Thread: Mexican puts $500,000 in illegal contributions into U.S. elections

Feds: Mexican Tycoon Exploited Super PACs to Influence U.S. Elections

• BY JOHN HUDSON
• FEBRUARY 11, 2014 - 06:08 PM
• 
  

In a first of its kind case, federal prosecutors say a Mexican businessman funnelled more than $500,000 into U.S. political races through Super PACs and various shell companies. The alleged financial scheme is the first known instance of a foreign national exploiting the Supreme Court's Citizens United decision in order to influence U.S. elections. If proven, the campaign finance scandal could reshape the public debate over the high court's landmark decision.

Until now, allegations surrounding Jose Susumo Azano Matsura, the owner of multiple construction companies in Mexico, have not spread beyond local news outlets in San Diego, where he's accused of bankrolling a handful of southern California candidates. But the scandal is beginning to attract national interest as it ensnares a U.S. congressman, a Washington, D.C.-based campaign firm and the legacy of one of the most important Supreme Court decisions in a generation.

Under longstanding federal law, foreign nationals are prohibited from donating to political campaigns at the state, local and federal level. On January 21, the U.S. Attorney's Office accused Ravneet Singh, proprietor of the Washington campaign firm ElectionMall, and Ernesto Encinas, a former San Diego police detective, of using Azano's money to support three Democratic politicians and the city's Republican district attorney. Azano wanted to turn the San Diego bayfront into a West Coast version of Miami's bustling waterfront, but lacked the political clout to do so, according to prosecutors. In order to buy support for the project, he's accused of doling out illegal contributions to politicians.

What's unique about the allegations is that Azano's money was funnelled through a "Super PAC," a political fundraising vehicle born out of the Supreme Court's Citizens Uniteddecision in 2010. The ruling paved the way for Super PACs to spend unlimited sums of money for candidates with only limited reporting requirements. Although Super PACs have been linked to other campaign finance abuses, a foreign national has never been accused of using one to hide his idenity. "We are not aware of another example of a similar case," Peter Carr, a public relations officer at the Justice Department, told The Cable. "Super PACs are a new vehicle for political spending."

For some critics of the Supreme Court's Citizens United decision, the San Diego case validates warnings about foreign contributions previously dismissed by supporters of the landmark court case.

The controversy dates back to 2010, when President Obama used his State of the Union address to lament that Citizens United would "open the floodgates" for foreigners and special interest groups to "spend without limit in our elections."



The remark famously prompted Justice Samuel Alito to shake his head and mouth the words "not true" during the address. It also led the non-partisan fact-checking site PolitiFact to label Obama's warning "mostly false" because the legality of foreign contributions was "outside the scope of the opinion" made by the court. Politifact cited the court's majority opinion, which stated that "We need not reach the question" of foreign contributions.

It turns out that although Citizens United did not change the legality of foreign contributions in the U.S., it enabled the type of illegal schemes now being alleged by federal prosecutors.

"Before Citizens United, in order for a foreign national to try and do this, they'd have to set up a pretty complex system of shell corporations," said Brett Kappel, a campaign finance expert at the law firm Arent Fox. "And even then, there were dollar limits in place. After Citizens United, there are no limits on independent expenditures."

That's an important point given the massive size of Azano's alleged donations: Half a million dollars. According to the complaint, Azano's money traveled through a U.S.-based shell company before arriving at the Super PAC.

Because the Super PAC was only required to disclose the name of the U.S. shell company, the contributions appeared to be U.S.-based. When contacted about the allegations, the details alarmed campaign finance reformers on Capitol Hill.

"If proven, these allegations are the latest example of the damage being done to our democracy by the Supreme Court's misguided Citizens United decision," Sen. Sheldon Whitehouse (D-RI) told The Cable. "By opening the floodgates of unlimited, secret spending in American elections, the Court has helped to prop up a system in which corporations, foreign tycoons, or virtually anyone else can funnel huge amounts of money through phony front organizations."

The Supreme Court may not be the only casualty of the San Diego scandal: It could also take a few political careers down with it. Given the charges, Encinas and Singh may face up to 5 years in prison and $250,000 in fines. As for the politicians involved, last month's federal complaint did not mention the candidates by name, but it left enough clues for local reporters to piece together their identities.

Local newspaper UT San Diego traced the contributions and identified the candidates as former San Diego Mayor Bob Filner, District Attorney Bonnie Dumanis, mayoral candidate Nathan Fletcher and a U.S. congressman believed to be Juan Vargas (D-CA). Each politician denied any wrongdoing in the scandal and distanced themselves from Encinas and Singh.

While allegations involving local officials will likely remain local, the case of Congressman Vargas could be different. Unlike the other politicians, the contributions to Vargas did not go through a Super PAC, but the Democratic Congressional Campaign Committee instead. (The DCCC operates nationally to elect Democrats to the House of Representatives.) Vargas did not respond to requests for comment from The Cable, but he did tell Voice of San Diego in January that he was "shocked" at the allegations and "if true, am offended by the actions of these individuals."

At the time, he vowed to return any funds received from Encinas or Singh and urged the DCCC to return funds from the men as well. It's unclear, as of today, how much funds were returned to the men, if any. When asked if the DCCC had given back any funds from the men, a spokesman did not respond.

Meanwhile, the local scandal has sparked a burst of interest in Azano and his business empire in Mexico. Federal prosecutors say the ultimate goal of the finance scheme was to build a "Miami West" in California, which required the development of San Deigo's bayfront area. "He wanted to develop here in San Diego, and he sought political clout to help him in doing so," said Assistant U.S. Attorney Timothy Perry in January.

According to UT San Diego, Azano sells surveillance equipment to the Mexican military and owns construction firms in the Mexican state of Jalisco.

Though he has yet to be charged, FBI agents searched two residential properties associated with him in San Diego County last month. According to an article in the mexican newspaperEl Universal,the Azano family has benefited from lucrative Mexican government contracts for decades.

If there's something to be learned from the San Diego case more broadly, campaign reform advocates say it's the need for stricter reporting requirements from the Federal Election Commission. "That's why I've been fighting for legislation to strengthen disclosure requirements for money in politics," Sen. Whitehouse said. The goal would be to require the disclosure of the original contributor, rather than the shell companies and Super PACs that sometimes conceal the source. Kappel said that without beefed up reporting requirements, schemes like the one alleged in San Diego won't be the last.

"Given the Federal Election Commission's current interpretation of the disclosure requirements for independent expenditures, the same thing could happen in a federal election and the influence of foreign money would never be detected," he said.

http://thecable.foreignpolicy.com/po...e_us_elections

Evidence piles up in campaign finance case

Defense wants more of it now; prosecutors say investigation continuing

By Kristina Davis 1:12 P.M.APRIL 2, 2014 Updated 3:29 P.M.

SAN DIEGO — More than 1,000 surveillance photos. Wiretap recordings. Skype calls. Hundreds of pages of FBI and other investigative reports. Volumes of bank and business records.

That is only some of the evidence federal authorities have collected in the case against Mexican tycoon José Susumo Azano Matsura, the Coronado resident accused of funneling foreign money into local elections.

Prosecutors have already turned over 58 gigabytes of evidence related to the corruption investigation — 13,196 separate files in all.

The latest court filing from the U.S. Attorney’s Office provides a glimpse into the various methods investigators used to puzzle together the alleged campaign finance scheme.

Azano, who made his fortune supplying eavesdropping equipment to foreign militaries, is accused of routing about $600,000 to the campaigns of some of the region's most recognizable politicians.

Only U.S. citizens are allowed to legally make such contributions to elections.

Assistant U.S. Attorney Tim Perry said in court that Azano envisioned developing the San Diego bayfront into “Miami West” and thought local politicians would help make it a reality.

Prosecutors said Azano used intermediaries to make the transactions: Retired San Diego police Detective Ernesto Encinas, who worked vice investigations and later provided personal security for Azano; City Hall lobbyist Marco Polo Cortes, who often represents business owners; and national campaign services manager Ravneet Singh, who owns ElectionMall based out of Washington, D.C.

