Bill Brough, with the mystery beverage on his last day in the Assembly. Hopefully, soon there will be pictures of him in Prison – experiencing the best prison life has to offer
Please note: The URL is changing to www.rightondailyblog.com soon. rightondaily.com will still point here for a while longer.
In 2009 as the Point Center Financial Saga was detonating, Diane Harkey had problems beyond just people asking where the $2.1 Million she contributed to her own runs came from.
The L.A. Times lit her up good over a few peculiar campaign donations. Donations I think should have never been taken and then should have been returned. But, she’s a victim and it wasn’t her fault etc etc etc.
California Assemblywoman Diane Harkey accepted $16,600 in political contributions from real estate developers who had received loans from her husband’s business, now under investigation by the Securities and Exchange Commission.
The borrowers later failed to repay loans brokered by her husband’s lending company, Point Center Financial Inc. of Aliso Viejo. The firm was accused of fraud last month in an investor lawsuit, and the company’s owner has confirmed that Point Center is under investigation by the SEC.
Harkey (R-Dana Point) said Monday that there was nothing improper with the developers’ contributions and that she had no idea they had loans pending with her husband’s company at the time they donated to her campaign.
Then why did Diane Harkey call them for donations? How would they have crossed her radar screen? Someone had to introduce her to these donors? But note, no offer to return the money or attempt to remedy the bad optics. Patterns, folks… patterns.
In the lawsuit filed last month, the investors contend that Point Center neglected to inform them about the risky nature of its loans and that Harkey, a defendant in the lawsuit, used proceeds from bad loans to donate nearly $1.1 million to her political campaigns.
Harkey said she used her own money — from a prior “six-figure” banking career — to donate to her campaigns for the state Senate and Assembly.
“It came from my personal income. I don’t care what the lawsuit says. It’s frivolous. It’s full of lies. And it will all come out in court,” she said.
Wait, what? Just a few weeks later in the Orange County Register – this gem:
“I’ve been married for 25 years to my husband,” said the Dana Point Republican. “We have personal income. He has income. I have income. Sometimes it was my income. Sometimes it was his income. Sometimes it’s both of our incomes. And I’ve saved him financially many years. So I’m not going to get into whose, yours, mine, ours. Who knows after 25 years?”
It did come out in court, Diane Harkey had to sue her way out of community property (speaking of saving Dan Harkey), Dan Harkey lost a $12.5 Million Judgment and then lost on appeal in 2018. And, not a dime paid to any victims – more on all this in future posts. (BTW – suing your way out of community property is a spouse trying to separate themselves from liability in a lawsuit related to the other spouse.)
Harkey accepted $16,600 in campaign contributions from three developers who borrowed tens of millions of dollars from Point Center, according to campaign finance records.
Two of the loans ended in foreclosure and a third was modified because the developer was unable to meet the original terms.
C. Lynn Burnett, president of Burnett Development Corp., gave $5,000 to Harkey’s failed Senate campaign Dec. 31, 2005, records show. Two months later, Point Center Financial funded a $19.2-million loan to Burnett for a development project at the Palm Springs Country Club.
Burnett’s company defaulted on that loan, and Point Center investors ended up holding title to the property, which is now in such disrepair that the city of Palm Springs sued Point Center and the investors demanding immediate improvements. The property is worth a fraction of the amount Burnett owed when he defaulted. Burnett died in 2007.
Home builder R.W. Hertel & Sons Inc. gave Harkey $5,000 on Dec. 31, 2005, two months before closing on a $16-million real estate development loan with Point Center. Hertel defaulted on that loan and Point Center foreclosed on behalf of investors. Like the Palm Springs project, the Hertel property is worth only a fraction of the loan that investors funded, according to allegations in the lawsuit.
Note the timing of the donations. Were they done to grease the skids of business deals?
“At no time did Point Center Financial ever disclose that she was receiving money from borrowers at the time investors were putting up money for loans,” Charton said. “Had they disclosed it, investors might have said, ‘I’m not going to give you money to lend to somebody you have a special relationship with.’ ”
Charlton was one of the plantiffs that successfully sued Point Center Financial. The rub on Point Center Financial is they would go to ordinary people with an offer of a great real estate deal and get them to put up money that was used to write loans to developers. Such loans are called hard money loans and many of them detonated in the 2008-2010 Real Estate Market, Hard Money loans are extremely difficult instruments to begin with and have high failure rates. The appearance of large checks weeks before the contributors got high-risk unsecured loans they later defaulted on smells to high heaven.
Speaking of poor judgement, it is not just in taking tainted campaign funds. I learned through confidential interviews that Diane Harkey hired none other than the monster William “Bill” Brough.
Here’s the ballgame, Brough served as her Chief of Staff for a short time. His tenure was marred by several allegations (yet no verified complaints or victims forward) of sexual misconduct. Apparently, just a few years before backing in to the Assembly Brough took a test run at his animal house lifestyle in Sacramento.
It is clear to me that Harkey disdains Bill Brough and was helpful when many others in the OCGOP were still drinking the incumbent kool-aid and having group think about how to defend the status quo. However, Diane Harkey is alleged to have hired Bill Brough at the behest of his codenendent spouse. How many women did Brough hurt whilst infesting the Cheif of Staff office for Diane Harkey?
Did Harkey know about the incident in 2011 with Lisa Bartlett and Bill Brough? It happened in Dana Point when both were on the council she once served on? Then, why was Brough able to last as long as he did when I know for a fact (albeit heresay from people there) that Brough was already out of control and they were telling Diane Harkey what he was doing!
Harkey (R-Dana Point) said Monday that there was nothing improper with the developers’ contributions and that she had no idea they had loans pending with her husband’s company at the time they donated to her campaign.
#facepalm. I guess there was nothing improper with hiring Bill Brough either, so there’s that I guess.
As we continue, next up is Harkey’s troubled tenure in the California Board of Equalization. This is another subject with a lot of articles, but little campaign scrutiny. It needs to be looked at for a bit as we continue completing the story about Diane Harkey.