Free Republic

A San Francisco engineer testified Tuesday in Sacramento federal court that political fundraiser Julie Lee asked him to adopt fraudulent documents to satisfy auditors looking into Lee's use of state grant money. James Li described for a jury how Lee, in the summer of 2004, brought him "a bundle of documents in an envelope and asked me to review them and be prepared to answer questions from state controller auditors." Among the documents, Li told the jury, was a backdated invoice that purported to be from his firm seeking payment of $621,300 from Lee's nonprofit San Francisco Neighbors Resource Center...

The criminal case that brought former California Secretary of State Kevin Shelley's political career to an abrupt halt more than three years ago is scheduled for trial today, as federal prosecutors attempt to prove mail fraud and witness tampering charges against his onetime fundraiser Julie Lee. While the case dashed the lofty aspirations of Shelley - once considered a potential senator, mayor or governor - and took a long time to get to trial, the allegations against Lee are straightforward. Prosecutors have charged her with four counts of mail fraud and three counts of witness tampering for fraudulently obtaining state...

Secretary of State Bruce McPherson has dropped plans to sue predecessor Kevin Shelley in an attempt to recover nearly $3 million in federal funds that were misspent or mismanaged. McPherson, who lost to Democrat Debra Bowen in his bid for re-election, has decided not to hire private attorneys to file suit on behalf of his agency in the final six weeks of his term. "At this point, it's up to (Bowen) to recover the money,"

Secretary of State Bruce McPherson demanded Monday that the state sue his predecessor, Democrat Kevin Shelley, to recover nearly $3 million in federal funds that were misspent or mismanaged. McPherson, in a letter to Attorney General Bill Lockyer, said it is "imperative that you bring legal action at once." "It is wholly unfair and unacceptable that the taxpayers of California would be required to lose funds" due to the "documented misconduct and mismanagement of Kevin Shelley." McPherson said he was reacting to a ruling Monday by the U.S. Election Assistance Commission that requires California to repay $2.92 million in federal...

There's a final resolution to federal election assistance money given to California and, according to authorities, misspent by the office of former Secretary of State Kevin Shelley. This morning, the U.S. Election Assistance Commission closed the books on the investigation into how Shelley spent some $3.8 million in funds allocated through the federal Help America Vote Act (HAVA). The spending was part of the scandal allegations that drove Shelley from office in 2004. It included payments for activities not related to HAVA, including payments to consultants who appeared to be doing pro-Shelley political work on the federal government's dime. Secretary...

SACRAMENTO – Former California Secretary of State Kevin Shelley, who resigned under pressure in February, misspent or failed to document more than $3.8 million in federal election money, according to a federal audit released yesterday. ~snip~ Shelley, a Democrat, denied wrongdoing but resigned after he was accused of mishandling the money, bending state hiring rules to reward allies, and accepting questionable campaign contributions.

Sacramento -- More than $3.8 million in federal election money sent to California was either misspent by former Secretary of State Kevin Shelley or lacked proper documentation, according to a federal audit released Wednesday. Shelley, who resigned in February after a series of scandals buffeted his administration, was criticized last December in a state audit for slipshod management -- a finding echoed by federal officials who questioned nearly half of the spending they reviewed. The auditors said they found instances of legal costs that exceeded contracted amounts, employee salaries improperly paid with federal dollars, and the purchase of promotional items...

SACRAMENTO (AP) - More than $3.8 million in federal election money was spent improperly or without required documentation by former Secretary of State Kevin Shelley, federal auditors said in a report released Wednesday. The audit, commissioned by the U.S. Election Assistance Commission, confirms an earlier state audit of Shelley's handling of money given to California under the Help America Vote Act. It examined spending through 2004. Auditors said about $3 million in spending lacked documentation, such as paying salaries for people who didn't submit time sheets, or was improperly awarded to consultants through no-bid contracts. The audit, conducted by the...

SACRAMENTO — “So you’re a reporter,” the salesman said as we sat in the little room. He was just trying to break the silence as we waited for his boss to come back and tell me that my offer for their overpriced car was too low. “What’s it like down there at the Capitol,” he asked. “Is it just all corruption?” That was several weeks ago. But I thought about the salesman when I read about Congressman Randy “Duke” Cunningham pleading guilty to taking at least $2.4 million in bribes. Probably no one is more representative of middle America than...