All have been indicted by grand juries and have entered not guilty pleas except for Encinas, who pleaded guilty last month to conspiracy and filing a false tax return.

This week's court filing for the first time confirms the identity of the alleged straw donor — Marc Chase, co-owner of Symbolic Motor Car Company in La Jolla — who Azano is accused of using to make the donations to three candidates. The document also names for the first time one of those candidates, Bob Filner. Both men have already been named in news reports.

Prosecutors say Azano — known to be an exotic car collector — recruited Chase to make a $120,000 contribution to an independent expenditure committee supporting Filner for San Diego mayor, plus other donations, on his behalf. Chase at first protested that he didn’t have enough money to make the donations, but Azano assured he would be reimbursed, the court records say.

Chase used a bank account named “South Beach Acquisitions” in September 2012 to write the $120,000 check to an independent expenditure committee, San Diegans in Support of Bob Filner for Mayor 2012. Days later, Azano wrote a $380,000 check to Symbolic, which Chase then deposited into the South Beach account, prosecutors say.

One of Azano’s representatives then delivered the $120,000 check to someone at the committee, according to the document.

Chase has not been charged or arrested.

Prosecutors haven’t publicly revealed the names of the two other candidates who received donations, although enough information exists in the records to show they are District Attorney Bonnie Dumanis, who also ran for mayor in 2012, and congressional candidate Rep. Juan Vargas.

The volume of evidence already collected and the more that is sure to come will be the focus of a hearing set for Monday in San Diego federal court.

Azano’s lawyers are asking prosecutors to hand over all of the discovery unearthed in the case, saying “critical” discovery is missing and is crucial to help their defense. An attorney for Cortes has filed a similar motion.

Prosecutors contend they have already handed over more than is legally required at this point, and that they intend to provide more evidence to the defense as the case and the related investigation continues.

Knut Johnson, one of Azano’s lawyers, is specifically asking for any evidence that might show Azano was unaware of the campaign finance laws. He argued that in a case such as this, the burden is on the government to prove the offender was aware of the law and that he violated it knowingly.

Azano’s lawyers also want official confirmation of the identities of the two confidential informants referred to in court documents — names that have already been reported in the media.

Prosecutors are resisting, saying in their motion that Azano hasn’t shown how an official confirmation would help in his defense.

The government added that it has already provided a wealth of evidence from both informants, including video and audio recordings, and it’s not difficult for the defense to figure out their identities.

U-T San Diego in February named Ed Clancy, Filner’s former campaign manager, as one of the informants.

Protective orders have been filed in the case to prevent any of the evidence shared with defense attorneys from leaking to the public.

http://www.utsandiego.com/news/2014/...iscover-court/

San Diego campaign scandal gets second guilty plea

Published 1:19 pm, Thursday, April 10, 2014

SAN DIEGO (AP) — A luxury car dealer is the second person to plead guilty in a case alleging that a Mexican businessman illegally funneled more than $500,000 to support San Diego politicians.

Marc Chase pleaded guilty Thursday to eight federal misdemeanor counts of campaign finance crimes. The U.S. attorney's office says he faces a maximum sentence of eight years in prison.

Under a plea agreement, the 52-year-old car dealer says Mexican businessman Jose Susumo Azano wrote a $380,000 check in 2012, with instructions to spend $180,000 to support unnamed candidates for elected office. The remaining $200,000 was to buy an Andy Warhol serigraph.

The plea agreement says Chase sold Azano $9 million in cars from 2010 to 2013. Azano has pleaded not guilty to making campaign contribution by a foreign national.

http://article.wn.com/view/2014/04/1...guilty_plea_r/

CAR DEALER PLEADS GUILTY TO HELPING MEXICAN BILLIONAIRE FUND AMERICAN ELECTIONS

Video at Breitbart TV

10 Apr 2014,
4:41 PM PDT

ABC 10: SAN DIEGO - The co-owner of a La Jolla luxury car dealership pleaded guilty in federal court Thursday to eight misdemeanor counts of campaign finance crimes, including conspiracy, aiding and abetting contributions by a foreign national and making a "straw" contribution in connection with a federal campaign.

