A serious campaign finance violation…or just an unbelievable deal on rent?

For those just catching up with this story…

On March 14 and 28, with no previous notice and against overwhelming public opposition, our two newest county supervisors, Jeff Gorell and Janice Parvin, armed with a shoddy letter of nonsense, and the vote of their willing accomplice – fellow conservative Supervisor Kelly Long – proceeded to kill off our 20-year-old local election campaign finance and ethics ordinance. It has been replaced with the +600% higher contribution limits and dysfunctional violations enforcement offered by the state.

This team would consider no compromises, no delays, no citizen-led study committee nor a public vote. Needless to say, county residents smelled a rat…(remember the rat!)

Following that March 28th meeting, people combed through the supervisors’ publicly-accessible campaign finance records, and found a number of violations, which could be excused as possible errors made in the heat of the campaign. Despite what a fawning media story reported, none of them were “dismissed.” Both Parvin and Gorell had to return contributions in violation of our original ordinance.

But one alleged violation appears far more serious than others, far more deliberate, and remains unresolved. From the original citizen complaint, quoted in the the Compliance Officer memo:

“As shown in the attached Facebook post, Jeff Gorell moved into Shawn Moradian’s vacant office building in two of its 3 suites, a 1,300 SF office and an 1,500 SF office space on March 17, 2022 but didn’t report in his 1/1/2020-4/23/2022 filing as required by law. (He also misspells Moradian’s name.) While Gorell’s 460’s list the paltry sum of $250 In-Kind contribution a month for the rent for 3 months on 5/2/2022, 5/31/2022, 6/7/2022 during the Primary election, and for 3 months on 7/7/2022, 8/7/2022, 9/7/2022 during the General, the fair market value based on comps of similar office show the value at $55,650.“

This may have been some misunderstanding, or a willing “suspension of disbelief” that allowed Gorell, a lawyer himself and a former LA Deputy Mayor – to not only accept these problematic in-kind donations, but to entangle himself with a landlord who needs the Board of Supervisors to remove a watershed easement to develop another property. (MAC letter here) Even if Gorell’s campaign had paid full market value for the office space, even if the space had been a 10’x10′ storage unit, he still should have found a different landlord to avoid any appearance of impropriety.

Under our former ethics rules, Gorell might have faced a penalty of 3 times the disputed amount, in the range of $165,000. That issue no longer exists, thanks to his brisk actions to repeal the ordinance on March 28. The complaint has also been filed with the state, but under their guidelines, any penalty might be as low as $5,000.

Links to the original citizen complaint and the responding memo by Bryce Gee, Compliance Office for our late Ventura County Campaign Finance Ethics Commission here (tinyurl.com/gorell-violation)

So, how does this story end?

Well, that kind of depends on all of us, as the clock has run out on our old ordinance.

From Compliance Officer memo: “Based on my initial review and investigation, it is my opinion that the allegations in the Complaint and the evidence I have obtained in the short time available to me establish that the Gorell Committee may have committed potentially serious violations of the Ordinance. It would be my recommendation to further investigate these issues. However, because the Ordinance is set to be repealed effective April 27, 2023, no further investigation by the Compliance Officer will be possible.“

As this case disappears into the state’s huge backlog of campaign violations, there may never be an official resolution to what appears, at best, to be a lapse in judgment from someone who should have known better, and at worst, a deliberate cutting of ethical corners.

Even if the state finally makes a ruling, Supervisor Gorell’s reluctance to risk judgment under our county’s original ordinance, under which this alleged violation took place, will follow him through his career here like a permanent stain.

The irony is that if he and Parvin hadn’t destroyed our ordinance in such a hurried and undemocratic fashion, this alleged violation, along with the others already resolved, might never have come to light.

At the bottom of this post, we ask that you call your supervisor, the one you can vote for, and ask them to put extending Ventura County’s original election ordinance to the resolution of this serious violation on the agenda.

Defining our terms.