OAKLAND - An associate of indicted political fundraiser Julie Lee personally delivered a $25,000 campaign check he knew was laundered to Kevin Shelley at his San Francisco home in 2002, and told him to wait a few days before cashing it, according to grand jury transcripts released Tuesday. Bowman Leong told the grand jury investigating Lee last month that Shelley, then an assemblyman seeking the post of California secretary of state, was expecting him in his Glen Park home. The two men, Leong testified, "spent probably about 10 seconds exchanging pleasantries, and then (Shelley) asked if I had something for...

SAN FRANCISCO - Julie Lee, the San Francisco real estate agent charged with funneling state grant money to former Secretary of State Kevin Shelley's campaign, solicited false grant documents, arranged for laundered contributions and tried to enlist others in hiding the scheme, according to grand jury transcripts released Monday. Lee has pleaded not guilty to eight felony counts, including grand theft, embezzlement and forgery, returned by a state grand jury. San Francisco District Attorney Kamala Harris and Attorney General Bill Lockyer allege Lee converted a state grant for a community center and proceeds from two real estate transactions into cash...

SAN FRANCISCO - A state grand jury is investigating the activities of a fundraiser for former Secretary of State Kevin Shelley and is expected to hand down an indictment within a week, it was disclosed in court Thursday. During a procedural hearing on a criminal complaint filed in April against Julie Lee by the San Francisco District Attorney's and the state attorney general's offices, Steven Gruel, Lee's defense lawyer, said a grand jury had been convened. Assistant District Attorney Davina Pujari indirectly confirmed that, telling Superior Court Judge Perker Meeks Jr. that whatever action the grand jury takes could be...

The other shoe dropped for Julie Lee on Thursday when the erstwhile fundraiser for former Secretary of State Kevin Shelley was charged by a federal grand jury in Sacramento with mail fraud and attempted witness tampering. A seven-count indictment alleges that the 58-year-old Lee, a San Francisco businesswoman, one-time city commissioner and political power broker in the Asian community, siphoned $125,000 out of a state grant in 2001 and 2002, then used the money for campaign contributions through intermediaries to Shelley, who was a candidate for secretary of state. The indictment also alleges Lee created false and misleading paperwork and...

SAN FRANCISCO (AP) - The U.S. attorney's office on Thursday indicted Julie Lee, a top political fundraiser for former Secretary of State Kevin Shelley, for diverting $125,000 from a taxpayer-funded grant to Shelley's campaign coffers. An FBI investigation led a federal grand jury to issue the seven-count indictment that charges Lee with four counts of mail fraud and three counts of attempted witness tampering, U.S. Attorney McGregor Scott said. Lee's attorney, Steven Gruel, could not immediately be reached for comment, but last month she pleaded not guilty to related criminal charges in San Francisco. The federal indictment alleges that Lee...

Sources say Shelley fund-raiser accused of diverting grant funds. State prosecutors charged a top volunteer fund-raiser for former Secretary of State Kevin Shelley with grand theft and other felonies on Thursday, accusing her of diverting $125,000 from a taxpayer-funded grant to Shelley's 2002 campaign fund, sources with knowledge of the case told The Chronicle. The complaint, filed under seal in San Francisco Superior Court, claims that Julie Lee, a San Francisco businesswoman, city commissioner and political power broker in the Asian community, forged documents to obtain state funds, used the money for illegal purposes and later falsified records to cover...

Through her aggressive fund raising for San Francisco politicians, Julie Lee transformed herself from grassroots activist to City Hall insider and political power broker. But that same largesse and the power it brought her have written the most bitter chapter of Lee's career, leading to the resignation from office of one of her biggest benefactors, Kevin Shelley, as California secretary of state -- and now felony charges said to have been filed against her by the state attorney general Thursday. Lee coveted insider access, say those who worked closely with her, and she quickly learned that campaign contributions opened the...

SACRAMENTO - Former state Sen. Bruce McPherson was sworn in Wednesday as California's 29th secretary of state, and quickly promised to restore public confidence in the beleaguered office just hours after the Assembly voted to confirm him. McPherson, 61, a Santa Cruz Republican nominated by Gov. Arnold Schwarzenegger to replace former Secretary of State Kevin Shelley, vowed not to let down the state and the office's staff. "Now our work begins," McPherson said. "This office is going to lead the nation again in innovation, creativity and impartial elections administration." Ninth U.S. Circuit Court of Appeals Judge Connie Callahan of San...

