part 1 of the story; please look for future stories in the San Bernardino American News.