Prompted by a citizen complaint, the California Fair Political Practices Commission (FPPC) has launched an investigation into the campaign of Palo Alto Vice Mayor Liz Kniss, whose re-election bid was boosted by a flurry of late contributions from developers and who did not disclose most of these contributions until well after the election.
The state agency, which enforces the requirements of California's Political Reform Act, informed Kniss in a March 10 letter that it has initiated an investigation into whether she violated the act. The FPPC has not made any determinations at this time, the letter states.
The anonymous complaint that triggered the investigation pertains to Kniss' Jan. 11 campaign-finance statement, which covers the period between Oct. 23 and Dec. 31. The statement shows that between Nov. 18 and the end of the year, Kniss received $19,340 in contributions, with the lion's share coming from local developers and property managers. Earlier in the campaign, Kniss said she would not accept contributions from developers.
As the Weekly previously reported, two developers who gave to Kniss said that they had actually contributed to her campaign before the Nov. 8 election and well before the dates in which their contributions are listed on Kniss' statement. In addition, Kniss reported that she had received a $2,500 contribution from the California Association of Realtors Political Action Committee (CREPAC) on Nov. 18, while the association's own filing shows that the contribution was made on Oct. 18.
The list of late donors to the Kniss campaign also includes developers Jim Baer, Chop Keenan, Joseph Martignetti, Premier Property and Thoits Bros. In almost all cases, the occupation of each contributor is listed on Kniss' campaign filing as "unknown."
When the Weekly asked Kniss about these contributions in January, she acknowledged she had not initially intended to accept developers' contributions because of negative perceptions from the community and potential accusations of being "in a developer's pocket." She also attributed her late reporting of the contributions to the fact that her treasurer, Tom Collins, was in rehabilitation from knee surgery and did not open any mail between Oct. 22 and Nov. 15. That explanation did not, however, account for the four contributions she had received and reported between Oct. 26 and Oct. 30 – from Hal Mickelson, William Reller, Martha Kanter and Josh Becker.
While the FPPC received the complaint in late February, it did not announce its decision to investigate Kniss until this week. The agency is also investigating the campaign of Greg Tanaka, who was elected to the City Council in November. Tanaka, who had campaigned alongside Kniss and now-Councilman Adrian Fine, finished second in the 11-member race for four seats. Kniss finished first.
The FPPC has also received a complaint against Fine but had not announced any investigations based on that complaint.
Kniss said Wednesday that she is aware that "an organized group has filed complaints with the FPPC against the top three vote getters in the November election."
She said she is working with an attorney to address the issues raised in the complaint and provide the answers to the FPPC.
The six-page FPPC letter is filled with excerpts from the complaint, which alleges at least six violations of the Political Reform Act. The complaint, signed by "Palo Alto Residents," alleges that Kniss failed to comply with a requirement that pre-election contributions of $1,000 or more be reported within 24-hours. Even allowing for "extraordinary postal delay," the complaint states, the Oct. 18 contribution from CREPAC "must be deemed to have arrived in the committee/candidate's (or their agent's) possession prior to election day on Nov. 8."
The complaint also took issue with Kniss' explanation about why the check wasn't received until Nov. 18. Both she and Collins are "campaign veterans," the complainants wrote, and were well aware of the 24-hour reporting rule. The contribution, the complaint states, should have been listed in the Oct. 22 campaign filing, the final major statement each candidate must submit before the election. Instead, the contribution was "forward dated: as received well after the election," the complaint states.
"The candidate/committee's failure to ensure prompt and accurate disclosure and reporting consistent with financial disclosure requirements hid the CREPAC contribution from voters," the complaint states. "The candidate/committee's inconsistent and inaccurate reporting undermines public confidence in campaign-finance transparency, creates the appearance that candidates/committees may freely 'sit' on pre-election contributions in order to manipulate the system, and may well have hidden the existence, source and amount of several large, pre-election contributions from the voting public."
In addition, the complaint notes that for 18 individuals who made late contributions to Kniss, the occupation/employer is listed as "unknown." The FPPC's Campaign Disclosure Manual for local candidates states that committees must return contributions of $100 or more within 60 days of receipt "if the committee has not obtained the contributor's name, address, and, in the case of a contributor who is an individual, his or her occupation and employer."
If the committee returns the check to the donor who does not cash it within 90 days, the committee is required to forward the amount to the city's General Fund within the next 30 days, the manual states.
The FPPC manual also lays out provisions for what campaigns should do if a treasurer is unable to carry out his or her duties. It notes that contributions may not be accepted and expenditures may not be made if the treasurer's post is vacant at any time.
"If the treasurer is unavailable to carry out his or her duties, a new treasurer must be designated and the committee's Statement of Organization (Form 410) amended," the manual states.
Kniss has consistently maintained since January that her campaign hasn't done anything in proper. In a late January text, Kniss pointed out that she has been a candidate in nine previous elections "and to my knowledge, have always complied with all rules and laws as I have done this time."
After the Weekly inquiry in January, Kniss also solicited the advice from an FPPC hotline. Unlike the FPPC's Enforcement Division, hotline employees do not perform their own fact-finding and rely solely on the information provided to them by those seeking advice. The hotline employee concurred with Collins' position that because he "had not opened the $2,500 contribution (from CREPAC), the contribution is not considered 'received.'" As a result, he would not have been required to make a separate filing for this contribution.
After receiving the FPPC advice, Kniss forwarded the email from the hotline employee to area newspapers, prompting the Daily Post to run a story with the headline: "State: Kniss didn't break campaign cash rules."
The complaint accuses Kniss of "manipulating the press" and notes that the Daily Post "reported the content of that limited, hot-line advice as fact, implying that the FPPC had ruled that there had been no campaign finance violation."
"In REAL FACT, there has been no investigation and no finding that 'Palo Alto Vice Mayor Liz Kniss did not violate rules,'" the complaint states.