(Exhibit 5 – Quote for Gorell by J. Slater of Campaign Compliance.com) “The “office space” was used for sign storage and pickup – it was under complete construction with exposed walls, ceiling and wires etc and not rentable to anyone in that raw state which is why they let him store his signs there and use it as a distribution hub. The in-kind amount was based on average monthly storage space costs in the area.”

Seriously, what?

“Shell” spaces are usually commercial areas that are newly built with no interior finishes. Sometimes the term is also used for spaces that have been partially scrubbed of a former occupant’s presence, along with the terms “partial build-out” or “2nd generation space.”

Despite the assurances that the space was not rentable to anyone, the owner’s advertisement for his building, which is located at 280 E. Thousand Oaks Blvd, clearly indicates that his spaces are available for rent in their current condition. These are the two spaces the violation complaint refers to.

We will assume for the purposes of this discussion that the building owner maintained the required building permits, fire department inspections and certificates of occupancy on both spaces that allowed them to be accessed legally and safely by members of the public for the functions of storing objects, and acting as both a “distribution hub” and a campaign office.

If it quacks like a duck…

Gorell’s campaign would have us believe they were renting a mere storage unit…

(Exhibit 5 – Quote for Gorell by J. Slater of Campaign Compliance.com) “The in-kind amount was based on average monthly storage space costs in the area...”

What did the owner of the building think Gorell was “renting? According to election documents – “Office Space.”

Most of us know the difference between storage spaces and office space…

As one can see from these comps of Thousand Oaks area monthly storage spaces., a single 10′ x 10′ storage unit is the size most closely matching the $250 rent donation in the Thousand Oaks area.

Here’s an example of what storage units look like.

Standard storage units are simple boxes accessed solely with lockable roll-up doors. Most have no lighting or electricity inside the units themselves.

Access into storage unit buildings is usually tightly controlled with security gates requiring access codes to enter into the properties. This makes them unsuitable facilities for a “distribution hub.“

But let’s pretend, like his campaign compliance person is doing, that these monthly storage spaces are equivalent to the actual office building Gorell was “renting” and run the numbers.

At $244 dollars a month – a 10′ x 10′ space is pretty expensive – $2.44 per square foot.

Gorell had (2) spaces for a total of 2800 square feet. This would equal a monthly rent of $6,832. This amount multiplied by the eight or so months of rent would equal $54,656 dollars.

We don’t have to guess at what actually occurred in Gorell’s space. His campaign announced it over and over.

The memorandum from Bryce Gee details the numerous meetings and events that were advertised to take place at Gorell’s campaign OFFICE on pages 5-6. ( Exhibit 10 and 11)

The memo noted that people don’t have “Office Grand Opening” parties in storage units. Storage units also don’t have nice publicly-accessible hallway/lobby spaces perfect for big group photos, regular doors, public restrooms, electricity, lighting, space for meetings, or other lovely amenities that are expected when one rents OFFICE SPACE.

This facebook notice indicates that Gorell had staff, at least part time, working in this space, which we once again assume that the owner had the proper permits for.

Photos entered into evidence by Gee show that the office space had access to lighting, and electrical outlets and one photo showed tables and chairs. Gee added that the space was used as the address of his headquarters, and the return address on his mailers. Additional photos showed Gorell posing in the open office door with his sign on the inside of its windows and standing inside a space that had a finished wall, carpeting, acoustic ceiling and lighting.

From Gee’s memo: An August 9, 2022 post on Jeff Gorell’s Instagram account contains the same photograph of himself and the others inside the office space. The posted message states: “Thank you to everyone who came out tonight for our volunteer coordination meeting. It was standing room only. We have a great group, and I’m looking forward to the Fall campaign and November victory. #TeamGorell.” (See Exhibit 12.)

From Gee’s memo: “Based on this substantial amount of publicly available evidence, it does not appear credible that the Gorell campaign used the office space at 280 E. Thousand Oaks Blvd. “for storage only and as a sign pick up.” (See Exhibit 3 (Ms. Slater’s April 25, 2023 email).) On the contrary, during the campaign, Mr. Gorell and his campaign appear to have regularly used that office as the campaign’s “headquarters” for campaign events and meetings.“

Here comes the rat!

