January 15, 2016

CV’s McCann Funded Campaign With Debt

By La Prensa San Diego

INVESTIGATIVE SERIES: PART 1

City Councilman overspent by $55,000 in 2014 election

By Eduardo Rueda, Investigative Reporter

chula vista City Councilman John McCann, Photo by Sean M. Haffey

chula vista City Councilman John McCann, Photo by Sean M. Haffey

Chula Vista City Councilman John McCann continues raising money to retire debt from his 2014 campaign.
McCann, a Republican, won a bitterly fought race against former Mayor Steve Padilla, a Democrat. The two candidates ended up tied on election night, and after a few rounds of re-counts and challenges, McCann emerged the winner by a margin of only 2 votes.
During the campaign leading up to the election, McCann raised a total of $41,129 but ended up spending $99,075.  The majority of the outstanding debt was for campaign mailing services totaling $40,662, as well as $5,000 win bonus to his political consultant.

The debts began to pile up sometime between July 1st and September 30th of 2014 during the very tight campaign. On August 22, McCann loaned his campaign $5,000 to stay afloat, but by October 18th, he had racked up over $30,000 in unpaid bills. By the end of the campaign, McCann had amassed a total of $55,661 in debt, having financed the winning campaign on the backs of unpaid vendors.

After the November 2014 election, McCann raised another $13,747.00 in contributions from a variety of donors, including several that have business interests before the City Council. Individuals connected to development companies requiring project approvals from the City of Chula Vista wrote checks; family members of the Baldwin developer family contributed maximum donations totaling $1,240; the President of the McMillan companies contributed $310; Chelsea development company executives contributed $225; and wealthy Chula Vista Marina developer Ash Israni and his wife chipped in $610.

In his last campaign statement filed on July 28, 2015, McCann still listed debts of over $43,000 even after paying down more than $12,000 in outstanding obligations.

Although other candidates for elected office have run up debts in their campaigns, the Chula Vista Municipal Code does not allow for such overspending. Section 2.52.050(b) specifically states that “A loan or extension of credit shall be considered a contribution from the maker of the loan or extender of credit and shall be subject to the contribution limit of $320.00 per person.”
When asked for a comment on this issue, Chula Vista City Attorney Glen Googins could not offer any guidance on interpreting the city law except to say that “there is a lack of clarity regarding the “credit” aspect of unpaid bills relative to the $320 contribution limit.”
Several other California cities have limits on carrying debts by an “extension of credit”.

The City of Petaluma defines extension of credit as “the provision of goods or services for which payment in full is not received”, and limits those to 30 days.

San Diego only allows candidates to carry debt for up to 180 days after the goods or services are received.
The City of Sacramento limits extensions of credit to its $1,650 campaign contribution limit and those must be paid within 90 days. Its local law was passed to “protect the integrity of the electoral process” and to “limit the use of loans and extensions of credit to finance political campaigns.”

In addition to raising over $41,000 from contributors, McCann also loaned his campaign $9,999, starting with $4,999 on March 17, 2014, then the $5,000 loan on August 22, 2014. Chula Vista law allows candidates to loan themselves up to $5,000 per election but does not specify how long he can take to raise money to repay himself. McCann is raising money from contributors to repay himself those loans.
For purposes of his loan, McCann listed his employer as “McCann Family Properties”. He lists several rental properties around Chula Vista as assets on his annual economic disclosure form.  He does not list any other job for his employment.

Before his narrow victory in November to claim a seat on the City Council, McCann served 4 years on the Sweetwater Union High School District school board from 2010 to 2014. He served on that board during the corruption scandal that forced all 4 of his fellow school board members to resign after each was convicted of accepting illegal gifts from contractors. Although McCann was not indicted in that investigation, he did receive campaign contributions from the same contractors that were involved in the corruption scandal.

As a candidate for the school board in 2010, John McCann received over $20,000 in contributions from several construction contractors, including $16,000 from the Seville companies. One year later, McCann voted to approve a contract for that same company. The President of the company later pled guilty to participating in the pay-to-play scheme at Sweetwater.

The existence of campaign debt after the election has allowed McCann to continue soliciting and accepting contributions from individuals with business before him at the City Council.

For example, since the November 2014 election, McCann has received contributions totaling $800 from five individuals that work directly for San Diego Gas & Electric or its parent company, Sempra. SDG&E continually has issues before the Council ranging from approving facility sites to changes in energy policies. Similarly, while on the school board, McCann raised money from contractors to retire his debts after the election. Some of those late contributors later received contracts approved by McCann.

Before serving one term on the school board, McCann had been elected twice to the Chula Vista City Council between 2002 and 2010 before being barred from running again by term limits. It was during that time on the City Council that McCann voted to create the 2007 law that limits candidates from incurring campaign debts. The measure, known as Ordinance 3048, passed unanimously with his support.
Today, McCann continues soliciting campaign contributions as he serves on the City Council. Several individuals familiar with local politics confirm McCann hands out campaign contribution solicitation envelopes when he is at civic events.

McCann was able to run for the city council again in 2014 because the term limits law requires that a person that has already served the maximum 2 terms must sit out for at least one election before running for the post again. Under this law, McCann could run for reelection once more in 2020.

That Chula Vista Charter rule that allowed McCann to run again is currently under review to be changed to ban others from returning after having served two terms. McCann supports the change.

The proponent of the law change is Mayor Mary Salas who used the opening in the law herself to return to the City Council in 2010 after having served two terms from 1994 to 2002. After she was elected again to the council in 2010, she ran for mayor the following year and won, thereby creating a vacancy on the city council. Her vacated council seat was filled by appointment; Steve Miesen is serving out the remainder of that seat until the end of this year.

McCann did not return a message for a comment on this story.

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