Why didn’t school board president Ref Rodriguez just write himself a big check?
When news broke that Los Angeles school board president Ref Rodriguez was caught up in a criminal case over his campaign contributions, friends and foes alike were baffled.
Rodriguez, who won his school board seat in 2015, legally could have poured as much of his own money as he liked into his upstart campaign. So why would he, as prosecutors claim, have arranged for others to donate and then use his funds to illegally pay them back?
That question looms large as Rodriguez faces three felony charges, including perjury and conspiracy, in what investigators call a campaign money-laundering scheme.
“It’s one of the most unusual money-laundering cases I’ve ever seen, maybe the most unusual,†said Bob Stern, co-author of the landmark California Political Reform Act. “There are no limits on how much he can contribute of his own money. So why would he do this?â€
Stern said he could not recall another case over the past 40 years of a sitting politician being accused of illegally paying back his own contributors. In campaigns, such violations are typically committed by donors or fundraisers, he said, not the politicians themselves.
Prosecutors have also charged Rodriguez with 25 misdemeanor counts of campaign finance violations and have raised the prospect of possible jail time. In a document filed Wednesday, Dist. Atty. Jackie Lacey accused him of filing fraudulent paperwork in mid-January 2015, stating he had collected more than $51,000 from donors to his campaign.
About half that amount came from 25 contributors — friends and family members — whom Rodriguez had illegally reimbursed, according to prosecutors. Rodriguez obtained the money, the filing states, by cashing out a $26,000 business investment.
Rodriguez has not explicitly denied the allegations. In a statement the day he was charged, he said he has cooperated with authorities and is hoping to resolve the matter “expeditiously and fairly.â€
His lawyer, Daniel Nixon, did not respond Friday to a Times request for an interview. Earlier in the week, Nixon downplayed the seriousness of the case, which has stunned L.A. education circles, as one focused on a relatively small amount of money.
City investigators say Rodriguez carried out the campaign money-laundering scheme in late December 2014, shortly after he filed to run.
Some political consultants and education insiders say there are logical reasons why Rodriguez, who would go on to defeat an incumbent school board member in the March 2015 election, might not have wanted to simply write a check to kick off his campaign.
At the time, Rodriguez and his two opponents — incumbent board member Bennett Kayser and educator Andrew Thomas — were facing a Dec. 31 fundraising deadline. Rodriguez’s campaign was only a few weeks old and would soon have to go public with his first fundraising numbers. It was a critical period, according to some political experts.
Thomas had already reported that he had put $51,000 of his own money into his campaign. Political consultant Sue Burnside, who represented Kayser, said she believes Rodriguez was feeling pressure to show he, too, was financially competitive.
Had Rodriguez shown only $25,000 in his first fundraising report, he would have trailed his opponents significantly — and would not have been viewed as a viable candidate by donors, consultants and L.A.’s education community, Burnside said.
The lower amount “would have made him look weak, and not the star candidate everyone was touting him to be,†she said. “His campaign would have never launched the way it did without the $51,000 raised in the first period.â€
Harvey Englander, a lobbyist and longtime political consultant, said first-time candidates typically face pressure to show strong fundraising numbers early on. Although Rodriguez could have given himself the money, a report showing contributions from a significant number of donors would have made a much bigger splash, he said.
“Those are people who will be willing to walk a precinct, willing to put a sign on their lawn,†Englander said. “So it always is better to show that you can raise money, not just give money.â€
Had Rodriguez donated a large sum to his own campaign, sophisticated donors also might have wondered whether he really intended to spend that money — or was simply looking to inflate his numbers, said Englander, who has worked on local, state and federal campaigns for 49 years. Candidates do not have to spend the money they give to their campaigns.
Rodriguez’s victory in 2015 represented a major achievement for charter school advocates, who had been looking to unseat Kayser, a charter skeptic closely aligned with the teachers’ union.
In recent days, some Rodriguez supporters have argued he would have had little to gain by misrepresenting who his donors were. When Rodriguez entered the contest, he already had the wealth and might of the charter school advocates, who worked with their allies to spend more than $2 million on his bid.
Roger Lowenstein, a former criminal defense attorney who founded the Los Angeles Leadership Academy charter schools, said the Rodriguez case centers on “a crime without a victim.â€
It’s “totally crazy,†Lowenstein said, to think that Rodriguez’s list of donors — relatives and friends — would have had an influence on whether others decided to support his campaign.
“And it’s also totally crazy why he didn’t just donate the $25,000 to his campaign, which he’s legally allowed to do, and leave it at that,†he added. “So it’s kind of sad.â€
Criminal charges are rare for L.A.’s local elected officials. In 2010, Dist. Atty. Steve Cooley charged then-L.A. City Councilman Richard Alarcon with perjury and voter fraud in a case that centered on whether he lied about living in his council district. Alarcon remained in office until 2013, when he was forced out by term limits, and the case is still ongoing.
Four years earlier, former City Councilman Martin Ludlow pleaded guilty to a federal charge of conspiring to divert $36,492 from a school employee union to his 2003 campaign. But Ludlow had left office by the time charges were filed.
If Rodriguez is convicted, the felony charges would not automatically require him to leave office, according to district attorney spokesman Greg Risling.
Still, the Los Angeles City Charter does contain provisions that could put Rodriguez’s future in doubt.
If a school board member is convicted of a misdemeanor campaign-finance violation, a judge must determine whether that violation had a “material effect†on the outcome of that election. If the judge determines it did indeed have a material effect, then the school board member must be removed from office.
L.A. Unified history teacher Brent Smiley, who has volunteered for a number of school board candidates, said he firmly believes that the activities uncovered by the Ethics Commission did play a pivotal role in the outcome of the race. The campaign donations in question gave Rodriguez “instant legitimacy†at a critical time, Smiley said.
In the first fundraising report of 2015, Rodriguez had $51,000 in donations. That put him in the same ballpark as Thomas, who had collected nearly $62,000, and Kayser, who had collected about $66,000. Of the three candidates, however, Rodriguez appeared at that moment to be the only candidate who did not have to rely on his own money.
“That’s fraud. That’s misrepresenting himself to the voters,†said Smiley, who favored Kayser in the 2015 race.
Still, the $24,250 in donations targeted by ethics investigators are a tiny fraction of the $2.5 million spent to support Rodriguez’s 2015 bid. Campaign consultant Michael Trujillo, who has worked for charter-backed school board candidates, said that amount, even at that early point in the campaign, wasn’t enough to change the dynamic.
Without those contested donations, Rodriguez would “still have won by whatever amount he won by,†Trujillo said.
According to investigators, some of the donors who were reimbursed worked at the charter school organization where Rodriguez served as an executive. During the 2015 campaign, a reporter from KPCC specifically asked Rodriguez about some of those workers’ larger donations.
At the time, Rodriguez reassured the reporter the donations were legitimate and that the donors had not been reimbursed. “I know, for many of them, this is a tremendous sacrifice,†he told the station.
Twitter: @annamphillips
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