Capps Failed to Report Over $500K

Representative Lois Capps left more than half a million dollars in income off financial disclosure records for an eight-year period, according to documents required by the clerk of the House of Representatives.

From 1998 through 2006, Capps — in filings with the Legislative Resource Center, home to all public disclosure information filed by members of the House of Representatives — didn’t include income from two pensions she received, one from the State Teachers Retirement System and the Regents of the University of California. Together, the income totaled $512,813. She later corrected the disclosure, saying the income from the two pensions was “inadvertently left off my disclosure form in past years.”

Also, in 2009, she reported that, due to a clerical error, the year-end value of two reported mutual fund assets — “Eaton Vance Tax Management Fund” and “Van Kampen Equity” — were both underreported. They both should have been listed in the $15,001-$50,000 range, she said. They were originally listed in a lower bracket.

The disclosures might otherwise be old news, but they are the latest in a long debate over both candidates’ finances, beginning before the June primaries. In June, reports surfaced that Capps’s opponent, former Lt. Gov. Abel Maldonado, was disputing what could be up to $4.2 million in tax deductions his family farming business reported. The Los Angeles Times reported the IRS had challenged deductions that didn’t appear to benefit the business, including memberships at a golf club and the cost of horses on the farm. Parties at the Maldonado house and bathroom tile and outdoor deck work were also questioned as improper business deductions. That dispute is ongoing.

In August, Capps came under fire for failing to report $41,480 in income from a rental unit from 2001-2006. Her accountant eventually reported the income to the Legislative Resource Center in 2006, but her tax return was not amended until earlier this year.

Most recently, McClatchy Newspapers reported earlier this month that Maldonado raised $35,500 in campaign funds the same day as a party was claimed as a business expense in the family business federal income tax return. Election records reviewed by the news agency “appear to bolster an Internal Revenue Service decision to bar the company, Agro-Jal Farming Enterprises Inc., from writing off the $3,686.03 catering fee because the party may have been a political fundraiser that didn’t qualify as a business expense,” according to the report.

A Capps spokesman said her reporting error was not an ethics violation. “Members of Congress do not have to list social security or thrift savings plan benefits, but they do have to list other pensions,” said Jeff Millman. “In this case, there was an inadvertent reporting error that Lois found on her own and immediately fixed many years ago. Her forms are properly filed and this is not a current issue. Instead of Mr. Maldonado attempting to distract voters, his time would be better spent paying the $4.2 million he still owes in federal back taxes.”

The Maldonado campaign seized on Tuesday’s revelation in a statement by campaign spokesman Kurt Bardella. “This is the latest in a troubling pattern that has emerged where Congresswoman Capps hides or under-reports her income,” Bardella said. “Ultimately in a campaign you have to define what you’re for. That’s why Abel Maldonado has spent his time engaging this district in a conversation about ending bailouts, creating jobs, lowering gas prices and leveling the playing field with China. What has Lois Capps been talking about? A standard that apparently, she has repeatedly failed to meet.”

Ironically, Tuesday’s news comes just a week after Maldonado released a polling memo which, among other things, showed 68 percent of voters find the debate on personal finances and taxes a distraction, while 27 percent of people find it important.

Meanwhile, outside interests have spent more than $1.6 million on the race. Of the outside spending, $1.2 million has been spent to oppose Capps or support Maldonado, while $435,283 has been spent to oppose Maldonado or support Capps. While a recent Maldonado polling memo indicated he held a one-point lead in the race, the lack of heavy participation from the Dem side suggests they don’t view the race as quite as close.

Recent filings show the candidates themselves have topped the $5 million mark. Capps has brought in $2,795,403 while Maldonado has raised $2,249,907, including $482,187 over the last three months. He has $448,612 on-hand. Capps has just more than $1 million on-hand.

“With House Speaker John Boehner and the Republican House Leadership Team raising money for Abel Maldonado, Lois’ supporters knew they needed to work harder than ever,” said Capps campaign consultant Bill Carrick. “We continue to be very grateful to Lois’ growing group of grassroots donors for their incredible generosity. But with all Mr. Maldonado’s Super PAC ads, we must keep raising money and getting out the vote every day until the Election Day, and we will.”

Said Bardella: “Throughout this entire campaign, Congresswoman Lois Capps has enjoyed every advantage that an entrenched, 14-year Washington incumbent could possibly have – yet the latest polls have her behind. It explains why she is running a 100% negative campaign while Abel talks about lowering gas prices, creating jobs and leveling the playing field with China. For all the resources she has, it’s too bad Congresswoman Capps won’t communicate what she’ll do to fix the real challenges we face. At the end of the day, this election isn’t about who has the most money, but whether or not people believe the status-quo is working for them or not.”

KCOY canceled their planned televised debate for later this week, meaning last week’s debate hosted by the Independent and UCSB’s Carsey-Wolf Center is the last debate between the two candidates on the schedule. See it here

Election Day is November 6. Vote-by-mail ballots are already out, but it’s not too late to register, which can be done by visiting registertovote.ca.gov.