November 1, 2012
Pro-Sherman mailer labeled 'despicable' may have ties to former Sherman staffer
A pro-Brad Sherman mailer sent out in October to Republican voters in the San Fernando Valley’s new 30th Congressional district features a shadowy and ominous-looking image of Rep. Howard Berman, Sherman’s Democratic opponent for Congress, shown alongside Rep. Maxine Waters (D-Calif.), Rep. Barney Frank (D-Mass.) and Sen. Barbara Boxer (D-Calif.). The mailer, which the Los Angeles County Democratic Party has called “despicable” and “divisive,” was created by a Super PAC that appears tied to Sherman’s former district director, Democratic Calif. Assemblyman Mike Gatto, the Journal has learned.
“If you love these politicians, then vote for Howard Berman,” the mailer says, before going on to claim that Sherman “has been endorsed by every Republican elected official in the Valley.”
Waters is black, Frank is gay, and Boxer is known for her advocacy on women’s issues and environmental legislation, and the Berman campaign immediately called on Sherman to denounce the mailer, calling it “offensive to women, minorities, the LGBT community and Valley voters.”
The involvement of Super PACs in the race between Berman and Sherman has been the subject of a heated argument between the candidates since the campaign’s earliest stages. On Jan. 5 of this year, Sherman called on Berman to sign an anti-Super PAC pledge for their contest, aimed at reducing the impact of the outside groups. Super PACs can accept unlimited contributions from individuals, unions and businesses as long as they do not coordinate their activities with any candidate or candidate’s committee. Sherman has since repeatedly criticized Berman for the independent Super PAC monies supporting Berman’s candidacy.
Asked by Warren Olney about the recent mailer in a debate broadcast on KCRW on Oct. 29, Sherman said he didn’t know who sent it.
“I got an email about it somewhere certainly, and I haven’t seen it, but it’s certainly not our campaign,” Sherman told Olney. When asked by the Journal on Nov 1 to comment on Gatto’s possible involvement, the Sherman campaign declined to comment.
The mailer states that it was “Paid for by Californians for Integrity in Government” and was “not authorized by any candidate, candidate’s agent, or committee.”
But according to an individual involved in running campaigns who spoke to The Journal only on condition of anonymity, Gatto had mentioned to him that he was chairing a Super PAC that would be backing Brad Sherman. This individual speculated that Gatto likely had oversight over the controversial mailer.
“If it’s Gatto’s money at the end of the day, he would have to OK it,” the campaign professional said.
After repeated requests for comment from Gatto on Wednesday and Thursday with a member of the Assemblyman’s district office staff, as well as on the voicemail of a member of his campaign staff, a text message from a member of Gatto’s campaign staff was sent to a Journal reporter stating: “Mr. Gatto has no official relationship with the entity you described on my voicemail.”
Gatto worked for Sherman for five years in the early 2000s, including almost two years spent as his district director and a stint as his acting chief of staff. He has maintained close ties to his former boss since his election to the Assembly in a special election in June 2010. Gatto is currently running for reelection against Greg Krikorian, a Republican member of the Glendale School Board.
Multiple donors to Californians for Integrity in Government, the Super PAC named on the mailer, have also supported Gatto’s election campaigns, according to records obtained from the California Secretary of State.
Of the 12 individuals, businesses and union groups that have donated to Californians for Integrity in Government, at least eight have also given to Gatto’s campaign committees in the past four years. Those same donors have also given to Sherman’s campaigns.
The two largest single donations to the pro-Sherman Super PAC came from the Southwest Regional Council of Carpenters, which donated $225,000 to the group in May, and S&S Business Holdings, a Thousand Oaks-based company that gave $100,000 to Californians for Integrity in Government in September.
According to records obtained from the California Secretary of State, S & S Business Holdings, LLC is located in Westlake Village and has a “Susan A. Mallhicoff” (sic) listed as its agent for service of process. An online phone book listing for Susan A. Malchicoff shows that she lives in Westlake Village with her husband, Sheldon A. Malchicoff, who is CEO of DEX, a supply chain corporation headquartered in Camarillo. According to data obtained from the Secretary of State, a “Scheldon(sic) Malchicoff” from Westlake, who was described as the CEO of Data Exchange Corp., donated $1,000 to Gatto in February 2010.
The Southwest Regional Council of Carpenters, which represents 65,000 union carpenters in six states, has endorsed both Sherman and Gatto in their races this year and supported Gatto monetarily in both of the last two election cycles, donating $7,800 to his committee in 2010, $1,000 in 2011 and $3,900 in 2012.
A request for an interview with Sheldon Malchicoff on Wednesday got no response, as did a request for comment from the Carpenters union group on Wednesday afternoon.
