Faulconer finances: He pays one company with campaign funds, receives income from another

California gubernatorial candidate Kevin Faulconer’s campaign committees paid tens of thousands of dollars to a company controlled by his previous chief of staff, who has paid him for work at another company she controls.

According to state-mandated campaign disclosures, three committees controlled by Faulconer paid longtime aide and political ally Aimee Faucett’s firm at least $58,000 through July of this year. A different company controlled by Faucett paid Faulconer between $10,000 and $100,000.

The payments include money for a car lease, food, an insurance policy and campaign consulting to Agenda Setting LLC, a limited liability company that Faucett launched in January, public records show.

They also include a one-time payment of $5,000 directly to Faucett for management services she provided to the campaign between January and June.

The expenses paid to Faucett were made at the same time the Republican former mayor is being paid as a strategist for a different company that Faucett established called Collaborate for California. Those payments were disclosed in a statement of economic interest Faulconer signed in July.

Candidates aren’t allowed to use campaign funds as personal income. The public records available do not show that Faucett’s company used the money from Faulconer’s campaign to pay him, only that the overall amount falls within the same broad range. A spokesperson for Faulconer said there was no connection between the two companies, their finances, the work that they do or the payments in question.

Every campaign expense was made for a lawful political purpose with strict oversight, Faulconer campaign spokesman John Burke said in a statement. He said the payments to Faucett were unrelated to the candidate’s employment with Collaborate for California.

“Ms. Faucett’s company, Agenda Setting LLC, provides policy expertise for the campaign and has helped to develop Faulconer’s California Comeback agenda: the most comprehensive series of plans of any candidate for governor in this race,” he wrote.

“Agenda Setting LLC and Collaborate for California are two separate companies with separate books, separate bookkeepers, separate clients, and separate bank accounts, with no finances moving between the two.”

The Faulconer campaign did not respond to other questions, such as what specific work the former mayor performs for Collaborate for California and how much he has been paid by Faucett’s company.

Faucett declined to discuss her arrangement with the Faulconer campaign or the candidate’s work for Collaborate for California.

“My response will be provided to you by the Faulconer campaign,” she said by email.

In July, Faucett told the Voice of San Diego online news organization that Collaborate for California provides strategic counsel to individuals, businesses and organizations that interact with government agencies.

In the same report, she said the start-up had one client — IQHQ, the local real estate company that bought rights to redevelop a swath of the San Diego Bay waterfront from businessman and Faulconer supporter, Doug Manchester.

Faucett, who like Faulconer is a San Diego State University graduate, served as Faulconer’s chief of staff when he was a City Council member representing the 2nd District.

She later worked for then-Mayor Jerry Sanders and for the San Diego Regional Chamber of Commerce after Sanders left public office and became president and CEO of that organization.

Faulconer hired Faucett back to City Hall in 2017, when she succeeded Stephen Puetz as his chief of staff. During her final weeks in the Mayor’s Office Faucett served as the city’s interim chief operating officer.

‘Voters should know’

Under the California Political Reform Act, campaign committees are not permitted to pay candidates, except to cover reimbursements for routine out-of-pocket expenses.

“Campaign funds shall not be used to compensate any individual or individuals with authority to approve the expenditure of campaign funds for the performance of political, legislative or governmental activities,” the law states.

The California Fair Political Practices Commission, which regulates state and local office-seekers and enforces the Political Reform Act, did not respond to questions from The San Diego Union-Tribune about the payments to and from Faulconer.

“We declined to comment on this or any specific situation, especially when it’s part of an election campaign season, as is our longstanding policy,” spokesman Jay Wierenga said in a statement.

Faulconer is one of 46 people vying to replace Gov. Gavin Newsom through a recall election scheduled for Sept. 14.

Faulconer controls four separate committees related to his gubernatorial campaign, according to the Secretary of State’s Office. All but one has paid Faucett and her company, Agenda Setting LLC.

Most of the funds — just over $32,500 — came from Faulconer for Governor 2022, a committee that collected $2.2 million between January and July and spent just under $2 million, records show.

Two other committees controlled by the former mayor also disclosed campaign payments to Agenda Setting LLC.

Faulconer for Governor 2021 reported just over $19,500 to the consulting firm, and Faulconer’s Ballot Measure Committee to Recall Gavin Newsom; Clean Up California, Kevin reported three payments of $500 each.

Combined, those two committees raised $2.1 million and spent $1.2 million, campaign filings show.

The fourth committee is called Faulconer’s Ballot Measure Committee; Rebuilding the California Dream, San Diego Mayor. It raised no money this year and spent just under $10,000; it has about $6,700 cash on hand.

Political experts said Faulconer should explain his committees’ revenue and spending practices ahead of the recall election.

“It would be best if Faulconer were totally transparent about the arrangement,” said Jack Pitney, a political science professor at Claremont McKenna College. “Voters should know about any potential conflicts of interest.”

Jim Boren, executive director of the Institute for Media and Public Trust at Fresno State University, said the financial arrangement raises questions about how Faulconer separates campaign funds from his personal finances.

“Public officials must conduct themselves so that there is no question about whether there is a special arrangement,” Boren said.

Restaurant Events Inc.

A public relations professional before he was elected to the City Council on his second try in 2006, Faulconer’s income doesn’t approachthe income his best known rivals in the recall election reported.

Reality television star and Olympic champion Caitlyn Jenner reported $5.5 million in income between 2016 and 2019, according to a Los Angeles Times report in July.

Rancho Santa Fe businessman John Cox reported an income of $2.7 million over the same period, the Times reported.

Conservative talk radio host Larry Elder reported annual income between $100,000 and $1 million on his state-required financial disclosure, as well as a 50 percent interest in a rental home in Los Angeles.

Faulconer was paid about $75,000 a year during his time on the City Council and saw his salary increased to $100,000 when he was elected mayor.

He told the Los Angeles Times he had not yet submitted his 2020 tax return, but the 2019 document reflected an adjusted gross income of $358,119 — most of that from Restaurant Events Inc., his wife’s event-planning business.

The company’s revenue apparently began rising after Faulconer was re-elected in 2016. The family’s adjusted gross income was $142,609 that year; $199,640 in 2017 and $186,429 in 2018, the Times said.

It’s not clear how the COVID-19 pandemic might have affected Restaurant Events Inc. revenue. The financial disclosure Faulconer signed in July placed the company value between $100,000 and $1 million.

The same document says Faulconer was paid between $10,000 and $100,000 by Pepperdine University for work as a visiting professor and up to $100,000 for his work at Collaborate for California.