AG candidate Harris' complaint alleges that Kelly borrowed money from
private investors, bought Facebook stock options, and then sold the
options, allowing himself to pour more money into his own campaign. The
Harris campaign argues that these loans were campaign contributions,
and thus should have been subject to the state's $6,500 donation limit.
The complaint also argues that Kelly should have fully listed the
buyers for the stock on his mandatory income-disclosure forms.
"Though short-term loans from shady private equity firms to exercise stock options in private companies may be the way business is done at Facebook, statewide campaigns operate under a very different set of rules," Sutton writes in the Harris complaint.
Robin Swanson, spokeswoman for the Kelly campaign, said Kelly hadn't broken any laws, and that the transactions cited by the Harris campaign are simply personal financial dealings. "It's his own private money," she said. "It's his own private financing."
Swanson said the complaint -- filed just two weeks before the June Democratic primary -- was a "publicity stunt" to draw voters' attention away from the fallout over Harris' own handling of recent scandals involving the San Francisco crime lab. Last week, a San Francisco Superior Court judge assailed Harris' failure to disclose problems at the lab to criminal-defense attorneys. "I think she's clearly trying to deflect attention from the fact that a judge said she violated the civil liberties of defendants," Swanson said.
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