Records from the Federal Election Commission show that even as Sherman publicly pushed Berman to reject Super PAC support, Californians for Integrity in Government was setting up shop and raising money on Sherman’s behalf.
The group’s first filing to the FEC is dated Jan. 3, two days before a debate at which Sherman presented a poster-sized reproduction of his pledge before Berman and two other candidates.
On Feb. 6, Sherman’s campaign put out a press release challenging Berman to sign the Super PAC pledge. Californians for Integrity in Government received its first donation later that month. By the end of May, the pro-Sherman Super PAC had raised $270,000, all of it from donors who had also given to Gatto’s campaigns.
On May 7, the Sherman campaign submitted a formal complaint to the FEC alleging that Berman had illegally coordinated activities with one of the pro-Berman Super PACs.
Californians for Integrity in Government’s first donation of $25,000 was made in February by a Montebello-based business called PF Heritage, LLC, which had donated a total of $100,000 as of Oct. 31. According to records obtained from the California Secretary of State, the registered agent of service for PF Heritage is Igor Pasternak, who is also the founder and CEO of an airship manufacturer called Aeroscraft, which is located at the same address as PF Heritage.
Pasternak, who lives in Tarzana, inside the new 30th Congressional district, donated $2,400 to Gatto in 2009. Aeroscraft’s CPA, Carrie Cass, also donated $2,400 to Gatto that year.
Messages requesting comment on Wednesday left at Aeroscraft’s offices for Pasternak and Cass received no response.
There is no evidence that Sherman or his campaign have coordinated efforts with the Super PAC or Gatto in a way that would violate election law.
In its initial filing, Californians for Integrity in Government did not describe itself as a pro-Sherman Super Pac. It described its mission as supporting more than one federal candidate. If the group had been formed to support or oppose only a single candidate – as the Committee to Elect an Effective Valley Congressman, a pro-Berman Super PAC, was – the group would have had to specify which candidate it was set up to support.
Such a disclosure might have drawn attention to the group earlier in the race, and might have given Berman information to respond to Sherman’s frequent mentioning of the pro-Berman Super PACs in debates and public appearances. Absent that disclosure, no one but the Super PAC’s organizers could have known of the group’s existence and its primary aim – to support Sherman and oppose Berman – until September, when it began spending in large amounts the money it raised over the preceding seven months.
The overwhelming majority – more than 99 percent -- of the Super PAC’s spending has been targeted to support Sherman’s campaign against Berman.
Of the $460,000 spent by the group as of Nov. 1, only $5,000 was spent outside the 30th district, according to data from the Center for Responsive Politics. On Aug. 31, Californians for Integrity in Government informed the FEC that it had paid a campaign consultant to make an unspecified number of live calls on behalf of Gloria Negrete McLeod, a Democratic State Senator who is running for Congress against incumbent Democratic Congressman Joe Baca, in California’s new 35th district.
Every other expenditure made by Californians for Integrity in Government has been directed at the 30th district race, all in the form of either pro-Sherman or anti-Berman mailers. The group has spent $263,000 on mailers opposing Berman and $191,000 on mailers supporting Sherman.
Gatto’s name does not appear on any document associated with the group. Shawnda Deane, the committee’s treasurer, reached by phone at her office in Sacramento on Wednesday, declined to answer questions but offered to send a link to a Web site for the group and to pass on a message to the people behind it.
No email was ever received by The Journal, nor did any other person affiliated with Californians for Integrity in Government contact the Journal.
Gatto is known to still be very close to Sherman. In 2011, Gatto followed his former boss’s lead when he introduced legislation in Sacramento that would have protected the rights of parents to circumcise their male children. He is also listed as one of Sherman’s endorsers on Sherman’s campaign Web site.
Jennifer Laszlo Mizrahi, who has spoken out very publicly on Sherman’s behalf, donated $5,000 to Californians for Integrity in Government in September. The founder and former president of The Israel Project, a pro-Israel advocacy organization, has commented publicly on the race, and about the recent media coverage of the controversial anti-Berman mailer.
When a gay news Web site drew attention to the pro-Sherman group’s use of “race baiting [and] gay baiting” in its mailer, Mizrahi came to Sherman’s defense.
“Any suggestion that Rep. Sherman doesn’t support equal rights, civil rights, marital rights, healthcare fairness and dignity is false!” Mizrahi wrote in a comment on the story at Queerty.com.
In an interview on Oct. 31, Mizrahi would neither confirm nor deny that Gatto had been involved in soliciting her donation.
“He may have been,” Mizrahi said. “I think everyone knows that I’m a Brad Sherman supporter, so when there was a pro-Brad Sherman group established, I was an obvious person to call.”
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