The Tangled Web of the Recall Campaign - Reporting Revisions, Mistakes & Secrets - nearly $100,000 missing from reports

I have invested numerous hours of time researching documents for this article. And there are some serious reporting issues as explained below.

Campaign Filing Revisions

I noticed the there are many changes made to the Recall Committee’s reports as listed below (see for yourself at http://nf4.netfile.com/Pub2/AllFilingsByFiler.aspx?id=158168692), each requiring the electronic or physical signature of Leah Basile, Recall Leader (listed as “Responsible Officer of Sponsor” on each form):

1. Cost report (also called a “Form 460”) for the period 7/1/2015 to 12/31/2015
- was originally filed on January 25, 2016
- was subsequently revised on February 1, 2016
- was subsequently revised on April 30, 2016
- was subsequently revised on October 1, 2016

2. Cost report for the period 1/1/2016 to 3/31/2016
- was originally filed on May 2, 2016
- was subsequently revised on October 1, 2016

3. Cost report for the period 4/1/2016 to 6/30/2016
- was originally filed on July 13, 2016
- was subsequently revised on October 1, 2016

Revisions may be requested by the City Clerk when he/she may know of an expense that isn’t listed on the original filing or when mistakes are made by the campaign. Either way, they are mistakes made by the campaign. But these mistakes are ridiculous:

1. Leah Basile has not filed any original Form 460 filings that haven’t been amended
2. Revisions have outnumbered original Form 460 filings by a factor of 3 to 1 for the original filing period ending July 1, 2015 to December 31, 2015
3. Overall, for every original 460 filing, there has been nearly 2 revisions

Ouch! If I were Leah Basile, I would be embarrassed by this lack of attention to detail (this is becoming a trend – see “Attention to Detail” section at http://patch.com/california/lakeforest-ca/where-leah-basiles-city-council-campaign-getting-its-cash-her-lastest )

Reported Spending doesn’t match Estimated Spending

So I examined the last filed financial report and noticed that the campaign only spent a total of $32,002.28 (https://www.dropbox.com/s/jwgqxiv5t2n7vgv/4-460_2016_0401-2016_0630_1st%20revision.pdf?dl=0), which equals $5 for calendar 2015 plus $31,997.28 for calendar 2016 (Page 3 of each report – Line 8 “Subtotal Cash Payments” for Column B). This is truly laughable.

Let me explain:

1. Paid Signature Gatherers: Due to the high amount of paid petition gatherers that many people noticed during the recall, I believe the cost per signature that the recall obtained is too low. Based on similar campaigns’ cost (https://ballotpedia.org/California_ballot_initiative_petition_signature_costs), the cheapest cost for any ballot measure was $2.72 per signature in 2016. From published reports, over 24,000 recall signatures were submitted (http://www.ocregister.com/articles/city-713057-recall-signatures.html). Sure, I saw some volunteer signatures around, but the vast majority were paid signature gatherers at Ralphs, Target, Walmart, walking neighborhoods, etc.

Let’s assume 80% of the 24,000 were paid signatures. And let’s assume the cost matches the lowest per signature amount from the list of 2016 ballot measures - $2.72 per measure. This equals approximately $52,000 of money paid for signature gathers. I think you will agree that I am being very conservative in my estimate.

2. Mailed campaign fliers – as you can see below, there were 6 different fliers mailed to residents in Lake Forest, (3 that were mailed twice) and another that was not mailed:

https://www.dropbox.com/s/w5r2qpx3jcertm4/Flier%201.pdf?dl=0
https://www.dropbox.com/s/bgzhs31f7hh5hd0/Flier%202.pdf?dl=0
https://www.dropbox.com/s/nf4fct4v9veiiqs/Flier%203.pdf?dl=0
https://www.dropbox.com/s/sfq1v5yvdl5buep/Flier%204.pdf?dl=0
https://www.dropbox.com/s/d5ddrexchb67xxs/Mailpiece_5.pdf?dl=0
https://www.dropbox.com/s/fmwhazsh085ivei/Mailpiece_6.pdf?dl=0
https://www.dropbox.com/s/n60qjwmhhps8hz1/Walk%20Piece_7.pdf?dl=0

Using a similar assumption as a previous post about James Gardner’s FPPC violation of approximately $7,500 per mailed flier and increasing it 50% because the population of recall signatures were probably sent to ALL registered voters (and not likely voters during an election), six mailed fliers x $7,500 X 150% = $67,500. Again, I think this is a very conservative calculation because I didn’t even include the cost of the non-mailed 7th flier.

Under-Reporting Summary

$119,500 Total Estimated Costs for Signature Gatherers ($52,000) plus Mailed Campaign Fliers ($67,500)

$ 27,127 Total Expense Reported on Form 460’s ($0 printing reported and only spending $27,127 on Coast to Coast Campaigns – I would assume for signature gathering)

$ 92,373 Total Under-reported Expenses

This appear to be an under-reporting issue of almost 3 times!

As you can see, I now assume that Leah Basile is a firm believer (and star student) in the James Gardner School of NOT reporting expense and donations (http://patch.com/california/lakeforest-ca/state-political-watchdog-opens-investigation-councilman-james-gardners-2014).

