ORIGINAL 3 4 5 Charles H. Bell, Jr. (SBN 60553) Brian T. Hildreth (SBN 214131) BELL, McANDREWS & HILTACFIK, LLP 455 Capitol Mall, Suite 600 Sacramento, California 95814 Telephone: (916) 442-7757 Facsimile: (916) 442-7759 COP 1916 NOV -7 PH , ig; 59. cLEitre, s *Ai- 7u 1.4‘ OUR S tvfl 1;1E63 COUNTY, CA Attorneys for Plaintiff DARRELL E. ISSA 6 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 COUNTY OF SAN DIEGO 10 DARRELL E. ISSA, an individual 11 Plaintiff, 12 13 14 15 Case No37-2016-00039144-CU-MC-CTL V. DOUG APPLEGATE, individually; ROBERT DEMPSEY, individually; DOUG APPLEGATE FOR CONGRESS, INC.; a California corporation; and DOES 1-10, inclusive, 16 VERIFIED COMPLAINT FOR DAMAGES;_DEFAIVIATION (LIBEL) AND REQUEST FOR PERMANENT INJUNCTIVE RELIEF. JURY TRIAL DEMANDED Defendants. 17 18 Plaintiff, DARRELL E. ISSA, by his attorneys, for his Complaint against Defendants 19 DOUG APPLEGATE, individually; ROBERT DEMPSEY, individually; DOUG APPLEGATE 20 FOR CONGRESS, INC., and DOES 1 through 10 (collectively, the "Applegate Defendants" or 21 "Defendants"), states as follows: NATURE OF THE CASE 22 1. 23 This is a Libel action arising from two false and misleading political 24 advertisements released by the Defendants. The first, released on September 20, 2016, falsely 25 reports on Plaintiff's business ventures and personal wealth. The second, released on October 4, 26 2016, falsely reports on certain statements made by Plaintiff relating to the September 11 terrorist 27 attacks. Both have materially harmed Plaintiff's reputation. 28 /// BELL MCANDREWS & H1LTACHK LLP 1 PLAINTIFF'S COMPLAINT 1 2 3 JURISDICTION AND VENUE 2. Pursuant to Code of Civil Procedure section 395(a), venue in this Court is proper as a substantial portion of the events and injuries from which this case arises occurred within the 4 County of San Diego, California and some of the Defendants in this action (namely Applegate 5 and Dempsey) conduct significant business in the County of San Diego, California. Plaintiff is 6 now, and at all times mentioned in this Complaint was, a resident of San Diego County, 7 California. The Applegate Defendants, by their actions and omissions as detailed in this 8 Complaint, caused tortious harm to Plaintiff in the State of California. 9 10 PARTIES 3. Plaintiff DARRELL E. ISSA ("Congressman Issa") is a resident and citizen of 11 California. He serves in the U.S. House of Representatives, representing the 49 th District of 12 California. 13 4. Defendant DOUG APPLEGATE ("Applegate") is an individual and is a resident 14 and citizen of California. Applegate is a current candidate for the U.S. House of Representatives, 15 challenging the seat held by Congressman Issa representing the 49 th District of California. 16 Applegate controls and directs the activities of Defendant Doug Applegate for Congress, Inc., 17 which employs Defendant ROBERT DEMPSEY. Applegate personally approved the false and 18 misleading advertisements that are the subject matter of this Complaint and upon information and 19 belief, is one of the parties chiefly responsible for making the final decision to broadcast the 20 advertisements on television and over the Internet. 21 22 5. Defendant DOUG APPLEGATE FOR CONGRESS, INC. is and was, upon information and belief, at all relevant times herein, a California Corporation with its headquarters 23 located at 977A Lomas Santa Fe Drive, Solana Beach, CA 92075, and is the principal campaign 24 committee for Defendant Applegate. DOUG APPLEGATE FOR CONGRESS, INC., acting 25 through Defendants Applegate and Defendant ROBERT DEMPSEY, sponsored, approved, and 26 facilitated the broadcast on television and over the Internet of the false and misleading 27 advertisement that is the subject matter of this Complaint. 28 BELL MCANDREWS Ac HILTACHK LLP 2 PLAINTIFF'S COMPLAINT 6. Defendant ROBERT DEMPSEY ("Dempsey") is an individual and a resident of 2 the State of California. Dempsey is the Campaign Manager running Defendant Applegate's 3 campaign to be elected to the U.S. House of Representatives, representing the 49 th District of 4 California. Dempsey is employed by Defendant DOUG APPLEGATE FOR CONGRESS, INC., 5 and his place of business is and was at all relevant times herein located at 977A Lomas Santa Fe 6 Drive, Solana Beach, CA 92075. Dempsey personally approved the false and misleading 7 advertisements that are the subject matter of this Complaint and, upon information and belief, is 8 one of the parties chiefly responsible for making the final decision to broadcast the advertisement 9 on television and over the Internet. 10 7. The true names of Defendants DOES 1 through 10, inclusive, are unknown to 11 Congressman Issa, who therefore sues such Defendants by fictitious names. Congressman Issa is 12 informed and believes, and based on that information and belief alleges, that each of the 13 Defendants designated as a DOE is legally responsible for the events and happenings referred to 14 in this Complaint and unlawfully caused the injuries and damages to Congressman Issa alleged in 15 this Complaint. Congressman Issa will seek leave of Court to amend this Complaint to show the 16 true names and capacities of the Defendants designated as DOES when the same have been 17 ascertained. 18 COMMON FACTUAL ALLEGATIONS 19 The First Defamatory Advertisement 20 8. The first defamatory advertisement upon which this Libel claim is based was 21 released by Applegate and Defendant DOUG APPLEGATE FOR CONGRESS, INC. 22 ("Applegate Defendants") on September 20, 2016 ("the 9/20 Advertisement"). It is currently 23 airing on broadcast and cable TV stations that serve California's 49 th Congressional District, 24 which includes northern San Diego County and southern Orange County. Additionally, the 9/20 25 Advertisement appears on the Doug Applegate for Congress website directed and controlled by 26 the Applegate Defendants. 27 28 BELL MCANDREWS & HILTACHK LLP 3 PLAINTIFF'S COMPLAINT 1 2 9. The main thrust of the 9/20 Advertisement is the false allegation that Congressman Issa has profited off his eight terms in Congress. Specifically, about nine seconds into the spot, 3 the 9/20 Advertisement visually depicts a copy of an article from The New York Times dated 4 August 14, 2011 -- both the The New York Times masthead and that particular date appear in this 5 portion of the 9/20 Advertisement. The referenced article, entitled "A Businessman in Congress 6 Helps His District and Himself," was published in The New York Times on August 14, 2011 ("the 7 Article"). A complete copy of the Article is attached to this Complaint as Exhibit A and 8 9 incorporated herein by reference. 10. Instead of including the actual headline of the Article, the 9/20 Advertisement 10 visually depicts a fake, doctored headline consisting of the following words that do not appear 11 anywhere in the Article: "Rep. Issa Gamed the system to line his own pockets." A fake sub- 12 headline, which likewise does not appear in the Article, is also depicted: "Rep. Issa has secured 13 millions of dollars in Congress earmarks for roadwork to the many properties he owns." This is 14 followed by a voiceover and further visual depiction of words to the effect that Congressman Issa 15 has "steer[ed] millions in taxpayer money to help properties he owns" -- again, words that do not 16 17 appear in the Article. 11. By juxtaposing an image of the Article (or at least images that ptirport to represent 18 the Article) with the statements identified in paragraph 10 above, the 9/20 Advertisement falsely 19 and misleadingly leads viewers to believe that the statements are quoted from an article in The 20 New York Times -- i.e., the Article attached as Exhibit A to this Complaint. Yet, as a review of 21 the Article reflects, the words in quotation marks featured in the 9/20 Advertisement do not 22 appear anywhere in the Article. (See Exhibit A hereto.) 23 24 12. By approving and sponsoring the 9/20 Advertisement, the Applegate Defendants have sanctioned a lie -- namely, the use of invented headlines and statements improperly 25 attributed to The New York Times. 26 13. In addition to misleading viewers of the 9/20 Advertisement into believing that the 27 referenced fake headlines and statements in the 9/20 Advertisement were quoted from the Article 28 BELL MCANDREWS Sr HILTACHK LLP 4 PLAINTIFF S COMPLAINT 1 (which is demonstrably untrue), the 9/20 Advertisement's attempted reproduction of the Article 2 itself constitutes a publication of false material. This is because the Article contains numerous 3 falsities reported as fact in supporting the false premise that Congressman Issa has obtained 4 personal financial benefits through his activities as member of the House of Representatives and 5 6 generally painting Congressman Issa in a false light. 14. That the Article contains numerous falsities is not a matter of opinion, but of 7 public record: after the Article's original publication on August 14, 2011, The New York Times 8 was forced to issue public corrections on three separate occasions, which completely and wholly 9 debunk the central message contained in the Article. These corrections are noted in the version of 10 the Article available on The New York Times' website. (See Exhibit A.) 11 15. In terms of the actual corrections made, the Article falsely stated that Congressman 12 Issa "split a holding company into separate multibillion dollar businesses." On August 16, 2011, 13 The New York Times printed a correction noting that the use of the term "multibillion" was in 14 error. (See Exhibit A, p. 10.) 15 16. The Article also falsely stated that Congressman Issa's family foundation earned a 16 return of nearly 1,900 percent in connection with one 2008 stock sale. (See Exhibit A.) The then 17 Managing Editor (and current Executive Editor) of The New York Times, Dean Baguet, later 18 19 admitted in writing that this information was not correct. 17. The Article also falsely stated that the value of a medical complex owned and 20 subsequently sold by Congressman Issa's company rose 60 percent after Congressman Issa 21 secured federal funding to widen a road alongside the plaza. On August 26, 2011, The New York 22 Times printed a correction noting that at the time of the sale, "the value of the property remained 23 essentially unchanged [from its purchase price] and did not rise 60 percent after Mr. Issa secured 24 federal funding to widen a road alongside the plaza." A second correction relating to this issue 25 appeared in The New York Times on September 7, 2011. (See Exhibit A, p. 10.) 26 18. There are numerous additional falsehoods contained in the Article referenced in 27 the Advertisement. But at a minimum, it is undisputed that The New York Times itself was forced 28 BELL MCANDREWS & HILTACHK LLP 5 PLAINTIFF'S COMPLAINT to issue several corrections admitting that the Article contained false information, as identified above. The 9/20 Advertisement does not mention any of these corrections or otherwise acknowledge that the Article it references, in support of the wholly untrue allegation that 4 Congressman Issa "gamed the system to line his own pockets steering millions in taxpayer money 5 to help properties he owned," indisputably contains false information. 6 19. In addition to containing material falsehoods, the 9/20 Advertisement is now the 7 subject of a complaint filed by the Foundation for Accountability and Civic Trust ("FACT") 8 pursuant to 52 U.S.C., § 30109(a)(1), against Defendant Doug Applegate For Congress (among 9 others), for violations of the Federal Election Campaign Act of 1971, as amended. A true and 10 correct copy of the FACT Complaint is attached hereto as Exhibit B and incorporated herein by 11 12 this reference. 20. Congressman Issa is informed and believes and thereon alleges that the Applegate 13 Defendants and DOES 1-10, and each of them, made the false and defamatory statements in the 14 9/20 Advertisement as identified above: (1)with the specific intent to injure Congressman Issa; 15 and (2) with actual knowledge of the falsity of the statements or reckless disregard for the truth or 16 falsity of the statements. 17 18 The 9/20 Advertisement's Defamatory Meanings 21. That the 9/20 Advertisement was reasonably susceptible of carrying the 19 defamatory meanings ascribed to the 9/20 Advertisement by this Complaint is underscored by the 20 fact that these defamatory meanings were precisely the meanings immediately ascribed to the 21 9/20 Advertisement by average readers and by other media outlets, commentators, and bloggers 22 throughout the nation and the world, spanning a broad cross-section of society. 23 22. On September 20, 2016, the same date that the Applegate Defendants released and 24 caused the 9/20 Advertisement to begin airing, a reporter with The Los Angeles Times noted as 25 26 27 28 BELL MCANDREWS & HILTACHK LLP follows: The Applegate campaign released a new ad Tuesday . . . accusing Issa of profiting off his eight terms in Congress. Issa, with an estimated minimum net worth of $254.7 million, is the wealthiest member of Congress. He made most of his fortune in the 1990s while leading Directed Electronics Inc., a manufacturer of vehicle anti-theft devices. "Just like Trump, Issa gamed the 6 PLAINTIFF'S COMPLAINT system to line his own pockets steering millions in taxpayer money to help properties he owned," the narrator says. 2 3 A copy of the referenced article from The Los Angeles Times, which is accessible on the internet 4 at http://www.latimes.com/politics/essential/la-pol-sac-essential-eolitics-updates-congressionalrace-between-darrell-issa-1474413104-htmlstory.html is attached to the Complaint as Exhibit C. 6 23. Also on September 20, 2016, The Daily Kos published a piece describing the 9/20 Advertisement, noting in relevant part as follows: In his first ad, Democrat Doug Applegate links Republican Rep. Darrell Issa to Donald Trump. Applegate wisely uses clips of Trump to make his case, with Trump declaring, "I'm really rich," and "Nobody knows the system better than me." The narrator then accuses Issa of "gaming the system to line his own pockets" by "steering millions in taxpayer money to help properties he owned." Applegate then appears and calls for a congressman "who looks out for you, not himself." 8 9 10 11 12 13 A copy of the referenced piece from The Daily Kos, which is accessible on the Internet at 14 httn://www.dai lykos.com/story/2016/9/20/1572372/-Ad-Roun dup-D emocrat-Doug-Ap legate- 15 ti ed-Donald-Trump-to-Darrel 1-Issa, is attached to the Complaint as Exhibit D. 16 24. Further, a political action committee that supports Democrats running for Congress 17 has issued an advertisement that attacks Congressman Issa in a manner strikingly similar to the 18 attack contained in the 9/20 Advertisement. The advertisement, which comes from the House 19 Majority PAC ("PAC Advertisement"), uses newspaper reports about Congressman Issa's real 20 estate holdings to attack him. In particular, the PAC Advertisement uses a quote from the Article 21 as part of its attack on Congressman Issa. 22 25. The San Diego Union-Tribune published an article discussing the PAC 23 Advertisement on October 21, 2016. Among other things, the author notes that "Nile new 24 commercial, much like an ad from Applegate's own campaign, uses newspaper reports about 25 Issa's real estate holdings to attack the incumbent." The author goes on to note that "[t]he 26 commercial uses a quote from a 2011 New York Times article that Applegate's campaign has 27 referenced in one of its own commercials" (i.e., the 9/20 Advertisement) and additionally 28 explains that Congressman Issa "has long contested the accuracy of the New York Times article BELL MCANDREWS HILTACHK LLP lc 7 PLAINTIFF'S COMPLAINT cited . . . ." A copy of the referenced piece from the San Diego Union Tribune, which is - 2 accessible on the Internet at http://www.sandiegouniontribune.com/news/politics/, is attached to 3 the Complaint as Exhibit E. 4 5 26. By letter dated September 29, 2016, Congressman Issa, though his legal counsel, demanded the advertisement be pulled from the air forthwith. A copy of the referenced letter is 6 attached to the Complaint as Exhibit F. Counsel for Doug Applegate and Doug Applegate for 7 Congress responded by letter 'on October 3, 2016. A copy of the referenced letter in response is 8 attached to the Complaint as Exhibit G. 9 27. On information and belief, following the demand by Congressman Issa and after 10 its injurious content was repeatedly publicly broadcast at the behest of Doug Applegate and Doug 11 Applegate for Congress, the ad was pulled from the air. 12 The Second Defamatory Advertisement 13 28. The second defamatory advertisement upon which this Libel claim is based was 14 released by the Applegate Defendants on October 4, 2016 ("the 10/4 Advertisement"). It is 15 currently airing on broadcast and cable TV stations that serve California's 49 th Congressional 16 District, which includes northern San Diego County and southern Orange County. Additionally, 17 the 10/4 Advertisement appears on the Doug Applegate for Congress website directed and 18 controlled by the Applegate Defendants. 19 29. The 10/4 Advertisement uses images of the terrorist attacks of September 11, 20 2001, and misleading statements about Congressman Issa's voting record, and a doctored quote to 21 wage the dishonest charge that Congressman Issa has opposed supporting the victims, first 22 responders, and heroes of September 11 th• 23 30. In particular, the narrator of the 10/4 Advertisement states that Congressman Issa 24 and "[t]he tea party Republicans actually voted to deny healthcare to 9/11 first responders," The 25 narrator goes on to say, "Issa said he'd done enough for something that was 'simply a plane 26 crash.' 27 /// 28 BELL MCANDREWS & HILTACHK LLP 8 PLAINTIFF'S COMPLAINT 31. In connection with the former charge, the 10/4 Advertisement references "H.R. 2 847, Vote # 550, 9/29/10." A review of the actual vote in connection with the referenced 3 House of Representatives Bill shows that a bipartisan group of 160 members of Congress, 4 including Congressman Issa, opposed that particular iteration of the bill, which eventually was 5 amended by the U.S. Senate before final passage Despite these facts, the 10/4 Advertisement 6 falsely suggests that only Congressman Issa and "the Tea Party Republicans" opposed the 7 referenced Bill. 8 32. In connection with the latter, the Applegate Defendants have used a doctored 9 quote in an effort to smear Congressman Issa's reputation. Congressman Issa never said "he'd 10 done enough for something that was 'simply a plane crash.' " The actual quote from the 11 congressional record is as follows: 12 Mr. Issa: Okay. Because, well, my question from the dais is purely a Federal one. We voted in the wake of 9/11 huge amounts of money to the city and the state of New York. We have spent, arguably, between $1-$2 trillion related to the post-9/11, if you include going to Afghanistan and so on. 13 14 15 16 17 18 I have to ask why damages from a fire that had no dirty bomb in it--it had no chemical munitions in it, it simply was an aircraft, residue of two aircraft, and residue of the materials used to build this building--why the firefighters who went there and everyone in the City of New York needs to come to the Federal Government for the dollars versus, quite frankly, this being primarily a State consideration. 19 20 21 22 You know, it is very simple: I can't vote for additional money for New York if I can't see why it would be appropriate to do this every single time a similar situation happens, which quite frankly includes any urban terrorist. It doesn't have to be somebody from Al Qaida. It can be somebody who decides that they don't like animal testing at one of our pharmaceutical facilities. 23 24 33. Beyond misrepresenting the nature of the vote that occurred in connection with 25 H.R. 847 and featuring a doctored quote, the 10/4 Advertisement is additionally false and 26 misleading in that it fails to mention Congressman Issa's strong record of leadership on 27 national security and supporting the victims, families, and first responders of 9/11. In 28 particular, Congressman Issa has voted to support those directly affected by 9/11 in Congress BELL MCANDREWS & HILTACHK LLP 9 PLAINTIFF'S COMPLAINT on at least 9 separate occasions and even offered his own legislation -- an amendment to the 2 anti-terrorism bill passed in 2001 -- to increase the death benefits provided police officers who 3 lost their lives in the September 11 attacks. 4 34. On February 13, 2003, Congressman Issa voted for an Omnibus Appropriations 5 bill, which included FEMA money that was used to create the World Trade Center Captive 6 Insurance Company. The law provided up to $1 billion to create an insurance company to 7 cover the risks assumed by New York City and its contractors working without commercial 8 Insurance coverage, in claims resulting from work done subsequent to the September 11 9 attacks. 10 35. Congressman Issa introduced an amendment to the PATRIOT Act which would 11 Increase payments to slain police officers killed in the line of duty on 9/11 from $100,000 to 12 $250,000. The amendment was included in the final version of the bill which became law on 13 10/26/2001. [PL No. 107-56]. 