Marc Alan Chase, 52, faces up to eight years in prison and $800,000 in fines when he is sentenced Nov. 13.

Two of Chase's corporations, South Beach Acquisitions, Inc. and West Coast Acquisitions, Inc. consented to the filing of felony charges of conspiracy and entered into deferred prosecution agreements with federal prosecutors.

http://www.breitbart.com/Breitbart-T...ican-elections

More illegal campaign money @

http://www.alipac.us/f9/federal-pros...-grimm-301687/

‘STRAW DONORS’ ARE FINED $60,000

8 illegally gave funds to Dumanis effort

By DavidGarrick5:08 A.M.JULY 12, 2014

San Diego’s Ethics Commission has levied $60,000 in total fines against eight people for making illegal campaign contributions to District Attorney Bonnie Dumanis’ unsuccessful 2012 mayoral campaign.

The so-called “straw donors,” who are all connected to La Jolla luxury car dealership owner Marc Chase, have agreed to pay the fines rather than demand a hearing to dispute the charges.

The donations were part of a wider scheme in which Chase helped a wealthy Mexican businessman donate about $600,000 to various campaigns. Because it’s illegal for foreign nationals to donate to local elections, Chase and others made the contributions on behalf of José Susumo Azano Matsura, according to the government documents.

Contributions from individuals in San Diego city elections are capped at $500, so Chase recruited bogus donors to allow Azano to donate more than that, according to Ethics Commission documents released Thursday night.

The recruited donors wrote $500 checks to the Dumanis campaign after Chase gave them $500 in cash he had received from Azano, the documents say. The donors didn’t make the Dumanis campaign aware of the chain of transactions, according to the documents.

Dumanis has said she was unaware of any illegal money being contributed directly to her campaign or to independent committees set up on her behalf.

The donations, which the commission describes as money laundering, are a problem because they deprived the public of information regarding the actual financial supporters of Dumanis.

The city’s contribution cap for individuals aims to prevent the appearance of corruption and undue influence over elected officials, said John O’Neill, commission chairman.

“The maximum penalties were warranted in light of the severity of the violations,” O’Neill said in a statement.

“These cases should send a clear message that the commission will aggressively pursue individuals who agree to serve as conduits for illegal campaign contributions.”

Four of the illegal donors were fined $5,000 each — the maximum — and another four were fined $10,000 each because they each arranged for their spouses to also make $500 donations to

Dumanis on behalf of Chase and Azano.

The donors receiving fines include five employees of Chase’s dealership, Symbolic Motor Car Company on La Jolla Boulevard: Olivia Falcone, Richard Ahumada, Christopher Peterson, Sean Hughes and Michael Pedace.

The other three donors are Elliott Grossman, owner of Iconic Car Consulting; William Noon, owner of Historic Racing Sales and Service; and Maria Luisa Zarate Lajud, an interior designer who worked part-time as Chase’s personal assistant.

Hughes, Pedace, Grossman and Noon also recruited their spouses as donors. All have paid their fines to the commission except Peterson, who faces a Sept. 30 deadline.

Chase agreed to pay the commission an $80,000 fine in April, the same day that he pleaded guilty to eight misdemeanor charges in federal court on charges of conspiracy, aiding and abetting contributions by a foreign national and making a conduit campaign contribution.

Chase, who is free on his own recognizance, faces up to eight years in custody and fines as high as $800,000 at a sentencing hearing scheduled for November.

This week’s fines for the straw donors conclude the ethics commission’s role in the Chase matter, said Stacy Fulhorst, the commission’s executive director. The federal investigation into the Azano case is ongoing.

The commission cooperated with the U.S. Attorney’s Office and the FBI on the probe, she said.

Fulhorst credited discovery of the illegal donations by those fined Thursday to rigorous routine efforts by the commission to identify patterns of campaign contributions that could indicate money laundering.

