By Laurel Rosenhall and David Siders
The state Fair Political Practices Commission is issuing warning letters to as many as 40 state elected officials after reaching a tentative agreement to fine a firm headed by a Sacramento lobbyist who held lavish fundraisers for politicians at his home, sources told The Bee.
Sloat Higgins Jensen and Associates, a lobbying firm headed by Kevin Sloat, has reached a tentative agreement with FPPC staff to pay fines involving violations of state political disclosure rules.
The action was prompted by a lawsuit filed in Sacramento Superior Court against Sloat and his firm in December by a disgruntled former employee under investigation for embezzlement.
Rhonda Smira, a former bookkeeper at Sloat's firm, alleged that his elaborate events amount to non-monetary campaign contributions that lobbyists are not permitted to give. Her wrongful termination suit says Sloat fired her for questioning whether his conduct violated California's lobbying laws.
"At these fundraisers, (Sloat) made contributions to elected officials by providing catering, expensive wine, decorations, flowers, imported cigars and high-end cognac, scotches and whiskeys," the lawsuit says.
"Over the course of several years, Smira repeatedly voiced her concerns about the illegal contributions prior to each fundraising event at Sloat's private residence. On every occasion, she was reprimanded by (Sloat) and was finally directed... to 'never talk to him again' about her concerns."
The suit does not name the officials who benefited from the events, but specifies that at least 11 state senators, 26 members of the Assembly "and various other high ranking public officials" raised money for their campaigns by attending events at Sloat's home in an enclave of multi-million dollar houses off of Fair Oaks Boulevard.
At the time, Sloat responded to Smira's lawsuit with a statement describing it as "a desperate legal maneuver" by a terminated bookkeeper who is under criminal investigation for stealing from his firm. The Sacramento County District Attorney's Office has confirmed it is reviewing a potential charge of grand theft against Smira.
"It is important to view her lawsuit in its proper context," Sloat's statement said.
California law tries to prevent corruption by putting strict limits on lobbyists who register with the state. They can't give state government officials campaign contributions or gifts of more than $10 in a month. If they host a political fundraiser in their house, it's supposed to be a low-key affair that costs no more than $500.
Sen. Jerry Hill said he was told Thursday that he and several other lawmakers will be receiving a warning letter on Monday for a fundraiser Sloat hosted for them in 2009.
"We made the correct reporting based on the information we had," Hill said, adding that other lawmakers, including then-Assemblymembers Jose Solario, D-Santa Ana, Marty Block, D-San Diego, Paul Fong, D-Cupertino, Alyson Huber, D-El Dorado Hills, Norma Torres, D-Pomona and Senate President Pro Tem Darrell Steinberg, D-Sacramento, were also expecting letters from the FPPC.
The Bee could not reach them Thursday night.
Hill said the catering expenses he knew of had been properly reported by his campaign but was told Sloat provided high-end liquor and cigars that amounted to an illegal in-kind campaign contribution.
"The unfortunate thing is the perception is we did something wrong, where in reality we reported what we knew about," he said. We get wrapped into it, which makes no sense."
Sloat founded his lobbying firm in 1997 following a long career in Republican politics, including as the chief legislative adviser to Gov. Pete Wilson.
Today, his firm is one of the biggest players in Capitol politics. It brought in $4.7 million last year, according to filings with the Secretary of State's Office, making it the sixth-highest earning lobbying shop in California.
Sloat's firm has five registered lobbyists and serves dozens of clients, including cities, utility companies, education groups and casino-owning Indian tribes. Verizon, PG&E and the San Francisco 49ers are on Sloat's long list of clients.
Smira's lawsuit does not say which clients were asked to contribute to the fundraisers Sloat hosted. But she describes a list of 30 clients she was told to invite to every event at his house. In exchange for attending Sloat's parties, the suit says, "clients were promised exclusive access to the Governor, legislators or candidates."
After years of complaining to Sloat about her ethical concerns with his hospitality, Smira's lawsuit says Sloat told her in 2010 to scale back the amount he spent by asking the political candidates to pay for the catering.
But Sloat continued to "provide thousands of dollars of wine, cigars, scotch and other alcoholic beverages," Smira's suit says. It continues:
"While Defendants changed some of their activities, they continued to illegally make in-kind contributions.