Feinstein Dismisses Allegations, Says "Law is Being Followed"

By Oliver Lukacs
Lookout Staff

Feb. 9 -- Allegations that Councilman Michael Feinstein misappropriated $30,000 in Green Party contributions is the result of a “misunderstanding” being used by “a handful of people” who are engaged in a political power-struggle and have appointed themselves "judge and jury," the former mayor told The Lookout.

In an exclusive interview, Feinstein said that he is being "unnecessarily tried in the press" over the allegations, which resurfaced after County and State Green Party officials worried that the councilman was poised to raise funds during an upcoming conference in Santa Monica of national Green office holders.

"My core objection is that I am being denied due process by being unnecessarily tried in the press, as a result of a few reckless insinuations and innuendoes," Feinstein said. "I’ve decided to take the high road in analyzing this situation and not speculate upon the motivations of those few individuals behind this dispute.

"Unfortunately, their actions have made it possible to blow something entirely out of proportion in the public’s eye, which should have remained an internal party matter," he said. "There is no reason to treat me this way, when I have done so much to build this party, including back when many of those involved today were in their Green Party diapers."

His "handful" of accusers, Feinstein said, should wait until he completes the fundraising reports he will make available to State party officials next month. The reports, he said, will answer the fiscal questions -- which first surfaced in August 2001on KPCC and were reported in The Lookout -- that center on the handling of a $10,000 donation by a Green Party member, as well as all the money Feinetsin raised over two years, including $2,000 from a Ralph Nader fundraiser.

Feinstein has said that he deposited the funds in a private credit union account and used the money to pay rent, utilities and other necessary expenses at the party's local Pico Boulevard office, from which the County party has disassociated itself.

"There are rules for filing fundraising reports, and I have followed them," Feinstein said. “I am doing my own filing, and that’s all that’s happening, and I guess people aren’t willing for that to happen on its own timeline. There is no case. That’s the thing.

“Since the party disassociated itself from the office, the books are the property of the government. Done. And I am already taking care of it. However tardy, I remain legal. I am filing all the appropriate documents, and the law is being followed.”

But party officials said they are tired of waiting for Feinstein to open the books. In August 2001, Feinstein said that the spreadsheets he had received from his credit union were "totally off" due to a computer problem. A year and a half later, some party officials who discussed the issue at a County Council meeting January 10, remain skeptical.

"We gave Michael Feinstein a date at which time he was to have all the bank records to us so that we could do the filing," said State party co-coordinator Michael Borenstein, according to the minutes of the meeting. "Feinstein did not give us the records and our final date passed.

“This is an elected green official who has gotten involved in questionable activities," said State Green Party treasurer Mike Wyman, according to the minutes. "This isn't supposed to happen to Greens. The question of how we respond will guide future Green Party bodies. In an actual legal showdown, the evidence is on our side.

"He was acting on his own," Wyman said. "And I think he knew that. But he thought that he was slick enough to get away with it. He always had gotten away with it, and he's not going to stop."

The rekindled controversy -- which has led to questions about Feinstein's leadership style, his handling of local funds and the County Council's role in fiscal decisions -- hinges on two key questions: Who controls the Pico storefront where the office holders conference will be held later this month? And was the money -- which was written out to the State and County Green party -- donated to run the local office?

Feinstein maintains that he was authorized by the State Party in 1999 -- “before a lot of these people were around or knew about it -- to “open the office and raise money.” The local office, which he opened three years ago, is not under the jurisdiction of the County party, although it has had a desk, received mail and used it as a delivery center for literature, Feinstein said.

The money, which was donated at the Nader fundraiser "was not for the State party.

"Nader’s people called me. I put it on for the office. Some people might have liked it to have been for the County and the State, but it was for the office.”

If anything, Feinstein and his supporters contend that the financial controversy is the result of the fledgling grassroots party's growing pains and its lack of a rigid party hierarchy. That helps to account for the "misunderstanding" that resulted after party member Bill Pietz donated $10,000, only to question where his money had gone.

"Pietz gave the money to run the office," Feinstein said. "He gave it to a friend, who gave it to me. He didn't know at the time there was a difference between a (County) council account and (a local) office account. There's all this hoopla because people didn't know where the money went."

Feinstein said Pietz made an “honest mistake” because the party was disorganized around the time the fundraising event took place. “A lot of people came who have a lot confusion about how the organization was set up at the time because we had a lot of people come as a result of the (Ralph) Nader (Presidential) campaign" in 2000.

