Those signs are up again, you know, the ones which tout Jeff Denham as a “local farmer”. Just another “not quite true” spin used to gain and keep the congressional seat he now occupies? Let’s use our “wayback machine” and see if we can detect a pattern:
It’s 2009, Jeff Denham is a State Senator and has been since 2000, He is eyeing a move up the political ladder. He wants to be Lt. Governor and has amassed quite a war chest. Then, George Radinovich, Congressman for California’s 19th District decides to retire and Jeff refocuses.
There are federal laws which do not allow him to use money raised for state campaigns in a federal run. Why? The rules regarding who can contribute and how much they can contribute differ between state and federal campaigns.
Denham had represented a senate district which sprawled from Monterey into Stanislaus Counties but did not have any real overlap with Radinovich’s district which included several foothill counties and much of the population of Fresno County. So he had little “name recognition”.
A non-profit group called Remembering the Brave decided to host a fund raiser at an Indian Casino in Coarsegold featuring some country western singers. The net proceeds were to go to fund a special license plate to be used by Gold Star families, families who lost loved ones in combat.
The state said they would okay such a special plate if $300,000 was raised to offset the costs. Jeff had an interest in the cause and had enough campaign funds to cover the entire $300,000.
Instead, he made a series of gifts and loans (later forgiven) to the non-profit group totaling $225,000. He became a spokesman for the event, appearing in radio and television ads and on the internet. The ads did not say anything about his run for Congress but he was identified by name, as a veteran and as a State Senator.
The ads preceded the event which was held close to Memorial Day, less than two weeks before the primary election.
The event netted $105,000, far less than would have gone for the cause had Denham simply contributed directly to it.
At about the same time, an Independent Expenditure Only Committee was created. These committees are supposed to be independent of the candidate and can use contributed funds to support or oppose candidates without coordination with the primary campaign.
The organizer of this committee was an official of the tribe which hosted the event in Coarsegold. That tribe and one other Southern California tribe each contributed about $25,000 to this committee. The committee, within a day or two of its organization ran a series of attack ads against Denham’s opponent, Fresno mayor James Patterson.
(That committee spent all but $3,000 of the $50,000 within a few days before the primary. It did not, thereafter, collect any more contributions or spend any more money. The committee was suspended by the FEC early in 2017 for failing to make required reports.)
Jeff went on to win the primary over Patterson, and then the general election in November of 2010. He also prevailed in elections in 2012 against Joe Hernandez, 2014 and 2016 against Michael Eggman in what had become the 10th District through re-districting.
Complaints were made to the Federal Election Commission regarding the use of the state funds, claiming Denham was gaining name recognition as spokesman for the casino event and, with regard to the attack ads, claiming there was coordination with the candidate.
The FEC uses a two-step process. First, the FEC General Counsel prepares a recommendation based on submissions by the parties, primarily letters and other documents. If the Commission finds, based on the recommendation of General Counsel that a full investigation is warranted, then document subpoenas can be issued and depositions taken.
The General Counsel’s report recommended no action be taken with regard to the Independent Expenditure Only Committee but, did recommend a full investigation be undertaken with regard to the use of the state campaign funds.
The second step, the full investigation, proceeds only if the commission votes to do so. At the time, there were three Democrats and three Republicans on the Commission.
The seventh seat was for presidential appointment. President Obama’s nominee had not been confirmed. The six members voted along party lines and without a tie breaking vote, the matter was dismissed.
It was akin to a hung jury, not an acquittal.
We jump forward to 2012 when a fire of undetermined cause and origin swept through warehouse in Salinas which was the base of operations of Denham Plastics, a limited liability corporation. Denham Plastics has become the main source of Jeff’s wealth and income.
Right after the fire Denham Plastics moves to another commercial property in Salinas which has triple the space of the burned facility, leading to a doubling of the company’s income, according to the trade publication Plastics magazine.
This move triggers the creation of another LLC, MTJ Properties, which then buys the property to which Denham Plastics moved after the fire, and then to the creation of Kanaha Properties LLC which buys the commercial property next door.
It is these two purchase which leads us to question which Jeff didn’t disclose, publicly, the sources of the loans made to buy these properties. It was JPMorgan Chase Bank. MTJ got a loan for $1,820,411 and Kanaha got a loan for $740,000.
Both the booklet which tells representatives how to disclose, and the page on which loan obligations are set forth, say that business loans need not be disclosed unless there is a personal obligation to pay them back.
In the usual course of business, a “personal guarantee” would have been required of the owners of an LLC for loans such as these, where the LLC is recently created and created for the purpose of buying commercial property.
So, if such a personal guarantee was given, the loans should have been disclosed; The MTJ loan on the 2014, 2015 and 2016 disclosures and the Kanaha loan on the 2015 and 2016 disclosures. They do not appear on those documents.
If no personal guarantee was given then the question raised is whether this congressman got loan terms more favorable than available to you and me, which fact should have been disclosed.
Creation of and use of an LLC is a legitimate way of doing business, unless it is done for the purpose of concealing that which should be disclosed.
Would you want to know that your representative was in hock for $2,000,000 to a national bank at the same time he is voting on banking regulations?
The Wayback Machine lands on 2015. California has some pesky laws regarding hours of service and pay per-mile systems which apply to interstate drivers operating in California. Several large companies take the state to court, claiming federal regulations of trucking pre-empt state laws.
Federal trial and appellate courts disagreed, and the state regulations stand. So, the only solution is federal legislation which would clearly pre-empt state law.
Up steps Jeff with an amendment to a transportation bill. It does not fly then, and when attempts are made in several other instances to pass it. They include one where an attempt is made to attach the amendment to the Federal AVIATION Authority reauthorization package.
Why is this “inside baseball” kind of thing here? Well a moving force to go around the California laws is Walmart. Oh, wait, doesn’t Jeff have some kind of indirect connection to Walmart. Yep. His wife, Sonia, worked for Earthbound Farms, largest supplier of packaged salad fixings in the west. And Sonia is the national account manager for…you guessed it…Walmart.
Now let’s jump ahead to late October 2016, the last time the 10th District seat was contested. Out comes what looks like a personal letter from Sonia Denham, Jeff’s wife, to her “friends” in which she defends her husband from attacks she thinks are too personal. Good letter. Strong. But, it was virtually identical to two other letters sent at the same time (same date) with similar language, theme, salutation and ending.
The Bee’s Jeff Jardine has outed Jeff on this one, pointing out he cynical nature of the personal letter he prevailed on his wife to sign; how he played himself as a victim.
Now it’s 2018 and out comes the “farmer” signs. And, the claim he has made that he “fought” in Desert Storm and Operation Restore Hope in Somalia.
We will not denigrate his service in both campaigns when called up as a Reserve with his unit which maintained air refueling tankers. But, is ”fought” the right word. In Desert Storm he was stationed in Saudi Arabia, not Iraq and in Operation Restore Hope his unit was stationed in Spain, not Somalia, not anywhere near Somalia.
Maybe this “fought” business is a quibble, but “farmer” isn’t close. For many years, Jeff has included a piece of property of about 20 acres near Atwater among his holdings and has disclosed income from that property as rent. In the latest disclosure he categorizes the property as “investment property”.
Not sure what would be appropriate for his signs, that is what would be accurate. “LLC owner”?
The Takeaway: Whether or not you think any of these activities is “sneaky” is entirely up to you and your neighbors. Talk amongst yourselves.