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Feds want California to repay nearly $3 million in voting funds
Tuesday, October 17, 2006
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SACRAMENTO — Federal elections officials told California on Monday to repay nearly $3 million in Help America Vote Act funds, saying the money was mismanaged under former Secretary of State Kevin Shelley.

Shelley’s successor said the state should sue to try to force Shelley to repay the money.
“It is wholly unfair and unacceptable that the taxpayers of California would be required to lose funds that would otherwise be used for education, transportation and public safety due to the documented misconduct and mismanagement of Kevin Shelley,” Secretary of State Bruce McPherson, a Republican who is running for re-election, said in a letter to Attorney General Bill Lockyer.

A spokesman for Lockyer, Nathan Barankin, said his office was reviewing the letter, but added that it would be difficult to force Shelley to reimburse the state.
“The legal standard for establishing personal liability on an elected official is very high,” he said.

A spokesman for Shelley, Sam Singer, called McPherson’s request a “shameless election-year ploy.”
“Secretary Shelley was never found personally responsible for any wrongdoing relating to HAVA, nor did he misuse these funds,” Singer said. “Mr. McPherson’s attempt to pin the bill on Mr. Shelley is a shameless election-year ploy and not deserving of further comment.”

Shelley, a Democrat, resigned in February 2005 amid allegations that he mishandled the federal money, bent state hiring rules to reward political allies and accepted questionable campaign contributions.

In the separate case dealing with campaign contributions, Julie Lee, a San Francisco real estate agent, is awaiting trial on charges that she illegally funneled money into Shelley’s campaign fund from a state grant that Shelley helped arrange. No charges have been filed against Shelley, who has denied wrongdoing.

McPherson, a former state senator, was appointed by Gov. Arnold Schwarzenegger to succeed Shelley. He is running for a full term as secretary of state on Nov. 7 against state Sen. Debra Bowen, D-Redondo Beach.

Shelley sent his letter to Lockyer after being notified by the U.S. Election Assistance Commission that the state had to repay $2.9 million in Help America Vote Act funds.

The act was passed in 2002 to provide money to replace controversial punch card voting systems, implement voter outreach programs and set minimum election administration standards.

Federal and state audits found several problems in the way Shelley’s office handled the funding, including using the money to pay consultants to attend political events that were “partisan in nature.”

Other problems included lack of proper documentation of spending, insufficient planning for the use of the funds, poor oversight of staff and lack of competitive bidding for many contracts paid with HAVA money, the audits said.

Singer said at the time that Shelley’s office was overwhelmed “by a cyclone of unprecedented and historic forces” that included California’s 2003 gubernatorial recall election and the 2004 regularly scheduled election.

The Election Assistance Commission said that because of the mismanagement of the HAVA funds, the state must repay $536,122 to the federal treasury and restore nearly $2.4 million to its HAVA implementation fund.

A spokesman for the state Department of Finance, H.D. Palmer, said the state would repay the money, although he also said Lockyer should sue Shelley to force him to reimburse the state.

A federal audit released late last year concluded that more than $3.8 million in HAVA funds were misspent. Federal officials reduced the amount owed by the state after California officials were able to provide documentation supporting some of the spending, said McPherson spokeswoman Nghia Nguyen Demovic.
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