The Acorn posted this story on the alleged violation issue, including Gorell’s complaining about his $250/mo. 2800+ s.f. office space, which actually cost him nothing, while simultaneously throwing his suspiciously generous landlord under the bus with the dead rat story…NICE!

“In a May 2 statement, Gorell said the complaint compares “Class A, turnkey” property values to an unfinished, partially demolished building that had missing walls, exposed wood and nails, and hanging electrical wires and pipes.

“There were no locks on rear sliding doors so 2-by-4 pieces of wood were fashioned by the campaign staff to brace the doors closed,” Gorell said. “A deceased rat was removed from rafters by the campaign during utilization of the space.”

Seriously. For $250/mo. versus the true market-value rent, he could have drywalled the backside of that wall and painted it over in a weekend if appearances were so important. Swept up. Stacked things neatly. Painted the 2×4 at the door his campaign colors. Covered piles with painters’ tarps if necessary.

And never mentioned the rat.

Meanwhile, thanks to Gorell’s great suggestion, we’ve found “shell” space comps, which, unsurprisingly in CA’s expensive real estate market, weren’t a whole lot different than “full build-out” comps. (See section on market value comps below.)

Despite social media comment to the contrary, shell commercial real estate in California NEVER has “zero” value!

Another truth – Keeping the “this is just a storage room” story straight is tricky, even for the building owner. From the Ventura County Compliance Officer Findings/Opinion:

The written lease agreement promised to the Compliance Officer never appeared.

Note to Supervisor Gorell – there’s a reason that most supervisor candidates use their own homes as campaign headquarters – renting at true market rates is prohibitively expensive. At least it was under our former $750 contribution cap.

Can’t a property owner make up any rent they want to for their in-kind “donation?”

No.

“Market value” is why you should be leery of winning a “free car!” or any high value prize at a game show, radio giveaway or a casino. The actual market value of that prize is what the tax people will be coming after you for.

Just because a +1500 s.f. shell space isn’t currently rented, that doesn’t mean that its market value magically becomes equal to that of a 10’x10′ storage unit, or as one overeager defender dramatically stated – “zero.”

Shell spaces and partial build-out spaces aren’t as plentiful in the commercial real estate listings, because they are more trouble for the average business to use, requiring tenant improvement permits and inspections to use, but they definitely have market value that Gorell’s campaign ignored.

Gorell complained in the Acorn article that his office was unfairly compared against “Class A, turnkey” property values.”

Below are comps of shell and “partial Build-out” spaces. Gorell and his campaign compliance consultants should have carefully considered these before they jumped at a too-good-to-be-true offer. Just the size of the spaces involved (1,500 s.f. and 1,300 s.f.) should have tipped them off that a $250 price tag might become a problem.

Here is a comp for OneWest Bank Plaza, at 199 E. Thousand Oaks.

• Monthly rent for the cheapest commercial shell space shown above was ±$22/SF/year. For a 1,000 square foot office, that would equal $22,000/year ÷12 months = $1,833/month.
• The most expensive shell space was ±$28/SF/year. For a 1,000 square foot office, that would equal $28,000/year ÷12 months = $2,333/mo.
• The average cost is ±$25/SF/year. For a 1,000 square foot office, that would equal $25,000/year ÷12 months = $2,333/mo.for a 1000 s.f. = $2,083, or $2.08/s.f.
• For the two spaces (2800 s.f.) the rent = $5,824/mo.
• For 8 months, the landlord’s gift to Gorell’s campaign of shell space square footage would be $46,592.

So, what would $250/mo. get you? We’ve already done the math. $25/SF/year x 120 square feet = $3000/year ÷12 months = a monthly rent of $250.

120 s.f. – A little bigger than a 10’x 10′ storage unit.

Counting is hard!

One of Supervisor Gorell’s complaints about Ventura County’s ordinance was the same thing candidate Gorell had previously complimented it on – a strict $750 contribution limit.

Was he was just worried that it appeared that his in-kind rent payments didn’t add up?