But according to a letter to the County council last month, Pietz stated: "On the evening of January 13, I handed the ($10,000) check to Woody Hastings, who, I gather, passed it on to Mike Feinstein. Mike called me late that evening to confirm that the check was real, which I confirmed. It is not true that in that discussion I was told the money would not be given to the County but would instead be used to fund an office for the state party."

Concerns that the County Council, which represents the largest local Green Party constituency in the country, is responsible for the money are unfounded, Feinstein said. He pointed out that no liability exists, since the State and County council -- which he served on for eight years -- disassociated themselves from the office.

"The money wasn't given to the County Council," Feinstein said. "That office is not run by the County Council, and they don't have jurisdiction."

Top Green State officials also argue that it was never a state office. They wrote a letter stating that the Pico office “has never been a GPCA office, nor does it currently serve as the office of any GPCA-affiliated county organization.” But the same officials held a meeting in January to discuss their possible legal liability connected to the alleged mismanagement of the donations.

Party officials fear they may be liable for as much as $30,000 in fines from the state’s Fair Political Practices Committee because they believe none of the money collected by Feinstein has been properly disclosed under California election laws, according to minutes from the meeting.

“The fact that none of this money ended up in an account that I was in charge of, I am probably not liable,” Borenstein said at the meeting.

“But there were checks made out to GPCA and GP of LA, which means that somebody is liable,” said Borenstein, who was among the officials who signed a party letter sent out nationwide last month disassociating Feinstein from the State party. “If they're going to go after anyone besides (Feinstein), they're going to go after me.”

Party officials also worried that the controversy might be a media “bomb of sorts,” and that the internal bickering makes the party as a whole “look silly, prejudiced, and slightly illegal,” according to the minutes.

Feinstein -- who contends that there is a power struggle within the party -- denounced those who made the allegations public before he could put the concerns to rest.

"Who then made this handful judge and jury? What happened to respecting my rights under the legal process? For a party that is concerned about the loss of civil liberties as a result of the Bush-Ashcroft-sponsored Patriot Act, this slippery slide towards slander is appalling."

Feinstein said that despite the concerns expressed by party leaders, who disassociated themselves from the event, the national office holders conference will be held as scheduled on the weekend of February 22 in the Pico Green Party office that is at the center of the political firestorm.

“Nobody asked them to endorse it,” said Feinstein, who also organized the first conference of national party office holders five years ago. “Nobody needs them to endorse it. We decided to take into our own hands and organize it ourselves.”

Feinstein denied that there would be any fundraising at the event, which will include elected delegates from every level of party leadership, including members of the National Steering Committee and the National Political Coordination committee from the national Green Party headquarters in Washington, D.C.

“There’s no fundraising going on and in fact there isn’t even a registration fee because people are taking care of their own housing and their meals,” Feinstein said.

For years, visiting party members stayed at Feinstein's home, which also served as the unofficial Southern California headquarters for the local party, which fellow veteran Greens largely credit Feinstein with building from scratch.

Two veteran Greens -- who said they met Feinstein when he was “just a kid” in the late 80s and the party was a small group meeting in dingy community centers -- contend that there might never been an organized state party without the former mayor.

Beginning in 1989, Feinstein converted his Santa Monica home into a makeshift Green party “office,” where between 12 and 50 people attended meetings, Green literature spilled off coffee tables and bookshelves and the phone rang off the hook with party business. The house also served as a lodge for international Green delegates crashing on couches and in guestrooms.

“There were always two or three people there from all over the world,” said veteran Green Jenevieve Marcus. “All the meetings were held at his house. It went on for years,” until the Pico office opened in 1999.

“Eighty percent of the house was used, except for maybe the kitchen and his bedroom,” Marcus said. “When people came from out of town they would call him.”

Bob Smith, another of the original founders, said he and Marcus would at times have to feed Feinstein, who “was going hungry, because he would pay the phone bills out of his own pocket.”

Smith estimated that the former mayor dedicated 90 percent of his time to the party, borrowing money from his family and friends to travel to international conventions only to return home and mail out publications he authored about the meetings in an effort to weave together a unified political network. He even wrote a massive tome on the party’s international policies, they said.

“His life has been the party," said Marcus. "There really is nothing else, except maybe Santa Monica."

"If you woke him up from a dream, “ said Smith, “he’d say ‘Green Party.’ The party is his life.”

Asked about allegations that Feinstein may have misappropriated the funds, