Trutanich RentGate Scandal? - Missing Rent Payments and Irregularities Raise Campaign Finance Questions
EXCLUSIVE: Carmen Trutanich's 2009 City Attorney Campaign Could Face Ethics Violation Investigation Over Apparently Unreported or Under-Reported Campaign Expenses.
Dragnet readers familiar with Trutanich's Billboard Blunder, and the ensuing BillboardGate cover-up, will need no reminding that City Attorney Carmen Trutanich's former campaign headquarters were located at 12524 Ventura Blvd. in Studio City.
The scandal surrounding Trutanich's off-site billboards has led to questions about who paid the rent for Trutanich's headquarters As a result of the Dragnet's coverage of those scandals, an anonymous tip suggested that we research the amount of rent paid by Trutanich for his headquarters. Campaign finance laws require all candidates to timely report their expenses, debts, as well as cash and in-kind contributions, so the tipster suggested we research the City Ethics Commission website where the relevant records can be found on-line.
Following the tipster's suggestion, we searched for campaign payments made to "Allen Realty Plaza," Trutanich's landlord and, according to Los Angeles Department of Building and Safety Inspector Luke Zamparini's statement to the Los Angeles Metropolitan News, 'the property owner, Mort Allen, was “a big supporter” of Trutanich’s campaign."
The results of our search shows that four payments were made by Trutanich to Allen Realty Plaza LLC, two of which appear to be rent as they are described as 'Office Expenses.'
The first apparent rent payment of $1,822.50 was made on March 11, 2009, eight days after the March 3, 2009 primary election:
This payment purports to cover a three month period from January 1, 2009 to April 4, 2009, suggesting a monthly rent of $607.50 for the approx 750 square foot unit occupied by Trutanich.
The second apparent rent payment of $2,053.00 was made on April 13, 2009:
That payment covers a one month period from April 5, 2009 to May 2, 2009 at what appears to be a monthly rent of $2,053.00.
If indeed, our interpretation of these two payments is correct, several issues arise. Issues that could constitute ethics violations as they relate to the timely and accurate reporting of campaign expenses, as well as non-monetary contributions.
Question 1: Who paid the rent for the period May 3, to May 19, 2009?
The general election was on May 19, 2009. Trutanich's campaign staff were using the campaign headquarters right up until the eve of the election when they went to the Sheraton Hotel at Universal City for Trutanich's victory party.
Trutanich personally used the campaign headquarters on May 12, 2009 when he gave an interview to Fox 11 News regarding Jack Weiss and the Felon Fundraiser, so he cannot claim not to have used the headquarters after May 2, 2009.
The campaign headquarters was probably in use in the days after the May 19, 2009 election, at the very least until the end of the month.
However, no record can be found for payments to Allen Realty Plaza LLC in respect of 'Office Expenses,' which would appear to be the correct description for the rent.
The $2,053.00 payment for the 27 day period of April 5, to May 2, 2009, results in a daily rent rate of $76.04, meaning an unreported expense of $1,216.59 to the date of the election, or $2,129.04 to the end of May 2009.
Of course, it is possible that the landlord, Mort Allen, could have made a gift of the rent, however, that would also have to be reported as an "in kind" or "non monetary" contribution. The problem there is that on March 25, 2009, Allen contributed the maximum allowable $1,000.00 to Trutanich:
It does appear that Trutanich either paid Allen the rent without reporting the expense, or, if no payment was made, Trutanich received an "in kind" or "non monetary"contribution from Allen which exceeds the campaign contribution limits. Either way, it appears to violate the rules.
Question 2: Who paid the rent for the period before January 1, 2009?
Just as no record can be found of rent payments for Trutanich's campaign headquarters after May 2, 2009, no records can be found of rent payments before January 1, 2009.
Former Trutanich campaign workers have stated that the headquarters were in use well before January 1, 2009, perhaps as early as September 2008. However, independent evidence exists which establishes Trutanich's use of his headquarters at a very minimum on November 24, 2008:
Trutanich's infamous "Pledge to Serve" challenge to Jack Weiss was signed on November 24, 2008, on letterhead giving the campaign headquarters' address. In all likelihood, the campaign headquarters was occupied and in use well before November 24, 2008, but the 37 day period between that date and December 31, 2008 would, based on the daily rent rate of $76.04, result in an unreported campaign expense/payment of $2,813.37, or an unreported "in kind" or "non monetary"contribution of that amount from Allen, which clearly exceeds the campaign contribution limits.
Question 3: Was the rent for January 1 through April 4, 2009 under-reported?
If it didn't initially strike you as strange that a monthly rent of $607.50 is exceptionally low for a prime location on Ventura Blvd., then perhaps the difference between that and the second $2,053.00 payment makes the likelihood that Trutanich received the benefit of a below market rent all the more apparent.
The $2,053.00 charged for April 5, through May 2, 2009, equates to an annual rent of $27,753, or $37 per square foot, which is believed to be in the region of the market rent for comparable locations. The $607.50 declared rent would equal an annual rent of $7,752 or $9.54 per square foot. This is believed to be well bellow the market rent.
If Trutanich had paid rent at the same rate for that 93 day period from January 1, through April 4, 2009, as he apparently paid for the 27 day period of April 5, through May 2, 2009, that would equal $7,071.44. He only paid $1,822.50, so arguably, Trutanich either failed to report the true rent, or received an unreported "in kind" or "non monetary"contribution of $5,248.94.
Unless Trutanich paid the rent to Allen in some other way, not apparent from the reported campaign expenses, there appears to be a minimum of $9,278.90 either in unreported expenses, or in illegal campaign contributions in excess of campaign finance limits. Violations of the Campaign Finance Ordinance (LAMC 49.7.1 et seq) can be prosecuted as misdemeanors. Additionally, because each campaign finance report requires the signature of the candidate and treasurer under penalty of perjury, a prosecution for a felony violation of Penal Code Section 118 is also possible if it can be established that those signing the reports knew that they were making a false statement about a material fact.
The Dragnet believes that these three questions require adequate answers, and perhaps reference to the City Ethics Commission, the Fair Political Practices Commission, and the Public Integrity Division of the District Attorney's Office for investigation.
While illegal campaign contributions scandals dogged Jack Weiss's campaign for City Attorney, Weiss always maintained that he did not know that the illegal contributions were 'laundered.' In contrast, it would appear to be hard for Trutanich to claim that he did not know how much rent was paid for his campaign headquarters; only deadbeats don't know how much rent they have to pay.
Once again, the Bernie Madoff statement "there is no innocent explanation" comes to mind, however, should Trutanich have an innocent explanation for what appears to be a series of serious violations of campaign finance laws, the Dragnet will gladly publish it.
Dragnet readers familiar with Trutanich's Billboard Blunder, and the ensuing BillboardGate cover-up, will need no reminding that City Attorney Carmen Trutanich's former campaign headquarters were located at 12524 Ventura Blvd. in Studio City.
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| The City Ethics Commission website allows visitors to search campaign contributions and expenses. |
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| We found two payments from Trutanich to Allen Realty Plaza LLC which appear to be related to rent as they are described as 'Office Expenses.' |
The first apparent rent payment of $1,822.50 was made on March 11, 2009, eight days after the March 3, 2009 primary election:
This payment purports to cover a three month period from January 1, 2009 to April 4, 2009, suggesting a monthly rent of $607.50 for the approx 750 square foot unit occupied by Trutanich.
The second apparent rent payment of $2,053.00 was made on April 13, 2009:
That payment covers a one month period from April 5, 2009 to May 2, 2009 at what appears to be a monthly rent of $2,053.00.
If indeed, our interpretation of these two payments is correct, several issues arise. Issues that could constitute ethics violations as they relate to the timely and accurate reporting of campaign expenses, as well as non-monetary contributions.
Question 1: Who paid the rent for the period May 3, to May 19, 2009?
The general election was on May 19, 2009. Trutanich's campaign staff were using the campaign headquarters right up until the eve of the election when they went to the Sheraton Hotel at Universal City for Trutanich's victory party.
Trutanich personally used the campaign headquarters on May 12, 2009 when he gave an interview to Fox 11 News regarding Jack Weiss and the Felon Fundraiser, so he cannot claim not to have used the headquarters after May 2, 2009.
