Four days before the June 7 primary election, 28-year-old Republican congressional candidate Justin Fareed finds himself confronting uncomfortable questions about his relationships with a number of his big donors, including Los Angeles resident Uri Mandelbaum, a convicted tax fraud, who was forced to pay $1.5 million in restitution.
Fareed was the subject of an extensive Los Angeles Times piece detailing that 80 percent of his campaign cash came from outside of the 24th district, orchestrated largely by Larry Feigen, an executive of SnF Management, which owns a chain of nursing facilities across the state.
The Times emphasized that at least 30 people connected to Feigen and his business donated a total of at least $108,000. Many contributions were for $5,400 each, the maximum amount an individual can donate in both primary and general elections. What’s more, many of the people interviewed by Times said they had never met Fareed, but had heard he was a “good guy.”
In addition, Shlomo Rechnitz, a wealthy businessman who also owns nursing homes in the state and contributes to many campaigns, wrote him a $2,700 check. People employed by Rechnitz and their family members have given Fareed at least $74,000, according to the Times.
Though about half of Fareed’s donors came from inside the 24th Congressional District — spanning San Luis Obispo, Santa Barbara, and a slice of Ventura — at least 90 donors came from the Los Angeles area and contributed nearly 25 percent of his campaign money, the Times reported.
Fareed, who has never held public office and unsuccessfully ran for Congress in 2014, raised $1.1 million, second to Democrat Salud Carbajal, a nearly 12-year Santa Barbara County supervisor who brought in $1.9 million. Democratic rival Helene Schneider, who has served on the Santa Barbara City Council and as mayor since 2003, raised $630,000 in this race. Katcho Achajdian, a Republican Assemblyman from San Luis Obispo and the supposed frontrunner, raised $750,000.
Asked about the allegations, Fareed was unavailable Friday for an interview. Christiana Purves, his campaign spokesperson, dismissed the Times article as “tabloid” material “pushing false narratives for a profit.” She charged national Democrats “resorted to peddling lies in a desperate attempt to keep the seat blue.” “Unlike establishment candidates in the race, Justin has operated his campaign with integrity and transparency, forcing political insiders to invent stories to save their careers,” she said in an emailed statement. “…Justin remains the frontrunner in the race for California’s 24th Congressional seat.” When pressed to identify specific inaccuracies in the article, Fareed’s campaign declined to comment beyond its statement.
Nine people in the Feigen family contributed at least $2,700 to Fareed’s campaign, including three who are listed as students in financial disclosure forms. (Of those, three donated a total of $5,400.) Feigen and his company also contributed at least $25,000 to political action committees set up to support Fareed.
The origin of Larry Feigen’s relationship with Fareed is not clear. When asked, a campaign aide declined to comment. The Times reported Feigen knew Fareed “through business connections in the medical sector.”
Fareed’s parents, Linda and Donald Fareed, founded ProBand Industries, a company that makes devices to alleviate pain from sports injuries. In public, Fareed often talks about growing up packing boxes in the garage; his dislike of government regulations, he often says, comes from his experience with his family’s small business.
Feigen did not contribute to Fareed’s campaign in 2014. That year, Fareed gave himself nearly $200,000, and later forgave the loan. His 2015 financial disclosure forms indicate he could have received sizable disbursements from a family trust. His 2016 financial disclosure forms were due May 15, but have not been filed.
After Fareed lost the 2014 primary election — surprisingly coming within 600 votes of Republican Chris Mitchum — he became the vice president of ProBand. Fareed has not loaned his 2016 campaign any money.
Last year, Fareed hired two former aides to presidential candidate Governor Scott Walker, but one left Fareed’s campaign in March. Sources close to the campaign indicated there were disputes over fundraising practices. A Fareed campaign spokesperson said the manager was let go due to an internal matter.
Over the years, Feigen has donated nearly $70,000 to candidates, mostly Republicans but some Democrats. The long list includes Senator John McCain (who endorsed Fareed last August), Congressmember Kevin McCarthy, Congressmember Ed Whitfield (whom Fareed worked for as a legislative aid), and Montana Congressmember Ryan Zinke (who held a fundraiser for Fareed at his Santa Barbara home in March).
Feigen also donated $62,000 to joint fundraising committees, including Cotton Victory (raising money for Arkansas Senator Tom Cotton) and Ryan-McCarthy Victory (a committee to elect House Republicans). According to the Jewish Journal, Feigen donated $14,500 to Israeli candidates in last year’s election. Feigen did not return multiple requests for comment on Friday.
In theory, the practice of bundling campaign donations is not illegal. But the Times article raises questions about rank-and-file employees giving to a campaign — in another congressional district — they apparently know nothing about. If employees were coerced into making political contributions, or were reimbursed after making donations, that would raise serious legal concerns.
[For the Record — 4:43 p.m., June 6: There is no charge or statement intended in this article, implied or expressed, that the Fareed campaign has accepted or will accept coerced or reimbursed contributions from any source.]
Asked about the Times article, Republican candidate Achadjian pointed to a Lompoc Record story that states most of his 800 donors live in the district. “We don’t have the wealthy connection,” he said. “That’s always been the case with us.” He added, “Every [donor] knows me personally. Everything goes through me.” He also pledged not to accept money from the tobacco industry.
Democrat Bill Ostrander, who founded Citizens Congress, a nonprofit to lobby against big money in politics, said Fareed’s out of district contributions are “another example of why campaign finance reform is at the center of my campaign. There is a clear conflict of interest when we use private money to fund races for public office.”
At debates, Ostrander has condemned Carbajal for accepting political action committee money. At one UCSB debate, Carbajal shot back: “I am 100 percent against Citizens United…[but] we need to do everything we can to keep this seat blue.”
Ostrander took further issue with the fact Carbajal received partial access to Congresswoman Lois Capps’s donor list — reported in federal financial reports as a $250 in-kind mailing list rental. “That’s probably worth a half million dollars,” Ostrander said. “If not more.”
According to Carbajal’s campaign, 65 percent of Carbajal’s money, through May 18, has come from inside the district.
Schneider said in a statement the outside dollars in this campaign “are having a major effect on the landscape of this election. Voters should look carefully at how all the candidates are being funded, including via independent expenditure spending, and take that information into account when they vote.” Last week, Schneider and Fareed got a drink together at Dargan’s, generating buzz amongst political gossipers. Neither have answered requests for comment on the nature of the meeting. Both are running as the anti-establishment candidates.
As for Mandelbaum, the 78-year-old Los Angeles resident pleaded guilty in 2008 to tax evasion after he made nearly $900,000 in contributions to charities connected with Spinka — a Brooklyn-based religious group in Orthodox Judaism — but got 95 percent of the money refunded. Spinka was at the center of an alleged conspiracy case to defraud government agencies by laundering money through a bank in Israel. He was sentenced to six months in prison.
Seven others in the Mandelbaum family — associated with the nursing home SNP Pharmacy — donated at least $2,700 to Fareed’s campaign.
Asked over the phone about his donation to Fareed’s campaign, Mandelbaum said, “So? I meet a lot of people.” Asked about his relationship with Fareed, he said before hanging up, “I don’t like to be interrogated. It’s not my cup of tea.”