14 36. On September 13, 2001, Congressman Issa voted for H.J.Res. 61. This measure 15 honored the victims of the 9/11 attacks, condemned the terrorists, and commended the heroes 16 who served. [Vote #338, 9/13/2001] 17 37. On September 13, 2001, Congressman Issa voted in favor of H.R. 2882, a bill 18 that would provide for the expedited payment of certain benefits for a public safety officer who 19 was killed or suffered a catastrophic injury as a direct result of a personal injury sustaned in the 20 line of duty in connection with the terrorist attacks on September 11, 2001. [Vote #339, 21 9/13/2001] 22 38. On September 13, 2001, Congressman Darrell Issa voted to pass the Victims of 23 Terrorism Relief Act of 2001 which provided sweeping tax relief to aid victims of the attacks 24 and their families. [Vote #340, 9/13/2001] 25 39. On September 14, 2001, Congressman Issa voted in favor of the authorization of 26 temporary use of force to allow the President to engage military action against Al Qaeda. [Vote 27 #342, 9/14/2001] 28 BELL MCANDREWS Se HILTACHK LLP 10 PLAINTIFF'S COMPLAINT 40. Congressman Issa voted to approve the H. Res. 994, which mourned the victims 2 and honored the lives and health of those who aided in the aftermath of the terrorist attacks of 3 9/11. [Vote #440, 9/13/2006] 4 41. On September 9, 2009, Darrell Issa supported H. Res. 718, a measure 5 recognizing 9/11 as a "national day of service and remembrance." [Voice Vote on H. Res.718, 6 9/9/09] 7 42. Congressman Issa also voted on December 18, 2015, in favor of reauthorizing 8 he 9/11 First Responders Bill - the vote referenced in the 10/4 Advertisement -- until 2090. 9 [Vote #705, 12/18/15, reauthorizing the James Zadroga 9/11 Health and Compensation Act, 10 11 extending benefits through 2090.] 43. By letter dated October 7, 2016, Congressman Issa, though his legal counsel, 12 demanded the new defamatory advertisement be immediately pulled from the air. A copy of the 13 referenced letter is attached to the Complaint as Exhibit H. No response was received to this 14 correspondence from Doug Applegate or Doug Applegate for Congress. 15 16 44. including the date of the filing of the Complaint, including its libelous content. 17 18 On information and belief, this defamatory advertisement has aired through and The 10/4 Advertisement's Defamatory Meanings 45. That the 10/4 Advertisement was reasonably susceptible of carrying the 19 defamatory meanings ascribed to the 10/4 Advertisement by this Complaint is underscored by 20 the fact that these defamatory meanings were precisely the meanings immediately ascribed to 21 the 10/4 Advertisement by average readers and by other media outlets, commentators, and 22 bloggers throughout the nation and the world, spanning a broad cross-section of society. 23 46. For example, on October 4, 2016, the same date that the Applegate Defendants 24 released and caused the 10/4 Advertisement to begin airing, a reporter with The Los Angeles 25 Times noted as follows: 26 27 28 BELL MCANDREWS & HILTACHK LLP The Democrat challenging Republican Rep. Darrell Issa on Tuesday released a new television ad slamming the Vista congressman for his controversial comment about giving more financial aid to workers who responded to the Sept. 11 terrorist attack on New York's World Trade Center. 11 PLAINTIFF'S COMPLAINT 1 A copy of the referenced articlafrom The Los Angeles Times, which is accessible on the Internet 2 at http://www.latimes.com/politics/essential/, is attached to the Complaint as Exhibit F. 3 FIRST CAUSE OF ACTION 4 Defamation - Libel 5 (Against All Defendants) 6 7 47. Congressman Issa repeats and realleges paragraphs 1 through 46, inclusive, and incorporates the same herein by reference as if fully set forth herein. 8 48. The statements in the 9/20 and 10/4 Advertisements concerning Congressman 9 Issa, reproduced above, are false and libelous and purport to state facts about the Congressman 10 which are false. (Baker v. Los Angeles Herald Examiner (1986) 42 Ca1.3d 254, 261-263 ["The 11 sine qua non of recovery for defamation ... is the existence of a falsehood"]; see also Wong v. 12 Jing (2010) 189 Cal.App.4th 1354, 1369 ["The elements of defamation claim are (1) a 13 publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to 14 injure or causes special damage].) In order for a plaintiff; who is a public figure, to maintain 15 a claim for slander or libel, he or she must establish that the defendant acted with "actual 16 malice." (New York Times Co. v. Sullivan (1964) 376 U.S. 254; Harte-Hanks Communications 17 v. Communications v. Connaughton (1989) 491 U.S. 657; Carney v. Santa Cruz Women 18 Against Rape (1990) 221 Cal.App.3d 1009, 1013.) In order to establish "actual malice," a 19 plaintiff must show that the defendant had reason to know that the statement was false but 20 published the statement anyway. (Summary of Cal. Law, Torts, Vol. 5, § 602 (10th Ed.).) 21 49. The 9/20 and 10/4 Advertisements explicitly and unambiguously refer to 22 Congressman Issa. 23 50. The 9/20 and 10/4 Advertisements refer to Congressman issa by name 24 throughout, were made of and concerning the Congressman, and were so understood by those 25 who viewed the 9/20 and 10/4 Advertisements. 26 / / / 27 /// 28 BELL MCANDREWS & HILTACHK LLP 12 PLAINTIFF'S COMPLAINT 51. The statements about Congressman Issa were falsely, maliciously, and 2 intentionally published by the Applegate Defendants and were made with actual knowledge of 3 their falsity or reckless disregard for their truth or falsity. 4 5 6 52. Defendants, and each of them, published these statements with actual malice and with the intent to cause harm to Congressman Issa. 53. The 9/20 and 10/4 Advertisements are publicly available on the Doug 7 Applegate for Congress website at http://applegateforcongress.com/media/, and they have 8 been viewed by and communicated to an unknown number of third persons, including 9 individuals in the State of California and throughout the United States and the world. 10 54. The statements, including statements that Congressman Issa engages in self- 11 dealing and has opposed supporting the victims, first responders and heroes of 9/11, have 12 been reproduced in other publications and on other websites such as those identified 13 elsewhere in this Complaint, including in a new advertisement issued by the House Majority 14 PAC (i.e., the PAC Advertisement). 15 55. The statements about Congressman Issa are libelous on their face. They accuse 16 the Congressman of self-dealing and opposing support for the victims, first responders and 17 heroes of 9/11, and they expose him to hatred, contempt, ridicule and obloquy because they 18 inaccurately portray the Congressman as a deceitful, uncaring person and corrupt in his role as a 19 member of the U.S. House of Representatives. 20 56. The statements about Congressman Issa adversely affect both his reputation and 21 his professional life as Congressman, and Congressman Issa has been damaged by their 22 publication. 23 57. Defendants, and each of them, are liable to Plaintiff as a result of these false and 24 defamatory statements for actual, presumed and punitive damages in an amount to be determined 25 at trial, but not less than $10,000,000, all of which will be donated to the Injured Marine Semper 26 Fi Fund, Employer Identification Number (EIN) 26-0086305, Camp Pendleton, California. 27 28 BELL MCANDREWS & HILTACHK LLP 13 PLAINTIFF'S COMPLAINT PRAYER FOR RELIEF • WHEREFORE, Plaintiff Darrell E. Issa prays: 3 4 1. That Plaintiff be awarded general and compensatory damages, including prejudgment interest, in an amount according to proof at trial; 5 2. That Plaintiff be awarded punitive damages in an amount according to proof at 7 3. That Plaintiff be awarded costs of suit, and reasonable attorneys' fees incurred; 8 and 4. 6 trial; For such other and further relief as the Court deems just and proper. 9 10 Dated: November 7, 2016 BELL MCANDREWS & BILTACIIK LLP 11 12 13 14 hic-tildei By: CHARLES H. BELL, JR. BRIAN T. HILDRETH Attorneys foi Plaintiff DARRELL E. ISSA 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BELL MCANDREWS dc HILTACHK LLP 14 PLAINTIFF'S COMPLAINT 4 VERIFICATION 2 3 4 5 6 7 8 9 I, DARRELL B. ISSA, am the Plaintiff in the above-captioned action. I have read the foregoing VERIFIED COMPLAINT FOR DAMAGES. The foregoing is true and correct and. of my personal knowledge, or as to matters stated on information and belief, I believe them to be true. If called as a witness, 1 could and would testify competently thereto; I declare under penalty of perjury under the laws of the State of California tbat the foregoing is true and correct. Executed this day of November, 2016 at California. 10 11 AFtRELL E. IS A 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BILL MCANDREWS1r HILTACHR LLP SACRAMONTD - 17 - MI 144 1' A Businessman in Congress, Helping His District, and Himself- The New York Times Page 1 of 10 SbeNettinerkeintea POLITICS I THE CHAMPIONS A Businessman in Congress Helps His District and Himself . By ERIC LICHTBLAU AU — G. 14, 2011 VISTA, Calif. — Here on the third floor of a gleaming office building overlooking a golf course in the rugged foothills north of San Diego, Darrell Issa, the entrepreneur, oversees the hub of a growing financial empire worth hundreds of millions of dollars. Just a few steps down the hall, Representative Darrell Issa, the powerful Republican congressman, runs the local district office where his constituents come for help. The proximity of the two offices reflects Mr. Issa's dual careers, a meshing of public and private interests rarely seen in government. Most wealthy members of Congress push their financial activities to the side, with many even placing them in blind trusts to avoid appearances of conflicts of interest. But Mr. Issa (pronounced EYE-suh), one of Washington's richest lawmakers, may be alone in the hands-on role he has played in overseeing a remarkable array of outside business interests since his election in 2000. Even as he has built a reputation as a forceful Congressional advocate for business, Mr. Issa has bought up office buildings, split a holding company into separate multimillion-dollar businesses, started an insurance company, traded hundreds of A Businessman in Congress, Helping His District, and Himself- The New York Times Page 2 of 10 millions of dollars in securities, invested in overseas funds, retained an interest in his auto-alarm company and built up a family foundation. As his private wealth and public power have grown, so too has the overlap between his private and business lives, with at least some of the congressman's government actions helping to make a rich man even richer and raising the potential for conflicts. He has secured millions of dollars in Congressional earmarks for road work and public works projects that promise improved traffic and other benefits to the many commercial properties he owns here north of San Diego. In one case, more than $800,000 in earmarks he arranged will help widen a busy thoroughfare in front of a medical plaza he bought for $1.6.6 million. His constituents cheer the prospect of easing traffic. At the same time, the value of the medical complex and other properties has soared, at least in part because of the government-sponsored road work. But beyond specific actions that appear to have clearly benefited his businesses, Mr. Issa's interests are so varied that some of the biggest issues making their way through Congress affect him in some way. After the forced sale of Merrill Lynch in 20 08, for instance, he publicly attacked the Treasury Department's handling of the deal without mentioning that Merrill had handled hundreds of millions of dollars in investments for him and lent him many millions more. And in an era when the auto industry's future has been a big theme of public policy, Mr. Issa has been outspoken on regulatory issues affecting car companies, while maintaining deep ties to the industry through the auto electronics company he founded, DEI Holdings. He has a seat on its board, and his nonprofit family foundation, which seeks to encourage values like "hard work and selfless philanthropy," has earned millions from stock in DEL which bears his initials. Mr. Issa's fortune, in fact, was built on his http://www.nytimes.com/201 1 /08/15/us/nolitics/15issa.html A Businessman in Congress, Helping His District, and Himself- The New York Times Page 3 of 10 car alarm company, and to this day it is his deep voice on Viper alarms that warns potential burglars to "please step away from the car." In recent months, The New York Times has examined how some lawmakers have championed particular industries, pushing measures to protect and enrich supporters. In Mr. Issa's case, it is sometimes difficult to separate the business of Congress from the business of Darrell Issa. Mr. Issa, 57, did not respond to repeated written requests in the last three weeks to discuss his outside interests. In the past, he has said his business background has made him a better lawmaker. In at least one Congressional matter, however, he recused himself after being advised of a potential conflict. But perhaps his clearest statement on the issue came last year amid Toyota's recalls of millions of automobiles with dangerous acceleration problems. Then, Mr. Issa brushed aside suggestions that his electronics company's role as a major supplier of alarms to Toyota made him go easy on the automaker as he led an investigation into the recalls. "If anything," the congressman said, "Toyota probably got a harder time by having an automobile supplier sitting up there on the dais saying 'Hold it, I'm not letting you off the hook now." A Powerful Gadfly As the influential chairman of the House Oversight and Government Reform Committee, Mr. Issa has proven both a reliable friend to business and a constant annoyance to an Obama administration that he sees as anti-business. Even before formally taking over the committee in December, he made headlines by asking 150 businesses and trade groups to identify regulations that they considered overly burdensome, and he has issued numerous subpoenas on his own authority in investigating programs he believes are harmful. His pro-business policies usually align closely with those of the firms he has worked with in his wide-ranging business career both before and after he joined Congress. Congress has historically had more than its share of millionaires from http://www.mrtimes.com/20l A Businessman in Congress, Helping His District, and Himself- The New York Times Page 4 of 10 storied American fortunes, from the Rockefellers to the Kennedys. But typically, those members lower their business profiles considerably and limit their active dealings to avoid potential conflicts of interest and the political repercussions that might follow from private business decisions. Senator John D. Rockfeller IV, Democrat of West Virginia, for one, has much of his money in blind trusts, run by outside trustees. And Senator John Kerry, Democrat of Massachusetts, has a number of family and marital trusts for money generated largely through the fortune of his wife, Teresa Heinz Kerry. Mr. Issa, who grew up in a hardscrabble neighborhood near Cleveland and now owns homes north of San Diego and in Washington, has assets totaling as much as $725 million, outstripping by some measures even Mr. Rockefeller and Mr. Kerry. (Because lawmakers must disclose their assets only within broad dollar ranges, public reports do not allow for precise figures.) According to his filings, Mr. Issa's minimum wealth doubled in the last year, and he appears flush with cash: he bought dozens of mutual funds in 2010 worth as much as $80 million, managed by Wall Street powerhouses, without selling off any securities. Mr Issa's transactions cover many pages in his annual disclosure reports, as he has traded huge volumes of stock funds and municipal bonds on a weekly or even daily basis. In 2008 alone, he traded some 360 securities totaling between $650 million and $2 billion. Those investments have often produced sharp profits. In one 2008 sale, months before the stock market crashed, his family foundation earned $357,000 on an initial investment of less than $19,000 — a return of nearly 1,900 percent in just seven months, the foundation reported to the Internal Revenue Service. It reported acquiring the security, then known as AIM International Small Company Fund, at a cost basis representing a tiny fraction of the market value. A Businessman in Congress, Helping His District, and Himself - The New York Times Page 5 of 10 In addition, Mr. Issa sold at least $1 million in personal holdings in the same fund that year but was not required to report what he paid. Invesco, as the AIM fund's manager is now known, told The Times it did not 'provide Mr. Issa's foundation the steep discount. That suggests the foundation may have acquired the shares from a third-party broker. A former government official said House ethics committee officials quietly inquired into Mr. Issa's business interests last year because of possible conflicts in his electronics connections. While the exact focus of those inquiries is not known, Mr. Issa's ties to the industry are well established: in each of his first five years in Congress, he reported accepting free trips to Las Vegas from the Consumer Electronics Association for its annual convention. Such corporate-sponsored trips were allowed at the time, but Congressional rules have tightened since. The inquiries did not produce sufficient evidence of ethics problems to move forward, the former official said. Standards for determining a financial conflict are murky. House members are generally restricted from using their positions "for personal gain" or on matters in which they have a direct financial interest. But a 2009 ethics committee ruling added to the ambiguity, finding there is no prohibition on the mere "appearance" of a conflict. There are also restrictions on taking salaries from certain businesses. While Mr. Issa's wife draws a salary at their property management company, Mr. Issa — the firm's president — does not. A Balancing Act Lawmakers must also avoid outside work that can pose a "time conflict," and "detract from a member's full time and attention to his official duties," the guidelines say. By all accounts, these rules were designed to promote the notion of a full-time legislature. A Businessman in Congress, Helping His District, and Himself- The New York Times Page 6 of 10 Mr. Issa's outside interests certainly appear to have kept him busy. Associates describe him as actively involved in business decisions, particularly in his auto electronics firm. His office did not discuss how he balances the time demands of Congress and his outside businesses. His management company, Greene Properties, which he runs with his wife from the office down the hall from his Congressional office in Vista, has acquired more than two dozen properties in the last five years, valued at up to a total of $80 million. In nearby Carlsbad, a new office complex he owns advertises for prospective tenants. A few miles away, a Hooters restaurant rents space in another building he owns. Nearby, his medical complex bustles with doctors and patients and has few vacancies. "Issa's a smart businessman," said Dean Tilton, a local real estate broker. "We haven't seen real estate prices this low in 20 years, and he's taking advantage of that." The hard-hit San Diego area has also benefited from federal money Mr. Issa brought through earmarks, which allow lawmakers to award money for their own pet projects. Indeed, more than two dozen of Mr. Issa's properties are within five miles of projects he has personally earmarked for road work, sanitation and other improvements, an analysis by The Times shows. His medical complex, for instance, sits directly along West Vista Way, a busy corridor scheduled for widening with $815,000 in funds Mr. Issa earmarked. The congressman bought the complex in 2008, soon after securing the first of two earmarks for the two-mile project and unsuccessfully seeking millions more. The assessor's office now values the complex at $16 million, a 6o percent appreciation. Mr. Issa owns a number of commercial properties near the planned $171 million expansion of State Route 76. The project, intended to ease traffic for tens of thousands of commuters, was helped by $245,000 in his earmarks. A regional transportation official said the earmarks supplemented state financing to move the projects along. A Businessman in Congress, Helping His District, and Himself- The New York Times Page 7 of 10 Local leaders say they are just grateful for the money, regardless of any suggestions locally in San Diego that Mr. Issa stands to benefit. "I don't really blame the guy," said John Aguilera, a Vista city councilman. "As a politician, that's his job to bring a slice of the pie back home, and as a businessman, he's going to invest in the areas that he champions." Some ethics experts wonder, however, whether Mr. Issa's business interests invite problems. "The idea is you're supposed to be a full-time congressman," said Robert M. Stern, who runs the nonprofit Center for Governmental Studies in California. "There may not be a direct conflict of interest, but it creates an appearance that he is tying to influence a policy on issues where he has an investment." In 2009, as earmarks became a damaging symbol of Congressional abuse, Mr. Issa joined other lawmakers in pledging to discontinue them. And in recent weeks, he has attacked "the culture of government overspending" in pushing for deep cuts in the national debt. Mr. Issa's dual roles reach beyond earmarks. At a House hearing in 2008 on a much-debated