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Tilting at Political Windmills 

Some people, like attorney Paul Melbostad, just don't know when to quit. Bully for him.

Wednesday, Jan 4 2006
There are attorneys who, after impoverishing and humiliating a prominent client, aggrandizing a sworn enemy, and spending $19,000 out of their own pocket to help pay for the whole mess, might call it a day and move along to other projects.

Paul Melbostad, however, is not that type of attorney.

Melbostad is the San Francisco general legal practitioner who in 2004 represented Gerardo Sandoval pro bono in a lawsuit against Gap Inc. founder Don Fisher and political consigliere Jim Sutton, alleging campaign finance violations. A judge threw the case out under a state law discouraging lawsuits that might limit free speech, known in the legal profession as "Strategic Lawsuits Against Public Participation," or SLAPPs. The judge also ordered Sandoval to pay his opponents' attorneys' fees. Sandoval appealed. The appeal was rejected. The San Francisco supervisor's total bill came to nearly $100,000, including $20,000 for a white-shoe lawyer to come in late in the day to clean up the fiasco, which, as it happens, is about the same amount Melbostad paid from his own money as recompense for the failed legal work.

"I felt that I had encouraged him to pursue this action, and I wanted to assist him in paying the fees," says Melbostad, former head of the S.F. Ethics Commission, which monitors campaign finance.

This debacle left Melbostad undeterred, however.

In October, he sent a letter to City Attorney Dennis Herrera urging him to prosecute the defendants in Sandoval's suit. Herrera declined.

And on Dec. 23 Melbostad was at it again, filing a lawsuit against Sutton and Fisher claiming, just as he had previously, that Sutton helped launder Fisher's campaign contributions as part of an allegedly illegal attempt to route money in support of Sandoval's 2004 Board of Supervisors election opponent.

"We've seen the complaint, and as far as I can tell, it's the same claims that the judge rejected last November, and then that another judge rejected in late April, and which the city attorney chose not to pursue," says Sutton. "As far as we can tell it's his fourth attempt at making these claims. And they still don't have any merit."

The new suit has been reworded so that -- Melbostad hopes -- it won't be thrown out of court, and, even if he loses, the plaintiff won't have to pay the defendants' legal bills as happened with the 2004 case.

Sutton says Melbostad's attempt to correct the errors of the original suit ignores a judge's preliminary ruling that Sandoval hadn't produced clear evidence that campaign finance law had been violated.

Melbostad's relentlessness tempts me to think: "Doesn't this loser know when to quit? Hasn't he done enough harm already? Doesn't he know that this sort of blind zealotry is responsible for half the problems in the world?"

But another cranial chorus drowns those thoughts. It says: "This guy's got balls the size of grapefruits." And, "Damn. Wouldn't it be cool if he got up, scraped the mud and blood off his face, and somehow beat the campaign finance sharpies who make San Francisco a less democratic place?"

Sometime during Sandoval's fall 2004 campaign to retain his Board of Supervisors seat representing the Outer Excelsior neighborhood's 11th District, mailboxes began filling with fliers festooned with swastikas, equating a remark Sandoval had previously made about bar mitzvahs with Nazism. Sandoval traced the anonymous mailings to a company connected to a consultant at the time working on a committee to oppose that year's Proposition F, which would have allowed illegal immigrants to vote in school board elections. Sutton was the committee's treasurer. To Sandoval's mind, the fliers were designed to benefit his opponent in the Board of Supervisors race, a real estate saleswoman named Myra Lim, and were an improper use of campaign funds that, Sandoval and Melbostad believe, violated city law.

Sandoval got the idea of suing, and was egged on by Melbostad. Melbostad had a particular motivation to try a case like this. Not only had he served on the Ethics Commission, he had also helped author Proposition O, passed on the fall 2000 San Francisco ballot, which prohibits using money slated for one political campaign on another.

Though set up to oppose the immigrant measure, Melbostad believes, the committee focused its firepower on the Sandoval-Lim race.

For Melbostad, this supposed redirecting of campaign money was tantamount to money laundering. He believed he could give his 2000 campaign finance law its first courtroom tryout. What's more, Melbostad would get to battle his old nemesis Jim Sutton.

"I was one of the primary persons on the Ethics Commission who was a constant, I would say, thorn in his side regarding his efforts to get away with schemes to avoid the law," Melbostad says. "What Sutton specializes in is concocting schemes to try to launder contributions in such a way that enforcement action won't be taken, and it takes someone very savvy like myself to see that it's obviously a scheme to evade -- I shouldn't say evade, it's to avoid enforcement of the law."

In response to Melbostad's allegations that he broke the law, Sutton again notes that these allegations were thrown out of court, failed on appeal, and that the city attorney declined a request to address them.

