U.S. Rep. Lois Capps faces new questions over House financial reports

McClatchy NewspapersOctober 18, 2012 

HO

Rep. Lois Capps of California

HANDOUT — MCT

— California Rep. Lois Capps’ tight re-election bid took another hit Thursday as her opponent accused her of having waited years earlier in her career to report more than a half-million dollars in income on required House of Representatives financial-disclosure forms.

The charges from former California Lt. Gov. Abel Maldonado, bidding to unseat the seventh-term Central Coast incumbent, are the latest flap between him and Capps over how they’ve handled their personal finances and taxes.

Maldonado’s family is embroiled in a lawsuit with the Internal Revenue Service over $470,000 in business deductions and a dispute over $3.6 million in allegedly underreported income. The Capps campaign has been running TV ads highlighting the problems.

This week, Maldonado seized on documents showing that Capps, over an eight-year period, left off the annual disclosure reports $512,813 in income from two state pension funds. She acknowledged the omissions more than four years ago.

In a May 14, 2008, letter to the clerk of the House, Capps reported the omissions of $358,024 from the Regents of the University of California and $154,789 from the State Teachers Retirement System between 1998 and 2006.

Capps, a Santa Barbara Democrat, said the income “was inadvertently left off my disclosure forms in past years.”

Maldonado’s campaign spokesman, Kurt Bardella, said the new revelation followed reports in August that Capps had failed to report on her IRS tax returns $41,480 in rental income from a former staffer between 2001 and 2005. She filed amended returns this year, paying $8,819 in additional taxes.

“This is the latest in a troubling pattern that has emerged where Congresswoman Capps hides or underreports her income,” Bardella said.

The Capps campaign counterattacked, saying that Maldonado, who also served as the state's lieutenant governor, has reneged on a June promise to McClatchy to match Capps’ transparency gesture and release his own tax returns.

“Instead of Mr. Maldonado attempting to distract voters, his time would be better spent paying the $4.2 million he still owes in federal back taxes,” said Capps campaign spokesman Jeff Millman.

Millman said Maldonado, a Santa Maria Republican, was stirring up old news.

“Her forms are properly filed, and this is not a current issue,” Millman said.

An internal Maldonado poll released two weeks ago showed the race as a dead heat. While Capps’ newly redrawn 24th Congressional District still has more Democrats than Republicans, the margin has narrowed.

In the same poll, two-thirds of those surveyed dismissed as a distraction the two candidates’ scraps over their finances, with only one-quarter calling the issues important.

Maldonado is also fending off recent disclosures that his family threw a fundraiser for him when he was a state senator and later wrote off the $3,686 catering cost as a business expense.

The Capps-Maldonado contest is among the costliest House races in California, with the two candidates spending nearly $4 million combined and outside groups adding $1.6 million.

Email: jrosen@mcclatchydc.com; twitter: @jamesmartinrose

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