Dumanis plans to disgorge all funds she received illegally into the city treasury after the federal case is adjudicated, a campaign spokeswoman said Friday.

http://www.utsandiego.com/news/2014/...e-fined-60000/

U.S. Attorney’s Office August 12, 2014 Southern District of California(619) 557-5610

New Indictment in Campaign Finance Case Adds Gun, Bribery, and Falsification of Records Charges

U.S. Attorney’s Office
August 12, 2014

Southern District of California
(619) 557-5610

SAN DIEGO—A federal grand jury issued a new indictment this morning against Mexican businessman Jose Susumo Azano Matsura and alleged co-conspirators Ravneet Singh, his Washington, D.C.-based campaign-services company ElectionMall Inc. and San Diego lobbyist Marco Polo Cortes, detailing 26 counts of various campaign-finance, falsification of records, bribery, and gun charges.

Besides adding numerous charges, the superseding indictment also brings the defendants into a single case and alleges they were part of a broader conspiracy to illegally and surreptitiously funnel Azano’s money into various political campaigns and committees, including those of three San Diego mayoral candidates and a political party committee supporting federal candidates. The indictment details approximately $600,000 in such illegal donations. According to federal law, it is illegal for a foreign national to donate to political campaigns in the U.S.

The most-recent indictment lists 20 instances in which various defendants allegedly falsified campaign finance records with the San Diego City Clerk, the Federal Election Commission, or the California Secretary of State. Specifically, the indictment lists multiple occasions in which the defendants failed to identify Azano as the true source of campaign donations or concealed the donation altogether.

The new indictment also charges Singh, a social media consultant, and his corporation, ElectionMall Inc., with a single count of bribery. According to the indictment, Singh offered $1,000 to a federal official in exchange for confidential and classified information between December of 2013 and January of 2014.

The superseding indictment also charges that Azano was an alien in possession of a firearm, namely, a black Sig Sauer P225 semi-automatic pistol. Federal law prohibits possession of firearms, ammunition or explosives by an alien who is unlawfully in the United States or who has been admitted to the United States under a nonimmigrant visa.

Among other things, the new indictment alleges that members of the conspiracy would survey candidates for various elective offices to determine which ones to support.

Azano would seek a private meeting with a candidate and conspirators would then design secret methods of financing that candidate’s campaign. They would use various methods to inject the cash into campaigns—including straw donors and unreported in-kind donations. Azano would also use companies and an independent expenditure committee of his own creation to support favored candidates, the indictment alleges.

Singh, his corporation, Cortes and retired San Diego Police Detective Ernesto Encinas were first charged in January of 2014 via complaint. Azano, Singh, ElectionMall and Cortes were first indicted in February of 2014.

Ernesto Encinas, a former San Diego police detective and owner of a private security firm, pleaded guilty in March to conspiracy to commit crimes against the United States and filing a false tax return.

Marc Allen Chase, a co-owner of a La Jolla luxury car dealership, pleaded guilty in March to eight misdemeanor counts of campaign finance crimes, including conspiracy, aiding and abetting contributions by a foreign national and making a “straw” contribution in connection with a federal campaign.

DEFENDANT

Case Number: 14cr388MMA

Jose Susumo Azano Matsura Age: 48 Coronado, CA
Ravneet Singh Age: 41 Washington, D.C.
ElectionMall Inc. Washington, D.C.
Marco Polo Cortes Age: 44 San Diego, CA

SUMMARY OF CHARGES

Count 1: Conspiracy to Commit Offenses Against the United States—Title 18, U.S.C., Sec. 371. Maximum Penalties: Up to five years in prison and $250,000 fine All Defendants
Count 2: Conspiracy to Commit Offenses Against the United States—Title 18, U.S.C., Sec. 371. Maximum Penalties: Up to five years in prison and $250,000 fine Azano and Cortes only
Count 3: Donation and Contribution by a Foreign National Aggregating $25,000 or more—Title 2, U.S.C., Secs. 437g (d) (1) (A) (i) and 441e (A) (1). Maximum Penalties: Up to five years in prison and $250,000 fine All Defendants
Count 4: Contribution in the Name of Another Aggregating $25,000 or more—Title 2, U.S.C., Secs. 437g(d) (1) (A) (i) and 441f. Maximum Penalties: Up to five years in prison and $250,000 fine Azano and Cortes only
Counts 5-24: Falsification of Records—Title 18, U.S.C., Sec. 1519. Maximum Penalties: Up to 20 years in prison per count and $250,000 fine per count. All defendants charged with one or more counts
Count 25: Bribery—Title 18, U.S.C., Sec. 201(b). Maximum Penalties: Up to 15 years in prison and $250,000 fine Singh and ElectionMall Inc. only
Count 26: Alien in Possession of a Firearm—Title 18, U.S.C., Sec. 922 (g) (5) (B). Maximum Penalties: Up to 10 years in prison and $250,000 fine Azano only

