Laguna Seca Raceway | Creative Commons
By Royal Calkins
Longtime hotel manager John Narigi, who appears poised to win a three-year Monterey County contract to run the Laguna Seca Raceway, figures prominently in a current investigation by the state Fair Political Practices Commission into allegations of campaign money laundering and other possible violations of election law. Among the recipients of the contributions under scrutiny were the campaigns of Monterey County supervisors John Phillips and Chris Lopez.
The complaint to the FPPC raises questions about more than $60,000 in contributions to Phillips and $10,000 to Lopez and additional questions about what could be impermissible coordination of campaign activities by candidates and political action committees in which Narigi has been heavily involved.
The complaint was filed early this year by Christian Schneider, a professional political consultant and sometimes campaign manager who helped lead Steve Bernal’s successful sheriff’s campaign five years ago and Scott Davis’s unsuccessful campaign against Bernal a year ago. Schneider has filed several complaints with the state watchdog agency over the last year, including one that resulted in pending criminal charges against one-time Assembly candidate Neil Kitchens of Prunedale.
Schneider’s lengthy complaint alleges that a membership solicitation sent out by the Monterey County Hospitality Association while Narigi was an officer of the group spelled out how the source of campaign contributions to particular causes or candidates could be hidden by routing the money through the association’s political action committee. While political action committees routinely collect contributions, election laws bar the use of PACs to obscure the source of contributions to specific candidates.
The complaint also alleges that the Hospitality Association solicitation strongly suggests that the PAC makes a practice of paying for campaign advertising in coordination with candidates, which is also prohibited under state and federal laws.
Galena West, chief of the FPPC’s enforcement division, informed Schneider by email April 29 that her office would formally investigate the allegations he had lodged against the two supervisors along with four organizations heavily involved in financing local campaigns — the Salinas Valley Leadership Group, the Monterey County Hospitality Association, Monterey Bay Action Committee-Candidates and Monterey County Business Political Action Committee. Also named is Ricky Cabrera, a business partner of Salinas Valley Leadership Group founder Don Chapin and a close associate of Phillips.
A spokeswoman for the FPPC said Monday that the investigation remains active.
“There are an attorney and an investigator working on it actively,” she said.
Under standard practice, the subjects of the complaint would have been notified months ago about the inquiry. Calls and other inquiries to Narigi, Phillips, Lopez and Chapin early Monday had not been returned as of 4 p.m.
Cabrera, reached by telephone, said he had been questioned by an FPPC representative but was too busy to say any more.
Narigi has been heavily involved with at least three of the groups named in Schneider’s complaint, having served as president and treasurer of the Monterey County Business PAC, treasurer of the Monterey Bay Action Committee-Candidates and director and president of the Monterey County Hospitality Association.
The Board of Supervisors is scheduled to take up the Laguna Seca management contract Tuesday morning. The county-owned racetrack has been operated since 1957 by the non-profit Sports Car Racing Association of the Monterey Peninsula but the county Administrative Office surprised the racing world by announcing last week that the contract will not be extended beyond this year.
County officials have been dissatisfied with the group’s performance for at least several years. They picked another race course manager to take over three years ago but a final agreement could not be reached, leaving SCRAMP in charge. An audit earlier this year found a long list of deficiencies and irregularities within the SCRAMP operation. County officials have also complained that SCRAMP has been slow to make necessary improvements to the track along Highway 68 between Monterey and Salinas. By one account, the winding track is in need of repaving work expected to cost some $30 million.
Assistant County Administrative Officer DeWayne Woods indicated last week that the management contract would go to a partnership formed by Narigi last month for that purpose, but the Board of Supervisors is scheduled to hear presentations Tuesday from Narigi, SCRAMP and Chris Pook, founder of the Long Beach Grand Prix and developer of numerous other race courses.
SCRAMP officials argue that they were given late notice of a possible change at the track. They also argue that the county is about to put one of its most important assets under the control of someone with no experience in racing, Narigi. SCRAMP is receiving support from racing legends Mario Andretti and Roger Penske along with local racing enthusiasts who have worked with SCRAMP over the decades.
SCRAMP chief executive Tim McGrane has told associates that Phillips should not be involved in the decision because of his relationship with Narigi.
Narigi was general manager of the Monterey Plaza Hotel for three decades until last spring when he said he was moving to the Seattle area to help care for an ailing relative. He has been heavily involved in Peninsula business and marketing organizations, especially within the hotel industry, and has received numerous awards from those groups. For several years, he has served on the board of Rancho Cielo, the highly acclaimed nonprofit founded by Phillips that provides culinary training for at-risk youth.