Leah Basile also has reporting issues in her current council campaign as she has not reported a PENNY of contributions or expenses (http://patch.com/california/lakeforest-ca/where-leah-basiles-city-council-campaign-getting-its-cash-her-lastest) but has a website, campaign signs and a mailed flier.

Missing Expenses = Missing Donations (and Missing Donors)

Since my conservative estimate of unreported expenditures is nearly $100,000, it makes me wonder where did all of the money come from? What is Leah Basile hiding? Does anyone else feel there is a massive under-reporting issue of campaign contributions coming from both James Gardner and Leah Basile?

Could Adam Nick be the mysterious donor? He certainly has the history of attempting to make secret donations:

1. Adam Nick admitting in a recent Voice of OC article (http://voiceofoc.org/2015/08/lake-forest-councilman-wields-cash-bribes-and-rage) that he tried making illegal bribes or secret cash donations to a reporter and 3 other campaigns:

"According to McCullough, Nick tried to bribe her at least twice -- once during a lunch at Sizzler and the other time at a boy scouts meeting. She said Nick offered to match her regular council salary in exchange for her resignation from the council and threatened to “destroy” her if she didn’t take the offer."

"Councilman Dwight Robinson confirmed that Nick also tried to give him cash. However, he said Nick didn’t offer it again after Robinson explained that it’s illegal for council candidates to accept cash. Robinson said he accepted a check for his council campaign from Nick instead."

"During the course of reporting for this article, Nick offered to pay a Voice of OC reporter for stories about Lake Forest politics. 'I’m not cheap,' Nick said. 'I’ll compensate you for your time.' ”

"Nick himself claims he gave over $3,000 in unreported cash contributions to Voigts during Voigts’ 2010 bid for council. And he questioned whether it was a 'quid-pro-quo' during an audio-recorded interview with Voice of OC. Voigts said Nick offered him cash but he never took it."

2. Nick also admitted (in his own words) to offering a secret cash donation:

3. Nick also admitted (in his own words) to offering a bribe:

Vendor “Debt Forgiven?”

Another incredible claim from the Recall Campaign comes from Schedule C on the final amended Form 460 (https://www.dropbox.com/s/jwgqxiv5t2n7vgv/4-460_2016_0401-2016_0630_1st%20revision.pdf?dl=0) – it states that the following amounts were forgiven:

1. $11,594 ($8,309 plus $3,285 on page 5 in this section’s DropBox link) from Coast to Coast Campaigns – I assume they were used for signature gathering.

2. $6,555 (on page 6 in this section’s DropBox link) for what appears to be printing from “Spectrum Marketing” – James Gardner’s 2014 campaign also used this vendor (I am not surprised).

Therefore, a total of over $18,000 was reported as “Debt Forgiven.” I don’t know about you, but this seems impossible to me. I would like to start a campaign and then not pay for the services. Sorry folks, this just doesn’t happen in politics.

Just to confirm, on page 3 in this section’s DropBox link, line 10 is where this is reported (“Nonmonetary Adjustment”). I take this to mean that no payment was made to these vendors, or else it would have been reported on Line 6 (“Payments Made”).

Largest donation comes after half-way point of Recall

The first major contribution for $10,000 to the Recall campaign comes on the approximately 70th day (of 120 days) into the recall. The total of all previous contributions were less than $1,500. This is my main issue with this scenario:

Based on common sense and my research, the vast majority of campaign expenses (paid signature gatherers and mass mailings) in recalls or regular campaigns are required to be paid in advance. In the recall campaign, the 1st major contribution is nearly 70 days into the campaign on March 1. This date is after 6 campaign fliers were mailed and after paid signature gatherers obtained a majority of signatures. As campaign vendors do not extend credit as campaigns cannot promise payment due to the uncertainty of donations, it is IMPOSSIBLE that the Lake Forest Recall campaign received its first donation on Day 70 of the Recall.

Summary

I started writing that “voters should be concerned about Leah Basile’s lack of ‘Attention to Detail.’” However, I have changed my mind. I believe Lake Forest is experiencing serious election campaign fraud. Here is why:

1. Overall Revisions of Recall Financial Reports outnumber the original filings by almost a factor of TWO.

2. Reported Spending doesn’t match Estimated Spending by nearly $100,000.

3. Donations (and Donors) for the same amount of $100,000 are not being reported.

4. Adam Nick, who has the wherewithal and history of making secret illegal donations (including bribes) is the only logical choice for this mysterious campaign donation.

5. Campaign vendors don’t forgive debt – they require money up front. When the Recall Campaign reported that debts were forgiven just does not pass the sniff test.

6. Another attempt to hide Recall Campaign donors is by saying that the first donation comes 70 days into the Recall Campaign (when all signatures have to be submitted within 120 days). If I remember correctly, nearly all of the mailers and probably 75% of signatures would have been received within the first 70 days. Again, campaign vendors require money up front.

7. This has been occurring since the Lake Forest City Council 2014 campaign (http://patch.com/california/lakeforest-ca/state-political-watchdog-opens-investigation-councilman-james-gardners-2014) and in the 2016 Lake Forest City Council campaign ((http://patch.com/california/lakeforest-ca/where-leah-basiles-city-council-campaign-getting-its-cash-her-lastest)

How will Lake Forest escape from this blatant campaign fraud? Hopefully the voters will decide next month.