Three candidates seeking citywide offices in the June primary could be facing thousands of dollars in fines after the city said they broke campaign finance laws by loaning too much money to their own campaigns—something the candidates contend was nothing more than a clerical error.
An announcement from the city said that Dan Miles, Gerrie Schipske and Nicholas Liddi, who are running for auditor, attorney and prosecutor, respectively, self-reported lending too much money to their own campaigns when filing their contribution reports with the City Clerk last week.
The limit for loans in citywide offices is $15,000, but campaign finance disclosures showed that Miles loaned $20,000 to his campaign, Liddi loaned $34,100 and Schipske loaned $50,000. They could be forced to pay fines as high as three times the amount of the unlawful loan, according to the city attorney’s office.
Miles and Liddi are seeking to replace longtime incumbents, and Schipske is running against a candidate endorsed by the incumbent, in the June 7 primary.
To avoid potential conflicts of interest when enforcing campaign rules like this, the city has contracted with an outside law firm, Best, Best & Krieger, to monitor elections while a current member of the city attorney’s office, Dawn McIntosh, is running for city attorney.
City Attorney Charlie Parkin said Friday that it’s his understanding that the firm will pursue the monetary penalties against the candidates. Miles could have to pay as much as $15,000; Liddi’s penalty could be as high as $57,300, and Schipske’s could be $105,000.
“If someone gives themselves that type of significant advantage, that hurts the whole process and goes against what voters wanted,” said Parkin, who is not seeking reelection but has endorsed Schipske’s opponent, McIntosh, in the race.
Schipske and Miles acknowledged the error but said their respective loans were only supposed to equal $15,000, with the remaining amounts being listed as a contribution. All of Liddi’s contribution was supposed to be a donation, according to his campaign team.
Miles, in a statement, said that his campaign treasurer incorrectly filed a $10,000 check as a loan, when it was intended to be a donation. Schipske and Liddi said similar situations happened in her case.
A statement from David Gould, who is the treasurer for both Miles and Liddi, said that Liddi’s error was due to a clerical mistake that has been fixed, adding that it was “no fault” of Liddi’s.
There is no limit on how much candidates can spend on their campaigns in the form of non-refundable payments.
Schipske said Friday that she doubts the city will prevail on any civil action. “It was a mistake in a filing that was done about four business days ago and it’s been corrected.”
Schipske, a two-term council member who’s been a longtime critic of City Hall since leaving office in 2014, called the city’s announcement political theater.
Schipske brought a recent lawsuit against the city over the Measure M transfers to the city’s general fund. The city lost the case and must pay back the water department $30.8 million by September and will now have $9 million less in its annual general fund going forward.
Liddi echoed the sentiment, saying “candidates who are challenging entrenched incumbents” were being “unfairly targeted with potential enforcement action.”
The city taking action like this does not have much precedent. The law was adopted by voters in 1994 and Parkin, who’s been city attorney since 2013, couldn’t recall his office issuing a notice like this in the past.
Parkin pushed back on Schipske’s contention that the announcement about the enforcement action was politically motivated.
“If someone is cynical they could say that,” he said, adding that this type of action will be taken against anyone who violates the city’s campaign finance laws.
The June 7 primary is just over a month away but mail-in ballots are expected to be delivered to homes across the county May 9. Parkin said there’s no projected timetable for when a ruling could be announced on if the fines are actually assessed to the candidates.
The fines would be paid into the city’s campaign reform account, which is used to administer the 1994 Proposition M law adopted by Long Beach voters that created new guidelines for municipal elections in Long Beach.
Editor’s note: This story was updated with a statement from Liddi and a statement from Liddi’s campaign treasurer, David Gould.