INVESTIGATING AGENCIES

Federal Bureau of Investigation
Internal Revenue Service
San Diego Police Department

This content has been reproduced from its original source.

http://www.fbi.gov/sandiego/press-re...ecords-charges

Donor to local pols long on fed's radar

Mexican tycoon who donated to Filner, Dumanis, Vargas campaigns accused in campaign finance case

By Kristina Davis11:35 A.M.AUG. 19, 2014Updated5:22 P.M.

SAN DIEGO — A Mexican tycoon charged with illegally funding the campaigns of San Diego politicians has been on the government’s radar for years, as federal investigators have investigated him in connection with drug smuggling, money laundering and threats, according to a motion filed by prosecutors this week.

The latest filing in the campaign contribution case against José Susumo Azano Matsura reveals several past investigations into Azano’s possible ties to alleged criminal activity, from a car trip with an accused drug trafficker to suspicious cross-border flights to financial records that don’t add up.


Jose Susumo Azano Matsura, a businessman, at his home in Coronado. CREDIT: 10News

The U.S. Attorney’s Office in San Diego filed the motion Monday in response to Azano’s request to see more of the evidence against him in the campaign case. Lawyers on both sides are to argue the issues in federal court next Monday. Azano and his two co-defendants, campaign services manager Ravneet Singh and City Hall lobbyist Marco Polo Cortes, are set to be arraigned a few days earlier, on Thursday, on the charges contained in a new indictment returned last week.

Azano, whose family owns two homes in Coronado, is accused of masterminding a scheme to secretly funnel about $600,000 to local election campaigns, which is against federal law for foreign nationals.

In a request for the government to disclose further details in the case against him, Azano’s lawyer filed a motion last month that blamed the federal government, Sempra Energy and others for railroading and harassing him over the years with false allegations.

In response, the U.S. Attorney’s Office, laid out exactly what those investigations entailed.

Document


Feds respond to Azano discovery motion

DOWNLOAD .PDF

Azano attracted the attention of U.S. Department of Homeland Security investigators in 1997, when agents received a tip that a person was living illegally in the United States. The investigation revealed that the person was using the same social security number, business address and bank accounts of Elizabeth Lugo Martinez, who was receiving mail at Azano’s address, court records state. A confidential informant also noted that Azano was responsible for smuggling in large loads of cocaine into the U.S., the records state, citing the homeland security report.

The investigation showed that in March 1996, border agents at the San Ysidro Port of Entry intercepted a car with 69 pounds of marijuana inside. The car was registered to the address of Azano’s then-wife, at an apartment where several other cars registered to Azano were seen, the report states.

Azano apparently had other links to cars implicated in drug trafficking, according to investigators.

Later, agents focused on a private plane that they later learned was owned by Azano, “albeit not in his own name,” according to the documents.

A source told homeland security agents that the plane had been landing at Brown Field with suspicious occupants onboard, and further investigation showed the pilot had also flown about 10 other aircraft, some of which appeared to have suspicious travel patterns, the report says. Some of the planes also were reported to have missing rivets, a possible sign they were taken apart to smuggle drugs, and had transported high-level drug traffickers, the document says.

Aircraft records put Azano aboard the plane as well, according to the document.

Around this time, the FBI contacted homeland security agents, sharing that FBI surveillance had observed Azano meeting with a “known drug smuggler in a car without license plates,” the court filing says.

The investigation drove forward, with subpoenas, searches and witness interviews, but was “put on hold pending further developments” in 2010, the document says.

Azano entered the picture again in 2011 when a squabble between an Ensenada landowner and Sempra Energy heated up over a liquefied natural gas plant.

