A longtime Westside activist Wednesday filed a lawsuit accusing Los Angeles city attorney candidate Mike Feuer and his political consultant of improperly obtaining taxpayer matching funds by hiding the true cost of his campaign.
Working with the nonprofit group Fix the City, former City Council candidate Laura Lake alleged that Feuer and his consultant, John Shallman, failed to comply with laws governing campaign contribution limits and disclosure of election spending.
The lawsuit mirrors complaints filed with the Ethics Commission earlier this year. Both the lawsuit and the complaint target a consulting agreement that allowed Shallman to run Feuer's campaign for $1 and receive a "win bonus" if he won outright.
Lake — a supporter of Feuer's opponent, City Atty. Carmen Trutanich — said the consulting agreement masked the true cost of Feuer's campaign, which included work by Shallman on campaign communications and strategy. By avoiding payment to Shallman, Feuer kept his expenses below $1.26 million and fraudulently qualified for $300,000 in taxpayer matching funds from the city, the suit said.
"We want these laws taken seriously," she said, adding: "We're putting all candidates and politicians on notice."
Feuer said he consulted the Ethics Commission about the agreement and was told that it complies with all applicable rules. And he indicated Wednesday that he reworked his contract with Shallman one week after the March 5 primary to make regular payments to him throughout the remainder of the campaign.
Feuer said he rearranged the agreement with Shallman because of the quality of his work, not because of the ethics complaint. "I decided that I wanted to ensure that he was compensated no matter the outcome of the race," he said.
The lawsuit seeks to force Feuer to give back the $300,000 and prevent him from receiving additional taxpayer money during the runoff campaign unless he makes regular payments to Shallman. Lake also suggested that she and her allies are looking at other candidates to see if they are obeying the city's rules regarding contribution limits, taxpayer matching funds and disclosure of campaign spending.
Feuer's campaign said other experts on city and state ethics rules consider the agreement legal. He also released a statement from Stephen Kaufman, an election law attorney, calling the "win bonus" proper under campaign finance laws.
"Whether a consultant chooses to get paid up front or defer his payment to the end is a business decision the consultant is entitled to make," Kaufman said.
Ethics Commission officials will not comment on whether they have received citizen complaints or whether advice was sought.
Fix the City is a group that has focused on Fire Department response times and other city issues and is led by two neighborhood activists — Mike Eveloff and James O'Sullivan. Both are supporters of Trutanich.
In her lawsuit, Lake also asked that a judge from another county handle the case because Feuer's wife, Gail Ruderman Feuer, is an LA. County Superior Court judge.
jean.merl@latimes.com
david.zahniser@latimes.com
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