Old campaign debt trails San Jose councilmember

An old debt to a campaign consultant is raising questions about why a San Jose councilmember hasn’t paid it off.

District 5 Councilmember Magdalena Carrasco owes $25,719 to a consultant through her committee, Friends of Magdalena Carrasco for East Side Union High School Board of Trustees 2012, according to a campaign statement filed in February this year.

As the committee’s name suggests, the money was raised for Carrasco’s election to the school board in 2012, where she served for two years. Carrasco has owed roughly the same amount since at least 2014, although there are older campaign finance reports not available online. The money is owed to Shallman Communications, which produced print ads for Carrasco.

The Shallman firm has close ties to Carrasco’s family: In 2016, Shallman hired Carrasco’s daughter as an account coordinator (she is no longer listed as an employee). The firm has also done extensive campaign work for Carrasco’s former partner and father of her daughter, Los Angeles City Councilmember Kevin de León.

Carrasco did not respond to multiple requests for comment.

Candidates for local office are subject to numerous campaign finance rules established by the California Fair Political Practices Commission. But they do not appear obligated to repay campaign debts within a certain timeline.

“The candidates are not able to terminate or close their committees if in fact they have outstanding debts,” said a spokesperson for the Santa Clara County Registrar of Voters. “But I am not aware of any deadline to pay off debt.”

Carrasco has at least some of the money available to pay down her debt. The same campaign finance form filed earlier this year shows the committee has a cash balance of more than $15,000, which has been available since at least 2014.

By contrast, Carrasco used money from a different committee to pay a consultant who worked on her failed campaign for a seat on the Santa Clara County Board of Supervisors in 2020. A campaign report filed earlier this year showed that her committee paid consultant TBWBH $6,000 for campaign literature and mailings. As of the end of June, the committee still owes $32,508 and has a cash balance of about $1,600.

John Pelissero, senior scholar at the Markkula Center for Applied Ethics at Santa Clara University, said it’s not unusual for a politician to carry campaign debt for a long time after their election because it’s difficult to raise funds to pay off old expenses. But he said it can create the appearance of a conflict of interest if a candidate or their family members have other dealings with a company to which they’re indebted.

“Even though it may all be above board, it has this unethical appearance of being inappropriate,” Pelissero told San José Spotlight. “That’s what members of the public may focus on, (saying) ‘Hmm, why is this individual’s family member working for an entity that the former candidate, now councilmember, owes money to?'”

Pelissero said the fact that Carrasco has not used her available cash balance to pay portions of the debt to Shallman also raises questions. According to a media interview in 2015, Carrasco said she preferred to pay off the debt from the committee in one lump sum.

The school district committee—which has not had a political purpose in almost a decade—has landed Carrasco in hot water with the California FPPC on more than one occasion.

In March 2021, the FPPC sent Carrasco and the committee a warning letter for failing to timely file a semi-annual campaign statement for July 1, 2020 through Dec. 31, 2020. The FPPC decided against fining Carrasco because her statement was only 18 days late and it had no reportable activity. The letter notes that failure to comply with the FPPC’s requirements can result in penalties of up to $5,000 per violation.

In 2018, the FPPC issued a warning letter to Carrasco and Huascar Castro, treasurer of her 2018 re-election campaign, for violating the Political Reform Act by failing to file the required $50 annual fee to the Secretary of State, and for failing to pay the $150 fine following that offense.

In 2014, the agency issued a warning letter to Carrasco’s committee for failing to file two pre-election statements covering several months of that year. The FPPC closed its case without action, but required Carrasco to file all of the outstanding statements with the Santa Clara County Registrar of Voters and pay any associated late fees.

Contact Eli Wolfe at [email protected] or @EliWolfe4 on Twitter.