Azano had agreed to finance the landowner’s legal fight. Investigators said they were able to connect Azano to a so-called emissary of the landowner, who threatened a Sempra attorney with harm.

In 2012, attention turned to Azano’s financial activity, which various private banking institutions independently noted as unusual, the court filing states.

A task force including homeland security, San Diego police and the U.S. Internal Revenue Service probed his finances, finding activity that appeared consistent with money laundering and evading taxes, the document says.

For example, one of Azano’s companies, Airsam N492RM (the tail number of the private plane under investigation), reported nearly $2.6 million in gross receipts on tax forms and $25 million in deposits on bank forms in 2011. But the account actually had $22 million more in deposits in 2011, the report says.

Azano’s lawyer, Knut Johnson, in the previous filing called the government’s investigations of Azano “baseless and bullying.” “Neither agency has ever found any evidence of such crimes — because none exists,” the lawyer states. Azano wrote a letter to homeland security complaining of harassment last year, Johnson says.

That alleged harassment extended to one of Azano’s pilots, he says, as agents repeatedly tried to get him to turn informant on Azano.

Azano’s lawyer also argued in the previous filing that the government’s repeated harassment of Azano led to the current charges against him, saying prosecutors were acting on behalf of Sempra in revenge for the gas plant fight.

In its response, the U.S. Attorney’s Office called those visions “paranoid fables” that have nothing to do with the current investigation into campaign financing.

In the latest filing, prosecutors also reveal how the campaign contribution investigation came to be.

According to the document, Azano’s former accountant informed agents — without being prompted — that Azano’s assistant had given him money with instructions to donate it to District Attorney Bonnie Dumanis’ 2012 San Diego mayoral campaign. It was also around that time that San Diego CityBeat published an article about Azano’s funding of an independent expenditure committee in her support.

The story quoted a political consultant as saying Azano had a “green card,” which agents discovered was untrue, the document says.

Prosecutors have said Azano wanted to buy political influence in San Diego to help turn the city’s bayfront into “Miami West.” However, Azano blames his security consultant Ernesto Encinas, a retired San Diego police detective, for being the brains behind the operation. Encinas has already pleaded guilty to his role as an intermediary, as well as La Jolla car dealer Marc Chase, who acted as the straw donor for Azano’s contributions, according to court records.

The donations benefited the mayoral campaigns of Dumanis and Bob Filner and the congressional campaign of Rep. Juan Vargas.

Related:

Azano blames Sempra, ex-cop for woes

Feds allege wider political funding plot

http://www.utsandiego.com/news/2014/...paign-finance/

Federal Judge Nixes Most Of Mexican Businessman’s Requests

Monday, August 25, 2014
By Tarryn Mento

Photo by Tarryn Mento

U.S. Southern District Edward J. Schwartz Courthouse on Broadway Avenue in downtown San Diego.


A federal judge Monday denied most of a Mexican billionaire's requests for discovery in a case alleging he illegally donated to U.S. political campaigns.

Jose Susumo Azano Matsura, who appeared in court, is accused of funneling up to $600,000 to the 2012 mayoral campaigns of Bob Filner and District Attorney Bonnie Dumanis and Juan Vargas’s congressional bid. It is illegal for foreign nationals to donate to U.S. campaigns. Azano has pleaded not guilty.

U.S. District Judge Michael Anello decided against many of Azano's requests, including details about why U.S. Attorney Laura Duffy recused herself from the case. Anello said the information was either privileged, irrelevant to the charges or the request was too vague.

The judge did grant Azano’s request to seal court documents already made public this month by the U.S. Attorney’s Office. In them, prosecutors claim Azano appeared in earlier federal investigations involving drug smuggling and money laundering.

Azano's attorney, Knut Johnson, said details about those inquiries were irrelevant and they could hinder his client's right to a fair trial.

Federal prosecutors agreed to seal the court papers and file updated documents that redacted those sections.

Anello also ordered the government to provide more information about an email chain said to involve Azano and share materials obtained through electronic surveillance.