From Gee’s memo: “...the Gorell campaign “moved into the Jeff Gorell for Supervisor 2022 campaign office” on March 17, 2023 (see Exhibit 9) and held an “Office Grand Opening” on March 27, 2023 (see Exhibit 10). The In-Kind Contribution Forms provided by Ms. Slater further state that the Committee’s use of the office space began in “Mid March.” (See Exhibit 4.)

Yet the Gorell Committee first reported Mr. Moradian’s in-kind contribution on 5/2/2022 (Exhibit 7)—approximately a month-and-a-half after the Committee obtained possession of the office space and received the benefit of it...”

(For the primary election)

…If, as the Gorell Committee’s In-Kind Contribution Forms stated, the value of the office space was “$250 per month” (see Exhibit 4), the correct reporting of these contributions should have been:
(1) $250 on 3/17/2022, when the campaign “moved into the Jeff Gorell for Supervisor 2022 campaign office”;
(2) $250 on 4/17/2022;
(3) $250 on 5/17/2022; and
(4) the prorated amount of approximately $169 on 6/7/2022.
Thus, even assuming that $250 per month reflected the fair market value of the office space, Mr. Moradian’s in-kind contributions would have exceeded the Ordinance’s maximum $750 contribution limit for the primary election.”

(Similarly for the general election)

“The Committee reported $250 in-kind contributions from Mr. Moradian on 7/7/2022, 8/7/2022, and 9/7/2022. But the
Committee’s In-Kind Contribution Forms stated that for the general election, the office space would be used from “July – October.” (See Exhibit 4.) And the Gorell Committee’s Facebook page shows campaign events being held at 280 E. Thousand Oak Blvd. as late as October 15, 2022. (See Exhibit 18.) Therefore, there appears to be at least one missing $250 in-kind contribution from Mr. Moradian or a prorated amount of $250 that should have been reported on 10/7/2022, which would bring Mr. Moradian’s total contributions above the Ordinance’s maximum $750 limit for the general election.“

However, Supervisors Gorell and Parvin’s repeal of our county ordinance stopped this investigation.

“Accordingly, I find that sufficient evidence exists to establish that violations of the Ordinance may have occurred with respect to these allegations of the Complaint. Again, further investigation would ordinarily be necessary.”

Attacking those who are investigating you? Sounds like someone else we know!

Are we already at the “throw anything at the wall to see what sticks” stage?

Does the simple counting of months of occupancy, the comparing of comps, and the calculation of fair rent have partisan components?

Supervisor Gorell, we are exhausted by people in positions of power and responsibility taking no responsibility. These kinds of attacks should be beneath you and are a disappointment.

Examples of Letters-to-the-Editor on this issue!

Questions for a supervisor

I’m still reeling over last month’s vote to repeal the longstanding campaign rules, in spite of overwhelming public opposition.

Supervisor Gorell’s arguments were: 1. It would flush out dark money over which candidates have no control, adding other cities with local limits have a higher amount of dark money from IEC’s. Supervisor Lopez crushed this argument by showing several of the cities Gorell used in his presentation have limits that are higher than the state limits. 2. A local ordinance puts an undue burden and added bureaucracy on the county.

I have two questions for the supervisor. First, why did you not discuss this as an important issue during your campaign? Surely you felt it was a vital issue that needed to be addressed in your first 90 days in office.

Second, can you monetize what repeal of this ordinance will mean to the county? You never mentioned this in your presentation. Please present the data.

This week another complaint was filed against Gorell alleging he reported an “in kind” contribution of $1,500 for nine months of office space in a building owned by Shawn Moradian. It includes documentation showing the fair market value of this space was over $50,000. I am also aware that Gorell received $13,500 from relatives of Moradian, most of whom live in Los Angeles or Beverly Hills. This may be legal, but is it ethical?

I concur with Leanna Brand’s April 26 letter: We need to watch to see what Gorell does with Shawn Moradian’s development requests. Remember he needs the Board of Supervisors to release the county’s 45-year flood control easement to build on his Borchard Parcel. Supervisor Gorell may have underestimated how closely the public will watch and what his connection to Moradian might cost him.