Shelley's Last Day As Secretary Of State Uneventful Friday was the last day in office for California Secretary of State Kevin Shelley, who has already packed up his office and left town. "Kevin Shelley was here on Tuesday. (He) called an agency-wide staff meeting. (He was) very, very cordial, very pleasant. (He) thanked the staff for all of their hard work," said Secretary of State Office spokeswoman Caren Daniels-Meade. Shelley stepped down after being investigated for misuse of government money. He made the announcement last month and was set to resign March 1. But he extended the date until Friday...

Kevin Shelley’s State-Issued PDA Stolen From Home Someone broke into outgoing Secretary of State Kevin Shelly's San Francisco home last weekend. Whoever did it bypassed valuables and decided to take only Shelley's state-issued personal digital assistant. According to San Francisco police, Shelley called authorities Sunday morning after discovering someone had apparently entered his Everson Street home during the night though an open window. Shelley told police he had left the window open, but noticed the opening had been widened when he woke up in the morning. Shelley also told police that he may have wiped-off a smudge from the windowsill...

Sacramento -- Secretary of State Kevin Shelley has moved his resignation date from Tuesday to Friday, citing "administrative convenience,'' according to his resignation letter. Shelley, who was mired in ethics scandals and the subject of multiple investigations into his fund raising and his handling of federal voting act money, announced Feb. 3 that he would step down from the office effective Tuesday. Neither the secretary of state's office nor the governor's office could provide more information Friday about why the resignation date had changed.

SAN FRANCISCO (AP) -- Secretary of State Kevin Shelley told police that a handheld computer device containing sensitive information was taken from his San Francisco home. Shelley, who announced his resignation earlier this month and will leave office next week, reported the incident Sunday morning after discovering a window ajar in the study of his home, the San Francisco Chronicle reported Friday. He told police he had left the window open overnight, but that it appeared someone had opened it farther. He also said he had wiped a smudge from the window that could have been left by an intruder....

SACRAMENTO (AP) - State Auditor Elaine Howle said Tuesday that the secretary of state's office is "headed in the right direction" to better manage millions of dollars in federal election funds, but she acknowledged it's still too early to tell if a lasting turnaround is in place. Howle, testifying one week before Secretary of State Kevin Shelley was scheduled to step down from the state's top elections post, said Shelley's office has showed progress toward removing a "cloud" over its operations. A consulting firm hired by the office also detailed its work toward tightening the scandal-tinged operation within the next...

Secretary of State Kevin Shelley, who has resigned effective March 1, will not appear Tuesday before a legislative committee investigating his handling of millions in federal voting funds. The Joint Legislative Audit Committee opted not to seek Shelley's testimony, but retains the right to request his presence at a future hearing, said Assemblywoman Nicole Parra, a Hanford Democrat who chairs the committee. "We want to build a foundation before we even discuss calling Shelley forward," Parra said. Tuesday's hearing will focus largely on what Shelley's office is doing to correct problems cited in a state audit, which portrayed his agency...

SACRAMENTO (AP) - A week after announcing his resignation, embattled Secretary of State Kevin Shelley quietly named a Sacramento area attorney to a four-year term on the state board that regulates California's political campaigns. Shelley appointed A. Eugene Huguenin, a former staff lawyer for the California Teachers Association, to succeed Thomas Knox on the Fair Political Practices Commission. Knox's term expired Jan. 31. Shelley, facing allegations that he mishandled federal election funds, accepted tainted campaign contributions and sexually harassed employees, announced Feb. 4 that he would leave office March 1. According to news reports, the FPPC is one of the...

SACRAMENTO - Gov. Arnold Schwarzenegger on Friday appointed former Santa Cruz lawmaker Bruce McPherson as Secretary of State -- picking an affable, moderate Republican to take over the state's troubled elections office. A week ago, Democrat Kevin Shelley resigned his post as Secretary of State effective March 1 because he was unable to withstand a swirl of investigations, including probes into alleged misuse of federal funds. ``In filling this vacancy, I looked for someone with strong experience and unimpeachable integrity and somebody who is widely respected,'' Schwarzenegger said. ``That is exactly what Bruce McPherson brings to this job.'' McPherson, 61,...

