By Arturo Castañares
Political consultants delivered an estimated half million unpaid campaign mailers for South County candidates during their elections and obscured the names of sub-vendors from the public, according to official reports filed by the local Democratic Party and several candidate campaigns.
The Party and the candidate campaign committees failed to properly report the names of sub-vendors who provided the unpaid printing and mailing services as required by state law, leaving the public unaware of who is really covering the hard costs for mailers that may have impacted the election outcomes.
A review of official campaign finance reports filed by the local Democratic Party and candidates in Chula Vista, National City, and for the County Board of Supervisors reveals that several candidates who all shared the same political consultants received hundreds of thousands of dollars worth of campaign literature without paying for the materials before their elections, creating an unfair advantage over their opponents and obscuring their expenditures from the public in violation of state and local elections laws.
Three companies all worked together to execute the unpaid mailings for the Democratic Party and candidates; Grassroots Resources, Margin Victories, and TMC Direct.
Grassroots Resource is a local consulting firm owned by Jesus Cardenas and employs his sister, Andrea Cardenas as the Director of Community Affairs. The company was suspended from operating legally in the state by the Franchise Tax Board for failure to file its tax returns and has been the subject of several news articles in the San Diego Union-Tribune and La Prensa San Diego over the past year. The company maintains an office in downtown San Diego.
Margin Victories and its parent company, JE Strategies, Inc., are owned by Jehoan Espinoza, a Democratic consultant who has worked for Grassroots Resources as recently as last year. In 2022, Margin Victories began billing clients formerly represented by Cardenas after Grassroots Resources was exposed as being suspended from operating legally in the state.
Espinoza’s companies only list a PO Box address in San Diego as their mailing addresses but list no office address, and Espinoza has been registered to vote at the same residential address in Chula Vista as Andrea Cardenas, who was elected to the Chula Vista City Council in 2020.
TMC Direct, a local print services broker that also uses the names of TurpinMcLaughlin Communications and Grayson House, LLC, has been listed as the printing vendor for numerous campaigns directed by both Cardenas and Espinoza. The companies have received over $500,000 in payments from campaigns run by both Cardenas and Espinoza. TMC Direct is not a printer or mail processing company so they must subcontract that work to third-party vendors.
The San Diego County Democratic Party reported raising over $3.6 million in the 2022 election cycle but ended the year with $233,289.84 in unpaid campaign debts.
Of that debt, $214,089 is owed to Margin Victories for campaign literature, and the company was already paid an additional $755,083 for consulting, printing, mailing, and digital campaign services.
The outstanding invoices were for printing and mailing of campaign literature for several Democratic candidates, including Chula Vista Councilman Jose Preciado, National City Councilmembers Ditas Yamane and Jose Rodriguez, and Chula Vista mayoral candidate Ammar Campa-Najjar.
Although none of the unpaid debts for mailings detailed the names of vendors used to produce and deliver the literature, Margin Victories disclosed its printing vendor for paid invoices as TMC Direct. No actual printer was disclosed on any payments made to TMC Direct.
The unpaid invoices indicate that TMC Direct provided the campaign mailings without any payment from the Democratic Party or the candidates’ campaigns.
Since TMC Direct is not a printer , they must disclose the names of any sub-vendors used to execute the printing and mailing of campaign literature.
The same Democratic Party financial disclosures that list the outstanding debts to Margin Victories also detail expenditures for other mailings paid directly to printers, as well as to two other local political consulting firms; Amplify Campaigns and The Primacy Group.
Both Amplify Campaigns, owned by consultant Daniel Rottenstreich, and Primacy Group, owned by consultant Larry Remer, were paid for their work before the election, then they properly paid and disclosed the names of the printers who actually produced the mailers.
The Democratic Party only failed to disclose the names of the printing vendors on the work conducted through Margin Victories.
California state campaign laws require campaign committees to disclose the contact information for all sub-vendor work of $500 or more performed by third-parties.
“An expenditure(s) made by an agent or independent contractor (such as a campaign worker, consulting firm, or advertising agency) of $500 or more on behalf of the committee, must be reported in the same detail as if it was paid directly by the committee,” the California Fair Political Practices Commission explained to La Prensa San Diego in an email this week.
The local Democratic Party’s most recent campaign finance report filed for the period covering January 1 to June 30, 2023, still lists $220,043 in unpaid campaign debts to Margin Victories even though the Party raised an additional $963,582.25 in the first half of this year.
The only outstanding Margin Victories invoice paid during the first half of 2023 was for $23,454.84 for mailing and postage sent on behalf of Chula Vista Councilman Jose Preciado.
Preciado donated $5,000 to the local Democratic Party on February 21, 2023, more than three months after his successful election to the City Council benefited from the unpaid mailers.