Karen Wilburn, Newbury Park

Finish investigation of Gorell

(VC Star) Why were newly-elected Supervisors Gorell and Parvin in such a hurry to kill our county’s 20-year-old election finance and ethics code with its $750 contribution limit – the very limit that Gorell applauded earlier for keeping our elections “grassroots”?

County residents searched through campaign finance records for the cause behind their dramatic change-of-heart.
They found multiple campaign finance violations, including what appears to be a deliberate scheme involving massively undervalued in-kind contributions of office space rent between Gorell and Shawn Moradian, a T.O. landowner in need of future B.O.S. approval for property development. Comps of similar office space indicated a value of $55,650, instead of the declared $1500. The County Compliance Officer’s stated:  

“Based on my initial review and investigation, it is my opinion that the allegations in the Complaint and the evidence I have obtained in the short time available to me establish that the Gorell Committee may have committed potentially serious violations of the Ordinance. It would be my recommendation to further investigate these issues. However, because the Ordinance is set to be repealed effective April 27, 2023, no further investigation by the Compliance Officer will be possible.”  

Case closed!

The complaint was also filed with the state FPPC, but Gorell knows that the state system is overloaded and complaints take a long time to process, making accountability of little concern. The fine under our old code might have been as much as $165,000. When and if it is processed by the state, the fine might be just $5000. (Read local & state complaints here: tinyurl.com/gorell-violation)

Off the hook, and a contribution limit increase of over 600%? What’s not to like for Gorell?

Email/call your VC Supervisor & ask them to put finishing the County ethics investigation on the agenda! Ventura County residents deserve better!

Leslie Warren, Camarillo

Keep eye on new supervisors

(VC Star) After watching our new Supervisors Gorell and Parvin move to quickly change campaign rules and limits, in spite of receiving 500-plus letters and 80-plus comments, I decided to look at their contributions and expenditures. As suspected, they were both in violation of the regulations they decided to repeal.

I filed a complaint about Gorell’s double dipping contributions from Hagle Lumber Company. Mr. Gorell quickly refunded a $750 contribution so there would be no hearing or additional fine levied against him. Parvin also refunded money. Hagle Lumber has been in violation of SOAR regulations for a few years now for paving over 10 acres of land covered by SOAR and storing lumber on them. It has still not been resolved. Hagle came before the previous supervisors to change the land use rules (which really can only be done by a vote of the people) and the supervisors rightly said no. I am concerned that the new supervisors will be hearing from Hagle about this and will roll over and give into these donors the next time they ask.

Also, we should be watching to see what Gorell does about Shawn Moradian’s development requests after getting office space for his campaign for $250 a month expenditure and $750 in kind contribution from Moradian. Last time I checked you couldn’t rent office space on Thousand Oaks Boulevard for $250 per month. Moradian could end homelessness in Thousand Oaks if he were willing to rent to others for $250 per month.

We need to keep our eyes on these new supervisors. They obviously don’t care about rules or their constituents. They are all about the money.”

Leanna Brand, Simi Valley

Now it’s our turn.

Voting on your own “Get-out-of-trouble-free” card may have been “legal,” but it sure doesn’t smell right!

Minimal phone script for those who live in Districts 2 (Gorell) and 4 (Parvin):

(Not sure of your district? See “Contacts” below)

Hi, my name is [___] and I’m a voter in District [2 – Gorell/4- Parvin]. Supervisor [Gorell/Parvin] dumped our county’s election finance ordinance on some pretty flimsy arguments. I want [him/her] to know that I expect [him/her] to behave honorably and deal with any and all alleged campaign violations that have filed against them under the conditions of the ordinance they were committed under, no matter how long it takes. We will be watching this issue of public trust carefully. Thank you!

Minimal phone script for those who live in Districts 1 (LaVere), 5 (Lopez):

Hi, my name is [___] and I’m a voter in District [1 – LaVere/5- Lopez]. I would like to first thank Supervisor [LaVere/Lopez] for defending our county’s election finance ordinance. I also would like [him/her] to add an agenda item to vote on extending our finance ordinance to cover the violation complaint filed against Supervisor Gorell. We will be watching this issue of public trust carefully. Thank you!