http://www.mercedsunstar.com/2010/05/31/1441963/denham-testing-bounds-of-election.html

In a move that some experts say tests the bounds of election law, Valley congressional candidate and California legislator Jeff Denham has sent $175,000 from his state political account to a charity that has run advertisements that could benefit his campaign.

The advertisements by a nonprofit called "Remembering the Brave" don't directly tout Denham's campaign. That would be illegal because federal law prohibits candidates from spending state money on a federal race.

Rather, Denham is featured promoting a benefit concert held Friday night at Chukchansi Gold Resort and Casino that was aimed at raising money for a specialized license plate program for family members of military personnel killed on active duty.

Still, the ads -- running on radio and television in the Valley -- give valuable exposure to Denham in the tight Republican primary race for the 19th Congressional District.

And a Chukchansi marketing department meeting agenda memo -- which casino officials have disavowed -- suggests the concert also was meant to help raise money for Denham's campaign, as well as that of an aspiring Madera County supervisor.

"We all know what's going on, but it may not be illegal," said Jessica Levinson, political reform director at the Center for Governmental Studies, a Los Angeles-based think tank.

"He can use his state funds to give money to a charity. But in this case, there is a complication because that charity is promoting his run for federal office." Denham, a state senator from Atwater who terms out at the end of the year, reported the transactions this week from his state Senate political account. He gave the nonprofit $25,000 and made two additional loans totaling $150,000.

Dave Gilliard, a Denham campaign consultant, said the transactions have "nothing to do with any campaign. It's completely for the organization." "It's a charity that he's been working for, for a long time.

It's for the Gold Star families, which he's carried legislation for." Denham leads the state Senate's Veterans Affairs Committee.

His campaign says the concert has long been in the works and that organizers asked him to appear in the ads and help pay for the event.

But Denham's political opponents have seized on the ads, alleging they were coordinated by Denham's campaign and commercial sponsors, which they say breaks the law.

They also say that the ads should be accompanied by disclaimers that include contact information for the people paying for the ads.

Paul Sullivan, a Washington-based attorney working for Denham, told The Bee last week that the ads are legal because they do not explicitly advocate for the defeat or election of a candidate.

However, a memo on Chukchansi letterhead that is circulating in the Valley suggests that the concert is meant to help Denham. An agenda item for a meeting of the casino's marketing department states: "On 5/28, the Charity Concert by Phil Vassar will be performing to raise funds for Jeff Denham and Joe Alberta campaigns." Alberta is a candidate for Madera County supervisor.

In an e-mail interview, Gilliard said the item is "obviously a misprint." Chukchansi spokeswoman Chanel Wright also discounted the memo.

"We've seen the document. It is an inaccurate document. The document is not ours," she said.

Casino officials cannot say whether it is a forged document, but said they are conducting an internal investigation.

Ciara Torres-Spelliscy, counsel for the Democracy Program at the Brennan Center for Justice at New York University School of Law, said a lot would turn on whether this is a fundraiser for Denham.

Her conclusion: "They are skirting along the gray areas of campaign finance law." Among those criticizing Denham over the spending is Rep. Devin Nunes, R-Visalia, who actively supports the candidacy of former Tracy-area congressman Richard Pombo. Nunes used a House committee meeting last week to spell out details of the campaign dispute.

"We must ensure that Indian gambling revenues are not being used to fund political activities," Nunes said at the May 19 hearing of the House Ways and Means Committee, adding that "I'm appalled by this exploitation of veterans." Nunes added that "some members of the Chukchansi tribe contacted me, and they're worried about this money being spent improperly." Chukchansi's Wright said all of the proceeds are going to the Remembering the Brave Foundation. "It is very, very unfortunate that we have politicians who are attacking an organization who is simply helping raise money for our fallen soldiers and their families." The Remembering the Brave Foundation is an all-volunteer, Colorado-based foundation dedicated to preserving the memory of fallen veterans, according to its website. Officials could not be reached for comment.

Denham's loans and contribution appear to have been a huge boost to the group.

The organization's total income in 2008 was $62,995, according to the most recent available tax documents filed with the Internal Revenue Service. The organization reported assets of only $15,150.

The reporters can be reached at jellis@fresnobee.com, eschultz@fresnobee.com, mdoyle@mcclatchydc.com or (559) 441-6330.