proposal to merge the satellite radio companies Sirius and XM, despite objections on competitive grounds, Mr. Issa praised the "viable combined market" the deal would create as he questioned Sirius's chief executive and talked of opportunities for expansion. What Mr. Issa did not mention was that his electronics firm was then in a lucrative partnership with Sirius to distribute its audio products. While Mr. Issa sold off his controlling interest in DEI soon after he was elected, he remains a board member with a half-million shares in the firm held by his family trust. His management firm also receives $2 million a year for leasing DEI its Vista plant. DEI's partnership with Sirius, which continued after the merger, caused friction with competitors. In a lawsuit settled out of court, U.S. Electronics accused Sirius A Businessman in Congress, Helping His District, and Himself - The New York Times Page 8 of 10 and DEI of freezing it out of the market through anticompetitive practices that relied on "a web of deception, threats and lies" aimed at "the enrichment of certain of its officers and directors." When a watchdog group, the Center for Public Integrity, asked Mr. Issa about his role in the merger, his office said the congressman's participation in the House hearing posed no conflict because his founding of DEI was "public knowledge." But after advice from House ethics lawyers, Mr. Issa avoided any votes on the issue afterward. With its brand-name audio and electronics products, DEI caught the eye of an equity company, Charlesbank Capital, which bought the company in June for $305 million, or $4.45 a share — nearly three times the presale price. The premium promises a payday of at least $2 million for Mr. Issa's foundation, which has already earned more than SID million from sales of DEI stock. (Mr. Issa is now a defendant in a lawsuit brought by DEI shareholders; the suit claims the deal was structured to give him and other directors a "windfall not shared by other stockholders.") Ties to Merrill Lynch The lines between Mr. Issa's many interests have also become entangled in his frequent criticism of regulators and his frequent defense of Wall Street. At a series of hearings in 2009, Mr. Issa accused Treasury officials of a "cover-up" of their role in Bank of America's $50 billion purchase of Merrill Lynch months earlier. Most pointedly, he accused Ben S. Bernanke, chairman of the Federal Reserve, of bullying Bank of America "behind closed doors" into buying Merrill Lynch at bargain rates and then lying about it. "I for one," Mr. Issa told the Fed chairman, "am looking at Main Street America, the stockholders who in some cases got less than they would have gotten through other means. This includes Chrysler, General Motors and, of course, Bank of America and Merrill Lynch." Mr. Issa did not mention his own extensive links to Merrill Lynch. A Businessman in Congress, Helping His District, and Himself - The New York Times Page 9 of 10 In a television interview days later, however, he said: "I bank at Merrill Lynch. I'm very well aware that every broker there, all the people who were stockholders, were furious that they were in fact being fire-saled to them." And Mr. Issa is no ordinary Merrill customer. His transactions there have totaled more than a billion dollars in the last decade, records show. In the aftermath of the firm's acquisition in September 2008, in fact, he bought and sold at least $206 million in Merrill Lynch mutual funds in the next 15 days, records show. His ties to the bank deepened last year, records show, as Merrill Lynch gave him two "personal notes" for lines of credit worth at least $75 million. Likewise, Mr. Issa has aggressively defended Goldman Sachs, another Wall Street giant. When the Securities and Exchange Commission brought a major lawsuit charging Goldman with fraud last year, Mr. Issa fired back by opening an investigation. The timing of the lawsuit, he said, smacked of a "partisan political ag'enda" meant to help President Obama and bolster a bill overhauling financial regulations. His charge drew nationwide attention, putting regulators on the defensive, but the S.E.C. inspector general later found "no evidence" of political meddling. Mr. Issa came to Goldman's defense again last month in a letter to regulators complaining about restrictions on financial firms. Broker dealers "such as Goldman Sachs" faced "a substantial reduction in leverage" because of excessive capital requirements, he wrote. As with Merrill Lynch, Mr. Issa is keenly interested in Goldman's performance. A few weeks before opening his inquiry into the Goldman lawsuit, in fact, he bought another large batch of shares in one of the firm's high-yield mutual funds, records show. By the end of the year, his stake in Goldman's fund was worth as much as $25 million. A Businessman in Congress, Helping His District, and Himself- The New York Times Page 10 of 10 Correction: August 16, 2011 An article on Monday about the business empire of Representative Darrell Issa, Republican of California, misstated the worth of the companies involved in his splitting up of a holding company. The split entailed separate multimillion-dollar companies, not multibillion-dollar ones. Correction: August 261 2011 An article on Aug. 15 about Representative Darrell Issa's business dealings, using erroneous information that Mr. Issa's family foundation filed with the Internal Revenue Service, referred incorrectly to his sale of an AIM mutual fund' in 2008. A spokesman for the California Republican now says that the I.R.S. filing is "an incorrect document." The spokesman, Frederick R. Hill, said that based on Mr. Issa's private brokerage account records, which he made public with redactions, the purchase of the mutual fund resulted in a $125,000 loss, not a $357,000 gain. Correction: September 7, 2011 An article on Aug. 15 about Representative Darrell Issa's business dealings, using incorrect information from the San Diego County assessor's office, misstated the purchase price for a medical office plaza Mr. Issa's company bought in Vista, Calif., in 2008. And because of an editing error, a correction in this space on Aug. 26 also misstated the price. It cost $16.6 million — not $10.3 million or $16.3 million. Barclay Walsh contributed research. A version of this article appears in print on August 15, 2011, on page Al of the New York edition with the headline: Helping His District, and Himself. © 2016 The New York Times Company EXHIBIT FACT FOUNDATION FOR ACCOUNTABILITY AND CIVIC TRUST October 24, 2016 Lisa J. Stevenson, Esq. Acting General Counsel Federal Election Commission 999 E Street, NW Washington, DC 20463 Re: Complaint against Applegate for Congress, the Democratic Congressional Campaign Committee (DCCC), and Hillary for America Dear Ms. Stevenson, The Foundation for Accountability and Civic Trust (FACT) is a nonprofit organization dedicated to promoting accountability, ethics, and transparency in government and civic arenas. We achieve this mission by hanging a lantern over public officials who put their own interests over the interests of the public good. This complaint is filed by FACT, pursuant to 52 U.S.C. § 30109(aX1), against Applegate for Congress, the Democratic Congressional Campaign Committee (DCCC), and Hillary for America, for violations of the Federal Election Campaign Act of 1971, as amended. On or about September 20, 2016 Applegate for Congress and the DCCC began airing the first of two hybrid advertisements supporting the candidacy of Doug Applegate, titled "Darrell Issa's Lined Pockets," which can be viewed on YouTube at https://www.youtube.corn/watch?vr-RriiliNAe-L The first 21 seconds of the Applegate/DCCC advertisement are devoted exclusively to tying Applegate's opponent, Representative Darrell Issa, to Donald Trump and to attacking Donald Trump. Applegate used the following four seconds to support his own candidacy, and the final 5 seconds consist of Applegate's "stand-by-your-ad" message. The advertisement's written disclaimer reads: "Paid for by DCCC and Applegate for Congress Approved by Doug Applegate." This first advertisement includes a disclaimer that is appropriate for a hybrid advertisement benefiting Applegate and the DCCC, and media reports indicate that the DCCC and its candidates are characterizing advertisements such as the Applegate/DCCC advertisement as hybrid advertisements. See Bland, infra. www.factdc.org 1717 K Street NW, Suite 900, Washington, D.C., 20006 On or about October 11, 2016, Applegate for Congress and the DCCC began airing the second of two hybrid advertisements supporting the candidacy of Doug Applegate, titled "Access," which can be viewed on YouTube at haps.//www.voutube.com/watch?vr-B08sROGNU 4. The first two seconds of this Applegate/DCCC advertisement consist of Applegate's "stand-by-your-ad" message. The next eight seconds consist of statements by Trump while alternating between images of Mr. Trump and Representative Issa with Mr. Trump. The next four seconds show a statement by Representative Issa supporting Trump. The following nine seconds alternate between statements by Mr. Trump and statements tying Rep. Issa to Mr. Trump. During the final seven seconds of the advertisement, the message "it's time to put country first Say `no' To Donald Trump and Darrell Issa," appears on screen along with a voiceover audibly repeating the same message. (See below for on-screen message). The onscreen disclaimer reads "Paid for by DCCC and Applegate for Congress Approved by Doug Applegate." iStly NO Ito DONALD TRUMP "DARREL-ASS ..4Tea: - 40- 4 , "M KKR BYRXMAT'SkiF. FCKGE33 13.4 Maar:. This second advertisement also includes a disclaimer that iS appropriate for a hybrid advertisement benefiting Applegate and the DCCC. Media reports indicate that the DCCC and its candidates are characterizing advertisements such as the Applegate/DCCC advertisement as hybrid advertisements. See Bland, infra. According to this recent POLITICO report, which is included as Attachment A, these advertisements are just part of a series of similar advertisements: The Democratic Party is directing millions of extra dollars to its House candidates this fall by way of a legal loophole that has helped them bypass the typical limits on coordinated spending between parties and candidates - all while linking some vulnerable Republicans to Donald Trump. Typically, Federal Election Commission regulations limit parties to just $48,100 of spending in direct coordination with most House candidates But under a decade-old FEC precedent, candidates who word their TV ads a certain way including references to generic "Democrats" and "Republicans" as well as specific candidates - can split the cost of those ads with their party, even if that means blowing past, the normal coordinated spending caps. To date, more than a dozen Democratic challengers are benefiting from such "hybrid" advertising, getting extra hundreds of thousands of dollars apiece from the Democratic Congressional Campaign Committee. The technique has been a small but consistent part of Democratic strategy in recent years, but new legal guidance has also allowed Democrats to share costs on ads linking their opponents to Trump on policy. [***] Increasingly, some of the ads are naming Trump directly instead of linking GOP incumbents to generic "Washington Republicans." {***1 "The legal logic is that it's half an issue ad paid for by the DCCC and half a candidate ad paid for by the candidate," said a second Democratic consultant, who has been hwolved in the production of hybrid ads in 2016. "The language has to be very specifically about Trump policy," the consultant continued, to avoid falling afoul of rules governing in-kind contributions, since Trump is a candidate on the ballot this year. Hybrid ads do borne with complications. The phrasing needs to be just right, focusing equally on local candidates and broader references, to qualify as hybrids. Sources described an intensive vetting process for the ads, which includes the DCCC's research and legal departments. [****1 The DCCC declined to comment on its strategy. This type of ads [sic] has been a boon to some of Democrats' latest-breaking House campaigns, many of which are low on cash. Scott Bland, "Dems use loophole to pump millions into fight for the House," POLITICO (Oct 18, 2016), http://politi.co/2eR8eKy. There is no "new legal guidance" from the Commission on this subject. The referenced "decade-old FEC precedent" does not permit the DCCC to substitute the standard "generic party reference" with material expressly advocating the defeat of Donald Trump while still attributing a portion of the costs of the advertisement to the DCCC These advertisements are not especially clever, legally permissible hybrid advertisements; rather, they are run-of-the-mill coordinated communications that yield excessive and illegal contributions to the identified Democratic candidates and to Hillary Clinton. There is DO "legal loophole" here; the DCCC and its candidates are simply breaking the law. In fact, the POLITICO report suggests that the DCCC and its candidates have knowingly adopted this new tactic in spite of the fact that there is no legal justification for it, assuming a calculated risk with these illegal advertisements for one very simple reason: the Democratic candidates' House campaigns "are low on cash." See Bland, supra. According to information provided by broadcast and cable stations, Applegate for Congress and the DCCC have spent at least $802,641 1 on television advertising jointly paid for by the candidate and the DCCC from September 1, 2016, through the filing of this Complaint. We have reason to believe this figure will grow between now and Election Day. "Hybrid ads" (or "hybrid communications") are "communications that refer both to one or more clearly identified Federal candidates and generically to candidates of a political party." Notice of Proposed Rulemaking on Hybrid Communications, 72 Fed. Reg. 26,569, 26,770 (May 10, 2007) (emphasis added). See also Audit Report, McCain-Palm 2008, Inc. and McCain-F'alin Compliance Fund, Inc., Statement of Reasons of Chair Ellen L. Weintraub and Commissioners Cynthia L. Bauerly and Steven T. Walther at 1 (Feb. 4, 2013) ("Hybrid Communications are communications made by a political party (1) that refer to one or more clearly identified Federal candidates and (2) that also generically refer to other candidates of a political party without clearly identifying them.") (emphases added); Audit Report, Bush-Cheney '04, Inc., Statement of Vice Chairman David M. Mason and Commissioner Hans A. von Spakovsky at 6 (March 22, 2007) (noting the "generic reference' requirement, which requires that the communication 'generically refer[] to other candidates of the Federal candidate's party.") (emphases added). The generic reference to candidates of a political party committee is crucial to the concept of hybrid advertisements that portion of the advertisement is attributable to the party committee solely because the political party derives proportional benefit from the advertisement's generic party references Without generic party references, the political party committee derives no benefit from its portion of the advertisement, and the costs of the political party's portion must be paid for as a coordinated party expenditure or classified as an in-kind contribution to the clearly identified candidate. The Applegate/DCCC advertisements contain no discernible portion that can be reasonably characterized as benefiting the Democratic Party's congressional candidates as a whole. There is no message in support of the Democratic Party's congressional candidates, and no message in opposition to the Republican Party's congressional candidates. Never before has a party committee substituted the accepted "generic party reference" in its portion of a hybrid advertisement with material that does nothing more than reference and attack a single candidate, who, in this case, is presidential candidate Donald Trump. As a result, the costs of these advertisements are not properly attributed between the clearly identified congressional candidate and the DCCC, because The only persons who may reasonably expect to derive any benefit from this advertisement are Doug Applegate and Hillary Clinton. This figure includes the total advertising buy paid for jointly by both the candidate and the DCCC dining that timeframe. Legal Background While the concept of multi-purpose communications with allocated costs have existed for decades, the more modem practice of dividing the costs of hybrid broadcast advertisements between candidates and party committees first developed in the 2004 presidential campaign, and the legalities of that practice were addressed by the Commission ma series of decisions made in 2006-2007. The basic legal question that arises in the context of hybrid advertisements is whether one entity is paying for a benefit derived by another regulated entity while failing -to treat that benefit as a contribution or coordinated expense. The law of hybrid broadcast advertisements is the product of two regulatory provisions, a 2006 advisory opinion, two audits, and subsequent practice conforming to the Commission's precedents. Commission Regulations Commission regulations provide that "[e]xpenditures, including in-kind contributions, independent expenditures, and coordinated expenditure,s made on behalf of more than one clearly identified Federal candidate shall be attributed to each such candidate according to the benefit reasonably expected to be derived." 11 C.F.IL § 106.1(a)(1). "For example, in the case of a publication or broadcast communication, the attribution shall be determined by the proportion of space or time devoted to each candidate as compared to the total space or time devoted to all candidates." Id. A separate regulation addresses political party Committee phone bank cornnaunications that refer to a clearly identified Federal candidate and "another reference that generically refers to other candidates of the Federal candidate's party without •clearly identifying them." 11 C.F.R. § 106.8(a). Under this regulation, 50% of the cost of the phone bank is attributable to the clearly identified candidate, while the remaining 50% is not attributable to the candidate and may be paid by the party committee without reimbursement The party committee's payment for the candidate-attributable portion may be reimbursed by the clearly identified Federal candidate (essentially creating a hybrid advertisement), treated as an in-kind contribution from the party committee to the clearly identified Federal candidate (subject to the relevant contribution limits), or classified as a party coordinated expenditure (subject to the relevantparty coordinated expenditure limits). 11 C.F.R. § 106.8(6). 