Prior to these setbacks, Melbostad believed the Sandoval case was an opportunity to bring Sutton to justice.

"I was contemplating filing an action myself," Melbostad says, when the possibility of doing it on Sandoval's behalf came along. "He said he was interested in doing it, so rather than filing an action myself, I volunteered pro bono."

Sandoval, for his part, wasn't as interested in the idea of testing the 2000 campaign finance law.

"My goal was to expose whomever was behind sending out these anonymous mailers with swastikas. I wanted to get them in a deposition and expose them to the public," Sandoval now says.

The suit fell far from satisfying either man's wishes.

Sandoval and Melbostad were unable to establish a connection between the Nazi mailers and the defendants in the suit. That left the allegation that mailers sent out by the Proposition F committee, which criticized Sandoval for opposing the measure, were actually campaign propaganda in support of Sandoval's opponent. This claim didn't get very far either.

Remarkably, Melbostad failed to follow procedural rules set down in the law he himself helped write. Also, Sutton says, Melbostad failed to provide conclusive evidence in court showing any violations of that law.

Prop. O, the campaign finance law, says that a citizen wishing to sue to enforce the law's provisions "shall deliver the notice to the City Attorney at least sixty days in advance of filing an action."

Melbostad tells me he "worked with the city attorney in drafting" the measure. Yet when it came time four years later to file a suit under the stipulations of Proposition O, Melbostad apparently forgot about the time that's supposed to elapse between notifying the city attorney and filing suit.

A judge ruled that "Gerardo wasn't likely to prevail on the merits because he hadn't waited 61 days before filing," Melbostad says.

Under California's anti-SLAPP statute, defendants who believe a lawsuit infringes upon their constitutional right to free speech may ask that a case be thrown out if it doesn't meet this "likely to prevail" standard. And out it went.

"I was an expert on campaign finance law," Melbostad now laments. "But I wasn't on anti-SLAPP law."

Things got even worse thanks to a sentence thrown into the Sandoval complaint seemingly as an afterthought, asking for "personal damages" in addition to any penalties that might be assessed the defendants. California's statute allows defendants to demand repayment of attorneys' fees in cases where suits are dismissed on anti-SLAPP grounds -- but only in cases where plaintiffs demand money for themselves. This meant Sutton et al. could demand tens of thousands of dollars from Sandoval.

Sandoval hired a new attorney to replace Melbostad. But it was too late to repair the worst of the damage. By the time he settled the matter, Sandoval faced bills of $82,000 for his opponents' attorneys' fees, $20,000 to replace Melbostad, plus $10,000 for an accountant to make sure Sandoval's plan to repay some of the debt with campaign contributions stayed on the legal up and up.

"It was an experience that any rational person would want to avoid. But it was not without its upside," Sandoval says. "Most people talk about their ideals. You don't often get a chance to pay for them. It's kind of a weird privilege."

With his Dec. 23 filing against Fisher and Sutton, Melbostad claims to have cured what ailed Sandoval's failed suit. In August, Melbostad wrote a letter to City Attorney Herrera stating that he planned to sue, then waited four months before dropping his legal complaint off with the clerk, meaning his filing date falls well outside Proposition O's 60-day notification requirement. The new complaint takes pains to emphasize that Melbostad is acting purely on behalf of San Francisco voters, and that he is not asking for any award to himself should he prevail. Therefore the defendants can't ask for attorneys' fees should Melbostad again fall on his face.

Until now I've made no habit of cheering on irrepressible bungling zealots.

For one thing, this kind of fandom invites charges of prurience. Who, after all, hasn't felt ashamed at becoming mesmerized by a still-swinging, brain-injured boxer?

For another, artless windmill-tilting with others nearby can cause real damage -- witness Sandoval's mammoth legal bill.

But there's a case to be made for this kind of thing, one that emanates from a childhood memory most of us share.

Do you recall that kid in school who kept getting into fights with the bullies, kept getting his ass kicked, yet kept getting into more fights? I don't remember the name of that universal character at my school, but he was there. I remember wondering why he kept doing such a thing, unfathomable to a coward like myself. Even more intensely, I remember fantasizing about what would happen if there came a time when he actually won. Might it turn the schoolyard political world upside down?

If there's a version of schoolyard bullies in modern democratic San Francisco, it's campaign finance sharpies. They labor to hide the origins and destinations of millions of dollars in campaign cash. This corrupts several principles -- that everyone should get an equal voice in politics, that government policy shouldn't be bought, and that the public should know the names of people pulling political strings.

To begin the new year, I'm bestowing the first annual New York Nationals Award for Hapless Determination, named after the Harlem Globetrotters' perennial winless opponent. And our 2006 winner is: Paul Melbostad, the little esquire who couldn't -- at least not yet.

About The Author

Matt Smith


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