Dark money, accusations of campaign finance violations roil Lilac Hills Ranch

As the battle over the ballot measure to authorize construction of the Lilac Hills Ranch housing development enters its final weeks, the money behind the sides is emerging as a central issue in the debate.

It’s made strange bedfellows of environmentalists and developers, has spawned three complaints with California’s elections watchdog and has seen a six-figure donation from a nonprofit with a checkered record that refuses to disclose its source of funds.

At the heart of the debate over the 1,700-home project in rural Valley Center is money — the amount, source and motives behind it.

Accretive Investments, the project’s developer, has pumped $4.2 million into the campaign over Measure B. The measure’s opponents say the company is trying to buy an election and bypass the regular process of development in unincorporated parts of the county.

Accretive and other project supporters, in turn, allege that the measure’s opponents are not the bedraggled band of poor farmers they make themselves out to be.

Dark money nonprofit enters the fray

Until the past week, the largest source of campaign contributions to the No on B side was Save Our Forest and Ranchlands (SOFAR), a nonprofit that has been a fixture in the local environmental community for two decades.

SOFAR was an unlikely source of the funds. The group has for years had meager resources at its disposal. At the end of last year, it had only $165 in assets. It hasn’t reported revenues over $500 since 2008.

Related: San Diego GOP gets $50,000 donation from Lilac Hills developer after endorsement

That all changed on Sept. 12. That’s when the group received a $110,000 donation. The source of the funds? Another nonprofit: California Local Energy — Advancing Renewables (CLEAR).

Nine days later, SOFAR made a $45,000 contribution to Citizens and Taxpayers Opposed to Lilac Hills Ranch, the political committee established to run the No on B campaign.

CLEAR, which reported revenues of $325,000 last year, doesn’t disclose its donors.

Bill Powers, the group’s treasurer, told inewsource that the $110,000 contribution to SOFAR to oppose Measure B isn’t going to change that.

“When CLEAR is required to report our donors by the Fair Political Practices Commission, we will do so and it will be a part of the public record at that time,” Powers said by phone.

Gavin Baker, open government program manager at the liberal advocacy group California Common Cause, said Powers is wrong.

“There’s really no question as to what should be done. Sometimes there’s a question as to how you should do it,” said Baker, himself the treasurer of Common Cause’s campaign arm. “But if you spend the money, you’ve got to disclose. That part’s pretty clear.”

Baker points to state regulations adopted in 2014 that require politically active nonprofits spending more than $50,000 in campaigns to disclose their donors.

Duncan McFetridge, president and founder of Save Our Forest and Ranchlands, said CLEAR made the donation so SOFAR could in turn contribute to the campaign. He told inewsource the contribution was “basically for opposition to Measure B” and that his group was doing its own independent work against Measure B with the remainder of the donated funds.

When asked why California Local Energy — Advancing Renewables didn’t contribute directly to the ballot measure committee opposing Lilac Hills Ranch, Powers said his group had a lot of confidence in SOFAR’s ability to support the campaign.

“I mean we know (SOFAR) and so that’s the primary reason. It’s just that the folks that are working on this directly seem very dedicated and capable,” Powers said. “It’s just more (the) comfort level of going with people we’re comfortable with through past assocation.”

Under the 2014 rules, a nonprofit that donates funds to another nonprofit for use in a political campaign must disclose the original source of the funds.

Powers said his organization’s opposition to Lilac Hills Ranch stems in part from the project’s environmental impact.

“Greenhouse gas emissions on this property are going to increase by a factor of 60 from 500-plus tons to 34,000 tons using all of their assumptions based on what (Accretive representatives) actually think is going to happen,” Powers said, referencing figures listed in the county’s greenhouse gas emissions report.

Powers said No on B was the only campaign the nonprofit donated to this election cycle.

Nancy Layne, a Valley Center resident and vocal supporter of Lilac Hills Ranch whom Accretive often provides to speak on behalf of the development to the media, filed a complaint against CLEAR last Wednesday.

In the document she sent to the Fair Political Practices Commission, Layne says the group should have to disclose its donors.

Layne, a real estate agent whose two prior complaints against the No on B campaign were dismissed, says she’s disturbed by the group’s refusal to reveal its sources of funding.

“Why is CLEAR refusing to disclose that? I believe if you’re going to have an open conversation about something, that you should lay your cards out on the table and you should say why I’m here,” Layne said. “And I would venture to guess that there’s a reason that it’s not being disclosed and I believe, as a citizen, we deserve to know.”

An FPPC spokesman confirmed the agency had received the complaint but declined to comment on the allegations made within it.

CLEAR — which changed its name from the Southwest Center on Renewable Energy in February — is one of more than 40 nonprofits associated with high-profile San Diego attorney Cory Briggs that an inewsource investigation last year found flouted state and federal laws.

In particular, SCORE appeared to exist only on paper, despite reportedly raising more than $855,000 in contributions and grants from its inception in 2008 to 2014 and spending more than $450,500 on “research,” “advocacy” and “organizing” in that time frame.

Its 2009 tax filings seemingly failed to account for $230,000 in expenses, as required by federal law, and a forensic public accountant inewsourceinterviewed called the group’s filings “egregiously wrong.”

LLCs to the rescue

CLEAR isn’t the only anti-Measure B benefactor Accretive’s backers say isn’t following campaign finance law.

The largest donor to the campaign is Palomar Investors LLC. The LLC made a $25,000 contribution on Oct. 9 and followed that up with a $24,000 donation on Oct. 17.

Related: Read all of inewsource’s 2016 election coverage

The owner of the LLC is well-known San Diego philanthropist Darlene Shiley. Shiley, an inewsource donor, issued the following statement:

“I and my late husband Donald have had an association with Valley Center for close to four decades. Through the years, we made many contributions to the community in the hope of benefitting its well being. I gave money to those opposing the Proposition B initiative because I believe the proposed Lilac Hills development is too intense for this rural community, and because the approval process being used circumvents the traditional planning process. This is a David and Goliath situation. It is my hope that my contribution to ‘No on Proposition B,’ although very small in comparison to the huge amount of money being spent by the other side, will help give the ‘No’ forces at least a fighting chance to defeat this.”

The biblical comparison is apt.

Accretive has donated $4.2 million to San Diegans for Housing Opportunities, the committee the developer created to run the pro-Measure B campaign. Citizens and Taxpayers Opposed to Lilac Hills Ranch, the anti-Measure B committee, has raised $151,611.

Put another way, the Yes on B forces have raised 28 times the amount of the “No” crowd.

Source: San Diego County Registrar of Voters | Graphic by Joe Yerardi

Data is current as of Oct. 23

It’s important to remember how we got here.

County planning commissioners voted 4-3 last fall to recommend Lilac Hills Ranch’s approval but only if Accretive made substantial (and expensive) changes to the proposal. Then, county Supervisor Bill Horn (a beneficiary of Accretive campaign donations), seen as a surefire “Yes” vote, recused himself after the FPPC ruled he had a conflict of interest in the matter.

Faced with these setbacks, Accretive paid more than $1 million to collect enough signatures to put the development on the ballot, thereby bypassing the Planning Commission and Board of Supervisors.

The opposition only formed its committee in August. Among the group’s first donors was another LLC, whose owners have a vested interest in land adjacent to the proposed project.

Development runs in Jim Pardee’s blood. His father, James, founded Pardee Homes. And even after selling the company in 1969 and leaving it altogether in the 1980s, the family continued to own and develop plots of land in the county.

Now, he owns about 120 acres adjacent to the proposed Lilac Hills Ranch development, including a 70-acre lemon farm (he owns about 375 acres in total on both sides of I-15).

“Historically, when you bring farming and homes together, it’s not a real good mix,” said Pardee, offering helicopter spraying of pesticides on crops as an example of an activity that wouldn’t mix well with dense housing.

He’s also concerned about traffic from the 1,700 additional households. He’s worried about his employees safely getting his equipment onto the farm and his product off of it on congested roads.

And as a developer, he feels that Accretive isn’t playing by the same rules as he did when he developed 28 homes on 94 acres in Bonsall years ago.

“I would have loved to get 17 times more homes over there. That would have been sweet, but again, we’re playing by the rules. That took us 10 years to get that,” Pardee said, explaining they worked closely with the Bonsall community planning group to address the community’s concerns.

“The problem is it’s not the right area,” Pardee said of rural Valley Center. “It’s just not the right area for this.”

Pardee made two $20,000 contributions to Citizens and Taxpayers Opposed to Lilac Hills Ranch through his LLC, West Lilac Farms.

Layne, the Lilac Hills Ranch supporter who’s filed FPPC complaints against the opposition, said she suspected “the largest developer in San Diego County history” of trying to sabotage a rival’s business venture.

“I would certainly look at that and wonder what the purpose was,” Layne said, referring to Pardee’s $40,000 in contributions to the No on B campaign. “It changes a little bit of the narrative when the people who are so vehemently opposed to this developer are a giant developer themselves.”

Saying he’s invested “hundreds of thousands of dollars” in planting new lemon trees, digging new water wells and buying new equipment, Pardee said he has no interest in developing land near the proposed Lilac Hills Ranch.

“My dad’s 94 years old. This is something he loves,” Pardee said. “He loves farming.”

Taken together, the $134,000 in contributions from Shiley, Save Our Forest and Ranchlands and Pardee equal more than 88 percent of the $151,611 in total contributions Citizens and Taxpayers Opposed to Lilac Hills Ranch has received.

Source: San Diego County Registrar of Voters | Graphic by Joe Yerardi

Data is current as of Oct. 23

Accretive itself has accused Pardee of failing to file required disclosure reports.

“Under state law, individuals or entities contributing over $10,000 are required to file ‘Major Donor’ reports,” Accretive spokesman Jeff Powers wrote in a statement. “To our knowledge, the Pardees have not filed such a form. Had they done so, it would be possible for the public to determine what other contributions the Pardees may have made.”

Pardee said that while he’s “certainly not an expert” on FPPC disclosure requirements, he made sure all reports were filed appropriately.

“I was very careful because of the family and the name that we were doing everything above board,” Pardee said.

Baker, the campaign finance expert at Common Cause, disagreed.

“If you have a filing obligation — which they would, having qualified as a major donor — then you have to file (a campaign finance report) when you make the contribution of (at least) a thousand dollars within 90 days of an election to a political committee,” Baker said.

Neither Pardee’s nor Shiley’s LLCs have filed such reports.

Pardee suspects that his family’s developer roots make him a target.

“We’re one of the finest builders ever in California — great reputation. And, you know I think unfortunately that might be a problem,” Pardee said. “We are a developer and we’re not in favor of this project and that might be something they can’t absorb. I don’t know.”

 Joe Yerardi is an investigative reporter and data specialist at inewsource. To contact him with questions, tips or corrections, email joeyerardi@inewsource.org or call (619) 594-5321. By agreement, The Grapevine publishes investigative, in-depth data-driven journalism from independent non-profit inewsource based at San Diego State University’s School of Journalism and Media Studies. For more from inewsource, visit http://inewsource.org/about/.