Also on that board are Cabrera and Chapin, a Salinas-based paving contractor who started the Salinas Valley Leadership Group, which contributes to and endorses business-friendly candidates in local races. Chapin and Phillips are among the partners operating the Crazy Horse golf course outside Salinas. Schneider said in his complaint that he sees the Phillips’ supervisorial campaign and the Salinas Valley Leadership Group to be so intertwined as to be almost alter egos.
“SVLG on paper is no different than the Phillips’ campaign. Same accountants, treasurer, consultants, principle (sic) donors,” Schneider said.
He noted that SVLG and the Hospitality Association teamed up to spend $15,000 on a poll performed last year for the Phillips campaign, which suggests an impermissible amount of coordination. Political action groups are allowed to buy advertising and services to benefit various candidates but only if the expenditures are truly independent from the campaigns.
Narigi has told associates and county staff members that he will disengage from the political action groups if awarded the contract and also stop playing a leading role in Cal Am Water’s highly controversial effort to build a desalination plant. Narigi has lobbied extensively on Cal Am’s behalf and has written newspaper opinion pieces promoting the project. While managing the Monterey Plaza Hotel, he instructed his entire staff to attend a Marina City Council meeting as a show of support for Cal Am’s venture.
For his successful 2018 campaign against Regina Gage, Phillips received $40,000 from the Monterey County Business PAC, $20,000 from the Salinas Valley Leadership Group, $5,000 from the Monterey County Hospitality Association and $2,150 from Narigi. Phillips also reported receiving $500 from the Monterey Plaza Hotel, the site of one of his campaign fundraisers.
Phillips, a retired judge, represents Supervisorial District 2, which takes in most of northern Monterey County. With Salinas Valley representatives holding a 3-2 edge over their Peninsula colleagues, Phillips is widely seen as the most powerful member of the Board of Supervisors.
Lopez was elected a year ago to replace his former boss, Simon Salinas, to represent District 3, taking in most of southern Monterey County. He reported receiving $10,000 from the Monterey County Business PAC in May 2018, his largest contribution.
The other Salinas Valley supervisor, Luis Alejo, received $9,000 from the Monterey Bay Action Committee in 2017 but he is not named in Schneider’s complaint.
Cabrera, who was named in Schneider’s complaint, has no apparent connection to the Laguna Seca issue but he is close to the others named in the complaint and received campaign contributions when he ran unsuccessfully for a seat on the Salinas Valley Memorial Health Care board last year.
Cabrera was listed as a business partner of Chapin when Chapin applied last year for a county permit to open a marijuana dispensary at McShane’s Nursery on Highway 68. (That application was rejected at the planning department level because the use would have violated the property’s agriculture zoning.) Chapin’s Salinas Valley Leadership Group contributed $5,000 to Cabrera’s campaign.
Cabrera’s campaign documents indicate he also received $5,000 from the Monterey County Business PAC, $2,572 from Chapin, $1,000 from Phillips and $2,500 from Warren Wayland, the accountant whose firm performed the critical audit of Laguna Seca. Wayland also has served as treasurer of the Phillips and Lopez campaigns.
In his letter to the FPPC, Schneider argues that he had uncovered what appear to be “predicate issues of coordination, undisclosed expenditures, earmarked donations, co-mingling of resources, (prohibited) communications and possible campaign money laundering contrary to transparency laws on campaign finance.”
Schneider supplied the FPPC with some evidence of campaign violations and suggested several other areas for potential investigation. He said he was providing the FPPC with a “road map.”
In an interview, Schneider said he was motivated to study Monterey County campaign practices in 2018 when he was running the sheriff’s campaign of Salinas City Councilman Scott Davis. Deputies loyal to the incumbent, Steve Bernal, conducted a heavily publicized investigation into what they alleged was a pattern of embezzlement within the Deputy Sheriffs Association, which was supporting Davis.
Deputies claiming to be working on an official investigation seized association records and, though their investigation turned up no evidence of wrongdoing, they were never disciplined for what appeared to be an unauthorized investigation.
During the sheriff races he worked on, Schneider repeatedly accused reporters, including the author of this article, of treating his candidates unfairly.
Schneider said his work so far has turned up a pattern of self-dealing and violations of campaign law.
“In politics the word corruption is tossed around so often by both sides it has lost meaning,” he said, “But it causes harm in a community, it fosters inequalities. This isn’t a Republican or Democratic issue. It is an issue of blatant power grabs and greed by a small group of individuals who feel their needs are more important than everyone else’s.”
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