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A money-laundering scandal may have helped bring down former Secretary of State Kevin Shelley. But indicted political maven Julie Lee stands to pay the ultimate price.

Wednesday, Nov 22 2006
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Page 5 of 5

Still, based on what the grand jury was told, Lee's approaching trial could elicit testimony that raises new questions about what, if anything, Shelley may have known concerning the source of the allegedly laundered money.

That possibility appears especially so with respect to Bowman Leong, a one-time business associate of Lee's who served on the Taxicab Commission under former Mayor Brown. In his grand jury appearance, Leong — among those granted immunity for his cooperation against Lee — described how he wanted to gain state contracts for an information technology company he had formed, and agreed to Lee's request that he contribute $25,000 to Shelley with the understanding that she would front him the money.

At the time, there were no limits on the amount individuals could contribute to political campaigns for state office. (A $5,600 limit took effect in 2003.) But it was and remains illegal to make or to knowingly receive a political contribution under false pretenses, as well as to use public money, such as the state parks grant, for political purposes.

Leong, who declined to be interviewed for this article, testified that he personally handed Shelley a $25,000 check during a brief exchange inside the doorway of Shelley's home in February 2002. Although he had gone to the house unannounced, Shelley appeared to be expecting him, he testified. Leong said the men briefly exchanged pleasantries "and then he asked if I had something for him." Leong said he handed Shelley an envelope containing the check, and that Shelley "looked inside and just said, 'Thank you very much.'"

Questioned by Ronald Smetana, the deputy attorney general, Leong described Lee's giving him a check to cover his ostensible contribution before he went to Shelley's house.

Smetana: And what did she say to you when she gave you this check?

Leong: She made a comment that, I remember the comment very distinctly because it just — she just said that, "Do you really expect Kevin [Shelley] to give us this check and not get anything back?"

Smetana: When she said that, "Do you really expect that Kevin would give us this check" —

Leong: I meant she was referring to the half a million dollars that Kevin arranged for the resource center to obtain.


Like former State Insurance Commissioner Charles (Chuck) Quackenbush, who resigned in 2000 under a cloud of official misconduct without being charged with a crime (and who's now a sheriff's deputy in Florida), Shelley has suffered dearly for his woes while in office.

"I think you could say that he got the death penalty in terms of being a politician," says Robert Stern, former chief counsel at the FPPC, who's now the president of Los Angeles' Center for Governmental Studies. "For a high-profile political figure, it doesn't get much worse than losing your career."

For his part, Shelley says that he is happier in private life than he has been in a long while. "I've been able to reconnect with my family and spend much more time with my two sons," ages 5 and 3, he tells SF Weekly.

Shelley says he regrets having been "a difficult boss" and "alienating a lot of the people who worked for me over the years," but insists that he had no reason to believe that there was anything suspect about the contributions Lee raised on his behalf.

"Although some of my critics may say that I was a jerk, or overly opinionated, they've never said that I was unethical," he says. "To be so profoundly accused of a lack of ethics, it literally hurts me to my core, and I certainly regret that that part of my reputation is so strikingly damaged."

He says his decision to step down was "the result of a complicated set of factors," not least of which were the toll his troubles were taking on his family and his assessment that had he chosen to stay in office he couldn't have been effective.

"In no way was there any fear of any legal consequences should I have remained," he says.

Although Shelley says he had to mortgage his home to meet personal expenses, his political friends have helped fill the coffers of his legal defense fund. John Burton and Fabian Nñez were the single biggest contributors, at $15,000 apiece. State Sen. Carole Migden gave $7,500, and Assemblyman Mark Leno chipped in $2,000. "I felt Kevin was shoddily treated, and he paid a heavy price for it," says Migden, who says she was "glad to help Kevin and his family during their time of need."

Meanwhile, Julie Lee awaits a January court date, uncertain about her future.

"She's holding up as well as one could expect," says Donald Bergerson, her attorney. "But let's face it: She's been left alone in this. She's got the weight of the world on her shoulders."

About The Author

Ron Russell

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