2004 Presidential Campaign In 2004, Bush-Cheney '04 Inc. and the Republican National Committee, and KerryEdwards 2004 Inc. and the Democratic National Committee, produced and aired what came to be known as "hybrid advertisements?' The costs of these hybrid advertisements were divided between the presidential campaign and the national party committee using a time-space allocation that attributed the presidential campaign portion of the advertisement to the presidential campaign, and the generic party portion to the national party committee. Both 2004 presidential campaigns received public funding. • 2006 Advisory Opinion In 2006, the Commission approved Advisory Opinion 200641 (Washington Democratic State Central Committee) and permitted a state party and federal candidate to evenly divide the costs of a mass mailing that "expressly advocate[d] the election of one clearly identified Federal candidate, as well as the elections of other candidates of the Democratic party who are referred to only generically?' Advisory Opinion 2006-11 at 1 (emphasis added). The Commission noted that "[o]ne example of such a message would be: `Vote for John Doe and our great Democratic team." Id. atl fn. 1. The Commission acknovvledged that 11 C.F.R. § 106.1 and 11 C.F.R. § 106.8 were not "directly applicable" and that "[n]either the Act nor Commission regulations definitely address the appropriate allocation of payments for the type of mass mailings described in [the] request." Id. at 3. However, the Commission approved the request and provided what is currently the Comnaission's clearest statement on hybrid advertising: Although neither 11 CFR 106.1 nor 106.8 is directly applicable for reasons discussed above, the Commission concludes that there is nonetheless an appropriate method for allocating the costs of the mailings described in your request. A mass mailing that expressly advocates the election of only one clearly identified Federal candidate, as well as the election of generically referenced, but not clearly identified, candidates, serves in. large measure the purpose of influencing the election of the clearly identified Federal candidate, no matter how much of the space in the mailing is devoted to that candidate. See 2 U.S.C. 431(8XA)(i) and (9)(A)(i); 11 CFR 100.52(a) and 100.111(a). Advocacy related to the election of the clearly identified candidate is the most salient feature of such a communication, as compared to the generic reference to the party's candidates, which does not single out any particular candidate to the reader. Cf. 11 CFR 106.6(f). Although the Commission recognizes that such a communication also encourages support for all of the party's other candidates, and hence The State Party Committee itself derives some benefit from the mailing, "the benefit reasonably expected to be derived" by the clearly identified candidate from the mass mailing is sufficient to require no less than a 50 percent attribution of costs to him, even if The space attributable to him is less than that attributable to the generically referenced candidates. See 11 CFR 106.1(a). Where the space in the mailing devoted to the clearly identified Federal candidate exceeds the space devoted to the generically referenced party candidates, the Commission concludes that it is appropriate to apply analogous "space or time" principles set out in 11 CFR 106.1(a). In this situation, "the benefit reasonably expected to be derived" by the clearly identified candidate should be measured by determining the amount of space devoted to the clearly identified candidate as compared to the amount of space devoted to the generically referenced party candidates. Because no part of the cost of the mass mailing may be lefi unattributed to either the clearly identified Federal candidate or the State Party Committee, the percentage of the cost of the mailing to be attributed to The clearly identified candidate is equal to the amount of space devoted to the candidate as compared to the total space devoted to both that candidate and the generically referenced party candidates. No contribution or coordinated expenditure would be made by the State Party Committee so long as the [requestor] pays at least its proportionate share of the cost of the mass mailing. The portion of a mass mailing that is attributable to the clearly identified Federal candidate can be: (1) an in-kind contribution, subject to the limitations set forth in 11 CFR 1102; (2) a coordinated expenditure, subject to the limitations, restrictions, and requirements of 11 CFR 109.32 and 109.33; or (3) reimbursed by the clearly identified Federal candidate or his authorized committee. See 11 CFR 106.8(b)(2). Advisory Opinion 2006-11 (Washington Democratic State Central Committee) at 34 (footnotes omitted). • 2007 Consideration o f 2004 Audit Reports -1 The following year, in 2007, the Commission finalized audits of both 2004 presidential campaign committees. The Commission considered the Bush-Cheney '04 Audit Report in open session first, on March 22, 2007. With respect to hybrid advertisements run by Bush-Cheney '04 and the Republican National Committee, Commissioners Mason, Toner, and von Spakovsky applied the logic of 11 C.F.R. § 106.1 and 11 C.F.R. § 106.8 in the same manner seen in Advisory Opinion 2006-11, and concluded the committees' treatment of its hybrid advertisements was permissible under the Act and Commission regulations and that no violation of the party coordinated expenditure limits or public funding spending limits occurred. See Audit Report, Bush-Cheney '04, Inc., Statement of Vice Chairman David M. Mason and Commissioner Hans A. von Spakovsky (March 22, 2007). Two of the three Republican Commissioners wrote: "The permissibility of such cost-sharing is well-established by agency precedent, and the parties acted entirely reasonably and in reliance on prior decisions by the Federal Election Commission." Id. at 1-2. In addition, these Commissioners noted that the mass mailing approved in Advisory Opinion 2006-11 was "legally indistinguishable from the hybrid advertisements at issue here." Id. at 7. Commissioners Lenhard, Walther, and Weintraub disagreed and voted to find that BushCheney '04 had accepted approximately $40,000,000 in impermissible in-kind contributions in the form of the Republican National Committee's share of hybrid advertisement costs. See Audit Report, Bush-Cheney '04, Inc., Statement of Chairman Robert a Lenhard and Commissioners Steven T. Walther and Ellen L. Weintraub at 3 (March22, 2007). Commissioners Lenhard, Walther, and Weintraub rejected the campaign's reliance on the phone bank regulation (11 C.F.R. § 106.8) and Advisory Opinion 2006-11 on the grounds that those rules apply only to phone banks and mass mailings, respectively. Id. at 2-3. But even if Section 106.8 and Advisory Opinion 2006-11 were applicable, the Democratic Commissioners contended that the advertisements' references to "our leaders in Congress," "liberals in Congress," and "liberal allies" did not satisfy the "generic party reference" requirement, which, they explained, requires actual references to "Democrats" or "Republicans." Id. at 3. The Final Audit Report for Bush-Cheney '04, Inc., hmluded a description of the issues raised by the campaign's hybrid advertisements and a brief explanation of how those issues were analyzed, along with an explanation that the Commissioners were divided 3-3 on the subject. The Final Audit Report was approved by a 5-1 vote, with Commissioner Weintraub dissenting. In a separate statement, Commissioner Weintraub wrote: I. I cannot vote to approve this audit report because I disagree with its most important folding, that Bush-Cheney '04 complied with the expenditure limit for publicly funded presidential campaigns To the contrary, I believe that Bush-Cheney '04 exceeded the expenditure limit by over $42 million, and that the Commission should order the General Committee to repay that amount to the U.S. Treasury. [***1 Along with two of my colleagues, I voted that the 50-50 split between Bush-Cheney '04 and the RNC for the cost of these "hybrid advertisements" was impermissible. As a result, I believe Bush-Cheney '04 failed to honor its commitment to abide by the expenditure limit. Moreover, both Bush-Cheney '04 and the RNC violated the coordinated contributions [sic] limits. Thus, I dissented from an earlier Commission vote approving the finding that the General Committee complied with the expenditure limit. And I will not approve a Final Audit Report that contains that Ending. Audit Report, Bush-Cheney '04, Inc., Statement of Commissioner Ellen L. Weintraub at 1 (March 22, 2007). The Kerry-Edwards 2004 Audit Report was considered at a later open session, roughly two months later. The final report contained the exact same language regarding the Commissioners' 3-3 division on the issue of hybrid advertisements that appeared in the BushCheney '04, Inc. Audit Report, and was approved by the Commission by a 5-0 vote. With respect to the hybrid advertisement issue, the Kerry-Edwards 2004 Audit Report, like the Bush-Cheney '04 Audit Report, included the finding that the presidential campaign complied with the expenditure limit Commissioner Weintraub voted to approve the Kerry-Edwards 2004 Audit Report, despite her earlier insistence that she could "not approve a Final Audit Report that contains that finding." 2007 Notice of Proposed Rulemaking Subsequently, the Commission issued a Notice of Proposed Rulemalcing regarding the proper attribution of hybrid conamunications. See Notice of Proposed Rulemaking on Hybrid Communications, 72 Fed. Reg. 26,569 (May 10, 2007) ("2007 NPRM"). The 2007 NPRM defines hybrid communications as "communications that refer both to one or more clearly identified Federal candidates and generically to candidates of a political party." Id. at 26,570. The 2007 NPRM also indicates that the political party portion of a hybrid advertisement "generically refers to other candidates of a political party without clearly identifying them." Id. at 26,569. The Commission's proposed rule "would address the attribution of disbursements for a public communication made by any national, State, district, or local party committee, including national congressional campaign committees and convention committees, that contains a generic party reference and also refers to only one clearly identified Federal candidate, such as 'Show your support for Senator X and our other great Democratic candidates " M. at 26,571 (internal citations omitted). The focus of the 2007 NPRM was not whether hybrid advertisements should be permitted, but rather, how disbursements for hybrid advertisements should be attributed As noted in the 2007 NPRM, "[t]he proposed rule discussed below presents alternative methods for attributing the disbursements for various forms of hybrid communications made bypolitical party committees, and would supersede and replace current 11 CFR 106.8." Id at 26,570. The Commission received comments and held a public hearing on July 11, 2007, but no final rule was ever issued. 2013 Consideration ofMcCain-Palin 2008,Inc., Audit Report The Audit Report for McCain-Palin 2008, Inc., did not contain findings pertaining to the hybrid advertisements paid for by McCain-Palin 2008 and the Republican National Committee. The three Democratic Commissioners objected to this "omission" and noted that "the issue of how political party committees attribute disbursements for Hybrid Communications remains of paramount concern." Audit Report, McCain-Palm 2008, Inc., and McCain-Pala Compliance Fund, Inc., Statement of Reasons of Chair Ellen L Weintraub and Commissioners Cynthia L. Bauerly and Steven T. Walther at 2 (Feb. 1, 2013). Conclusion Since 2004, both parties have continued to distribute hybrid broadcast advertisements. Drawing on the 2004 audits, hybrid advertisements have generally reflected the generic party reference standard emphasized by the three Democratic Commissioners—that is, generic party references that explicitly call out "Democrats" and "Republicans" have been the norm. The Applegate/DCCC advertisements at issue are not hybrid advertisements. While they were paid for by a candidate and a party committee, they contain absolutely no generic party references that re fairly or reasonably attributable to the DCCC. In place of any generic party reference, the DCCC's portions of the advertisements consist solely of material attacking Donald Trump. Accordingly, the DCCC's costs in connection with these advertisements are not properly attributed to the DCCC. , lithe advertisements at issue do not qualify as hybrid advertisements, they are simply coordinated communications The portions of these advertisements that were paid for by the DCCC could be paid for by the DCCC as party coordinated expenditures pursuant to 11 C.F.R. §§ 10932-10937. However, as indicated by the disclaimers on these advertisements and as confumed by media reports, these advertisements are not party coordinated expenditures. To the extent that the DCCC has exceeded its assigned party coordinated expenditure limit with respect to Doug Applegate, the DCCC's payment for this advertising is an in-kind contribution to Applegate for Congress and is subject to the national party committee's contribution limit of $5,000 per election. In addition, and in light of the close and ongoing coordination occurring between the DCCC and Hillary for America, Applegate for Congress and the DCCC have also paid bra public communication that is coordinated with Hillary for America.' Unless the Democratic National Committee assigned some or all of its coordinated expenditure limit to the DCCC, the full amount of the cost of the Trump portion of these advertisements is properly classified an inkind contribution to Hillary for America. For the reasons set forth above, we urge the Commission to find reason to believe violations of the law occurred, investigate the charges raised, and impose all appropriate penalties. Sincerely, (Matthew G. Whitaker, Executive Director Foundation for Accountability & Civic Trust 1717K Street NW, Suite 900 Washington, D.C. 20006 VERIFICATION The Complainant listed below hereby verifies that the statements made in the attached complaint are, upon information and belief, true. Swom pursuant to 18 U.S.C. § 1001. Sr66 Matthew G. Whitaker, Executive Dirt -0161r Foundation for Accountability & Civic Trust 1717 K Street NW, Suite 900 Washington, D.C. 20006 Sworn to and subscribed before me on this 24th day of October 20164 aR: litRUJAM R. GUSTOFF Commission Number 721213 My Commission Expires March 5, 2018 The advertisement was paid for by a political party committee or its agent, satisfies one or more content standards (the communication expressly advocates the defeat of Donald Trump, and/or references a Presidential candidate during the relevant covered period), and satisfies one or more conduct standards (material involvement and substantial discussion). See 11 C.F.R. § 109.37. See also 11 C.F.R. § 109.21. 2 Attachment A Democrats use loophole to pump millions Into light for the House - POLITICO 10(21(16, 1138 AM POLITICO 2016 Dems use loophole to pump millions into fight for the House By invoking Donald Trump and Republicans, the party is stretching its cash to compete in a slew of unexpectedly competitive races. By SCOTT BLAND I 10/18/16 05:23 PM EDT The DCCC appears set to spend over 30 times the FEC limit on normal coordinated expenditures to help former Democratic Rep, Brad Schneider run TV ads against his better-funded opponent In Illinois. I AP Photo The Democratic Party is directing millions of extra dollars to its House candidates this fall by way of a legal loophole that has helped them bypass the typical limits on coordinated spending between parties and candidates — all while linking some vulnerable Republicans to Donald Trump. Typically Federal Election Commission regulations limit parties to just $48,100 of spending in http://vrempoDlico.com (story12016/10(democrats-house-campaign-money-229957 Page loiS Democrats use loophole to pump millions- Into fight for the House - POLMCO . 10/21116, 11:36 AM direct coordination with most House candidates. But under a decade-old FEC precedent, candidates who word their TV ads a certain way — including references to generic 'Democrats" and "Republicans" as well as specific candidates — can split the cost of those ads with their party, even if that means blowing past the normal coordinated spending caps. To date, more than a dozen Democratic challengers are benefiting from such "hybrid" advertising, getting extra hundreds of thousands of dollars apiece from the Democratic Congressional Campaign Committee.. The technique has been a small but consistent part of Democratic strategy in recent years, but new legal guidance has also allowed Democrats to share costs on ads linking their opponents to Trump on policy "You have a historically unpopular Republican presidential nominee, which increases the appeal of doing this sort of thing," said a Democratic operative. "If you can find a way now that you only have to pay so percent of an ad, and link your opponent to Tnunp, and that makes strategic sense in the district, that's a no-brainer." The cost-sharing has turned into a critical tool for the DCCC, as it suddenly fries to compete in more districts and support little-known challengers made unexpectedly viable by Trump's late slide. The ads that qualify for cost-splitting do exactly what Democrats already want to: nationalize House races and try to saddle local candidates — from Iowa to Nevada — with the Republican Party's general unpopularity. And the influx of funds from the DCCC directly into candidate advertising has helped the party grow the battleground map, even including districts where the candidates themselves are perilously low on cash. In one dramatic case, the DCCC appears set to spend over 3o times the FEC limit on normal coordinated expenditures to help former Democratic Rep. Brad Schneider of Illinois run TV ads against his better-funded opponent. The key is in the wording of the ads, which lump together GOP Rep. Bob "Dold and the Republicans." The DCCC and candidates around the country have split over ss.4 million on ad costs so far, according to a source tracking House ad spending, with millions more to come. The DCCC and Schneider have together booked more than $3.2 million of advertising together through Election Day Other candidates continue to book hundreds of new hybrid ad reservations every week. WHITE HOUSE Obama, Holder to lead post-Trump redistricting campaign By EDWARD-ISAAC DOVERE h ttplArrim poli tico.c omistory/2 016 110fdem ocra ts- h ouse-cam palg e- M mter- 229957 Page 2 05 5 Democrats use loophole to pump millions into light for the House - POLITICO 10/21/15 Mfi AM Increasingly, some of the ads are naming Trump directly instead of linking GOP incumbents to generic "Washington Republicans." One in Northern Virginia charges GOP Rep. Barbara Comstock with having the same agenda as Trump on abortion and Planned.Parenthood. The legal logic is that its half an issue ad paid for by the DCCC and half a candidate ad paid for by the candidate," said a second Democratic consultant, who has been involved in the production of hybrid ads in aca6. The language has to be very specifically aboutTrurnp policy" the consultant continued, to avoid falling afoul of rules governing in-kind contributions, since Trump is a candidate on the ballot this year. Hybrid ads do come with complications. The phrasing needs to be just right, focusing equally on local candidates and broader references, to qualify as hybrids. Sources described an intensive vetting process for the ads, which includes the DCCC's research and legal departments. And the wording can get clunky. Meeting the hybrid requirements is why, when President 13arack Ob erne appeared in a Schneider TV ad this week, he awkwardly shoehorned Schneider's party into his endorsement. "Vote for Brad Schneider and the Democrats," Obarna says in the ad. Hybrid ads have typically been deployed only in districts that lean strongly toward one party making links to "Democrats" or "Republicans" damaging to local candidates. ButTrump's massive unpopularity has made more districts fruitful ground for the advertising technique. "We can only do it in certain districts," said a third Democratic operative. "But it's increasing numbers of districts as Trump's numbers fall." 2016 How low can Trump go in the polls? By STEVEN SHEPARD The DCCC declined to comment on its strategy. This type of ads has been a boon to some of Democrats' latest-brealdng House campaigns, many of which are low on cash. Democrat LuAnn Bennett, the beneficiary of the anti-Comstock ad in Virginia, had just $90,000 in her campaign account at the end of September, while Comstock had 81.9 million, according to campaign finance reports filed last weekend. But since that last week of September, Bennett and the DCCC have aired over $47q000 worth of TV ads together, with more likely coming. http.Triminv.politico.comrstoryr2016/101democrats-house-campaign-Money-229937 Page 3 of 5 Democrat, use loophole to pump mations into fight for the House - POLITICO 10/21 /16. II:36 AM Bennett is one of more than a half-dozen top Democratic House candidates who started the finR1 six weeks of the campaign with less than $150,000 in their accounts, which wouldn't cover even a week of heavy TV advertising in some places. Many of them started their campaigns late or weren't initially considered marquee recruits, leaving them short on funds when the national political enviromnent started to turn in Democrats' direction. The DCCC, however, just announced a record $21 million raised in September, with a hefty 545.5 million on hand at the end of that month. Democrats have long noted that money would be a limiting factor on just how far the party could stretch its House hopes this year. But the hybrid ads are helping the committee save some money while contesting an increasing number of House districts, many of which are in some of the country's most expensive media markets. Since the hybrid ads are coordinated directly with candidates, who are guaranteed the "lowest unit rate" on ads from TV stations, the DCCC isn't paying premium outside-group rates to sp end that money on TV. When the DCCC airs independent expenditure ads separately from the candidates in these districts, it will usually pay a higher rate than a candidate even to run an ad on the exact same program. "It is one of our shields against the insane amounts of outside money coming into these districts," said a fourth Democratic strategist. Florida Democrat Stephanie Murphy started her House campaign only in June but has since benefited from over $270,000 in ads partially funded by the DCCC in Orlando, some of which say that veteran GOP Rep. John Mica "and Donald Trump share the same harmful policies." RNC members agree with Trump: It's rigged By KYLE CHENEY Michigan's Suzanna Shkreli, whose campaign kicked off in July and has recently generated enthusiasm among Democrats watching the House landscape for late opportunities, is another who appears to be leaning on the technique. In upstate New York, Democrat Colleen Deacon has tried to jolt her underdog campaign by linking GOP Rep. John Ratko to Trump's foreign policy views. And Doug Applegate, a Southern California Democrat and first-time candidate making a surprisingly strong run against GOP Rep. Darrell Issa, has been one of the biggest beneficiaries of the DCCC's emphasis on hybrids. An ad-buyer estimated Applegate and the DCCC have together http://www.polltico.comistary/2016/10fdemocrats-house-campalgn:money-229957 Page 4 of 5 Democrats use loophole to pump millions into light for the House - POLITICO 10121115.11:313AM aired over $960,000 of TV ads in the past month — during which time Applegate filed an ac report showing him with ju.st Si6z000 in his campaign account, compared with Issa's $3 millionplus. "Darrell Issa and the tea party Republicans tried to play politics with our lives," a 9/11 first responder says in one of Applegate's ads. Other spots paid for by Applegate and the DCCC reference Trump, including one charging that both Trump and Issa "gamed the system" to direct taxpayer money to themselves. Democrats are making heavy-use of hybrid ads now, but they have a bipartisan tradition. President George W. Bush's 2004 campaign used themheavily in conjunction with the Republican National Committee, and the FEC deadlocked on whether to continue allowing the practice. 