The local Democratic Party did not address or defend its use of unpaid mailers when asked for comment for this story, but instead would not comment during “an independent audit.”
“Earlier this year we initiated an independent audit of our campaign records from 2022, which was one of our most active years ever,” Becca Taylor, Chair of the San Diego County Democratic Party wrote to La Prensa San Diego. “It would not be appropriate for me to comment further until the results have been reviewed and presented to our Central Committee.”
City Council candidate Andrea Cardenas and mayoral candidate Ammar Campa-Najjar ended their respective campaigns with tens of thousands of dollars in debt to TMC Direct.
In the 2020 election cycle, Cardenas ended her campaign for a seat on the Chula Vista City Council with $38,991.89 of debt, 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.
None of Cardenas’ campaign spending reports listed the names of any printers or mailing service companies that delivered her mail. Only TMC Direct was listed as a vendor.
Both Cardenas and Espinosa helped run Andrea Cardenas’ campaign.
Andrea Cardenas defeated incumbent Councilman Mike Diaz who only raised a total of $32,049.00 for his entire campaign and ended the election with $1,690.61 in cash on hand and no debts. Diaz paid all of his vendors by the date of the election and listed the names of the printers who provided the mailing services.
In May 2021, only two days after a resident filed a complaint with the Chula Vista City Clerk alleging Cardenas violated the City’s campaign finance rules, Cardenas loaned $33,500 to her campaign committee and used the funds to pay off the outstanding invoices owed to TMC Direct.
Cardenas did not raise any contributions from donors during the first six months of 2021 after her election.
Some of the invoices Cardenas owed to TMC Direct had been outstanding for more than 12 months after the voters had received the campaign literature during the election.
Diaz, who was defeated by Cardenas, told La Prensa San Diego this week that he wasn’t surprised to learn that he was cheated during the 2020 election.
“Everyone has known the Cardenases are crooked,” Diaz wrote to La Prensa San Diego this week when asked for comment for this story. “From the Democratic clubs they use to gain power, to the $30,000 in illegal mailings, to running political mailers opposing their own client’s candidate, and now this. Too many people have been hurt by the Cardenas crime family,” Diaz wrote.
Ammar Campa-Najjar, who ran for Mayor of Chula Vista in the 2022 election cycle, ended his campaign with $58,444.96 in outstanding debts, including $8,204.00 owed to TMC Direct for campaign mailings and $8,000 to Margin Victories for consulting services.
Campa-Najjar reported raising no contributions from donors during the first six months of 2023 except for two $360 contributions from himself. Before those two contributions, Campa-Najjar had not donated or loaned any money to his campaign.
The finance report for Campa-Najjar’s campaign committee for the period ending June 30, 2023 shows that he still owes TMC Direct the same $8,204.00 for campaign mailers delivered to voters during the election and the entire $8,000 owed to Margin Victories.
None of the campaign financial disclosures for Campa-Najjar listed the name of the company or companies who actually provided the printing and mailing services.
Councilman John McCann, who defeated Campa-Najjar in the November 2022 election, ended his campaign with $32,819.67 in debts, which included outstanding invoices for his consultants, treasurer, fundraiser, and $10,000 he loaned his own campaign. McCann did not owe any outstanding bills for printing and properly disclosed his printer.
McCann paid all of the outstanding invoices after the June 30, 2023 report.
Councilman Jose Preciado also used Margin Victories as the consultant on his 2020 campaign. Preciado listed a payment of $2,370 to Margin Victories for literature and a sub-vendor payment from Margin Victories to TMC Direct for the literature, but no listing for any printing company as required by state law.
Preciado lists a $1,000 loan from himself as the only outstanding debt for his campaign committee.
Three well-known candidates ran for Mayor of National City in the November 2022 election, including incumbent Mayor Alejandra Sotelo-Solis, Councilman Jose Rodriguez, and Councilman Ron Morrison who had previously served as Mayor for 12 years.
Rodriguez, who also used Margin Victories as his consultant, ended his campaign with $46,982 in outstanding bills, including $36,982 owed to Margin Victories, of which $18,214 is owed to TMC Direct and $7,127 is owed to the US Postal Services for campaign mailings. $10,000 of the debt is money Rodriguez loaned to his own campaign.
During the 2022 election cycle, Rodriguez loaned $20,500 to a new campaign committee named “Yes for Safe Streets and Parks for All, supported by Councilman Jose Rodriguez” he created to support a ballot measure that will appear on the November 2024 election ballot. That committee also accepted a $2,500 contribution from Sempra Energy, the parent company of San Diego Gas & Electric. All of that money is sitting in the committee’s bank account.
