How Soaring Campaign Spending Shaped
‘14 City Council Race PAC Led by Former Tea Party Leader May Have Broken State Law

by Dave Waddell

Before he created a political action committee that appears to have broken state law while attacking former Chico mayor Scott Gruendl, Tom Kozik for years orchestrated and recorded Chico Tea Party meetings.

And at those meetings, as attendance appeared to steadily dwindle, Kozik occasionally made some bizarre claims. Most notably, at a gathering of Tea Party Patriots in 2014, Kozik quoted a Soviet dictator in criticizing President Barack Obama’s health care law.

“It looks like ‘Obamacare’ is set to collapse into a single-payer healthcare system, and this is what they call the ‘crown jewel of socialism,’ and that’s a quote from …,” said Kozik, pausing momentarily for effect, “ … Lenin.”

Actually, the term “single-payer healthcare system” does not appear to have come on the scene until the 1990s, or about 70 years after Vladimir Lenin’s death. And a Google search suggests that the true source of the “crown jewel of socialism” quote is former Rep. Michele Bachmann, R-Minn., in reference to the Affordable Care Act in 2011.

While Kozik’s notions may come from the farthest reaches of right field, his political action committee, named Butte County Awareness and Accountability, is relatively new among the numerous PACs that have operated in city elections for many years – their agendas ranging across the political spectrum. Indeed, with the Nov. 8 City Council election less than five months away, two trends seem likely to continue in Chico: Ever-bigger bucks being raised and spent by the candidates themselves and ever-greater involvements by political action committees.

(A political action committee is an organization that collects funds from donors to campaign for or against candidates or measures.)

During 2014, just prior to the Nov. 4 election, two new conservative PACs sprang up — one being Kozik’s — and together they spent more than $51,000 to thwart Gruendl and advance the conservative candidacies of Andrew Coolidge, Reanette Fillmer and Mayor Mark Sorensen. All three were elected, creating left-leaning Chico’s first conservative council majority in a dozen years.

The council’s three remaining members of liberal persuasion – Ann Schwab, Randall Stone and Tami Ritter – are all up for re-election in November, as is one conservative, Vice Mayor Sean Morgan.

Kozik’s Butte County Awareness and Accountability in fall 2014 issued two “Fire Scott Gruendl” mailers whose contents even the PAC’s biggest donor, downtown developer Wayne Cook, has called “pretty harsh.”

What has made this PAC’s actions most questionable is where it filed financial disclosure documents. Though it spent the bulk of its bankroll bashing Gruendl in the ‘14 City Council race, the PAC’s forms were filed by Kozik with the Butte County election office, rather than with the city – in apparent violation of the state Political Reform Act.

 

“Butte County Awareness and Accountability used 78 percent of its expenditures against Gruendl in the Chico election, its reports say.”

 

Butte County Awareness and Accountability wasn’t the only new conservative PAC fueled by wealthy Chico-area business owners at work in 2014, a city election noteworthy both for historic spending levels – with conservatives outspending liberals nearly 3-1 – as well as a dismal 37 percent voter turnout.

A separate conservative PAC was operated by Butte College administrator Mike Maloney, Chico’s politically active former police chief.

Maloney’s PAC — which issued its own attack ad against Gruendl — was called Chico Citizens for Accountable Government and spent more than $40,000. That PAC’s bankroll – established initially with just six donations of $5,000 and later bolstered by a seventh such donation from more than 3,000 miles away – was part of probably the costliest council campaign in city history. Spending by conservative candidates and PACs alone exceeded $170,000 in the ’14 city race, while overall spending totaled about $237,000, probably an all-time high, though no official records exist.

Political newbie Fillmer raised $46,900 — in all likelihood a record amount in Chico for a council candidate. She reported expenditures of the same amount, second only in city annals to Larry Wahl’s $48,919 spending binge in 2008. (Wahl apparently spent more than he raised, at least according to campaign-finance filings at City Hall.)

And, if Vice Mayor Morgan’s fund-raising start ahead of his 2016 election bid is any indication, Fillmer’s apparent record could be short-lived. Last year, at Morgan’s mid-summer Re-Election Round-Up at a private ranch, some 18 “hosts” ponied up $500 apiece, while the event’s 13  “sponsors” each donated $250, bringing the haul to $12,250 before a single guest had arrived at the $50-per-plate barbecue.

“We’re seeing higher amounts being raised in order to run for council,” said Debbie Presson, Chico’s city clerk. “It’s changed, and it’ll continue to change.”

 

 

PACS Exert Growing Influence

On Sept. 11, 2014, two forms were filed by Kozik, the erstwhile Tea Party leader, with elections officials. One was a statement of organization for Butte County Awareness and Accountability, naming Kozik as treasurer and principal officer. The second form disclosed that the PAC’s first contribution came from developer Cook, who ultimately would give the PAC a total of $5,000.

Kozik, who shortly after the election was appointed to a city commission, answered this reporter’s initial questions, but later stopped responding to follow-up questions. In a telephone interview, Kozik claimed Butte County Awareness and Accountability had “absolutely no affiliation with the Tea Party” and that he no longer was connected to the right-wing group.

Butte County Awareness and Accountability, in Kozik’s filings, classified itself as a “general purpose committee” aiming to “educate voters about issues and candidates using mail, online methods, and grassroots.” Kozik checked a box declaring that the PAC was “not formed to support or oppose specific candidates or measures in a single election.”

Of the $11,162 the group reported spending in 2014, $2,000 was a donation to Citizens for a Safer Butte County, which successfully backed Measure A regulating medical marijuana growing in the county. But most of the rest of the money, nearly $8,700, was spent on two mailers blistering Gruendl.

The state Fair Political Practices Commission (FPPC) provides guidelines for PAC treasurers in determining at which level – city, county or state – campaign disclosure forms should be filed. Based on those guidelines, it appears that Butte County Awareness and Accountability filed its financial disclosure documents in the wrong jurisdiction.

According to the FPPC, a PAC is required to file with a city if it “makes more than 70 percent of its contributions and expenditures to support or oppose candidates and/or measures … in one city.” Butte County Awareness and Accountability used 78 percent of its expenditures against Gruendl in the Chico election, its reports say.

Jay Wierenga, the FPPC’s communications director in Sacramento, said the commission comments only on cases its own staff has investigated.

“The law puts the responsibility of a correct, truthful and proper filing on the treasurer and/or candidate,” Wierenga said. “I can’t comment on any specific situation … What I can state is … a committee can’t purposely or knowingly file in the wrong jurisdiction or as a wrong committee. … A committee has to file for what it truly is and has to file where it is supposed to based on what it is.”

Penalties range up to a $5,000 fine for “each and any” violation of the Political Reform Act, Wierenga said.

In the phone interview, Kozik claimed – erroneously — that Butte County Awareness and Accountability could legally file with the county if it expended at least 20 percent of its funds on county races. Even if that were true, which it isn’t, the $2,000 donation in support of Measure A amounted to just 18 percent of the PAC’s overall spending in 2014.

In its most recent filings, the PAC reported receiving just one donation in 2015: $1,000 in May from Alex Debose, listed as “owner of Bobcat of Chico [Rental Guys].”  It reported spending about $1,100, including $700 for unspecified “signs,” last year.

Kozik, who described himself as semi-retired from the computer industry, said he walked door-to-door in fall 2014 and encountered much of the same dissatisfaction that presumptive Republican Party nominee Donald Trump has tapped into.

“That was what the last election was like in the city,” Kozik said. “People are desperate for good government.” 

In his role as a Tea Party leader, some snapshots of Kozik and his views are found in various videos on YouTube. In a January 2014 television news report, Kozik speaks 13 words on camera in response to President Obama’s State of the Union address: “More lawless executive actions, more of the same; don’t need to watch it.”

In February 2014, in explaining Tea Party principles at the beginning of a recorded meeting, Kozik displayed a graph showing his party on the right side of the political spectrum, just to the left of “anarchy.” The graph placed both the People’s Republic of China and Nazi Germany on the far left of the political spectrum.

Strongly supported by Kozik in his remarks were efforts to require citizens to produce identification before being able to vote: “Just like when you buy a pack of cigarettes or you buy a six-pack of beer, you show your ID. This is something we fully support.”

A more personal portrait of Kozik emerged at an October 2013 Tea Party meeting – at which then city manager Brian Nakamura and finance chief Chris Constantin discussed the sorry state of city finances.  As Nakamura and Constantin waited to be introduced, Kozik narrated a sluggishly paced, six-minute slideshow that included about nine different photos of his grandmother, the late Anna Kozik. His point had something to do with the tax tyranny he said his ancestors fled the former Czechoslovakia to escape.

In January 2015, two months after the election, Kozik was appointed by the City Council to be one of five members of the Chico Municipal Airport Commission. Nominating him were Sorensen, Coolidge and Schwab. The four votes that put him on the commission were cast by Schwab, Coolidge, Fillmer and Morgan.

Schwab said her support for Kozik was intended to “block” the appointment of Floyd Sanderson, a former airport commissioner. As such, Sanderson backed a second fixed-base operation at the airport – a move the council overturned, Schwab said.

One mailer put out by Kozik’s PAC includes an especially unflattering photo of Gruendl with a red line slashing through his blurred face. Gruendl later referred to his image in the picture as “Jabba-the-Gut.” The mailer references 67 stabbings in Chico and 39,000 pounds of trash pulled from Bidwell Park. It claims Gruendl’s “policies have attracted transients and vagrants from across the country. … Chico is now a city of Homeless Encampments. Street People. Drugs. Violence and Gangs.”

 

Mayor Raises Jurisdictional Issue

Presson, the city clerk, said that while it’s proper to hold public officials accountable, the election process suffers when individuals are targeted.

“I think it’s sad for our community that these hit pieces happen,” she said. “It saddens me when it turns ugly in an election. I don’t believe Chico has gotten so large that we’re devoid of compassion or feelings here.”

On the other hand, Bob Mulholland, who is both a member of the Democratic National Committee and secretary for Chico Democrats, has nothing negative to say about negative campaigning. After all, he’s helped produce quite a number of so-called hit pieces aimed at Republicans through the years. He dismisses today’s political attacks as “meek” compared to stuff the nation’s founders threw at each other.

Chico Democrats reported spending about $8,000 on the 2014 council race – roughly half targeting conservatives. They derisively portrayed Fillmer as lacking any interest in city government before running for council. The Democrats’ so-called Chico News Gazette “newspaper” claimed that Fillmer voted in only two of the 14 elections that preceded her own candidacy, including not voting in June 2014.

“She apparently hated to vote,” Mulholland said.

Asked for documentation, Mulholland said the Democrats routinely purchase voter rolls from the county election office. According to rolls going back to 2005, Fillmer voted in only the November general elections of 2008 and 2012, he said. Fillmer did not respond to messages requesting comment on Mulholland’s claims.

For Charles Turner, a political science professor at Chico State, the biggest surprise of the 2014 city election was not that Gruendl got turned out of office but how well Fillmer polled in finishing third.

Though she had never served on any public boards or commissions and was unknown politically until she ran, Fillmer proved to be a fundraising powerhouse. Her nearly $47,000 in contributions is notable not only for being the highest for a city candidate at least since 2008 – probably ever — but also for the number of maximum $500 donations she received: a whopping 47. (Not making the list of 47 was developer Cook, whose Hotel Diamond provided catering for a Fillmer “meet and greet” – a non-monetary donation valued at the untidy sum of $499.28.)

In comparison, the three liberals in the ’14 race together totaled 10 $500 donations — mainly from labor union, Democratic and environmental partisans. Coolidge, who loaned his campaign $8,600, reported six $500 donations. Even Sorensen’s 25 $500 donations are nowhere close to being Fillmeresque.

Fillmer, who operates a human resources consulting company, declined multiple requests to be interviewed for this article, instead emailing a statement that had nothing to do with the issues raised.

At the Aug. 4, 2015, council meeting, Sorensen criticized the reporting for this story before it was written and some 10 months before it was published. The mayor then lambasted liberal council colleague Stone, who had made false claims on Facebook related to online election information that had vanished from the city clerk’s Web page. After criticizing Stone at length, Sorensen closed by claiming that liberal PACs have long tried to avoid city scrutiny by filing with Butte County.

“Completely missing [as city filers] are the darlings of Stone’s world, people like the Esplanade League, many others, who participate in city elections, but it appears they, to evade city of Chico filing requirements, file at the county level,” the mayor declared. “And that has been a problem for years.”

Sorensen later was asked via email what evidence he had for his claims. His response provided none, and he named no other PACs.

A spokeswoman for Butte County Clerk Candace Grubbs said the county election office does not review whether PACs filing in the county are in their proper jurisdiction. 

Paul Friedlander, Esplanade League treasurer, declined comment on Sorensen’s claims. The Esplanade League’s spending in the 2014 election was limited to about $2,500 to print and mail a flier that deals almost entirely with the City Council race, backing liberal candidates Gruendl, Lupe Arim-Law and Forough Molina. A tiny part of the flier also says to “Vote NO on A, YES on B,” in reference to the competing Butte County marijuana measures that were on the ballot, but otherwise focuses exclusively on the city election.

Questioned about the appropriateness of the league’s county filing, Friedlander said: “We have always filed with the county dating back as far as I can remember … Over the years we have sometimes supported countywide ballot measures or supervisor candidates.”

Based on dollars spent, the Esplanade League, which has filed with the county since 1998, has been a relatively small player in recent city elections. The two most active liberal PACs in Chico-area politics are Chico Democrats, headed up by Democratic bigwig Mulholland, and Chico Conservation Voters, bankrolled by Kelly Meagher, a retiree who gave that PAC $16,000 in 2014.

Both PACs say they file with the county, as FPPC guidelines require, because they generally are involved in political activities at various levels. Chico Democrats’ 2014 spending included contributions to numerous state candidates and payments to state and federal Democratic committees.

Chico Conservation Voters actually sat out the city election in ’14, spending nothing on that race, said PAC treasurer Jessica Allen. Instead, the PAC focused its $16,700 in expenditures on defeating Proposition 1, a state water bond, she said.

Meagher was recently fined $14,500 by the state Fair Political Practices Commission, though not over the sort of jurisdictional issues raised by Sorensen. Meagher had failed to file paperwork as a “major donor” for contributions in 2011 and 2012, according to news accounts.

 

Weary of the Liberals

By the time Tom Kozik paid a visit to Wayne Cook’s office in fall 2014, the developer had grown weary of losing city elections to liberals.

“I wanted that election,” Cook, from behind a huge desk in his second-story office on Wall Street, acknowledged in a recent interview. Cook is best known for transforming a so-called “pigeon palace” on West Fourth Street into the Hotel Diamond.

While anti-Gruendl ads were “somehow involved” in his discussions with Kozik, Cook said he contributed to Butte County Awareness and Accountability mainly to promote “conservative, businesswise” candidates. Cook said he assumed the PAC was “doing everything right.”

“I didn’t see the stuff until it was done and over with,” Cook said of the mailers attacking Gruendl. “It was pretty harsh.”

Still, the city was mismanaged financially on Gruendl’s watch, and “sometimes you need some brutal facts out there.”

“We’ve had the wrong people running the show in this town,” Cook said. “This business of finance is very serious stuff. … I want more conservatives. I want people who are proficient in general mathematics.”

The Chico Democrats’ Mulholland’s spin on the ‘14 conservative council sweep is that “the Republicans saw an opportunity and poured in more money than I think ever.” Mulholland called Cook “a classic Republican businessman who goes before governments and asks for big subsidies, including free parking spaces, and then makes big contributions to Republican candidates.”

 

“I wanted that election… We’ve had the wrong people running the show in this town” — Wayne Cook

 

Mulholland’s reference was to Cook receiving $2 million in redevelopment loans from the city to help him build the Hotel Diamond, as well as continuing to receive free parking in scores of metered city spaces for his hotel guests.

Cook said one loan has been paid off and the other is down to $700,000. He said that any lost parking money was more than offset “in a New York second” by other tax revenues generated by the hotel.

Among others contributing to Butte County Awareness and Accountability were Wahl, now a county supervisor, and his campaign committee: Together they donated $1,500.  However, the second-biggest giver to the PAC — after Cook’s $5,000 donation – was a familiar name among conservative contributors: Thomas Dauterman, founding owner of Thomas Manufacturing on West Eighth Avenue, who gave $2,000.

Cook associate Joe Montes, who recently ran unsuccessfully for the 1^st Congressional District seat held by fellow Republican Doug LaMalfa, also gave the PAC $500 after meeting with Kozik. Montes said he doesn’t recall who else was at that meeting.

Dauterman, for his part, has spent easily over $100,000 since 2008 on conservative causes and candidates in Chico races. Via two different PACs, he almost singlehandedly financed the $86,000 Measure A effort in 2010-11 to move City Council elections from November to June. In a special election that was reported to have cost taxpayers about $150,000, Measure A lost in a landslide, with 68 percent of voters opposed.

 

The Ousting of Gruendl

Amid the masses of documents that regularly flow through City Clerk Presson’s office, a form filed in fall ‘14 is one she still remembers. It was the first financial disclosure of a new PAC, Chico Citizens for Accountable Government, led by Maloney, the ex-police chief.  The form showed the PAC had raised a smooth $30,000 – from just six donors.

“I looked and said ‘wow,’” Presson said. “It was the first time I’ve seen that amount in such a small amount of time.”

Each giving $5,000 in mid-October ’14 were:

• Dauterman, listed as owner of Thomas Welding and Machine.
• BidCal of Chico.
• Bobcat of Chico.
• James Paiva, owner of Paiva Hulling and Shelling.
• Bill Webb Construction.
• Guillon Business Park Properties.

A couple of weeks later, a seventh $5,000 contribution arrived. The donor was Pamela Schultz, a real estate agent who lives in Naples, Fla. She did not return a phone message asking about her interest in a municipal election so far from her home.

Chico Citizens for Accountable Government hired an Elk Grove firm to file its campaign disclosure forms and used a Sacramento bank to handle its money.

In 2002, the City Council passed an ordinance that set a $500 limit on individual contributions to council candidates, Presson said. According to Turner, the political science professor, such candidate caps have tended to increase the use of “independent-expenditure committees.” Such PACs can work for or against candidates – without being burdened by contribution limits — as long as they do not cooperate with their favored candidates.

As Gruendl sees it, Maloney’s political activism involving his former longtime employer is “not only … in bad taste and poor choice, but it’s borderline unethical.”

While Maloney was heading up a PAC that backed Fillmer and was required to not cooperate with her campaign, she was putting out materials that featured Maloney promoting her. Quotes from the retired chief were prominently displayed on a Fillmer campaign mailer, as was a dated picture of the retired Maloney, in his dress blues, a badge on his chest and the Chico Police Department logo on his shoulder.

 

 

Like Fillmer, Maloney declined to answer questions for this story.

Maloney retired as Chico police chief “the minute” he was eligible on his 50^th birthday in April 2012, Gruendl said.

“He left the city in such a negative situation,” Gruendl said. “The whole end of his career was so sad, and he was mad about it.”

Since the election, Gruendl has moved to San Francisco and become assistant director of the San Mateo County Health System. Gruendl said he ran in 2014 only because of a scarcity of liberal candidates, acknowledging a “half-ass” campaign on his part. The election results indicate that some voters blamed Gruendl for years of deficit spending during the recession that pushed the city close to insolvency and led to cutbacks and layoffs.

In finishing a distant sixth in ‘14, Gruendl raised and spent about $19,000; four years earlier, when he received the second-highest number of votes in winning a third term, Gruendl ran a $29,000 campaign. 

“Some people he relied on in previous elections weren’t there this time,” concluded professor Turner.

Maloney’s PAC, Chico Citizens for Accountable Government, paid about $4,000 for an attack ad aimed at Gruendl, its filings indicate. Together, the two conservative PACS spent almost $12,700 on a total of three anti-Gruendl mailers.

Gruendl said that after the election he received “more phone calls from conservatives than liberals just apologizing for the behavior of some of the folks in Chico. … I didn’t deserve to be treated the way I was treated.”

Correction: This story originally reported that Chico Citizens for Accountable Government had become inactive after the 2014 election, quoting City Clerk Debbie Presson. In fact, the PAC is still active. ChicoSol regrets the error, and our story has been corrected.

Editor’s note: This story was originally reported, written and revised for the Chico News & Review over the past year, but never published by that newspaper.

Dave Waddell, a professor emeritus in the department of journalism at Chico State, has practiced and/or taught journalism since the 1970s, including a 20-year career as a newspaper reporter and editor. In semi-retirement, he continues to teach journalism at Chico State and English at Butte College. He can be reached at dwaddell@csuchico.edu.