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However, no record can be found for payments to Allen Realty Plaza LLC in respect of 'Office Expenses,' which would appear to be the correct description for the rent.
The $2,053.00 payment for the 27 day period of April 5, to May 2, 2009, results in a daily rent rate of $76.04, meaning an unreported expense of $1,216.59 to the date of the election, or $2,129.04 to the end of May 2009.
Of course, it is possible that the landlord, Mort Allen, could have made a gift of the rent, however, that would also have to be reported as an "in kind" or "non monetary" contribution. The problem there is that on March 25, 2009, Allen contributed the maximum allowable $1,000.00 to Trutanich:
It does appear that Trutanich either paid Allen the rent without reporting the expense, or, if no payment was made, Trutanich received an "in kind" or "non monetary"contribution from Allen which exceeds the campaign contribution limits. Either way, it appears to violate the rules.
Question 2: Who paid the rent for the period before January 1, 2009?
Just as no record can be found of rent payments for Trutanich's campaign headquarters after May 2, 2009, no records can be found of rent payments before January 1, 2009.
Former Trutanich campaign workers have stated that the headquarters were in use well before January 1, 2009, perhaps as early as September 2008. However, independent evidence exists which establishes Trutanich's use of his headquarters at a very minimum on November 24, 2008:
Trutanich's infamous "Pledge to Serve" challenge to Jack Weiss was signed on November 24, 2008, on letterhead giving the campaign headquarters' address. In all likelihood, the campaign headquarters was occupied and in use well before November 24, 2008, but the 37 day period between that date and December 31, 2008 would, based on the daily rent rate of $76.04, result in an unreported campaign expense/payment of $2,813.37, or an unreported "in kind" or "non monetary"contribution of that amount from Allen, which clearly exceeds the campaign contribution limits.
Question 3: Was the rent for January 1 through April 4, 2009 under-reported?
If it didn't initially strike you as strange that a monthly rent of $607.50 is exceptionally low for a prime location on Ventura Blvd., then perhaps the difference between that and the second $2,053.00 payment makes the likelihood that Trutanich received the benefit of a below market rent all the more apparent.
The $2,053.00 charged for April 5, through May 2, 2009, equates to an annual rent of $27,753, or $37 per square foot, which is believed to be in the region of the market rent for comparable locations. The $607.50 declared rent would equal an annual rent of $7,752 or $9.54 per square foot. This is believed to be well bellow the market rent.
If Trutanich had paid rent at the same rate for that 93 day period from January 1, through April 4, 2009, as he apparently paid for the 27 day period of April 5, through May 2, 2009, that would equal $7,071.44. He only paid $1,822.50, so arguably, Trutanich either failed to report the true rent, or received an unreported "in kind" or "non monetary"contribution of $5,248.94.
Unless Trutanich paid the rent to Allen in some other way, not apparent from the reported campaign expenses, there appears to be a minimum of $9,278.90 either in unreported expenses, or in illegal campaign contributions in excess of campaign finance limits. Violations of the Campaign Finance Ordinance (LAMC 49.7.1 et seq) can be prosecuted as misdemeanors. Additionally, because each campaign finance report requires the signature of the candidate and treasurer under penalty of perjury, a prosecution for a felony violation of Penal Code Section 118 is also possible if it can be established that those signing the reports knew that they were making a false statement about a material fact.
The Dragnet believes that these three questions require adequate answers, and perhaps reference to the City Ethics Commission, the Fair Political Practices Commission, and the Public Integrity Division of the District Attorney's Office for investigation.
While illegal campaign contributions scandals dogged Jack Weiss's campaign for City Attorney, Weiss always maintained that he did not know that the illegal contributions were 'laundered.' In contrast, it would appear to be hard for Trutanich to claim that he did not know how much rent was paid for his campaign headquarters; only deadbeats don't know how much rent they have to pay.
Once again, the Bernie Madoff statement "there is no innocent explanation" comes to mind, however, should Trutanich have an innocent explanation for what appears to be a series of serious violations of campaign finance laws, the Dragnet will gladly publish it.
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