KEVIN Shelley's swift, infamous slide from public office has ended. But his resignation doesn't mean that the soon-to-be-former California secretary of state should be allowed to walk away from the accusations that undermined his credibility. There are too many of them and at least eight investigations at the local, state and federal levels. They are serious and the consequences too important to let him off the public hook just because he finally did the right thing. They must be resolved before Shelley can fade into the next phase of his life. Shelley, 49, said Friday when announcing his resignation that...

By happenstance, a multifaceted scandal is driving Secretary of State Kevin Shelley out of office just as a power struggle between Gov. Arnold Schwarzenegger and Democratic legislative leaders is hitting a critical stage - and the governor's choice of a successor to Democrat Shelley is being colored by the escalating battle. Legislative leaders are virtually begging Schwarzenegger to appoint a caretaker who wouldn't seek election to a new term in 2006, but he's planning to name a Republican - perhaps a Latino - who would, in fact, run in 2006 and begin rebuilding the otherwise nonexistent bench of statewide GOP...

I just heard Arnold interviewed on KMJ radio, and he stated that after a meeting this morning, he will *most likely* announce Shelly's replacement. Also discussed the budget, where he said, sadly the Democrats do not look like they are going to cooperate so he will take his agenda to the people. --No more tenure for teachers; --Merit based pay for teachers, dismissal for those not performing; --Dems want to spend 10B more than the 5B revenues taken in, and Arnold refuses to do that and keep his promise that CA will not spend more than they take in.

Confidants describe days leading up to politician's resignation, as recognition of snowballing crisis -- and its costs -- dawned. Last month, after state Sen. Gloria Romero became the first Democrat to call on Secretary of State Kevin Shelley to resign in the face of converging ethics scandals, Shelley called her immediately. California's embattled chief election officer wasn't angry, Romero said in an interview. Instead, he launched into a "soliloquy" over whether to stay in office and fight multiple allegations of ethical and financial improprieties, or simply walk away from a lifetime in politics -- and his $131,250-per-year public job. "There...

Analysis: A career flattened by a chain of blunders By Amy Chance -- Bee Political Editor Published 2:15 am PST Saturday, February 5, 2005 Secretary of State Kevin Shelley insisted to the end that he had done nothing illegal, and even his harshest critics had to concede Friday that there's no concrete evidence to contradict that yet. What he did do, however, had piled up to the point that it crushed both his ability to run his office and preserve his political career: * He created what the State Personnel Board concluded was "an abusive working environment" for his staff,...

Potential Replacements - Shelley's job a political plum Mid-term appointment gives governor a rare chance to put a Republican in office Sacramento -- Gov. Arnold Schwarzenegger is said to be eyeing a list of former Republican lawmakers and at least one member of his Cabinet as he considers filling the now-vacant secretary of state's position. The resignation of Kevin Shelley represents a rare opportunity for Schwarzenegger to appoint another Republican to statewide office. Any appointee could be rejected by a majority of either the Senate and Assembly, which are controlled by Democrats. The governor said in a statement that he...

Sacramento -- Shortly after becoming secretary of state, Kevin Shelley gathered together several county elections chiefs for a get-to-know-you meeting in which he informed them: "There's a new sheriff in town.'' Replacing the genial Bill Jones, a longtime lawmaker who had been in office the previous eight years, Shelley immediately alienated many of the people he needed to work with as the state's top elections official. In politics, where personal relationships often mean the difference between success and failure, Shelley never had the patience to develop them. Then, facing an extraordinary swirl of investigations and allegations, Shelley found himself with...

SACRAMENTO (AP) -- Secretary of State Kevin Shelley was to announce his resignation Friday amid investigations into his handling of federal election funds, questionable campaign contributions and bad behavior, a source close to Shelley told The Associated Press. Shelley, 49, was leaving his $131,250-a-year post before having to testify later this month at a Legislature audit committee hearing about his handling of millions of dollars in federal elections funds. Shelley, the son of former San Francisco Mayor and U.S. Rep. Jack Shelley, was once one of California's rising political stars. His move paves the way for Gov. Arnold Schwarzenegger, a...

