Pictured: Jesus Cardenas, far left, Andrea Cardenas, far right, during arraignment.
Credit: Meg McLaughlin / The San Diego Union-Tribune
By Arturo Castañares
Editor-at-Large
The Democratic Party’s candidate for Chula Vista City Attorney in March’s runoff election is announcing his new ethics plan after he violated the City's campaign finance laws himself and is supported by two indicted politicos.
Attorney Marco Verdugo is scheduled to hold a press conference at 11 am on Monday to announce what his campaign called an “anti-corruption action plan” after both Chula Vista Councilwoman Andrea Cardenas and her consultant brother, Jesus, were arraigned last week on 12 felony counts related to a fraudulent COVID-era federal loan they obtained.
But Verdugo’s announcement failed to disclose that Councilwoman Cardenas has endorsed his campaign and mailers supporting Verdugo sent to Chula Vista voters in this month’s special election included her as a supporter and that an independent campaign committee that sent out those campaign mailers supporting his campaign was managed by Jesus Cardenas before he was indicted.
“Verdugo will be joined by legal experts and residents to announce his plan to step up accountability, transparency, ethics enforcement,” the press release stated.
The press conference touting his tough stance towards ethics comes as he is being accused of violating the City's campaign finance requirement that he notify his opponents in writing before he spends more than $5,000 of his own money in his campaign.
"Prior to spending or contributing the personal funds, the candidate shall provide written notice of the candidate’s intent to spend or contribute more than $5,000 of personal funds to the City Clerk and all opponent candidates," the City's Municipal Code reads.
Verdugo mailed a registered letter to the Chula Vista City Clerk and to his opponents on September 27, but the letter was dated August 24.
But Verdugo's official campaign finance reports, which he signs as the Treasurer, show he exceeded the $5,000 threshold on August 24th when he loaned his campaign $5,000 after already having loaned $500 on August 3rd and donated $360 on August 22nd and $1,500 on August 24th.
Kerry Bigalow, Chula Vista's City Clerk, confirmed that the City received a registered letter from Verdugo on September 27th with a postmark of September 26th, but the letter was dated August 24th.
Verdugo's press conference is instead focusing on the indictments of Andrea and Jesus Cardenas.
The existence of the fraudulent $176,000 Paycheck Protection Program (PPP) obtained by Grassroots Resources was first reported by La Prensa San Diego in a February 22, 2023 article based on a lengthy phone interview with Jesus Cardenas.
San Diego County District Attorney Summer Stephan’s office indicted the siblings three weeks ago and outlined how they both participated in creating the application for the PPP loan on behalf of their consulting firm, Grassroots Resources, Inc.
The indictment alleges that they unlawfully used the names of 34 employees of a local cannabis dispensary that is a client of Grassroots Resources to misrepresent the employees as their own for the loan. The loan program specifically excluded both cannabis employees as well as political consultants, so Cardenas described his company as a financial firm on the application.
Councilwoman Cardenas then used $33,500 from the PPP loan to pay down campaign debt she incurred during her 2020 election to the City Council and Jesus Cardenas used more than $21,000 to pay down his own American Express credit card.
La Prensa San Diego first reported in early 2021 that Councilwoman Cardenas had ended her campaign with over $38,991 in unpaid bills, including $35,991.89 owed to TMC Direct for several mailers sent during the election. Cardenas only paid $11,446.86 to TMC Direct earlier in her campaign.
TMC Direct is a San Diego-based printing and mailing services broker.
A La Prensa San Diego article last month exposed that several of Grassroots Resources’ clients ended their campaigns with tens of thousands of dollars in outstanding bills owed to the same printing services company, TMC Direct.
Another political consulting firm whose clients ended their campaigns with debt owed to TMC Direct was Margin Victories, a new firm owned by Jehoan Espinoza, a former employee of Grassroots Resources and housemate of Andrea Cardenas.
Margin Victories uses Grassroots Resources as a subcontractor on campaigns.
The use of debt owed for campaign mailers is unusual because printing and mailing services companies require upfront payment before literature is sent to voters.
A review of campaigns run by Grassroots Resources and Margin Victories revealed that every one of their campaigns, including those run through the San Diego County Democratic Party, ended up owing money to TMC Direct for mail already sent to voters without payment first having been made.
Campaigns that benefited from the unpaid mail included Chula Vista candidates Andrea Cardenas, Ammar Campa-Najjar, and Jose Preciado; National City Councilmembers Jose Rodriguez and Ditas Yamane; San Diego Councilman Stephen Whitburn, and County Supervisor Nora Vargas.
Verdugo’s press release states that the “next City Attorney will immediately be tasked with restoring trust in Chula Vista’s city government” yet he did not make any such announcements during his campaign for the November special election before the Cardenas siblings were indicted.
The press release was sent by Verdugo’s campaign consultant, Dan Rottenstreich, owner of Amplify Campaigns, a Chula Vista-based political consulting firm.
Rottenstreich himself has been the subject of an ethics complaint in San Diego when he and his client failed to disclose payments of $205,000 to Rottenstreich for his work on a proposed redevelopment plan for the San Diego Sports Arena approved by the San Diego City Council.
Rottenstreich’s wife, Brigette Browning, is the leader of the San Diego-Imperial Counties Labor Council, a coalition of labor unions.
Browning testified in support of the Sports Arena proposal at the San Diego City Council without disclosing that her husband has been paid over $200,000 by the developer.
Rottenstreich’s involvement was not disclosed for months after the City Council approved his client’s proposal.
The Sports Arena developer’s selection was also controversial because he had given over $100,000 in campaign contributions to support San Diego Mayor Todd Gloria’s 2020 election.
The donor, Brad Termini, had given his large contribution through a campaign committee formed by the local Laborers International Union. That committee’s campaign consultant was Rottenstreich.
Just last month, Termini's group announced that they would be modifying their proposal to remove a 200-room hotel and also remove 250 middle income affordable units initially included in their plan.
Browning is also the leader of the HERE Local 30 union of hotel workers and used the hotel's proposed long-term impact as a reason she spoke in favor of the project, but she has not made any statements criticizing Termini's group for now dropping the hotel from the project as it continues to move forward.
The local Laborers International Union also formed the campaign committee that supported Verdugo’s campaign earlier this month. That committee’s activities were managed by Jesus Cardenas.
Verdugo was sued at the start of his campaign for misusing the title of “Deputy City Attorney” for his ballot designation. Verdugo has never been a Deputy City Attorney in Chula Vista, although he does work for a private law firm that provides legal services to other cities including Coronado and Solana Beach.
A judge agreed that the title was misleading and ordered Verdugo to use “City’s Attorney” instead. Verdugo has used “City’s Attorney” on his campaign literature and as his official ballot designation although he is not the City of Chula Vista’s lawyer.
Verdugo will face a runoff election on March 5, 2024, against Bart Miesfeld who served as Chula Vista’s City Attorney until 2010 when he returned to private practice.
The special election for City Attorney will fill the vacancy left after Simon Silva won the November 2022 election even though he had passed away two months before the election.
Verdugo, Miesfeld, and Dan Smith Diaz ran in the special election on November 7th. Verdugo ended the election with 38.9%, Miesfeld with 37.8%, and Smith Diaz with 23.1%.
A March 5, 2024 election between Verdugo and Miesfeld will determine who will serve as the next City Attorney.
La Prensa San Diego endorsed Miesfeld in October, outlining his experience in defending the City against a $600 million lawsuit filed by the builders of the SR125 toll road.