Although Anello ruled against most of the defense's requests, the tone in his courtroom at the Edward J. Schwartz Courthouse in downtown San Diego was mostly amiable, and at times even humorous. Anello joked that federal prosecutors should take Johnson out to lunch to show there’s no tension between the two sides. He said that notion, however unintended, could be interpreted based on media coverage of the high-profile case.

The next update is expected at a Nov. 3 status hearing.

http://www.kpbs.org/news/2014/aug/25...ests-discover/

Fines levied in Azano case

Ethics Commission will get $60,000 from eight who illegally donated to Dumanis

By David Garrick 12:11 P.M.JULY 11, 2014 Updated4:17 P.M.

VIDEO

DOWNTOWN SAN DIEGO — San Diego’s Ethics Commission levied $60,000 in total fines Thursday night against eight people for making illegal campaign contributions to District Attorney Bonnie Dumanis’ unsuccessful 2012 mayoral campaign.

The so-called “straw donors,” who are all connected to La Jolla luxury car dealership owner Marc Chase, have agreed to pay the fines rather than demand a hearing to dispute the charges.

The donations were part of a wider scheme in which Chase helped a wealthy Mexican businessman donate about $600,000 to various campaigns. Because it’s illegal for foreign nationals to donate to local elections, Chase and others made the contributions on behalf of José Susumo Azano Matsura, according to the government documents.

Contributions from individuals in San Diego city elections are capped at $500, forcing Chase to recruit bogus donors to allow Azano to donate more than that, according to Ethics Commission documents.

The recruited donors wrote $500 checks to the Dumanis campaign after Chase gave them $500 in cash he had received from Azano, the documents say. The donors didn’t make the Dumanis campaign aware of the chain of transactions, according to the documents.

Dumanis has said she was unaware of any illegal money being contributed to help her campaign.

The donations, which the commission describes as money laundering, are a problem because they deprived the public of information regarding the actual financial supporters of Dumanis.

The city’s contribution cap for individuals aims to prevent the appearance of corruption and undue influence over elected officials, said John O’Neill, commission chairman.

“The maximum penalties were warranted in light of the severity of the violations,” O’Neill said in a statement. “These cases should send a clear message that the commission will aggressively pursue individuals who agree to serve as conduits for illegal campaign contributions.”

Four of the illegal donors were fined $5,000 each — the maximum — and another four were fined $10,000 each because they each arranged for their spouses to also make $500 donations to Dumanis on behalf of Chase and Azano.

The donors receiving fines include five employees of Chase’s dealership, Symbolic Motor Car Company on La Jolla Boulevard: Olivia Falcone, Richard Ahumada, Christopher Peterson, Sean Hughes and Michael Pedace.

The other three donors are Elliott Grossman, owner of Iconic Car Consulting; William Noon, owner of Historic Racing Sales and Service; and Maria Luisa Zarate Lajud, an interior designer who worked part-time as Chase’s personal assistant.

Hughes, Pedace, Grossman and Noon also recruited their spouses as donors. All have paid their fines to the commission except Peterson, who faces a Sept. 30 deadline.

Chase agreed to pay the commission an $80,000 fine in April, the same day that he pleaded guilty to eight misdemeanor charges in federal court on charges of conspiracy, aiding and abetting contributions by a foreign national and making a conduit campaign contribution.

Chase, who is free on his own recognizance, faces up to eight years in custody and fines as high as $800,000 at a sentencing hearing scheduled for November.

This week’s fines for the straw donors conclude the ethics commission’s role in the Chase matter, said Stacy Fulhorst, the commission’s executive director. The federal investigation into the Azano case is ongoing.

The commission cooperated with the U.S. Attorney’s Office and the FBI on the probe, she said.

Fulhorst credited discovery of the illegal donations by those fined Thursday to rigorous routine efforts by the commission to identify patterns of campaign contributions that could indicate money laundering.

Dumanis plans to disgorge all funds she received illegally into the city treasury after the federal case is adjudicated, a campaign spokeswoman said Friday.

david.garrick@utsandiego.com (619) 269-8906 @UTDavidGarrick

http://www.utsandiego.com/news/2014/...anis-donation/