California's chief county elections official says Secretary of State Kevin Shelley's administration has created a "full-blown crisis" that threatens the state's compliance with federal law and its ability to conduct the 2006 elections. In testimony prepared for a legislative committee, Los Angeles County Registrar of Voters Conny McCormack blasted Shelley's process for approving voting machine systems the counties must purchase, and suggested he had manipulated the system "to favor or punish some equipment vendors." She called on the Legislature to step in and take over the process. MLS "County election officials have concluded that the voting system certification process in...

SACRAMENTO - In another sign of dwindling support for Secretary of State Kevin Shelley from his own party, the head of the Democrat-controlled California Senate said Thursday that he would back appointment of a Republican to replace the embattled elections leader if he is forced from office. Senate President Pro Tem Don Perata, the gatekeeper for any Shelley successor, said he would "do anything I could" to help former state Sen. Ross Johnson win confirmation if Gov. Arnold Schwarzenegger taps the Orange County Republican to take over the elections office. "This is an off-the-rack guy that exactly suits the problem...

SACRAMENTO (AP) - Secretary of State Kevin Shelley, scheduled to testify under oath Thursday before a legislative committee, received a reprieve Wednesday when legislative leaders pushed the hearing back to Feb. 22. Although legislative leaders said independent counsels appointed by both parties needed more time to study the case, there was renewed speculation that Shelley may resign before the new hearing date. Wednesday's postponement would provide three additional weeks to negotiate conditions of stepping down, which a handful of Democratic lawmakers and most of the state's major newspapers have asked Shelley to do. Critics have said he is no longer...

Sacramento -- Legislative leaders are scheduled to meet today to discuss management of the Legislature's investigation of Secretary of State Kevin Shelley, including whether Shelley's scheduled appearance Thursday should be delayed, according to people close to the proceedings. Shelley is set to testify under oath about his oversight of the secretary of state's office and its use of federal Help America Vote Act funds. The funds' use has been criticized as partisan and meant to advance Shelley's political career. But two sources familiar with the matter who spoke on the condition that they not be named said Tuesday that lawyers...

SACRAMENTO (AP) - As Secretary of State Kevin Shelley faces multiple investigations into his performance in office, as well as calls for his resignation, a key constituency - California's 58 county elections officials - has been conspicuously absent in rallying support to him. County officials call Shelley's tenure as California's top elections official a disappointment, so many are standing on the sidelines as he struggles to keep his job. "The point of view I have is we're all disappointed in the way things have happened in the secretary of state's office under his watch," said Debbie Hench, registrar of voters...

SACRAMENTO - Buried amid thousands of pages collected by auditors investigating Secretary of State Kevin Shelley is a memo from a state consultant who attended a union-sponsored "Take Back the White House" rally. The consultant wrote that he "was there to represent the SOS office" at the April 3, 2004, event and a state investigator's note on the document indicates that one of Shelley's top deputies asked the consultant to go. Shelley aides have vigorously denied that the Secretary of State's office misused federal voter outreach funds to send consultants hired with the money to partisan political events. Shelley's spokeswoman...

SACRAMENTO -- As Secretary of State Kevin Shelley struggles to keep his job, he's received only a single $250 contribution to his three-month-old legal defense fund, which he also lent $100,000 from money borrowed against his San Francisco home. The embattled state elections official has likewise received only $28,000 in campaign cash since his mounting legal troubles began last August, and none since the new year opened, according to campaign contribution reports released Monday. Aides said Shelley is too busy defending himself and running his office to raise money. "In October, the secretary took out a $500,000 loan on his...

SACRAMENTO (AP) - As Secretary of State Kevin Shelley struggles to keep his job, he's received only a single $250 contribution to his three-month-old legal defense fund, which he also lent $100,000 from money borrowed against his San Francisco home. The embattled state elections official has likewise received only $28,000 in campaign cash since his mounting legal troubles began last August, and none since the new year opened, according to campaign contribution reports released Monday. Aides said Shelley is too busy defending himself and running his office to raise money. "In October, the secretary took out a $500,000 loan on...

After a week of playing Hamlet to a rising chorus of calls that he resign, Secretary of State Kevin Shelley is telling confidants that he's staying put -- and that he won't even consider stepping down unless two major conditions are met: -- That he be freed from all state and federal legal liabilities. -- That he have a "safe place to land" -- i.e., a job. "Would he like those conditions to happen? Yes. Would it be possible for them to happen? I don't know,'' said one confidant who asked not to be named because of the touchy nature...

