An unusually lengthy investigation by the California Fair Political Practices Commission has finally concluded that Liz Kniss, a former Palo Alto City Council member who left office in January, violated two campaign finance laws during her 2016 campaign for reelection.
As a result, she faces $4,500 in fines, according to a stipulation agreement that the agency released Monday and which the commission is scheduled to formally approve on Feb. 18.
The four-year investigation kicked off shortly after Kniss was reelected to a second consecutive council term in November 2016. Kniss, who also served on the council between 1989 and 2000, was chosen to be mayor three times over her council career, the last time in 2018, while the Fair Political Practices Commission (FPPC) case was ongoing.
In the stipulation, the FPPC contends that over the course of the 2016 campaign, Kniss violated two laws: one that prohibits candidates from using their personal bank accounts for campaign expenditures and another that requires them to report the employers and occupations of donors who contribute more than $100.
The FPPC did not, however, penalize Kniss for the reporting irregularity that triggered the investigation: her failure to disclose 31 contributions, totaling $19,340, that she had received from developers in the weeks before the November 2016 election but did not list in her filings until Jan. 11.
As the Weekly had previously reported, numerous major contributors from the real estate industry, including Charles Keenan, Jim Baer, Thoits Brothers and the California Association of Realtors, had sent her checks in October or early November. Her acceptance of these contributions represented a shift in policy for a campaign that had initially pledged not to accept money from developers. However, the public did not know about the policy change since Kniss' campaign did not report these checks until her January filing.
Kniss previously told the Weekly that the contributions weren't reported because her campaign treasurer, Tom Collins, was waylaid by a knee surgery in 2016, which kept him from opening the envelopes, depositing the checks and filing the reports. While the stipulation agreement does not specifically address the campaign committee's late reporting of the developers' contributions, it notes that the campaign committee had some "additional reporting failures" and that those violations "are not being charged for settlement purposes."
"The actions of the Committee, Kniss and Collins appear to be negligent, as opposed to intentional or with an intent to conceal," the stipulation states. "Neither Kniss nor Collins has a prior record of violations."
Kniss also contended, according to the agreement, that Collins was ill during the period in which the violations occurred and that this was one of the main causes of the errors that were made. She told this publication in a Monday interview that, ultimately, the candidate for office is the one who is responsible for following campaign laws.
The $4,500 fine is well below the $10,000 maximum that the FPPC could have imposed based on the two violations, each of which carries a maximum fine of $5,000. In settling for a total fine of $4,500, the commission weighed the seriousness of the violations and Kniss' record of compliance with campaign finance laws.
If the FPPC approves the stipulation agreement, as expected, Kniss would be charged $2,000 fine for failing to list the occupations or employers of dozens of her contributors.
She is also facing a $2,500 fine for using her personal bank account to make campaign expenditures, with the understanding that the campaign account would later reimburse her. According to the stipulation, this violates the state's "one committee bank account" rule, which requires all expenditures to be made from the campaign account.
According to the FPPC, she made 24 transactions totaling $7,241 for campaign-related expenses using her personal credit card. She also paid $1,876 for campaign printing material using a personal check.
In setting the fine, the FPPC considered the similar case of Frank Bigelow, who made 13 charges on his personal credit card relating to his 2016 campaign for state Assembly. He was fined $2,000 for violation. In recommending a $2,500 fine for Kniss, the FPPC cited her extensive experience in politics. While Bigelow was seeking his first reelection in 2015, Kniss was first elected to office in 1985 and had served in various public positions, including on the Santa Clara County Board of Supervisors, the FPPC noted in explaining its recommendation of the higher fine.
While the anonymous complaint that triggered the FPPC investigation focused on her late reporting of developer contributions, Kniss noted that her campaign had sought a legal opinion from the Legal Division of the FPPC. It was advised that because Collins was rehabilitating from surgery and did not open the contributions, they were not considered "received." Collins died in May 2020.
While the Legal Division functions separately from the Enforcement Division, Kniss suggested that the legal opinion influenced the Enforcement Division's decision not to pursue that as a violation.
Kniss told this news organization she wasn't aware of the state's "one bank account" rule and suggested that it's not uncommon for candidates to pay for campaign expenditures upfront out of their personal accounts with the expectation of being reimbursed.
Kniss was represented in the FPPC case by Gary Winuk of Kaufman Legal Group, who served as chief of the FPPC's Enforcement Division from 2009 and 2015. She said she was informed by her attorney that the violations she was cited for by the FPPC are among the most common. She also suggested that the anonymous complaint that was filed against her was politically motivated and characterized it as a sign of the city's polarization.
"This is done to really discredit someone, which is most unfortunate," Kniss said. "It's going to continue in Palo Alto because we're so divided as a community now."
Neither the FPPC nor Kniss offered any explanation as to why the investigation took four years and is set to conclude one month after Kniss left office. The agency's 2017 investigations against then-council members Adrian Fine and Greg Tanaka were each resolved within a few months of being opened. (Fine was given a warning and Tanaka was fined $733 for three reporting violations that he called "clerical errors.")
When asked in January 2018 about the length of time the Kniss probe was taking, FPPC spokesman Jay Wierenga said the agency works to ensure that every investigation is both thorough and timely but would not comment specifically on Kniss' case.
In February 2019, Wierenga said that collecting facts and evidence and contacting witnesses, especially uncooperative ones, takes time. However, he noted, the FPPC completes more than 80% of its cases within a year.