'The reason this happens is that the coordinated limits are now increasingly irrelevant in campaigns, because the campaigns are so expensive," said a Republican legal expert. "There is so much money spent now that the parties want to stretch the coordinated limits so that they're somewhat relevant" httpliivnew.politico.comistory/2016/10/democrats-house-campaign-mon 229957 Page S ol 1 EXHIBITC I Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 1 of 18 Essential Politics September archives: Brown signs new laws and issues vetoes, fall campaigns heat up SEPT. 30, 2016, 5:45 P.M. This is the September archive of Essential Politics, our daily feed on California government and politics news. • Find our current news feed here Be sure to follow us on Twitter for more, or subscribe to our free daily newsletter and the California Politics Podcast SEPT. 20, 2016, 4:27 P.M. Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads Phil VVillon Darrell Issa's lined Pockets O f Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 2 of 18 It's game on in the hotly contested congressional race between Republican Rep. Darrell Issa and his surprisingly competitive challenger, Democrat Douglas Applegate. The Applegate campaign released a new ad Tuesday, assailing Issa for endorsing Republican presidential nominee Donald Trump and accusing Issa of profiting off his eight terms in Congress. Issa, with an estimated minimum net worth of $254.7 million, is the wealthiest member of Congress. He made most of his fortune in the 1990s while leading Directed Electronics Inc., a manufacturer of vehicle anti-theft devices. "Just like Trump, Issa gamed the system to line his own pockets steering millions in taxpayer money to help properties he owned," the narrator says. According to Applegate's campaign manager, the Wad will air on broadcast and cable TV stations that serve California's 49th Congressional District, which includes northern San Diego County and southern Orange County. Voters in the district also received campaign mail from Issa that ripped into Applegate. The mailer describes how Applegate was accused of harassing and threatening his ex-wife during their divorce proceedings and child custody battle more than 10 years ago. The mailer calls Applegate the "perfect candidate" of House Minority Leader Nancy Pelosi. Issa faces a strong challenge from Applegate, a retired Marine colonel from San Clemente. The Vista Republican outspent Applegate by more than $600,000 in the June primary, but the Democrat still nabbed 45.5% of the vote, while Issa finished with 5o.8%. THE RECORD http://wwvv.latimes.com/politics/essential/la-nol-sac-essential-volitics-undates-conaression.. . 11/1/2016 Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times - Page 3 of 18 That's Douglas Li Applegate, vt Nancy Pelosi's perfect candidate. . Campaign mailer sent out by Rep. Darrell Issa's congressional campaign. Latest updates Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 4 of 18 SEPT. 30, 2016, 5:45 P.M. California offenders are no longer eligible for early release in the deaths of police officers Jazmine Ulloa 0 A suspect is detained at the end of a pursuit that began in Downey, where Downey police Officer Ricardo Galvez was shot and killed. (KTLA) California offenders will no longer be eligible for early release if they have been convicted of murder in the death of a police officer. Gov. Jerry Brown on Friday signed legislation that exempts offenders from consideration for compassionate or medical release. Currently under the law, the secretary of the Department of Corrections and Rehabilitation and the Board of Parole Hearings determine whether a prisoner meets those provisions. Offenders are typically recommended for early release if they have six months or less to live and would not pose a threat to public safety under court conditions or if a prisoner is permanently medically incapacitated. f Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 5 of 18 Sen. Cathleen Galgiani CD-Stockton) has said she filed the legislation, SE 6, to target a group of offenders sentenced during a period in the 1970s, when California had neither a death penalty sentence nor a sentence of life without the possibility of parole. During that time, she said, people convicted in the deaths of police officers were sentenced to life with parole. Opponents of the bill said the parole board was capable of screening the petitions to determine who is appropriate for release. They said medical parole was meant to decrease the financial strain of caring for medically incapacitated inmates. SEPT. 30, 2016, 5:31 P.M. Bill increasing penalties for possessing date-rape drugs becomes law without governor's signature Patrick McGreevy 0 # f Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 6 of 18 Gov. Jerry Brown allowed a bill to become law Friday without his signature. (Lenny Ignelzi / Associated Press) In a rare move, Gov. Jerry Brown said Friday he was allowing a bill increasing penalties for possession of date-rape drugs to become law without his signature. Brown normally signs bills he supports or vetoes them if he doesn't, but bills can become law if the governor fails to act by Friday's midnight deadline. The governor's representatives declined to explain his decision, but Brown has in the past been reluctant to approve bills that added to prison overcrowding. The measure by Sen. Cathleen Galgiani (D-Stockton) targets drugs that cause victims to become completely incapacitated, leaving them with no memory of their assault. The bill restores the authority of county prosecutors to pursue felony charges against individuals caught with the most common date rape drugs and who have also demonstrated the intent to commit a sexual assault. It addresses a change in the authority that was included in Proposition 47, previously approved by voters. "The issue of sexual assault has received increased attention in both state and national media recently as California's inadequate sexual assault laws have been brought to light," Galgiani said in a statement. SEPT. 30, 2016, 6:29 P.M. New law aims to help keep sexual assault survivors' addresses private Sophia Bollag Protections to keep domestic violence survivors' addresses confidential will be standardized under a bill the governor signed Friday. The new law will also apply to people who have been sexually assaulted or stalked and reproductive healthcare providers. It will prohibit people, businesses and 0 V f Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 7 of 18 associations from publishing the addresses of people protected under the law who have requested that their addresses be kept confidential. Assemblywoman Catharine Baker (R-San Ramon), center, authored the bill to help keep domestic violence survivor& addresses confidential. (Rich Pedroncelli / AP) The bill, authored by Assemblywoman Catharine Baker (R-San Ramon), will also require the California Secretary of State's office to provide those protected under the law with information about how to keep their addresses private. The law will take effect Jan. 1. SEPT. 30, 2016, 5:17 P.M. Workers in small businesses will not get mandatory parental leave, after veto by Gov. Jerry Brown John Myers 0 V f Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 8 of 18 (Vadim Ghirda / Associated Press) Gov. Jerry Brown refused on Friday to extend parental leave requirements to Californians who work for some of the state's smallest businesses, saying he worried about the plan's impact. In his final bill actions for the year, Brown vetoed Senate Bill 654 and its mandate of six weeks of unpaid leave for mothers or fathers at businesses that employ between 20 and 49 workers. Current job protections for workers with new children are focused on businesses of at least 50 employees. The bill would have given these employees access to the state's paid family leave program, with subsidies that are paid for through worker paycheck deductions. Brown's veto message said that he was concerned about the "impact" of the leave proposal on small businesses, and cited potential liability issues that could be resolved through a modified proposal in 2017. The bill's author, state Sen. Hannah-Beth Jackson (D-Santa Barbara), said in a statement that "everyone deserves the basic right to take time off to care for a newborn." SEPT. 30, 2016, 5:09 P.M. Ring the bells of freedom. Denim is now California's official state fabric v f Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 9 of 18 READ MORE > SEPT. 30, 2016, 4:10 P.M. Yes to Prop 62' releases new ads in campaign to abolish death penalty system broken 'beyond repair' lii Jazmine Ulloa 0 V Thirty-eight years ago, lawyer Ron Briggs and his father wrote the ballot initiative that brought the death penalty back to California. They worked tirelessly to get it passed, gathering petition signatures and mailing out literature. But in a new online ad airing this weekend in support of Proposition 62, the November ballot measure that would abolish the practice, he tells viewers he made "a big mistake and you have been paying for it ever since." "I thought we'd save money," he says in the ad. "Instead, we have wasted $5 billion on just 13 executions." f Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 10 of 18 The video is one of two commercials that will begin playing this weekend as paid content on Facebook to raise support for the proposition. Past efforts to end the death penalty in the state have tended to focus on moral arguments against statesanctioned executions. This year, Prop 62 organizers said they also want to emphasize the cost to taxpayers' pockets. The second ad features a porcelain vase shattering on the floor as a voice says, "Sometimes something is so broken it just can't be fixed." It goes on to list what it calls the flaws in the state's death penalty system: suspended executions, endless appeals and millions in legal fees. Both Prop 62 videos tell viewers the measure will save the state $1.5o million a year. But not all agree with its financial estimates. The proposition, which would replace capital punishment with life without parole, is one of two competing death penalty measures voters will weigh on the Nov. 8 ballot. Prop 66 aims to speed up the execution process by limiting the number of appeals that death row inmates can file and by expediting deadlines. Prop. 66 supporters argue the Prop. 62 campaign has "wildly inflated" the costs of the death penalty system. http://www.latimes.com/politics/essential/la-Dol-sac-essential-nol Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 11 of 18 The "Yes on 62 campaignsays it took its 85-billion estimate from a report by California's Loyola Law School in 2011. But one of its authors told PolitiFact California that was the figure spent on the entire system since 1978 — not just the the cases of 13 death row inmates. Briggs, a former El Dorado County supervisor and retired San Quentin Prison warden, said he began to change his perceptions on the death penalty about a decade ago. "It is important for people to understand that 38 years ago we threw a pebble into the political pond, creating waves of unwanted effects," he said. This story has been updated with a comment from Briggs. SEPT. 30, 2016, 4:00 P.M. Democrat who lost in the primary says he will vote for Republican Rep. Steve Knight in heated House race Javier Panzar htto://wwwlatimes.com/Dolitics/essential/la-no1-sac-essential-nolitics-undatec-congressinn 0V f Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 12 of 18 Attorney Bryan Caforio, left, incumbent Steve Knight and Los Angeles police Lt. Lou Vince take part in a debate for the 25th Congressional District seat on May 5 in Newhall. (Gina Ferazzi / Los Angeles Times) Lou Vince, an L.A. police lieutenant who finished third in the 25th Congressional District's primary contest this June, crossed party lines Thursday and said he will vote for Republican Congressman Steve Knight over Democratic lawyer Bryan Caforio in the heated congressional race that national Democrats are targeting as a potential seat pick-up. In a letter sent to reporters Thursday, Vince said while he wants Democrats to win back Congress, Caforio is new to the district and "isn't a member of this community and certainly doesn't reflect the values of our district." Vince, who said he was asked to drop out of the race by Democratic Party leaders when Caforio entered, complimented Knight for his military service and career with the Los Angeles Police Department. "Steve Knight isn't perfect — I've opposed him on issues like climate change and healthcare," he said in the letter. "But I know Steve, I've known him for many years. While we may disagree on policy issues, he is a man of integrity and genuinely believes he is doing the right thing." In the letter, Vince accused Caforio of misrepresenting his legal career on the campaign trail and promoting "false accusations about my professional conduct as a police officer." During the primary campaign, L.A. Weekly and other outlets reported on a lawsuit filled by Cecil Miller, who claimed Vince and another officer, Timothy Gallick, beat him in front of his family after Miller ran over Vince's foot during a traffic stop in 2000. The suit alleged one of the officers held Miller up while the other punched him in the face before Vince also punched a passerby in the face, according to the suit. Page 13 of 18 Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads LA Times - "c.., Angeles Nationar Forest , an Bernardi -ids Sources: CaliforiQ1ttzens Redist Commission, Iviapbox, OpenStreet ngelica uintero / @la imesgraphicsi The case was eventually settled by the Los Angeles City Council for $150,000 and the matter was sent to the Los Angeles Police Commission, according to city records. The commission asked the LAPD to review the incident, but Police Commission Executive Director Richard M. Tefanka said they never received a report back from the department. Caforio's campaign denied spreading information about the suit or the settlement, which was covered by local press in 2002. In response to Vince's letter to reporters, Caforio's campaign released a statement from Maria Gutzeit, a Newhall Water District board member, who also ran for the seat but dropped out and endorsed Caforio. "After multiple failed campaigns, it's disappointing that Lou Vince is standing with an extremist like Steve Knight, who is against a woman's right to choose even in cases of rape, incest or when the life of the mother is at risk, and would be another vote for the Trunip agenda," she said. SEPT. 30, 2016, 3:33 P.M. Will denim be California's official state fabric? A decision looms f httn://www.latimes.com/Dolitics/essential/la-nol-sac-essential-nolitics-undates-congression.. . 11/1/2016 Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 14 of 18 SEPT. 30, 2016, 12:58 P.M. Distributing secret recordings like those in Planned Parenthood case now a crime in California John Myers cPV f (Los Angeles Times) Distributing secret recordings involving healthcare conversations will become a crime in California in 2017, under a new law inspired by the high-profile case involving videos of Planned Parenthood employees discussing abortion procedures. Gov. Jerry Brown's signature on Assembly Bill 1671 came after last-minute changes to the bill seeking to ensure journalists wouldn't be prosecuted for the use of video, audio or transcripts they are given but did not help to record. Existing law focuses on the illegal nature of the recording itself, not what happens to any copies of the recording. hitt) ://www.latimes.comkolitics/essential/la-nol-sac-essential-nolitics-undates-congression ... 11/1/2016 Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 15 of 18 Planned Parenthood, a sponsor of AB 1671, argued that the new law is necessary in the wake of the controversial videos taped by David Daleiden and other antiabortion activists that purport to show Planned Parenthood employees illegally trafficking in fetal tissue. The organization, which has not been found guilty of any wrongdoing, has insisted that the videos were manipulated and sparked a number of threats made to their medical providers and clinics. In an emailed statement, Daleiden said the conversations recorded were not confidential. "California's existing recording law and the new distribution provision are simply inapplicable to our work," he said. News organizations including the California Newspapers Publishers Assn. had opposed earlier versions of AB 1671. Late amendments sought to assure that only those involved in actually making the recording are subject to criminal prosecution for distributing it — not those, including reporters, who may receive it from another source. "Gov. Brown sent a clear message to anti-abortion extremists that you cannot break the law in California or you will be held accountable," said Kathy Kneer, president of Planned Parenthood Affiliates of California, in a statement on the signing of AB 1671. Update 3:45 p.m. This story has been updated with comment from David Daleiden. SEPT. 30, 2016, 11:48 A.M. REPORTING FROM SACRAMENTO Stronger equal-pay protections for women and people of color coming soon in California Sophia Bollag Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 16 of 18 State Sen. Isadore Hall III (D-Compton) authored one of the pay-equity bills the governor signed Friday. (Rich Pedroncelli / Associated Press) Equal-pay laws in California will get tougher under two bills Gov. Jerry Brown signed Friday. The two new laws will strengthen wage-equity protections for women and people of color. One will prohibit employers from paying women less than male colleagues based on prior salary. The other will bar employers from paying workers doing "substantially similar" jobs different wages based on their race or ethnicity. The announcement comes less than a year after California lawmakers passed one of the toughest equal-pay bills in the country. That law applied the "substantially similar" provision to protect against gender-based wage discrimination. The bills signed Friday take effect Jan. 1. LOAD OLDER UPDATES (192) Essential Politics Sign up for the best from our political teams delivered daily. Enter your email Sign me up Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Page 17 of 18 Privacy policy 0 More from politics Countdown to Election Day 6 18 18 57 Days Hours Minutes Seconds The 10 biggest issues were tracking in the California Legislature Int I want to register with a American Independent Party • ft Democratic Party o f I IP bg Griffith It paid numb EORGE W DEP and as a member is and Influence in his ty '01a end that there ci freedom in America?' • STAND UP Mutt Marne 'marmot Yea 33.00 1056 69 PARTY err his strength e and notion to and maintained CA 1° *(114. Palli410 MS Witt Rep. Darrell Issa and Douglas Applegate trade barbs in attack ads - LA Times Are you an independent voter? You aren't if you checked this box. Follow every step of the 2016 presidential election with the Los Angeles Times Trail Guide. Copyright 0 2016, Los Angeles Times htta://www.latimes.com/ooliticsiessenti Page 18 of 18 1 EXHIBITD 11/1/2016 Ad Roundup: Democrat Doug Applegate lies Donald Trump to Darrell Issa ELECTIONS TOP STORY PRESIDENT FORECAST Morning Digest: Republicans make a late move to save Ronjohnson In ELECTORAL VOTES CLINTON • TRUMP 0 A Wisconsin 11/1,2016 SENATE FORECAST CHANCE OE WINNING I SEATS 334 re-----r-31611 0 DEMOCRATS 204 ii= I ° REPUBLICANS Mg.! 1In,2016 CHANCE OF WINNING 50 50 fio ,:..,, M= I fix a I Hut a A41 1 1E PRE SHIPPING Shop Now DAILY KOS ELECTIONS (M1.06S/ELICTIONS) Stream (fuser/Elections/stream) Members (/group/Elections/prefs) Following (fuser Ad Roundup: Democrat Doug Applegate ties Donald Trump to Darrell lssa (Istories/201619/2011572372/-AdRoundup-Democrat-Doug-Applegatetied-Donald-Trump-to-Darrell-Issa) By Jeff Singer (/nser/ eff%205inger) 2016/09/20 16:56 1 Comment (1 New) (http://www.clailykos.com/story/201 6/9/20/1572372/- url-http%3A%2F962Fwww.dailykos.cor Ad-Roundup-Democrat-Doug-Applegate-tied-Donald- Roundup-Demc Trump-to-De rrell-Issakomm ents) Issa&text=Ad+Roundup%3A+Democrat+Do annbutIon:DougAppleg teal Fa ASS (/user/Jeff Singer/cu.:imp • AZ-Sen: Republican Sen. John McCain (https://vvww.youtube.com/watch7 v4PTcbU3nkVs) continues to argue that Democrat Ann Kirkpatrick's vote for Obamacare trashed the state. http://www.dailykos.com/stay/2016/9/2c11572372/-Ad-Roundup-Dem ocral- Doug-Applegate - tied- Donald -Trump.to- Darrell - Issa 1/7 11/112016 Ad Roundup: Democrat Dcug Applegate ties Donald Trump to Darrell Ism • FL-Sen: Democrat Patrick Murphy (https://www.youtube.com/watch?v=iPPDuqlrhY) repeatedly features a clip of Republican Sen. Marco Rubio declaring that"! REBLOGGED BY Bally Kos Elections (iblogs/Elections) don't require there to be an exception for rape or incest," and the narrator argues that Rubio would even take away the right to choose from women infected with Zika. The Senate Leadership Fund (https://www.youtube.com/watch?v=YIDIjhKtv5A) continues to say that Murphy embellished his resume. TAO • IN-Sen: The DSCC (https://www.youtube.com/watchN=FNEWUr9rmi8) attacks Republican Todd Young on Social Security. The Senate Leadership Fund (https://www.youtube.com/watch?v=NXNR747-Eo8) says that Democrat Evan Bayh got rich from a big bank he voted to bail out. The NRA has also placed a $644,000 Padroundup (/news/adroundup) (http://dogLiery.feCgOWCgl - bin/fOrMS/C90013301 /1099546/157) buy for Team Red here, though their ad is not out yet. Share this article • NC-Sen: In their first commercial of the race, the DSCC (https://vvww.youtube.com/watch?v=bEwSoITPpHO) argues that Republican Sen. Richard Burr is in the pocket of the insurance industry and has voted to make Medicare more expensive for seniors. 