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March 5, 2014

Berryhills contest judge’s ruling in ethics case

Brothers Tom and Bill Berryhill engaged in “serious and deliberate” violations of campaign finance law with “an intention to conceal, deceive or mislead” the public in a 2008 money-laundering scheme, a magistrate said in a decision handed down several weeks ago and made public this morning.

Sen. Tom Berryhill engaged in “serious and deliberate” violations of campaign finance law with “an intention to conceal, deceive or mislead” the public in a 2008 scheme to launder money to the campaign of his brother, Bill Berryhill, a magistrate said in a decision handed down several weeks ago and made public Wednesday.

The Berryhills contend that Administrative Law Judge Jonathan Lew got it wrong, according to an opposition brief. At an April 17 hearing before state campaign ethics leaders, the brothers will contest Lew’s recommendation that the Berryhills and Republican committees in Stanislaus and San Joaquin counties be fined a combined $40,000.

Approving Lew’s reasoning would present “a virtual death penalty” to political donors, who might fear that giving any money could expose them to investigations, the brothers’ attorneys said in the document, dated Feb. 27.

The brothers had argued at a November trial that there was no collusion when Tom Berryhill, a then-state assemblyman trying to help his brother get elected to the same body in 2008, raised $40,000 that ended up with his brother’s campaign. They insisted on a public proceeding in an attempt to clear one of the Modesto area’s most politically powerful names, but Lew largely went against them.

“Tom Berryhill (R-Twain Harte) knew where the money was going,” Lew said in his decision, dated Jan. 31, the basics of which were revealed in The Modesto Bee on Feb. 7. Tom Berryhill “used his connections to move matters along” and was “far more than a passive contributor,” Lew said.

He recommended that the California Fair Political Practices Commission fine Tom Berryhill and his campaign up to $70,000, while saying that Bill Berryhill and his campaign are liable for up to $20,000, and the two committees should be fined up to $10,000 each. That’s a potential total of $110,000, but Lew concluded that the combined fine should not exceed $40,000, or half the amount sought by prosecutors, and it’s not clear who would pay how much.

“I don’t know if a judge or panel sets that, or if we negotiate it among ourselves,” said Jim DeMartini, chairman of the Stanislaus Republican Central Committee. He was vice chairman in 2008, is a county supervisor and had testified at the trial.

Other witnesses included both Berryhills, former Stanislaus committee chairwoman Joan Clendenin, former Assembly minority leader Mike Villines and other local party officers, all of whom denied a prearranged agreement that money from a Tom Berryhill fundraiser would immediately pass to his brother’s campaign.

“The undisputed, unanimous testimony of all witnesses” close to the transactions should signal innocence unless Lew “concluded they were all lying,” states the brief, signed by attorneys Charles Bell and Brian Hildreth.

The Berryhills served together in the Assembly, and Tom Berryhill subsequently was elected to the state Senate, while Bill lost a close Senate race in 2012. Their late father, Clare, was a legislator and state agriculture secretary.

Ethics enforcers said the brothers conspired with the central committees to illegally fund a television attack ad on Bill Berryhill’s opponent, Democrat John Eisenhut.

Tom Berryhill had hosted a fundraiser and soon afterward sent $20,000 each to Republican central committees in both counties. The committees immediately contributed like amounts to the brother’s campaign, enabling his handlers to produce the ad.

Tom Berryhill already had given his brother the $3,600 maximum allowed under state law and knew that a single committee could not give Bill Berryhill more than $30,200. Funneling $40,000 through two committees provided the appearance of complying with campaign limits but ran afoul of another legal section preventing money-laundering, or concealing the true donor’s identity, Lew concluded.

Lew suggested that Bill Berryhill face lesser fines because “his actions were negligent or inadvertent” and not deliberate. He had testified that he did not want to resort to mudslinging and took a hands-off approach to campaign management.

The Berryhills did not claim that it was a big coincidence that the money from Tom ended up with Bill, who desperately needed it. They contended that a shell game is illegal only if the parties conspired to run it, and they said they did not.

Lew pointed to records of several telephone calls, texts and emails among Tom Berryhill and operatives with the committees and both campaigns.

“It was understood by all that the contributions from Tom Berryhill to the two county central committees were to go to Bill Berryhill’s campaign,” Lew concluded. He also found that the Stanislaus committee “allowed itself to be used,” as did the San Joaquin committee.

The Berryhills contend that the mere existence of communication records proves nothing about what was said and cannot be considered evidence. “It is not reasonable to infer anything about their content,” Bell and Hildreth said. Lew cited five texts between Tom Berryhill and Clendenin, but she testified that she didn’t have or use text messaging.

Lew improperly found “guilt by association” and made “unwarranted inferences based upon timing,” the attorneys said.

Clendenin also testified that she had witnessed Clare and Tom Berryhill lose close races previously, blamed the losses on insufficient money for last-minute advertising and didn’t want that to happen to Bill Berryhill. Although Berryhill was considered a shoo-in early in the race, Democrats had poured $1 million into Eisenhut’s campaign and Republicans feared a huge turnout among Democratic voters enthused about Barack Obama’s candidacy for president.

Lew’s conclusions also contradict those relied on when the FPPC in October approved a record $1 million fine against an Arizona nonprofit organization involved in the November 2012 election, the attorneys said.

Lew dismissed accusations that Tom Berryhill failed to report, as required by law, having received free tickets to a Keith Urban concert, as well as Disneyland tickets that had been solicited, received and used by Berryhill’s wife and not him.

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