After the election, Rodriguez loaned an additional $8,000 to his campaign committee and he used that money to pay $6,700 owed to Margin Victories for phone banking done during the campaign, but he did not pay for the outstanding bills for campaign mailers. Rodriguez did not raise any additional contributions from donors during the first half of 2023.
In June of this year, Rodriguez loaned $5,000 to a new campaign committee for his re-election to the City Council in the November 2024 elections.
In all, Rodriguez has loaned his campaigns over $32,000 for other purposes during the time he incurred the outstanding invoices for campaign mailers he received during his mayoral campaign.
None of the campaign financial disclosures for Rodriguez list the name of any company that actually provided the printing and mailing services.
Sotelo-Solis raised $29,641 in her re-election campaign and ended the year with $2,889.28 of cash on hand and only $302.50 owed to her campaign treasurer. Her financial disclosures properly listed the name of the printing company that provided her campaign literature.
“Campaigns are a reflection of who one is if and when they are elected and not a free pass to be unethical and have a ‘do-what-you-need-to-win’ attitude because in the end, the voters lose,” Sotelo-Solis told La Prensa San Diego this week. “Voters should know that their candidates and elected officials are telling the whole story, not picking and choosing certain parts, and that they will not compromise their values to win.”
Ron Morrison, who ultimately won the mayoral race, raised $38,047 for his campaign and ended with $5,000 in debt to himself for loans he provided to his own campaign. Morrison properly listed the names of the two printers who provided mailing services.
COUNTY BOARD OF SUPERVISORS
In 2020, Nora Vargas, who at the time was serving on the Southwestern College Board of Trustees, ran to fill the seat of retiring County Supervisor Greg Cox.
Vargas reported raising nearly $242,000 and ended her campaign with $66,160.36 in debt, including owing $40,556.09 to Grassroots Resources for consulting and $4,750 to TMC Direct for campaign literature.
The following year, Vargas continued to raise contributions and used the money to make payments to Grassroots Resources to pay down the consulting debt, but did not make any payments toward the mailing debt until the second half of 2022, nearly two years after she had received the campaign literature in her campaign.
Her campaign disclosures did not list any printing vendors as required under state law.
Vargas ran against then-State Senator Ben Hueso, who spent $384,281 in his losing campaign, but ended his campaign with no outstanding debts.
Hueso’s campaign disclosures properly listed the names of the printers who provided services during the election.
La Prensa San Diego reached out to several campaign consultants, Democratic Party insiders, and the Republican Party for their reactions to the use of political mailers not paid for by the campaigns before the election.
One long-time local political consultant said he had never had a printer send out campaign literature without first paying for the mailers.
The local Republican Party called the use of unpaid mail “cheating”.
“It’s cheating the electoral process to send out campaign literature that the Party and candidates couldn’t pay for and, even worse, to go months and years without paying off their debts,” Paula Whitsell, Chair of the Republican Party of San Diego County told La Prensa San Diego.
Whitsell pointed out that the Republican Party did not have any outstanding invoices for campaign mailers among its $10,901.99 of debt at the end of 2022. Whitsell herself was owed $1,000 for office expenses. All of the outstanding invoices were paid during the first half of this year.
Several political observers have questioned why so much campaign mail was sent without being paid for by the committees or the candidate themselves.
One insider pointed to the fact that both of the Cardenas siblings have worked for consulting clients who have financial interests before the same government entities where the candidates ran for office, including marijuana dispensaries, developers, and the San Diego County Deputy Sheriffs' union.
Jesus Cardenas reported representing Harbor Collective, a marijuana dispensary in San Diego, Blue Water Government Affairs, which represented marijuana industry clients, and RCS Harmony Partners, the developer behind the Harmony Grove development in North County.
Both of the Cardenases also represented several companies and individuals who applied for marijuana dispensary permits in Chula Vista where eight licenses were issued two years ago.
This year, National City approved its maximum of six marijuana dispensaries which are now under construction.
One of the biggest supporters of allowing marijuana shops into the city was Councilman Jose Rodriguez.
Two groups who did not receive licenses in National City sued the City for violating its approval process.
One of the suing groups includes Laura Wilkinson Sinton who successfully sued Chula Vista for violating its process when they disqualified her bid. Chula Vista has been ordered to put her company back in the process for a license.
Andrea Cardenas and Jose Preciado have both sat in closed session meetings of the Chula Vista City Council with its lawyers where they received updates on Wilkinson’s case and how to deal with the marijuana market.
Jesus Cardenas recently left his job as Chief of Staff for San Diego City Councilman Stephen Whitburn after news articles raised issues with his work as a government employee and a political consultant at the same time.
Cardenas said at the time he would be winding down Grassroots Resources even though the company had already been suspended by the state for more than a year.
Neither Jesus nor Andrea Cardenas responded to requests for comment.