In addition to borrowing several employees from the Legislature and using state and federal funds to pay their salaries, Secretary of State Kevin Shelley also was lent a San Francisco city employee for half of last year. The arrangement, which allowed Shelley to bypass the state's civil service system in order to fill a routine scheduling position, was detailed in a contract between the secretary of state and the office of San Francisco Mayor Gavin Newsom. The contract was noted in an audit released Tuesday by the State Personnel Board that accused Shelley, a San Francisco Democrat, of using inappropriate...

Sacramento -- California campaign-finance regulators are investigating whether Secretary of State Kevin Shelley illegally accepted a political donation in his government office from a contributor seeking help with a tax problem, The Chronicle has learned. Investigators from the state Fair Political Practices Commission have met with at least one potential witness in the case, seeking details about a meeting in June 2003 between Shelley and the donor, and about how the campaign check was delivered, according to a person who was questioned. "They were clearly trying to dot their i's and cross their t's," said the person, who spoke on...

SACRAMENTO (AP) - Secretary of State Kevin Shelley's expected appearance before an obscure legislative committee next week presents a rare spectacle in a state Capitol where few statewide elected officials have ever found themselves so engulfed in controversy. While many lawmakers have endured scandals and some seen the insides of prison walls, Shelley has few precedents as he prepares to testify before a committee that has traditionally concerned itself with auditing humdrum issues such as grazing fees and Medi-Cal overpayments. Though the 14-member Joint Legislative Audit Committee is also making headlines with its probe of cost overruns on the Bay...

WASHINGTON - The U.S. Elections Assistance Commission voted Thursday to audit California's alleged misuse of federal election funds, dealing another blow to embattled Secretary of State Kevin Shelley. In ordering what will be the first special audit under the $3 billion Help America Vote Act, the four-member commission based its unanimous decision on the spate of troubling questions raised in a report last month by the state's chief auditor, including Shelley's alleged use of federal elections-improvement money for partisan purposes. "I don't know of any circumstances where federal funds could be used at partisan events," said Gracia Hillman, the panel's...

SACRAMENTO (AP) - A fourth major California newspaper called Thursday for the departure of Secretary of State Kevin Shelley from public office, following three other calls by major newspapers since Tuesday for him to resign or be impeached. The Sacramento Bee said Thursday that Shelley has become ineffective while combating numerous charges and investigations into his performance in office. "That scratching sound you hear is California Secretary of State Kevin Shelley hanging on by his fingernails," said The Bee. "It's a futile effort. Shelley must go and soon." In editorials published Wednesday, The San Francisco Chronicle and San Jose Mercury...

WASHINGTON - The federal commission that distributes election reform money to states voted Thursday to audit millions in questionable expenditures overseen by California Secretary of State Kevin Shelley. In the latest blow to Shelley, who is also facing criminal investigations of his hiring practices and campaign fund-raising, the U.S. Election Assistance Commission voted unanimously to undertake a formal accounting of the $180 million in federal funds sent to California. A state audit released last month said Shelley, a Democrat, mismanaged the funds, using some of it to pay employees and consultants for attending partisan events. "Legitimate questions have been raised...

SACRAMENTO -- Embattled Secretary of State Kevin Shelley does not plan to resign from office and is expected to testify before a legislative panel next week on charges he mishandled federal voter funds, a spokesman said Wednesday as the Legislature drew up rules for a lengthy investigation. "The secretary does not intend to resign," his campaign spokesman Sam Singer said Wednesday. "He says there is much to be done in his office and he plans to carry out his duties." Asked if that meant Shelley would appear under oath before the Joint Legislative Audit Committee Feb. 3, Singer said "presumably,...

Secretary of State Website Gives Out False Information California’s Secretary of State, Kevin Shelley, already under fire for misuse of federal tax dollars and other allegations of impropriety, finds himself accused of providing misleading and false information to the public in what some say is a blatant attempt to harm the signature gathering process of the Save Our License Initiative. “It’s quite alarming that Shelley would incorrectly list the due date for Save Our License petitions,” stated Mike Spence, President of the California Republican Assembly which is sponsoring the initiative. “As a result, we’ve had erroneous press reports which are...