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Assemblywoman Diane Harkey has filed a $5 million defamation lawsuit against Sen. Mark Wyland, alleging her fellow Republican verbally attacked and bullied her to gain an advantage in their California Board of Equalization race.

Harkey, R-Dana Point, claims Wyland's comments to a tea party group in San Diego County painted her in a false light and caused emotional distress.

In his comments, the Escondido Republican referenced a separate lawsuit brought against Harkey's husband, Dan, and Aliso Viejo-based Point Center Financial by a group of real estate investors claiming they were defrauded out of tens of millions of dollars.

A jury in July found Dan Harkey and the company liable for $9 million to investors and added to the award roughly $1 million in punitive damages. Other claims remain unresolved.

"The speech clearly exposes (Diane) Harkey to hatred, contempt, ridicule and obloquy because of the very nature of the public office for which she is seeking as a member" of the tax board, Harkey states in the lawsuit filed Aug. 26 in Orange County Superior Court.

Harkey also refutes Wyland's claims that the lawsuit against her husband was brought by investors of modest means, stating "there are many investors who have substantial financial resources ... with net worths exceeding $1 million."

In a statement, the Harkey campaign said Wyland has breached a rarely-crossed line of propriety by attacking Harkey for her husband's business successes and challenges.

"In the process, the Wyland campaign has misrepresented the actual facts - wrongly claiming that the judge found investors had been defrauded," the statement said.

"These attacks are more than typical political mudslinging. Rather, they present false information with the potential of damaging Dan and Diane Harkey's longstanding reputation."

In an interview with The Bee, Wyland maintained many of the investors were of modest means and some were subjected to elder abuse.

Wyland countered that he was taken aback by the Harkeys' mischaracterization of the victims and said the lawsuit directed at him was intended to quell ongoing criticism.

"I think it's simply an attempt to bully me into not telling the victims' story and I am not going to be bullied," Wyland said. "Every single thing I said in there is accurate and if she is going to call these (investors) 'predators' I am going to keep telling their story."

The contest for a seat on the state board that administers personal and corporate taxes has been uncharacteristically spirited. Jockeying for the Republican-leaning district that takes in all or parts of Orange, Riverside, San Bernardino and San Diego counties grew more contested when former Assemblyman Van Tran, R-Garden Grove, joined the race last week.

PHOTO: Assemblywoman Diane Harkey, R-Laguna Niguel, looks at the roster as Assembly members voted on Gov. Jerry Brown's budget at the state Capitol on Thursday, March 17, 2011. The Sacramento Bee/Hector Amezcua.



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