By Arturo Castañares
Editor-at-Large
Two Chula Vista politicos pleaded guilty to two felony counts each today as part of a plea deal with prosecutors that limits their maximum potential sentence to one year in jail in a criminal case stemming from a La Prensa San Diego story from February 2023.
Jesus Cardenas, 41, and his sister, former Chula Vista City Councilwoman Andrea Cardenas, 32, faced a trial readiness hearing before Judge Rachel Cano on Wednesday.
The siblings were facing a total of 14 felony counts related to a fraudulent COVID-era federal loan and fraudulently applying for unemployment benefits while they were working.
But lawyers for the two defendants agreed to a plea deal with prosecutors before the hearing, leading the pair to unexpectedly plead guilty to two felony counts each in exchange for lighter sentences.
Both defendants pleaded guilty to two felony counts of grand theft for the federal loan funds and the unemployment benefits. The remaining charges were dismissed under the plea deal.
Jesus Cardenas agreed not to request a reduction in the felonies to misdemeanors at his sentencing scheduled for late March.
Prosecutors agreed to allow Andrea Cardenas to argue for reducing the felonies to misdemeanors at her sentencing hearing scheduled for late August.
The siblings and prosecutors also agreed to a sentencing deal where the maximum incarceration would be one year in county jail instead of the potential of years in state prison. The felony charges would otherwise carry a maximum sentence of 3 years 8 months in prison.
Such sentencing deals, known as No Opposition to Local Time, or NOLT, are usually accepted when defendants are first-time offenders facing non-violent or non-serious felony charges.
As with most felony convictions, the penalties include probation periods and restitution of funds.
Convicted felons may later seek a reduction in their felony convictions to misdemeanors after all conditions of probation and restitution are satisfied.
In California, convicted felons cannot vote in elections while they are in state or local custody, but regain or retain their voting rights when on parole or probation.
But California law does restrict convicted felons from running for or serving in public office.
Andrea Cardenas resigned her seat on the Chula Vista City Council on February 19th, but she was running for re-election at the time. Cardenas was first elected to office in November 2020.
Her name will still appear on the March 5th ballot even though she has suspended her campaign. Cardenas was facing five opponents in the race.
But, if Cardenas receives enough votes to be in the top two positions in the Primary Election, she would continue on to the General Election in November.
State election laws do not allow the name of a successful Primary Election candidate to be removed from the General Election unless the person dies more than 68 days before the election.
Cardenas would not be eligible to take office if she is sentenced to the two felony charges. If she were to win the election, a vacancy would be declared and a Special Election would be called to fill her term.
But if Cardenas is sentenced to misdemeanors in August and she were to win the November election, she would be eligible to serve a new four-year term beginning in December.
The siblings were charged in connection with a COVID-era Paycheck Protection Program (PPP) federal loan their company, Grassroots Resources, received in early 2021. Grassroots Resources provides political consulting services.
The existence of the PPP loan was first reported by La Prensa San Diego in a February 22, 2023 article.
Grassroots Resources applied for the loan using the names of employees of a local cannabis dispensary that is one of their consulting clients. The dispensary, Harbor Collective, is located in San Diego near the NASSCO shipyards.
Jesus Cardenas admitted during an extensive 155-minute phone interview with La Prensa San Diego that he used their employees after being confronted with information that their company did not have any of its own employees.
Grassroots Resources received a PPP loan of $176,221 in May 2021.
The PPP federal loan program was created to help businesses retain workers during the pandemic. Over 11.8 million loans totaling nearly $790 billion were awarded but were limited to help cover payroll, rent, and utilities. Companies could apply for a loan forgiveness after documenting how they spent the money.
Over 95% of the businesses eventually qualified for partial or complete loan forgiveness, but none of Grassroots Resource’s loan has yet been forgiven by the federal government.
The San Diego County District Attorney’s office confirmed that the siblings used the proceeds of the loan to pay themselves, paid off personal credit cards, and paid $33,000 of campaign debt from Andrea’s 2020 political campaign.
The siblings also pleaded guilty to unlawfully applying for unemployment benefits from April to December 2020.
During the time she was accepting unemployment benefits, Cardenas was running for her City Council seat. Her financial disclosure forms for that period reported she received between $10,001 and $100,000 as an employee of Grassroots Resources.
The siblings also reported receiving income during that period from consulting while they worked on campaigns for San Diego County Supervisor Nora Vargas, San Diego City Councilman Stephen Whitburn, and the San Diego County Democratic Party.
At the time the pair applied for the fraudulent federal loan, Andrea was serving on the Chula Vista City Council, and Jesus was serving as Chief of Staff to Councilman Stephen Whitburn.
Jesus resigned his position with Whitburn in June 2022 after news reports revealed he continued to serve consulting clients while also leading Whitburn’s City office.
Cardenas was criticized for helping lead a policy initiative for Whitburn that sought to amend the City’s cannabis dispensary regulations in 2021 that would have benefited his consulting clients.
The Chula Vista City Council declared a vacancy in Cardenas’ district on February 26th and started the process to fill the seat by appointment to serve the remainder of the term through December.
Anyone appointed to the seat cannot run for the full term in the election.
