Developer Ryan Ogulnick was required to pay the state of California $87,000 for the alleged laundering of political campaign money, reporting violations and failing to comply with advertising disclosure requirements, following a seven-year investigation from the Fair Political Practices Commission.
During an FPPC meeting on Thursday, some commissioners described the money laundering scheme as one of the most “egregious” cases they had ever seen.
Ogulnick’s lawyer, Gary Winuk, said Friday that Ogulnick has paid his share of the fine, $56,500, and his campaign attorney, Beverly Grossman Palmer, paid her share, $30,500.
“After the seven years this case has been open, we appreciate the FPPC approving the stipulated agreement,” Winuk said. “The stipulation recognized that Mr. Ogulnick was new to campaigns and sought experienced legal counsel to assist with full compliance of all campaign rules. This, unfortunately, led to some inadvertent errors under the complex campaign reporting laws.”
According to the FPPC stipulation settlement, a political action committee, or PAC, was formed by Ogulnick and his wife in 2018 to support Santa Ana City Council candidates Roman Reyna, Sal Tinajero and Sandra Peña Sarmiento, as well as to starkly oppose current Councilmember Phil Bacerra who was a planning commissioner at the time.
The PAC spent $320,000 in advertisements and mailers opposing Bacerra and supporting his opponent Reyna. The funding came from two companies partly owned by Ogulnick, according to the FPPC settlement document.
“The LLC respondents did not want to be disclosed as the true sources of the contributions to the PAC, and for this reason, they made their contributions through an intermediary company,” the stipulation settlement reads, an act that is illegal under state law. “Ogulnick and the LLC respondents maintain that they had communicated these facts to their legal counsel and treasurer, Palmer, but these communications resulted in confusion — the end result of which was a lack of correct reporting.”
Reyna beat Bacerra in the 2018 election, however Tinajero and Sarmiento lost. In 2019, Reyna resigned from his City Council seat and pleaded guilty to election fraud for falsely claiming to live in the district he was elected to represent.
“Potentially, there’s a correlation, you might even say it’s causation, but that this is not only egregious, terrible conduct, but it could have had an impact on an election,” FPPC Commissioner Catherine Baker. “I think that’s important to highlight the public harm potentially.”
Ogulnick acted as a principal officer of the PAC, although records never disclosed him as such, according to the FPPC settlement.
The maximum penalty that Ogulnick and Palmer could have faced is $106,000. One Santa Ana resident, Dale Helvig, called the $87,000 fine “inadequate” and unfair to Santa Ana residents.
“Hold Ogulnick accountable for illegally trying to influence the outcome of a free and fair election,” Helvig wrote in a letter to James Lindsay, FPPC’s chief of enforcement.
Baker echoed these concerns and said she would have liked to see a penalty fee closer to the maximum amount.
“This is one of the highest (cases) we’ve had in years,” Commissioner Alf Brandt said. “This is serious, and I don’t know that the public gets more benefit out of getting them to pay. My judgment is, I don’t think it’s valuable to the public.”
Although Lindsay said he believed the case didn’t rise to the level of criminal behavior, Baker recommended the case be referred to the county’s District Attorney’s office.
“My feedback would be, if that would be the one stone to make sure is not unturned. If this is approved today…refer it to the local District Attorney, and let them use their discretion and their analysis to see if there are criminal violations here as well,” Baker said.
Bacerra thanked the FPPC in an Instagram post and also called for a criminal investigation.
“Simply put, Ryan, his wife Rachel, and his consultant Pam Sapetto conspired to hide the true sources of campaign contributions used to attack me with outright lies,” Bacerra said. “I join the members of the FPPC who asked for our District Attorney to criminally investigate Ryan Ogulnick, Rachel Ogulnick, Pam Sapetto, and any other morally corrupt individuals who enabled these disgusting actions.”
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