Ethics questions dog Democrat running for California governor

SACRAMENTO, California — A California Democrat vying to succeed Gov. Gavin Newsom may have run afoul of state law by sending thousands of campaign dollars to a company owned by her spouse.

Toni Atkins, the powerful former legislative leader from San Diego, paid $22,500 to the Global Policy Leadership Academy, where her longtime spouse, Jennifer LeSar, is the firm’s chief executive officer and its sole shareholder, disclosures reviewed by POLITICO show. Atkins described the money as going toward a trip to Vienna, Austria, in 2022.

California law bars officeholders from using campaign funds for personal reasons such as giving to a spouse or domestic partner, experts said. The Global Policy Leadership Academy is part of a portfolio of affordable housing and economic development companies owned by LeSar.

Ann Ravel, former chair for both the Federal Election Commission and California’s Fair Political Practices Commission — the campaign finance watchdog agencies in Washington and Sacramento — told POLITICO the amount of money Atkins sent to the Global Policy Leadership Academy, a for-profit company, is not legal.

Any money given from campaign funds must be reasonably — and directly — related to a political, legislative or governmental purpose, she said. “This is not the case with the Global Policy Leadership Academy,” Ravel said after reviewing Atkins' payment.

A spokesperson for the Atkins campaign disputed Ravel’s interpretation and contended the senator did nothing wrong. Evan Westrup, in a statement to POLITICO, said the seminar focused on providing leaders, policymakers and practitioners with insight into proven international models and approaches for confronting the housing and homelessness crises.

LeSar didn’t receive any direct compensation from Atkins’ participation in the Vienna seminar, Westrup said, adding that “there was no net financial benefit from the seminar to GPLA or the senator’s spouse.”

“The Senator remains committed to avoiding any conflicts — or even the perception of a conflict — and as such, requested a full review of this matter by her attorneys, who concluded that the statute cited … does not apply,” Westrup said.

He said that the campaign money Atkins sent to Global Policy Leadership Academy covered seminar expenses for each participant, including transportation, lodging, meals, meeting space and programming costs.

“The fact that you’re citing information disclosed in public documents about the senator’s participation in this particular seminar reflects her longstanding and continued commitment not only to transparency, but also to making housing more affordable for Californians,” Westrup said.

Westrup said Atkins directed her attorneys to proactively contact the FPPC to “relay these facts” after POLITICO inquired about the spending. He said Atkins also offered her “full and complete cooperation in resolving the matter in the event the FPPC has a different view of the statute.”

POLITICO began scrutinizing Atkins’ campaign spending earlier this year after she leaped into the race to become California’s first woman and LGBTQ+ governor . News outlets have probed potential conflicts between the top lawmaker and her consultant spouse for well over a decade . But the money from Atkins’ campaign committee to LeSar’s firm is the first concrete example of an allegedly improper payment, according to Ravel’s interpretation.

Atkins climbed the political ranks from San Diego City Hall where she served on the council to the most powerful legislative positions in Sacramento — Senate president pro tem and Assembly speaker — positions that not only allowed her to help set the agenda on affordable housing spending but endeared her to many of the state’s most generous contributors.

The Los Angeles Times, for a story in 2019 , traced the uptick in public agencies, developers, nonprofits and other clients of LeSar over the years, based on a review of Atkins’ economic disclosure forms and other documents. Both Atkins and LeSar have repeatedly pushed back on potential conflicts, with Atkins telling the newspaper that “we spend a lot of time trying to make sure in our very busy days that we’re following the letter of the law.”

Atkins, who is leaving office in December, was elected to her final Senate term in 2020. Two years later, she sent the $22,500 in the leftover campaign funds to Global Policy Leadership Academy, LeSar’s company that records show was incorporated in January 2019.

Ravel said the only acceptable contributions of campaign funds are donations (and behested payments) to charitable, educational, civil, religious or other tax-exempt organizations as long as the contribution is reasonably related to a political, legislative or governmental purpose.

She noted that Atkins’ payment is much higher than the $200 amount generally accepted as a substantial personal benefit. A situation that gave rise to similar questions involved Attorney General Rob Bonta, prior to his leaving the Legislature in 2021, she said.

Bonta, a Democrat and himself a likely gubernatorial candidate, had made high behested payments to the nonprofit where his wife, now-Assemblymember Mia Bonta, was previously the director. Behested payments are money requested, suggested, solicited or made in cooperation with a public official. While Mia Bonta benefited from some of that money, it was not given for her use but on behalf of the nonprofit, Ravel explained.

Atkins has supported strengthening campaign ethics rules. In 2014, amid a series of scandals at the Capitol, the then-Assemblymember supported a raft of bills including a measure signed by then-Gov. Jerry Brown to bar the spouse or domestic partner of an elected official or candidate from receiving campaign funds for services rendered.

The campaign money Atkins sent to LeSar’s firm was earmarked in the senator’s May through June 2022 disclosure forms as going to registration for a “Social Housing Field Study Trip” to Vienna for Atkins and two of her staffers — $7,500 per person.

Housing is a top issue for Californians given its exorbitant cost. Building more places to live has been a vexing challenge for lawmakers and local officials. POLITICO previously reported that social housing in Vienna is not exclusively for low-income people . Well over half of the city’s nearly 2 million inhabitants live in subsidized housing, and the city owns about half of the available flats and co-ops.

In addition, Atkins’ campaign reported paying entities not affiliated with her spouse: the Altour international travel agency and Sato Tours for she and her staff, about $16,000 more for lodging and travel from Los Angeles to Vienna from Sept. 9 to Sept. 22, 2022, according to the same campaign disclosure filing.

Atkins disclosed sending another $9,781 to Steirereck, the fine dining restaurant in the spacious Stadtpark that specializes in fresh Austrian produce and has two Michelin stars. That expense was earmarked for a Sept. 15, 2022, dinner deposit for 80 guests participating on the trip.

In the same year, Atkins disclosed that she and her spouse received more than $100,000 in income from Global Policy Leadership Academy. She identified the fair market value of the company as being between $100,000 and $1 million.

The Global Policy Leadership Academy describes itself as helping prepare “professionals and civic leaders to advance solutions to intractable societal challenges through a deep commitment to the development of shared knowledge, best practices, and collaboration.”

LeSar was quoted saying that the Global Policy Leadership Academy “isn’t my first company, and I doubt it will be my last, but it’s undoubtedly my most scalable and impactful company” adding that they “seek to connect and build a global practice group for leaders and influencers working on the world’s most intractable crises.”

Atkins’ name does not appear in the company’s promotional material, and there is little evidence online of her at the 2022 trip. She does, however, appear for a brief snippet in a GPLA promotional video posted to YouTube that shows Atkins in the background, wearing a face mask, as LeSar speaks to a table of participants in the foreground.

Also in the video is a Los Angeles-based lobbyist who attended the Vienna trip in 2022 and sits on the board of the California Community Foundation, which gave GPLA a $150,000 grant for 2019-2020. Another attendee was Fresno Mayor Jerry Dyer. He attended as part of an effort to study social housing strategies to help with the city’s housing crisis.

The Fresno Bee newspaper reported that registration for the academy, meals, lodging, ground transportation and airfare for three city officials came in at under $29,000. And Dyer reflected fondly on the trip in a recent chat with POLITICO in Sacramento, saying it was a valuable experience for him.

Other groups that authorized expenditures for that year’s Vienna trip were the Southern California Association of Governments and its San Diego counterpart, known locally as SANDAG.