0 0 (https://twItter.com/Intent/tweet? k%2F%2Fwww.dailykos.com %2Fstory962F2016%21R%2F20%2F1572372942F-Ack .. . . ... • NH-sen: nepuolican sen. jseily Ayoue (nttps.uwww.youtube.com/watch7v=4L5pNCTRoundup-Democrat-Doug-Applegate-tlad:Donald-Trumo-ta-Darrell-. ma) teatures a couple wno lost their daughter to opioids praising Ayotte for reaching iundup943A+Democrat+Doug+ApplegatenlesTzt aurimitrrrell.Issa) wo rking to help other families. The Senate Leadership Fund (https://www.youtube.com/watch7v=GOObejEgAvk) argues that Democrat Maggie Hassan would defend Obamacare and backs the administration's nuclear deal with Iran. , • NV-Sen: EMILYs List (https://www.youtube.com/watch7v=YvM1LUhPuvc) spends $1 million (https://lasvegassun.com/news/2016/sep/20/campaign-ad-targets-hecks-votesto-defund-planned/) arguing that, while Republican Joe Heck likes to play up his medical background in ads, he's really repeatedly voted to defund Planned Parenthood and "criminalize a woman's right to choose." The NRSC (https://www.youtube.com/watch?v=NQOwb4hYVns) continues a line of attack from a recent Heck ad (http://www.dailykos.com/story/2016/09/20/1572021/-MorningDigest-The-GOP-s-own-poll-gives-Democrat-jim-justice-the-lead-in-WestVirginia#14) and says that Democrat Catherine Cortez Masto took several luxurious trips as state attorney general that were paid for by special interests and taxpayers. • PA-Sen: Democrat Katie McGinty (https://www.youtube.com/watch7 v=QBD89QbrCP1J&feature=youtu.be ) attacks Republican Sen. Pat Toomey for voting for tax break that encourage companies to ship jobs overseas, and she pledges to end these tax giveaways. The Club for Growth (https://www.youtube.com/watch7v=o5jOevxuMA) ties McGinty to "the Philadelphia political machine," and argues she wants higher taxes: the spot is airing in the Harrisburg media market (https://twitter.com/Alex_Roarty/status1777962847825457154). • WI-Sen: Democrat Russ Feingold (https://www.youtube.com/watch? v=qCVy9NpSMI4) calls for helping Wisconsin businesses grow. • • IN-Gov: Democrat John Gregg (https://www.youtube.com/watch? v=2pVs97xal6k) defends his work as speaker of the state House and argues that Republican Eric Holcomb will just continue the same policies of outgoing Gov. Mike Pence that are hurting Indiana. • AK-AL: Democrat Steve Lindbeck (https://www.youtube.com/watch? v=GT6wiOQFOxl&feature=youtu.be) features a tugboat worker arguing that Republican Rep. Don Young didn't defend Alaska jobs from a company that wants to outsource them to Louisiana (http://www.dailykos.com/story/2016/06/15/1538663/-Morning-Digest-As-Don-Youngsides-with-big-business-his-union-allies-weigh-forsaking-him-for-a-Dem). http://www.dailykos.corn/story/2016/9/20/1572372/-Ad-Roundup-Democrat-Daug-Applegato-tied-Donald-Trump-to-Darrell-Issa 11/1/2016 Ad Roundup: Democrat Doug Applegate lies Donald Trump to Darrell lssa • A2-01: In his first ad, Democrat Tom O'Halleran (https://www.youtube.com/watch? v=jjkO_hfOGZO) highlights his law enforcement background and calls for not paying Congress if they don't pass a budget and taking away their first-class travel perks. • AZ-02: Republican Rep. Martha McSally (https://www.youtube.com/watch? v=SknletY0-sw) talks about her military service. . • CA-07: Democratic Rep. Ami Bera recently ran a spot (http://www.dailykos.com/story/2016/09/19/1571331/-Morning-Digest-NationalDemocrats-make-a-big-bet-on-jason-Kander-in-the-Missouri-Senate-race#9) against Republican Sheriff Scott.lones that featured news anchors describing how a former Jones employee accused (http://www.dailykos.com/story/2016/07/14/1548365/Sacramento-sheriff-a-G0P-House-candidate-accused-of-sexual-harassment-by-aformer-subordinate)him of sexual harassment and unwanted touching (http://www.dailykos.com/story/2016/07/14/1548365/-Sacramento-sheriff-a-G0PHouse-candidate-accused-of-sexual-harassment-by-a-former-subordinate) . Jones is up with a response commercial (https://www.youtube.com/watch?v=OnXVIxcEp5s) that features a legion of people, including several in law enforcement uniforms, praising Jones' work and character. Aside from one person imploring the audience not to believe the attacks against Jones, the spot does not address Bera's commercial or the accusations against Jones. • CA-21: Republican Rep. David Valadao is out with his first general election ads in English (https://www.youtube.com/watchlv=Az5xybxuwek) and Spanish (https://www.youtube.com/watch?v=1a0YDBIcSRGE) that promotes his Central Valley roots and work for veterans. • CA-24: Republican Justin Fareed (https://www.youtube.com/watch? v=pCp9IRFCOTI) says that Democrat Salud Carbajal hasn't done anything to adopt common-sense solutions to California's water crisis. • CA-49: In his first ad, Democrat Doug Applegate (https://www.youtube.com/watch? v=RriitjNAe-l) links Republican Rep. Darrell Issa to Donald Trump. Applegate wisely uses clips of Trump to make his case, with Trump declaring, I'm really rich," and "Nobody knows the system better than me.' The narrator then accuses Issa of "gaming the system to line his own pockets" by "steering millions in taxpayer money to help properties he owned." Applegate then appears and calls for a congressman "who looks out for you, not himself? • CO-06: Democrat Morgan Carroll (https://www.youtube.com/watch? v=6WdQJbcoY64) talks about how her fathers lifesavings were wiped out after he was diagnosed with Parkinson's Disease, and she says she spent her career fighting for people with disabilities. Carroll goes on to attack Donald Trump for mocking people with disabilities and argue that Republican Rep. Mike Coffman hasn't stood up to him. The NRCC (https://www.youtube.com/watch?v=112pQXU7FdU) portrays Carroll has a huge spender and higher taxes In the state legislature. • FL-07: Over the summer, the Democratic group House Majority PAC (hups://www.youtube.com/watch?v=WCIdgD_kGXQ) reserved $853,000 against Republican Rep. John Mica, and they've announced that they'll spend that amount over the next two weeks (http://www.thehousemajoritypac.com/news/press-releases(newhouse-majority-pac-ad-highlights-choice-facing-fl-07-voters) . Their first commercial attacks Mica for raising his pay eight times even though Congress hasn't passed a budget. The narrator then praises Democrat Stephanie Murphy for fighting for "No Budget, No Pay." • IL-12: Republican Rep. Mike Bost (https;//www.youtube.com/watch?v1Jx9olzKhM) features the president of a local boot business praising him for helping them when big companies tried to make it tougher for them to get contracts. • IN-09: In her first ad, Democrat Shell! Yoder (https://www.youtube.com/watch? v=b75a7dBDswo) talks about her humble origins and calls for • cutting wasteful spending and creating better jobs. httuliwww.dailykos.com/story/2016/9/20/1572372-Ad-Roundup-Democrat-Doug-Applegate-tied-Dcnald-Trump-to-Darrell-Issa 11/1/2016 Ad Roundup: Democrat Doug Applegate ties Donald Trump to Darrell lssa • ME-02: The NRCC (https://www.youtube.com/watch?v=pikpybErSQ) once again ties Democrat Emily Cain to Hillary Clinton, this time attacking her support for the Obama administration's nuclear deal with Iran. The spot frequently uses a clip of Cain declaring, "We need to uphold the deal: to make its argument. • MI-01: The NRCC (https://www.youtube.com/watch?v=sUYn3hvf7sI) says that, while Democrat Lon Johnson likes to talk about his local roots, his real family is the Democrat Party: • MT-AL: In her first negative ad, Democrat Denise Juneau (https://www.youtube.com/watch?v=sFU00226T48) argues that Republican Rep. Ryan Zinke signed a pledge to sell off Montana's public lands, and is now lying both about Juneau's stance on that issue and about her support for the Second Amendment. • NV-03: The NRCC (https://www.youtube.com/watch?v=YLDIC1ejEc4) calls Democrat Jacky Rosen the handpicked candidate of Washington liberals, and hits her for supporting Obamacare. • NV-04: The NRCC (https://www.youtube.com/watch?v=bFkmJUCO3Y) praises what they say are Republican Rep. Cresent Hardy's votes for balanced budgets while accusing Democrat Ruben Kihuen of voting for a massive tax hike while allowing a pay raise for himself. Once again, what the narrator demonizes as "the largest tax hike in Nevada history" was pushed by GOP Gov. Brian Sandoval and passed by both houses of the GOP-led legislature. • NY-03: Democrat Tom Suozzi (https://www.youtube.com/watch? v=yPuMAuOLFbE) features a clip of John F. Kennedy declaring "but knowing that here on Earth, God's work must truly be our own," and the candidate pledges to "do what's right beyond party politics:Suozzi concludes by promising to be "a new kind of old fashioned Democrat." • NY-19: Democrat Zephyr Teachout (https://www.youtube.com/watch? v=vGryxtise5Q) rides a boat across the Hudson River, pointing out that "at one end is Albany, where politicians like my opponent sold out to corporate interests," and at the other end are the Wall Street companies that wrecked the economy and where Republican John Faso also worked. Teachout says that in between are strong communities on a polluted river that need jobs. The NRCC (https://www.youtube.com/watch?v=HRLeixwUtO) ties Teachout to the Iran nuclear deal, and repeatedly calls her "Professor Teachout" to unsubtly make the case that she's an out-of-touch egghead. • UT-04: Republican Rep. M la Love (https://www.youtube.com/watch? v=ksa6aBfilVo) features the daughter of a deceased veteran praising her after the VA denied the family military benefits. 0 1 Comment (1 New)Share (http://www.dailykos.com/story/2016/9/20/157237214his Ad-Round up-Democrat-Doug-Applegate-tled-Dona Id-artIde Trump-to-Darrell-Issatteornments) 121 (https:/ uttehttp%3A%21%2Fwww.dallykos.com %2Fstory%2F2016%2F99; Roundup-Dernocrat-Doug-Applegate-tied issa&text=Ad+Roundup%3A+Demacrat+Doug+Applegatetties+Donal http://www.clailykos.ocen/story/2016/9/20/1572372/-Acl-Roundup-Democrat-Doug-Applegate-tied-Donald-Trump-to-Darreh-Issa 11/1/2016 Ad Roundup: Democrat Dcug Applegate ties Donald Trump to Darrell Issa $6.95 FLAT I° RATE SHIPPING ON TOYS, GIFTS, BEDDING & MORE' °ResirithotISOppty . orbox&utm_source=dailykos&utm_medium=referral&utm_content=thumbnails-a:Below Story:) Drbox&utm_source —dallykos&utm_medium=referral&utm_content=thumbnalls-a:Below Story:) Drbox&utm_source =dallykos&utnunedium=referral&utm_content=thumbnails-a:Below Story:) FROM THE WEB (httpliwww.wayfalBcornigateway.php7refidatabwf88.NVOIO1k5iteadailykos) Don't Buy Furniture Until You See This Site Wart* (httplAvanvavayfair.com/gateway.php7refid=tabwf88.NV0101& sitedailykos) (htipafiviww.lowermybills.colMending/homerefinancefindetioan/sourceithimb-43259824618maida 6S624&pkeyladallykos&pkey2.http963A%2F%2Fcdnaaboolasyndication.tom%2Flibtrc962Fstatic962Rhumbnalls%2F9513b4bOddr699490d650b2 625k+MOnceln-A-1.1fetimetMongagetgaloun Congress Gives Homeowners Who Owe Less Than $300-625k A Once-In-A-Lifetime Mortgage Bailout Lowarmysills (https://www.lowermybillacomilendingthome-refinance/IndealoanNourceldalmb-43259824616moida65624/Lpkeyladallykos&pkey2=http963A962F%2Rdn.taboolasyndicatioracom%2FEbtrc962Fstatic%2Fthumbnails%2F9513b4bOddt699490d65002 625k+A•Once-In-A-LifedrneMortgagea8allour) (http/Avildlifeinsider.coaV45adorablebabyandanimalphotosRutm_source-taboclaSutm_medlurnacpautm campaign-24-+Bables•and+AnImals••Desktop•-•U5M-elMatekt&utni_trackinga35) 45 Utterly Adorable Baby and Animal Friendships [Gallery] Mars Insider (haaJAvildlifeinsider.com/45adorablebabyandanirnalphotosautrn source=taboolagutnunedium=cpc&urm_campaigna2a-iSablessand+Animals•+Desktop+-PuSa•AmBitelist&utm trackings35) Bittps://www.backgroundalerccom/pan tg_ref.tbbgaprernBacarnp IthEntertAnytName%2C.ViaBfr19.Seconds962C+Eirace•Yourself&keywordahrtp963A942PB2Fcdn.taboolasyndlcation,com%2Bibtr Enter Any Name, Wait 19 Seconds, Brace Yourself Background Alan Subscription IhnpsINnyw.backgnoundalerLcom/paR http://www.dailykos.com/story/2016/9/20/1572372/-Ad-Roundup-Democrat-Doug-Applegate-tied-Donald-Trump-b-Darrell-Issa sa 11/112016 Ad Rountp: Democrat Daig Applegate lies Duo Id Trump to Darrell Issa tgreNtbbgapremg&camp_IdvEnter+AnyiNameit2C+Walt 4194Seconds%2C+BraCerYourSelaikeywordchttp%3A%2F%2Rdn.tahoolasyndicadanicom%2Flibtr (http://hello.cultureamp.cornMew4ech-benchmark-7016 ? utm_sourceetaboolagutm_medium=cpcgutm_contentetb_us dsk&utm_campaign=blew7ed/Benchmark HR) How Top Tech Companies Measure Employee Happiness CuNure Arne (httratilhello.cultureamp.cominew-tech-benchmark-2016? utm_sourceetaboolagutm_mediumvcpautm_contentinb_us_dsligutm_campaign=NewiethEienchmark_HR) (http://vonv.yourdallyd ish.corn/gallerleststunning-celebriN-daughters/7 utrn_source-Taboola&utm_mediumcdallykos&uun_terminsturm_contentehttp9t3A%2S62Fcdn.taboolasyndication.co Flibtrc962Fstatic962FthumbnailvIC You Won't Believe Who Gene Wilder's Daughter Is Your Daily OW/ thttpliwww.yourdailyclish.corn/galleries/stunning-cekbrity-daughtersf? utm_source•Taboolagutm_mediumvdallykos&utm_tempiysgutm centent-http963A962F%2Fcdn.tahoolasyndication.com %2FIbtrc342Fstatic%2FthumbnallstN (http://gundrymd.cornkmd.php7adx801094Eutm_sourcectabootagutm_medium-referral) How To Fix Your Fatigue (Do This Every Day) Vital Reds Supplement thnp://gundrymd.comicmtLphpMd=1301094aunn sourceetaboolaSutm_mediumereferrall (hnpsitwww.hlueaprortcom/pages/perfeadlnneNcvosascontentpaid.taboola.perfeadinneaBlgutm_campaignverrectdInner7131gutm_medlumccontentpaiditutm_source=taboola) We Tried Blue Apron: Here's What Happened moo Apron (hapsThevrw.blueapron.comipages/perfectdinner7cvesrc-contentpaidlaboola.perfectdinnernitgutrn_campaign=perfectdinneaBlgutm_medlumecontent-paidgutm_sourceetaboola) 1 COMMENT Comment Settings COMMENTS ARE CLOSED ON THIS STORY. r I Recommend ( r )Reply (/user/Jeff Singer) Jeff Singer (!user/Jeff Singer) ( )Parent ( o )open/Close (J) Next Unread 110 Prey Unread More Sep 20 04:56:43 PM (icomments/1572372/635334910comment_63533491) Tip Jar Recommended 7 times 0 Kos Media, LC Daily Kos About Advertising Site content may be used for any purpose without explicit permission unless otherwise Front Page (/) Masthead Advenising Overview specified. 'Kos' and 'Daily Kos . are registered trademarks of Kos Media, ILL Privacy Policy Ihttol/www dallykns romforivaOil Elections (Mrp://dailykosicorn/MaelbePril/www.dailykos.com/specialtadvertising) linnthelecdonsidailykosiengiany State for advertisers Labor flittpINmw.dailykos.cor~anilkh3ntcastconVdaitykos.com ) thttplitaborslaibrkos.cornk riters Radio (htrp://www.dailykos.comOrizaboadabia) thttp://www.dailykos.comittogJdailykosradio ) media Inquiries Comics (http://dailykos.corMernittpltwww.dailykosicom/specialimedia) (http://comicsidalykoS.corrthes of the Road General Inquiries RS5 (/rules-of-the-road) (http://www.dallykos.comicontactus ) (httpitieeds.feedburner.exingtaileityfilegal Jobe Notice (/dmcacopyright-notice) (http://www.dallykos.coriVjobs ) Endorsements http://www.dallykos.com/story/2016/9/20/1572372/-Ad-Roundup-Demccrat-Doug-Applegale-tied-Donald-Trurnp-lo-Darrell-Issa 6/7 11/1/2016 Ad Rcunclup: Demccrat Doug Applegate ties Donald Trump to Darrell Issa (https://secure.actblue.comkontrilaute/page/dk20167 rercodentocneadandembox=show) Privacy (Mtp://www.dailykoscom/privacy) Merchandise Thins Ottpit/dailykos.merchtable.com/ http://www.dailykcs.com/story/2016/9/20/1572372/-Ad-Roundup-Democrat-DougApplegate-ticd-Donald-Trum p-to-Darrell-Issa 717 EXHIBIT 11/112016 Democratic group spencing $66OK cn anti-tssa, pro-Applegate ad- The San Diego Union-Tribune Democratic group spending $66oK on antiIssa, pro-Applegate ad Congressman Issa LIPP) $200 MILLION RICHER IN CONGRESS Screengrab from House Majority PAC commercial. (House Majority PAC) By Joshua Stewart OCTOBER 21, 2016, 9:50 AM A political action committee that supports Democrats running for Congress is spending $660,000 on an advertisement that attacks Rep. Darrell Issa, R-Vista, and boosts challenger Doug Applegate. The ad, "Country First," comes from the House Majority PAC, an organization that says it's dedicated to "holding Republicans accountable and helping Democrats win seats in the House." The new commercial, much like an ad from Applegate's own campaign, uses newspaper reports about Issa's real estate holdings to attack the incumbent. "Congressman lase% exposed for securing millions of taxpayer dollars to benefit his own business, making a rich man even richer," the new ad says. http://wwwsandegouniontribune.can/news/politics/sd-me-democratic-group-20161021-story.html 1/3 11/1/2016 Democratic grcup spencing $660K on anti-Issa, pro-Applegate ad - The San Diego Union-Tribune Issa's earmarks for projects near his properties questioned >> The commercial uses a quote from a New York Times article that Applegate's campaign has referenced in one of its own commercials. Issa's lawyers earlier said his challenger's ad was defamatory and they threatened to sue Applegate. Issa disputed the original Times article. 2011 Later, the new 30-second spot praises Applegate. "We need Doug Applegate, a retired Marine colonel with a combat tour in Iraq. He's tough enough to take on the mess in Washington," the narrator says, as pictures of Applegate in military camouflage and battle gear are displayed. It's the first time that any advertisement in the race promotes Applegate. Past commercials from the Democrat's own campaign and the party's congressional campaign committee have attacked Issa but have not introduced voters to the political newcomer. Issa's campaign said that the advertisement is an attempt by Rep. Nancy Pelosi to distract from temporary restraining orders Applegate's ex-wife obtained against him in 2002 and 2004 without taking about the Democrat's policies. Applegate's ex-wife and his children have all released statements criticizing Issa's campaign for using their family and the divorce in his campaign. "Funny how the even Nancy Pelosi's superPAC is too afraid to mention any of Doug Applegate's positions on the issues," Issa campaign spokesman Calvin Moore said. Applegate and Issa don't pull punches in new ads >> Issa has long contested the accuracy of the New York Times article cited, and after its publication issued a press release asking for 13 corrections in the report. The newspaper corrected three errors — including one caused by inaccurate information in Issa's foundation's IRS records and another from bad information from the county assessor — but the article's central premise that Issa personally benefited from his official actions in Congress remained. The article Issa disputes says, in part, that the congressman "has secured millions of dollars in Congressional earmarks for road work and public works projects that promise improved traffic and other benefits to the many commercial properties he owns here north of San Diego. In one case, more than $800,000 in earmarks he arranged will help widen a busy thoroughfare in front of a medical plaza he bought for $16.6 million." http://www.sandegouniontribune.con/news/politics/se-me-democratic-group-20161021-stcry.html 11/112016 Democratic group spening $660K on anti-155a, pro-Applegate ad- The San Diego Union-Trihune Issa sold the property in January 2012 at a $1.6 million loss and the earmarked funds were not spent on the road project. The House Majority PAC focuses on key campaigns around the country and had received $33.6 million in contributions this election cycle and spent $17.8 million by the end of September, election finance reports show. The new House Majority PAC commercial uses B-roll video that Applegate's campaign uploaded onto his YouTube channel, a move that's sometimes used by candidates to allow outside organizations to use footage of the candidate without violating regulations that prevent them from coordinating with outside groups. In a news release House Majority PAC said the ad will begin airing on Friday in the San Diego media market. The 49th district includes northern portions of San Diego County as well as southern parts of coastal Orange County. Incumbents have big financial lead in House races >> This is the second organization to provide advertising support for Applegate and follows $540,000 in spending from the Democratic Congressional Campaign Committee. Issa's campaign has accused Applegate of "hypocrisy" for saying he wants to get big money out of politics but then benefits from a commercial by the DCCC. Issa, a 16 year incumbent and the richest member of Congress, had 83.05 million in his campaign account as of the end of September, more than 18 times as much as Applegate, a first-time candidate. Twitter: @jptstewart joshua.stewart@sduniontribune.com (619) 293-1841 Copyright 2016, The San Diego Union-Tribune This article is related to: Darrell E Issa, Democratic Party, U.S. Congress, Nancy Pelosi, Republican Party, Vista http://www.sandegcuniontribunacom/news/politics/sd-me-democratic-group-20161021-stay.html 3/3 EXHIBITF C. J. Randy Evans Partner Randy.evans@dentons.com D +1 202 496 7500 Dentons