California elections watchdog closes investigation into spending during 2016 Santa Rosa City Council race
A lengthy state investigation into allegations the son-in-law of a prominent Sonoma County developer violated campaign finance laws during the 2016 Santa Rosa City Council race has been closed without reaching any conclusions.
The California Fair Political Practices Commission said it ended the investigation last month because the man at the center of the inquiry, Scott Flater, and his father-in-law, developer and banker Bill Gallaher, were suing The Press Democrat over its coverage of the campaign spending.
The investigation by the state’s political watchdog agency was triggered by a formal complaint filed by a Santa Rosa contractor who questioned whether secret donors were funding what would eventually amount to a record $202,574 in independent expenditures made by Flater to support three council candidates during the November 2016 election.
FPPC investigators closed the 2-year-old case without reaching a decision on whether to charge Flater with violating the law or clear him of allegations that he had laundered political contributions and failed to disclose the source of the money for his independent expenditure campaign.
In a March 1 letter sent to Flater’s attorney, FPPC senior counsel Angela Brereton stated the investigation had been closed “due to pending civil litigation concerning conduct related to the Enforcement Division’s investigation.” It cited the lawsuit filed by Flater and Gallaher against The Press Democrat.
Gallaher and Flater had accused the paper of harming their reputations in four stories that detailed the campaign spending and documented questions in the community about the source of the money. An appellate court dismissed the lawsuit March 15 after determining Gallaher and Flater had failed to prove the stories were false.
Jay Wierenga, spokesman for the Fair Political Practices Commission, declined to say why a civil lawsuit might have bearing on the agency’s inquiry into whether election spending violated the law. He would not make FPPC officials, including Brereton, available for interviews.
The non-partisan commission - charged with enforcing election, lobbying and government ethics laws - may close cases without taking action when other agencies are investigating activities or when another “situation may have some bearing on what enforcement has, which is a case,” Wierenga said.
“Until that other situation is resolved, without any other determination, they close it,” Wierenga said.
Wierenga said the investigation into Flater’s spending was closed “without prejudice,” which means it could be reopened at any time.
Flater and his attorney did not return multiple phone calls last week seeking comment.
The investigation was unusual, both in the amount of time it consumed and the way it ended without a conclusion about the validity of the allegations raised in the complaint.
The majority of FPPC cases involve minor violations of campaign rules and are settled within six months or less, Wierenga said.
Nearly 80 percent end with some action by the agency, such as warning or advisory letters, fines and violation notices, according to agency reports from 2015 to 2018.
Only 21 percent of FPPC investigations are closed with so-called “no action” letters, which are issued when the agency declines to take action for a variety of reasons. They include cases where investigators disprove the allegations, find insufficient evidence to prosecute, or determine “the potential violations are being addressed in another forum,” according to the commission’s website.
Flater had not been a major donor to local political campaigns before 2016, when he paid for mailers and other independent expenditures to support three candidates - Jack Tibbetts, Ernesto Olivares and Don Taylor - running for the council. The $202,574 he spent was equal to 89 percent of the total contributions raised directly by all six candidates in the council race and represented an unprecedented influx of outside cash flowing into a Santa Rosa City Council election.
Flater listed his occupation as a “homemaker” in campaign filings, raising questions about the source of the money, according to the Nov. 4, 2016, complaint filed with the FPPC by Santa Rosa contractor Chris Grabill.
The new council would have been poised to vote on a controversial housing project proposed by Gallaher to build 867 homes and apartments along Chanate Road on county-owned land. A deal to sell the property to Gallaher was voided by a judge in 2017 after neighbors filed a lawsuit alleging the county should have conducted an environmental assessment of the project.
FPPC investigation records obtained by The Press Democrat under the California Public Records Act show the agency announced the closure of its investigation March 1 - just eight days after it received a batch of financial records from Flater and his wife, Molly Flater, who is Gallaher’s daughter.