By most accounts, the government is using a timeless tactic in the federal campaign finance investigation of Mexican billionaire Jose Susumo Azano Matsura.
“The strategy is still a classic ground-up approach,” said former San Diego federal prosecutor Jason Forge. “They appear to be cooperating - the lowest-level individuals.”
The law bars foreign nationals from contributing to American campaigns.
Two of the four men — accused of helping Azano steer more than $600,000 into the 2012 mayoral campaigns of Bob Filner and District Attorney Bonnie Dumanis and Juan Vargas’s congressional bid — have pleaded guilty.
Car dealer co-owner Marc Chase admitted serving as a straw donor for Azano. He’s agreed to pay $80,000 in fines to the San Diego Ethics Commission for laundering money through committees supporting Filner and Dumanis. Also, last month eight people affiliated with Chase have agreed to pay $60,000 in fines to the commission for taking cash from Chase and contributing in their own names.
And retired San Diego detective Ernie Encinas, whom prosecutors said helped hide the foreign campaign donations, pleaded guilty to conspiracy and filing a false tax return.
“We took a look at the evidence, and there were wiretaps and there were recorded conversations between him and cooperating individuals,” Encinas’s lawyer Jeremy Warren said. “He said things in there that made it very untenable to defend in court. It was a very easy call for him to go in and admit that he did something wrong.”
Warren would not say whether Encinas is cooperating with prosecutors.
Two key questions hang over the case: Does Encinas know whether the beneficiaries of the money – Filner, Dumanis and Vargas – were aware the donations were coming from Azano? Filner won’t comment. Dumanis denies knowing, as does Vargas. But if Encinas knows otherwise, will he tell?
Forge said prosecutors hope to work their way up from Encinas.
“Not just to the people who are already indicted but perhaps to the actual beneficiaries of these donations,” Forge said. “The most notable aspect of the case is that it involves at least by implication two of the most prominent political positions in the city of San Diego -- the office of the mayor and the office of the district attorney.”
According to a federal complaint, Azano gave $340,000 through donors to Filner’s mayoral effort two years ago. The Mexican businessman also set up an independent expenditure committee for Dumanis’s mayoral run and contributed $100,000 to it. Another $100,000 of Azano’s money was paid to technology company owner Ravneet Singh, who is also charged in the case. Forge says good candidate management of their campaigns would require they knew about those contributions because of the sheer amounts.
“When you look at the size of their campaign coffers and the size of these donations, it’s a staggering percentage,” Forge said.
The $100,000 from Singh was used to pay for Dumanis’s campaign web services. But it was never reported on public filings of her disclosure statements.
Singh and San Diego lobbyist Marco Polo Cortes have pleaded not guilty to conspiring to help Azano pump foreign money into local campaigns.
Both Dumanis and Filner visited Azano at his home. Voice of San Diego also recently reported that Dumanis accompanied Azano to a meeting with San Diego County Sheriff Bill Gore. And Dumanis wrote a recommendation letter on district attorney letterhead to the University of San Diego’s President Mary Lyons on behalf of Azano’s son.
Forge called the letter damning.
“That is taking things a step further and actually making affirmative representations about someone connected to a political donor,” Forge said “It’s quite surprising and I think that if there is any flame so far, that’s the closest thing we have to it in the public record.”
Dumanis said she doesn’t know Azano’s son. She told KUSI last month she wrote the letter at Encinas’s request.
“It’s much ado about nothing,” Dumanis said. “It’s time for everyone to move on and focus on the people who committed the crimes and holding them accountable.”
As campaign finance scandals go, Warren said, this one has intrigue because Azano is foreign, wealthy and a bit of a mystery.
“People don’t really know what he’s all about,” Warren said. “He’s an individual who made a lot of money in tech services. He’s somebody who enjoys high living. He drives very fancy, expensive sports cars. He has expensive tastes in watches.”
The government contends Azano gave to mayoral candidates to build enough influence with the city's leadership so he could transform San Diego's bay front into Miami West.
Azano has pleaded not guilty. In court papers filed last week, he argued the government’s case against him is motivated by a vendetta from a San Diego Fortune 500 company, Sempra. Azano’s lawyers wrote that Sempra asked prosecutors to investigate him in 2011 after he bankrolled a landowner who was in a property dispute with the company in Mexico. And they believe the government complied.
Most white-collar criminal cases result in a plea deal. But Azano is known as a fighter. He’s hired some of the best lawyers in the country to defend him.
Even so, Forge is doubtful the case will go to trial.
"It certainly appears that the government already has two key cooperators, not to mention recorded conversations,” Forge said. “The next significant development in this case is going to be a guilty plea by one of the three remaining defendants."