US LIP 1900 K Skeet Suite 100 Washington, DC 20006 United States Salans FMC SNR Denton Mckenna Long .dentons.com September 29, 2016 Sent Via Certified Mail/Return Receipt Requested: Sent Via First Class U.S. Mail Sent Via E-mail To: Campaign(thapplegateforconaress.com Colonel Doug Applegate 977A Lomas Santa Fe Drive Solana Beach, CA 92075 Colonel Doug Applegate for Congress Attn: RobertDempsey, Campaign Manager 977A Lomas Santa Fe Drive Solana Beach, CA 92075 Dear Col. Applegate and Mr. Dempsey: Dentons has been retained to seek all appropriate and available relief for a false and misleading advertisement that Colonel Doug Applegate for Congress ("the Carnpaign") has sponsored, and Colonel Applegate himself has personally approved, attacking Congressman Darrell Issa, a Candidate for U.S. House of Representatives for California!s 49th Congressional District ("the Advertisement"). To the extent you have counsel, please forward this correspondence to them, as additional action is imminent. As detailed more fully below, the Advertisement contains false information deliberately and knowingly intended to mislead California voters and defame Congressman Issa's reputation. As a knowing publication of false information, it is actionable even under the standards for public figures. While certainly different, there are boundaries even for public figures, and the knowing publication of false information is one of them. The Advertisement crosses even that boundary. Accordingly, DEMAND is hereby made that you, individually and collectively, (i) immediately cease and desist further publication of the Advertisement; (ii) instruct any media, including without limitation broadcast and/or cable television stations, currently publishing the Advertisement to immediately and permanently stop; (iii) remove the Advertisement from the Campaign website and any affiliated (directly or indirectly) websites; and (iv) issue a public apology to Congressman lssa for having sponsored, approved, and used the Advertisement despite the falsehoods it contains. As is obvious from its contents, the Advertisement takes serious liberties with the contents of an article attributed to The New York Times in particular, about nine seconds into the spot, the Advertisement depicts a copy of The New York Times dated August 14, 2011, with the quote: ' ,Rep. Issa gamed the system to line his own pockets. Steering millions in taxpayer money to help properties he owns." J. Randy Evans Partner Randy.evans@dentons.com D +1202 496 7500 Page I 2 neatens USIA, 1900 )(Street Suite 100 Washington, DC 20006 United States 1k02 Salons FMC SNR Denton McKenna Long dentons.com Viewers are clearly led to believe that the statement with quotation marks is a quote from an article in The New York Times. Yet, as a simple review of the articles reflects, the words in quotation marks do not appear anywhete in the referenced article (or any other news article, for that matter). As a result The Advertisement inappropriately misleads California voters by falsely attributing quotes to an article in which such quotes do not exist. By approving and sponsoring the Advertisement, Colonel Applegate and the Campaign have sanctioned a lie — namely, the use of invented quotes improperly attributed to The New York Times. Colonel Applegate's and the Campaign's actions in this regard are not only deceptive and wrongfully damaging to Congressman Issa's reputation, but also threaten to compromise the integrity of the election to represent the citizens of California's 49th Congressional District. This will remain the case as long as the Advertisement continues to air. Even leaving aside the false attribution issue, and accounting for rhetoric and paraphrase, the Advertisement doubles down on the aforementioned lie by failing to account for extensive corrections The New York Times was forced to issue in the aftermath of the original August 14, 2011 report. Indeed, the newspaper's editor was forced to issue very public corrections on four separate occasions since the article was first published, which completely and wholly debunk the central message contained therein. The corrections issued by The New York Times regarding its August 14, 2011 article, were as follows: • The article falsely stated, e.g., that Congressman Ism "split a holding company into separate multibillion dollar businesses." On August 16, 2011, The New York Times printed a correction noting that the use of the term "multibillion" was in error. • The article falsely stated, e.g., that Congressman Issa's family foundation earned a return of nearly 1,900 percent in connection with one 2008 stock sale. The then Managing Editor (and current Executive Editor) of The New York Times, Dean Baguet, admitted in writing that this information was not correct. • The article falsely stated, e.g., that the value of a medical complex owned and subsequently sold by Congressman Issa's company rose 60 percent after Congressman Issa secured federal funding to widen a road alongside the plaza. On August 26, 2011, The New York Times printed a correction noting that at the time of' the sale, "the value of the property remained essentially unchanged [from its purchase price] and did not rise 60 percent after Mr. Issa secured federal funding to widen a road alongside the plaza." There are numerous additional falsehoods contained in the August 14, 2011 article referenced in the Advertisement. But at a tninimum, it is undisputed that The New York Times itself was forced to issue several corrections admitting that the article contained false information, as identified above. Had Colonel Applegate or the Campaign conducted even a rudimentary internet search, the falsity of the article referred to in the Advertisement would have become instantly clear. In any event, by virtue J. Randy Evans Dentons US LLP 1900 K Street Suite 100 Washington, DC 20006 United States Partner Randy.evans@dentons.com D +1 202 496 7500 tett Selene FMC SNR Denton McKenna Long dentons.com Page 3 of your receipt of this letter, both Colonel Applegate and the Campaign now have actual notice of the inaccuracies contained in the article as well as the true facts. Under these circumstances, any further publication of the Advertisement -- in the face of actual knowledge as to the falsity of the statements referenced in the article that forms the basis for the same -would constitute "actual malice" as that term is used in the landmark case of New York Times Co v. Sullivan, 376 U.S. 254 (1964) and subjects Colonel Applegate and the Campaign to liability for defamation. In sum, as outlined above, the Advertisement plainly conveys messages that are false and defamatory, as well as inaccurately portrays Congressman Issa as a deceitful person who is corrupt in his role as a member of the U.S. House of Representatives. The false and defamatory statements contained in the Advertisement adversely affect both Congressman Issa's reputation and his professional life as a Congressman, and he has been damaged by their publication and will continue to be damaged by their publication if the Advertisement continues to run. For these reasons, formal notice and demand has been made that Colonel Applegate and the Campaign (i) immediately cease and desist further publication of the Advertisement; (ii) instruct any media, including without limitation broadcast and/or cable television stations, currently publishing the Advertisement to immediately and permanently stop; (iii) remove the Advertisement from the Campaign website and any affiliated (directly or indirectly) vvebsites; and (iv) issue a public apology to Congressman Issa for having sponsored, approved, and used the Advertisement despite the falsehoods it contains. In the event that Colonel Applegate and the Campaign refuse to do so, Congressman Issa intends to vigorously pursue all legal rights and remedies available to him. In this regard, please see attached a copy of a draft defamation complaint relating to the actions of Colonel Applegate and the Campaign as respects the Advertisement and the resulting harm to Congressman Issa. Thank you for your prompt attention to this matter. I will anticipate your immediate response. Sin etaly Cfrt 2..v eJ. andy Evans Attorney, Darrell Issa for Congress .112E/mpk Enclosure cc; Congressman Darrell lssa EXHIBIT REMCHO, JOHANSEN & PURCELL,m2 ATTORNEYS AT LAW 1901 HARRISON STREET, SUITE 1550 OAKLAND, CA 94612 PHONE: (510) 346-6200 FAX: (510) 346-6201 EMAIL: aw(grjp.com WEBSITE: www.rjp.com Robin B. Johansen James C. Harrison Thomas A. Willis Karen Getman Margaret R. Prinzing Andrew Harris Werbrock Harry A. Berezin SACRAMENTO PHONE: (916)264-1818 Joseph Remeho (1944-2003) Kathleen J. Purcell oteo October 3, 2016 VIA EMAIL J. Randy Evans Dentons US LLP 1900 K Street, Suite 100 Washington, DC 20006 Re: Doug Applegate for Congress Dear Mr. Evans: As counsel to Colonel Doug Applegate and Doug Applegate for Congress, I write in response to your letter of September 29, 2016, and the attached draft complaint. Please direct all further correspondence regarding this matter to me. Your client, who with a net worth of as much as $768 million is already one of the richest members of Congress,' seeks $10,000,000 in damages for an advertisement that you claim "inaccurately portrays Congressman Issa as a deceitful person who is corrupt in his role as a member of the U.S. House of Representatives." In fact, a review of the advertisement and its supporting documentation shows that it is carefully documented and entirely accurate. Thus, your letter and draft complaint can only be seen as a misguided attempt by Mr. Issa to bully and intimidate my clients into silence, because Mr. Issa does not like the content of the advertisement. Your first objection is that the advertisement contains "the following statement in quotation marks: 'Rep. Issa gamed the system to line his own pockets. Steering millions into taxpayer money to help companies he owns!" The advertisement then cites to an article in The 1 Jake Sherman, Issa, one of the richest members of Congress, worth up to $768M, Politico (July 13, 2015); Sarah D. Wire, Meet the richest member of Congress: California's lssa earned it as a car alarm mogul, L.A. Times (Nov. 3, 2015). J. Randy Evans October 3, 2016 Page 2 New York Times titled "A Businessman in Congress Helps His District and Himself." 2 Because this statement does not appear verbatim in the article, Mr. Issa contends that the advertisement is misleading. As it turns out, the advertisement does not print the above-described statement in quotation marks, as the letter and draft complaint falsely allege. The only quotation marks used in the entire advertisement are at the beginning, where the advertisement faithfully quotes a press statement issued by Mr. Issa's campaign in which Mr. Issa said, "Trump is the obvious choice" for President. 3 Though the advertisement does not quote the newspaper article — nor does it purport to do so — it accurately describes the article's claim that, as a member of Congress, Issa took official actions that inured to his personal pecuniary benefit Among other things, the article says about Mr. Issa: As his private wealth and public power have grown, so too has the overlap between his private and business lives, with at least some of the congressman's government actions helping to make a rich man even richer and raising the potential for conflicts. He has secured millions of dollars in Congressional earmarks for road work and public works projects that promise improved traffic and other benefits to the many commercial properties he owns here north of San Diego. The article then describes a number of cases in which Mr. Issa took official actions on matters in which he had a financial interest, including instances where Mr. Issa used his position in Congress to promote and defend businesses in which he had a financial stake. For example, when the Securities and Exchange Commission brought a lawsuit against Goldman Sachs, Mr. Issa opened an investigation into the lawsuit. Just weeks before this, he bought "another large batch of shares in one of the firm's high-yield mutual funds.... By the end of the year, his stake in Goldman's fund was worth as much as $25 million." In another example, at a House hearing in 2008, Mr. Issa praised a merger between XM and Sirius, a company with which one 2 Eric Lichtblau, A Businessman in Congress Helps His District and Himself N.Y. Times (Aug. 14, 2011), available at http://www.nytimes.com/2011/08/15/us/politics/15issa.html?_r=1. 3 Press Release: Donald Trump is the Obvious Choice for Every American, Issa for Congress (May 6, 2016), available at https://www.darrellissa.com/2016/05/06/donald-trump-is-theobvious-choice-for-every-americant J. Randy Evans October 3, 2016 Page 3 of Mr. Issa's companies had a "lucrative partnership." Thus, the advertisement's characterization of The New York Times article is completely accurate. Your second objection appears to be that, because The New York Times issued three corrections to the article, the entire article must be disregarded. You identify three specific corrections that were made, and refer to "numerous additional falsehoods," which you fail to , identify. The New York Times did issue corrections on three minor points — but none of the three are material to the content of the advertisement. And, rather than impeaching the accuracy of the entire article, the corrections demonstrate that the vast remainder of the article's claims have withstood rigorous scrutiny and fact-checking. In any case, the advertisement need not rely alone on The New York Times article for support; its claims are supported by a number of other press reports and documents in the public record, including the financial disclosure forms that Mr. Issa signed under penalty of false statement. 4 It is understandable why Mr. Issa, as a 16-year incumbent who is now in danger of losing his lucrative position, would prefer that the advertisement not air. But he has no right to censor its truthful claims, which are amply supported by the public record. Should your client decide to pursue legal action, please send the complaint to my attention. Before he does so, he should bear in mind that my clients, too, will vigorously pursue all legal rights and remedies available to them. 5 Andrew Harris Werbrock AW:PS (00289260-3) 4 5 See, e.g., Jeff McDonald, Issa's earmarks questioned, The San Diego Tribune (Apr. 2, 2011). See Cal. Code Civ. Proc. § 425.16 (anti-SLAPP statute); see, e.g., Reedy. Gallagher, 204 Cal. Rptr. 3d 178 (Cal. Ct. App. 2016); see also Cal. Code Civ. Proc. § 128.5. EXHIBIT C*,:t-DENTONSZ J. Randy Evans Partner Randy.evans@dentons.coM D +12024967188 United Dentons US LLP 1500 K Street, NW Washington, DC 20006 States tlit Sala ns FPAC SNR Denton McKenna Long dentons.com October 7, 2016 BY E-MAIL Andrew Harris Werbrock Remcho, Johansen & Purcell LLP 1901 Harrison Street, Suite 1550 Oakland, CA 94612 Dear Mr. Werbrock: In the course of responding to your letter dated October 3, 2016, in which you attempted to defend the veracity of what most now easily recognize as a false and misleading advertisement on September 20, 2016 (the "9120 Advertisement'), it became apparent that your clients have moved on with a 'pattern and practice' of publishing false and misleading information about Congressman Issa. Accordingly, this letter both responds to your statements conceming the original false and defamatory advertisement sponsored and approved by your clients as well as addresses the latest false and defamatory advertisement sponsored and approved by your clients on or about October 4, 2016 (the "10/4 Advertisement"). As you are aware, pattern and practice wrongdoing gives rise to a whole litany of additional remedies under Califomia law. 1. The 9/20 Advertisement is and remains indefensible. No serious dispute exists that the 9/20 Advertisement purports to cite a discredited article published in The New York Times on August 14, 2011. Indeed, you concede as much in your October 3 letter. For the record, the version of the 9/20 Advertisement currently accessible on the Applegate for Congress website prominently features the masthead from The New York Times, beginning around the nine second mark, and specifically identifies the date of the referenced article (i.e., August 14, 2011) in the same frame as reference points for the narration and content of the advertisementi Notably, instead of including the actual headline of the referenced August 14, 2011 article, the 9/20 Advertisement visually depicts a fake headline consisting of words that do not appear anywhere in the article: "Rep. Issa Gamed the system to line his own pockets." If that were not enough, the advertisement also includes a fake sub-headline, which likewise does not appear in the actual article, stating: "Rep. Issa has secured millions of dollars in Congress earmarks for roadwork to the many There is no question that members of the public understand that the 9/20 Advertisement purports to rely on the referenced article. In discussing the article on The Daily Kos website, for example, a reporter notes as follows: "After playing a clip of [Donald] Trump declaring, 'I'm really rich, Nobody knows the system better than me,' a narrator explains that Issa likewise 'gamed the system to line his own pockets steering millions in taxpayer money to help properties he owned,' relying on a very negative 2011 New York Times piece [a link to which is included]." See http://www.dailykos.comistory/2016/9/30/1576312/Wow-Darrell-Issa-threatens-to-sue-Democratic-opponent-over-ad-and-has-lawyers-beg-for-an-apology I Andrew Harris Werbrack October 6, 2016 Page 2 tA Salons FMC SNR Denton McKenna Lang dentoncom properties he owns." This is followed by a voiceover and further visual depiction of words to the effect that Congressman lssa has steered "millions in taxpayer money to help properties he owns" — again, words that do not appear in the referenced article. More significantly, these are words that are not true. Your concession that the 9/20 Advertisement"does not quote the newspaper article" (10/13/16 Letter at 2) is accurate, but the content of the advertisement indicates otherwise - a knowingly false representation. As your clients know, neither the words visually depicted on frames containing The New York Times masthead and the date of the article in question nor the words in the accompanying voiceover appear anywhere in the article. Therein, of course, lies the problem — the 9/20 Advertisement falsely and misleadingly represents that these actual words appear in the article, when it is obvious that they do not. This is actionable defamation for which your clients are liable. In your October 3 letter, you go on to say that the 9/20 Advertisement "accurately describes the article's claim that, as a member of Congress, lssa took official actions that inured to his personal pecuniary benefit" 10/3/16 letter at 2. Of course, nowhere in the 9/20 Advertisement is there any reference to the multiple corrections issued by The New York Times regarding the article's specious "claim" in this regard. Nor is it fair to suggest, as you do, that the corrections were immaterial to the article's supposedly central "claim" — far from it. Thus, as alleged in paragraph 16 of the draft complaint: The Article ... falsely stated that Congressman Issa's family foundation earned a retum of nearly 1,900 percent in connection with one 2008 stock sale. The then Managing Editor (and current Executive Editor) of The New York Times, Dean Baguet, later admitted in writing that this information was not correct. Indeed, Mr. Baquet's admission 2 contradicts the claim that Congressman Issa "took official actions that inured to his personal pecuniary benefit," as well as the false assertion contained in the advertisement that Congressman Issa "gamed the system to line his own pockets ...." Similarly, as alleged in paragraph 17 of the draft complaint: The Article ... falsely stated that the value of a medical complex owned and subsequently sold by Congressman lssa's company rose 60 percent after Congressman lssa secured federal funding to widen a road alongside the plaza. On August 26, 2011, The New York Times printed a correction noting that at the time of the sale, "the value of the property remained essentially unchanged [from its purchase price] and did not rise 60 percent after Mr. lase secured federal funding to widen a road alongside the plaza. This particular correction by the New York Times itself demonstrates the utter falsity of the article's claim that Congressman Issa "took official actions that inured to his personal pecuniary benefit" — indeed, the "official action" described here resulted in no pecuniary benefit to Congressman Issa whatsoever — as well as the false assertion contained in the advertisement that Congressman lssa "gamed the system to line his own pockets ...." Congressman lssa maintains a copy of Mr. Baquets written admission concerning this matter, which will be part of the evidence submitted in support of the complaint 2 Andrew Harris Werbrock October 6, 2016 Page 3 ±Frg Salans FMC SNR Denton McKenna Long dentons.com As noted in the draft complaint, the article is replete with additional falsehoods. This can hardly be surprising, given how difficult it Is to obtain a printed correction from a major media organization, let alone multiple printed corrections and admissions of falsity relating to the same article. If your clients refuse to take the steps outlined in my September 29 letter (which are quite reasonable under the circumstances), and if it becomes necessary to proceed with litigation, Congressman Issa will produce evidence of the additional falsehoods in accordance with applicable civil discovery rules. But the above already makes clear that your clients have made false and misleading statements about Congressman lssa, in reliance on a false and misleading article, with the clear intent to harm his reputation. These actions violate the law. 2. Your clients' pattern and practice of continued misconduct and the 10/4 Advertisement After your clients were placed on direct notice of the false and defamatory nature of the 9/20 Advertisement, your clients decided to 'double down' their pattern of conduct with a second false and defamatory advertisement -- i.e., the 10/4 Advertisement. This second false and defamatory advertisement uses images of the terrorist attacks of 9/11 and a doctored quote to wage a patently dishonest charge that Congressman lssa has opposed supporting the victims, first responders, and heroes of 9/11. Nothing could be further from the truth, as outlined in the new allegations contained in the revised draft complaint attached to this letter. In particular: (i) Congressman Issa never said the terrorist attack on 9/11 was "simply a plane crash:" (fi) the Bill mentioned in the advertisement was opposed initially not only by Congressman Issa, but by a bipartisan group of 160 members of the House of Representatives: and (iii) Congressman Issa voted to support those directly affected by 9/11 on at least nine separate occasions, including last December when he voted in favor of reauthorizing the 9/11 First Responders Bill until 2090. -- the same legislation referenced in the 10/4 Advertisement This is not Congressman Issa's first campaign. Political advertisements are a fact of political life, and there is certainly room for productive debate on the issues to inform the voting public. Knowing publication of lies and grossly misleading statements with the intent to harm, however, has no place in a political discourse. DEMAND is hereby made for your clients to CEASE AND DESIST their pattern and practice of publishing knowingly false and misleading representations with the specific intent to injure. Such actions warrant not just damages, but also punitive damages. This will confirm your agreement to accept service of the attached complaint once filed. Please advise your clients accordingly. /Randy Evans Partner 101660621W-I 10106/16 EXHIBITI Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacked i... Page 1 of 18 Essential Politics October archive OCT. 31, 2016, 6:15 P.M. Welcome to the October archive of Essential Politics, our daily feed on California politics and government news. For the latest feed, go here. Be sure to follow us on Twitter for more, or subscribe to our free daily newsletter and the California Politics Podcast OCT. 4, 2016, 12:43 P.M. Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacked in opponent's ad 1 Phil VVillon f Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacked i... Page 2 of 18 The Democrat challenging Republican Rep. Darrell Issa on Tuesday released a new television ad slamming the Vista congressman for his controversial comment about giving more financial aid to workers who responded to the Sept. 11 terrorist attack on New York's World Trade Center. The ad, aired by congressional candidate and retired Marine Col. Douglas Applegate, was narrated by Jaime Hazan, a former Rockland County emergency medical technician who suffered a permanent disability after voluntarily responding to Ground Zero. "The tea party Republicans actually voted to deny healthcare to 9/11 first responders," Hazan said in the ad. "Issa said he'd done enough for something that was 'simply a plane crash.'" Hazan also campaigned against a New Jersey Republican congressman on the same issue earlier this month, and fought for more than a decade to have Congress reauthorize the compensation fund, which it did in 2015. Issa's campaign spokesman, Calvin Moore, accused the Applegate campaign of using "doctored quotes" to mislead voters. "It's shameful Doug Applegate would exploit the terrorist attacks of 9/11 to wage a dishonest charge for his own political benefit," Moore said in a statement Tuesday. The Issa campaign said that the congressman never said the phrase "simply a plane crash" "Congressman Issa never said the terrorist attack on 9/11 was simply a plane crash. That quote is fabricated to smear his reputation, when in fact he has been a leading voice for first responders and those affected by the terrorist attack on 9/11, having voted in Congress to support those directly affected by 9/11 on at least 8 separate occasions," said Dave Gilliard, a campaign consultant for Issa. Here is an expanded version of the comments Issa made during the April 1, 2008 congressional hearing,on whether to reauthorize funding for victims of the New York attack. He was questioning the need to provide additional federal aid and the precedent it might set for future attacks: "We voted in the wake of 9/11 huge amounts of money to the city and the state of New York We have spent, arguably, between $142 trillion related to the post-9/11, if you include going to Afghanistan and so on. Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacked i... Page 3 of 18 I have to ask why damages from afire that had no dirty bomb in it, it had no chemical munitions in it, it simply was an aircraft, residue of two aircraft, and residue of materials used to build this building, why the firefighters who went there and everyone in the City of New York needs to come to the federal government for the dollars vs. quite frankly this being primarily a state consideration. You know, it's very simple: I can't vote for additional money for New York if I can't see why it would be appropriate to do this every single time a similar situation happens, which quite frankly includes any urban terrorist. It doesn't have to be somebody from Al Qaeda. It can be somebody who decides that they don't like animal testing at one of our pharmaceutical companies." New York lawmakers were quick in criticize Issa's remarks in the New York press. Applegate, a lawyer from San Clemente, finished behind Issa by just 5.3 percentage points in the June primary, making it the closest a challenger has been to Issa since he started serving in Congress in 2003. The two will face off again in the race for California's 49th congressional district in November. Issa also released a television ad attacking Applegate in late September, accusing him of passing House Minority Leader Nancy Pelosi's "litmus test" by supporting tax increases and a "government takeover of healthcare." UPDATED at 4:23 p.m. -- This story has been updated to include the Issa campaign challenging the accuracy of the ad. Litmus Test Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacked L.. Page 4 of 18 Latest updates OCT. 31, 2016, 6:15 P.M. It's Halloween night at the governor's mansion Sutter Brown @SutterBrown Trick or treat! 9:08 PM - 31 Oct 2016 163 424 Follow Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacked i... Page 5 of 18 OCT. 31, 2016, 3:50 P.M. Former L.A. Mayor Antonio Villaraigosa endorses marijuana legalization initiative Patrick McGreevy Former Los Angeles Mayor Antonio Villaraigosa on Monday endorsed a marijuana legalization initiative. (Irian Khan / Los Angeles Times) Former Los Angeles Mayor Antonio Villaraigosa on Monday became the latest highprofile politician to endorse an initiative on next week's ballot that would legalize the recreational use of marijuana in California. Villaraigosa is considering whether to run for governor in 2018 amid a field that already includes Lt. Gov. Gavin Newsom, a leading proponent of Proposition 64. "I took my time on this measure because I wanted to make sure it included protections for children and public safety," Villaraigosa said in a statement. "In Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacked i... Page 6 of 18 evaluating the measure in its entirety, I am convinced there are enough safeguards to make it a workable proposition." The Proposition 64 campaign welcomed Villaraigosa's endorsement at a time when one recent poll indicated slightly fewer than half of Latino voters support the measure. "We're glad to have it," said Jason Kinney, a spokesman for the campaign. OCT. 31, 2016, 3:44 P.M. Every member of California's state Senate signs a letter asking Congress to stop the National Guard paybacks John Myers O (Paul Sakuma I Associated Press) In a rare show of unanimity, every member of the California Senate signed a letter on Monday asking Congress to permanently waive any repayment of bonuses offered to the state's National Guard members for Iraq war reenlistment. f Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacked i... Page 7 of 18 Most of the soldiers that accepted the money "acted on good faith, relying on bad information from recruiters and others in positions of authority," said the letter signed by all 39 sitting members of the state Senate. The letter comes more than a week after a Los Angeles Times investigation into efforts to require nearly io,000 of the state's National Guard soldiers to repay the money. "The federal clawback of the funds is devastating the families of current and former Guard members," said the letter sent to House Speaker Paul D. Ryan (R-Wis.), Senate Majority Leader Mitch McConnell (R-Ky.), House Minority Leader Nancy Pelosi (D-Calif.) and Senate Minority Leader Harry Reid (D-Nev). "The recovery effort ignores that the primary fault lies with the recruiting system's failure to ensure eligibility at the time of the awards," wrote the state senators. Meanwhile, the state's congressional delegation continues to insist on action from the Department of Defense. Following a conference call with Defense officials last week, Rep. Darrell Issa (R-Vista) sent his own letter on Monday afternoon, demanding that all collected funds be returned to state Guard members immediately. Times staff writer Sarah D. Wire contributed to this report OCT. 31, 2016,1:57 P.M. REPORTING FROM WASHINGTON Conservative group spends $3.5 million on Central Valley race once considered safe Sarah D. Wire We must stop mitheei Eggnian (cA-10 Iv) Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacked i... Page 8 of 18 The Congressional Leadership Fund is pouring another $1.5 million into the race between Rep. Jeff Denham and Democrat farmer Michael Eggman. The group, which is endorsed by House Republican leaders, and works with the American Action Network, has now spent $3.5 million in the race. The race was initially viewed as an easy win for Denham (R-Turlock), but has become increasingly uncertain in recent weeks. The district is being closely watched as an indicator of how Republican presidential nominee Donald Trump might affect down-ballot candidates. Democrats have spent more than $6 million in the district. The Congressional Leadership Fund and American Action Network have spent $45 million in 32 districts nationwide so far and have aired ads in other California House races, including in the nearby 21st District race between Rep. David Valadao CR-Hanford) and attorney Emilio Huerta and the 7th District race between Rep. Ami Bera (D-Elk Grove) and Sacramento County Sheriff Scott Jones. The group's newest ad in the loth District race begins running on television Tuesday. It calls Eggman, an almond and bee farmer, an "extreme liberal" and a "rubber stamp" for House Minority Leader Nancy Pelosi (D-San Francisco) because he supports the Affordable Care Act. It previously ran an ad against Eggman that used news footage from the 2015 San Bernardino terrorist attack. ' FOR THE RECORD Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacked i... Page 9 of 18 2:14 p.m.: An earlier version of this article incorrectly referred to the Congressional Leadership Fund as the Conservative Leadership Find. OCT. 31, 2016, 1:02 P.M. The Rev. Al Sharpton and civil rights leaders hold rally in support of Proposition 61 Christine Mai-Duc o tr f The Rev. Al Sharpton and other civil rights leaders gathered at a rally Monday morning to support Proposition 61, the ballot measure that seeks to lower the price state agencies pay for prescription drugs. Sharpton appeared alongside black community leaders, including Marc Mona!, former New Orleans mayor and head of the National Urban League, and Kevin Sauls, pastor of a South L.A. church. Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacke... Page 10 of 18 "This issue is very simple," Sharpton said to a crowd of about 40 supporters. "It's about the right of people to afford what they need, and they need to have accessibility that is affordable with prescription drugs." He likened the issue of prescription drug affordability to a civil right, and recycled the well-known "Yes We Can" slogan from President Obama's 2008 election to urge voters to pass Proposition 61. Sharpton's appearance came a day after he and Modal stumped for the measure at seven different churches in South Los Angeles and the Bay Area. "The significance of bringing in people of color is that we are the ones who disproportionately are impacted by the prices and impacted by the need for healthcare," Sharpton said in an interview afterward. "I think it's a civil right for people to be able to afford healthcare in the wealthiest nation in the world." "SrAtkaitta. , ttw- n Christine Mai-Duc @cmaiduc 'Follow Appearance of Sharpton, New Orleans mayor Marc Morial and LA pastor follows Sharpton's visits to two South LA churches Sunday for Yes on 61 1:46 PM -31 Oct 2016 In a statement, No on Proposition 61 spokeswoman Kathy Fairbanks pointed to support for the opposition campaign from groups like the California NAACP, and the California League of Latin American Citizens. httn://www.latimes.com/nolitics/essenti Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacke... Page 11 of 18 "Higher drug prices resulting from Prop. 6i. will decrease access to care," Fairbanks said. "That's a policy step in the wrong direction." The Rev. Al Sharpton at a Yes on Proposition 61 rally in downtown Los Angeles. (Christine Mai-Duc / Los Angeles Times) Oct. 31, 2016, 12:52 P.M. President Mama endorses a fourth legislative candidate in California o v f In Christine Mai-Duc @cmaiduc Follow .@BarackObama adds a CA State Senate candidate to his list of down-ticket endorsements: Josh Newman, a Democrat running against @AsmL2Chang pic.twitter.comNSaJ2m1mxq 3:14 PM -31 Oct 2016 http://www.latimes.com/nolitics/essential/la-nol-sac-essential-obl itinc-lindates-nd-n Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacke... Page 12 of 18 Last week, Obama announced his endorsement of three Democrats running for the state Assembly. OCT. 31, 2016,12:02 P.M. U.S. Senate candidate Loretta Sanchez releases tax returns and is ripped by her rival's campaign Phil Willon C 0 tr U.S. Senate candidate Loretta Sanchez casts her ballot at Orange High School in the June primary election. (Mark Boster/ Los Angeles Times) U.S. Senate candidate Loretta Sanchez earned a total of $156,674 in 2015 and paid $36,306 in federal and state income taxes, according to the Orange County congresswoman's 2015 tax returns. Sanchez declined to release the tax returns of her husband, attorney John "Jack" Einwechter, saying they filed separate returns and that she felt no obligation to disclose his tax information. Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacke... Page 13 of 18 "He has no financial conflict," Sanchez said. "My husband is a lawyer. He has four or five clients. They have nothing to do with anything." Atty. Gen. Kamala Harris in mid-October released the joint 2015 tax return she filed with her husband, Los Angeles attorney Douglas Emhoff. The couple reported earning approximately $1.17 million that year and paid just under $450,000 in federal and state income taxes. The Harris campaign was quick to criticize Sanchez for not releasing her husband's return. "Like nearly every aspect of her campaign, Loretta Sanchez's failure to honestly and completely release her taxes is a joke. And it's not funny," said Harris political consultant Sean Clegg. "Every serious candidate for U.S. Senate, including Barbara Boxer and Dianne Feinstein, has fully disclosed spousal tax returns." The congresswoman said her husband filed separately in 2015 because he was still sorting out some financial matters with his ex-wife. Sanchez added that by filing individually she pays more in taxes because she cannot claim the marriage deduction. "The Harris campaign can ask and whine for anything and everything they want. That doesn't mean we need to adhere to their demands," said Sanchez political advisor Luis Vizcaino. Both Sanchez and Harris have a net worth in the millions, according to financial disclosure reports. Here are some highlights from their returns: • Sanchez claimed $4,394 in charitable contributions, about 3% of her income, including donations to the California Breast Cancer Research Fund and the California Peace Officers Memorial Fund. • Harris and her husband claimed $32,947 in charitable contributions, about 3% of their income, including donations to USC and the United Nations Children's Fund. • Sanchez collected $43,200 in rent from a home she owns in Palos Verdes, and had $41,000 in expenses for the home. • As California attorney general, Harris makes $158,775 annually. As a congresswoman, Sanchez is paid an annual salary of $174,000. htto://www.latimes.com/nolitics/essenti ) Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacke... Page 14 of 18 OCT. 31, 2016, 11:15 A.M. Voters are being asked whether they want to cast more votes in future elections on big public works projects John Myers 0S Voters casting a ballot for Proposition 53 on election day are, in effect, choosing more voting on more propositions in future elections. The ballot measure, bankrolled by a wealthy Stockton agribusiness owner, seeks to force voter approval of a particular type of borrowing for large (Russel A. Daniels / Associated Press) public works projects. Its most likely impact, in the near future, would be ballot measures on a landmark water project and on California's high-speed rail effort. The proposition's backer, Dean Cortopassi, argues it's all about more transparency when it comes to government debt. His critics suggest there's more to it than that. READ MORE > OCT. 31, 2016.10:13 A.M. A weekend of bus tours and political jabs in California's U.S. Senate race f Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacke... Page 15 of 18 An overflow crowd watches through a window during a rally with Kamala Harris at the Democratic Party's headquarters in Santa Clarita. (Brian van der Brug / Los Angeles Times) U.S. Senate candidate and California Atty. Gen. ICaniala Harris launched a io-day campaign bus tour in Santa Clarita on Sunday, holding a rally with down-ballot Democrats who hope she'll bring out the party faithful in the November election. The rally, which was jam-packed inside the tiny, local Democrat Party headquarters, will be the first of many Harris will hold this week in congressional districts where Democrats threaten to nab seats from Republican incumbents. Harris' rival in the race, Democratic Rep. Loretta Sanchez of Orange, was campaigning in the Inland Empire over the weekend, touting her record on water issues and taking a few swipes at Harris. Sanchez said she's the only candidate in the race talking about the issues and that all she's seen from Harris are "commercials on TV." READ MORE > Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacke... Page 16 of 18 Mayor Robertson Follow @MayorDRobertson Offieal ribbon cut of the new Groundwater Wellhead Treatment System at @WestValleyWater w/ @LorettaSanchez @RepPeteAguilar #RIALTOPRIDE 9:14 AM -30 Oct 2016 Rialto, CA, United States 2 OCT. 31, 2016, 9:50 A.M. Conservative-leaning Hispanic Leadership Fund backs Republicans in Central Valley congressional races v Sarah D. Wire @sarandwire Follow Conservative @HispLeadFund endorses ©RepDavidValadao & @RepJeffDenham bids. Both are in tough races in heavily Latino districts. #CA21 #CA10 12:48 PM -31 Oct 2016 2 http.//www.latimes.com/nolitics/essential/la-uol-sac-essential-politics-updates-ad-attacks-d.. . 11/1/2016 Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacke... Page 17 of 18 LOAD OLDER UPDATES (197) Essential Politics Sign up for the best from our political teams delivered daily. Enter your email Sign me up Privacy policy du More from polities Countdown to Election Day 6 17 49 16 Days Hours Minutes Seconds http://www.latimcs.com/politics/essential/la-nol-sac-essential-nolitics-undates-ad-attacks-ci Darrell Issa's comment about expanding federal aid for Sept. 11 rescue workers attacke... Page 18 of 18 The 10 biggest issues we're tracking in the California Legislature les, 1 want to register with a 4American independent Party Ca Democratic Party heed, liReg h pard ° he 69 EORGE W DEP anaindsfla toho ronM ntArn ete tni har t: ::::" eri, 6, freedom Alas Molnar Ne PARI'Y fOsert his strength ond nation to d ond maintained STAND UP arakmazt ^t•orry 63.00 _J650114 P9t/lan ^US, fre0WhIr Are you an independent voter? You aren't if you checked this box. Follow every step of the 2016 presidential election with the Los Angeles Times Trail Guide. Copyright @ 2016, Los Angeles Times http://www.latimes.com/politics/essential/la-nol-sac-essential-nolitics-uodates-ad-attacks-d..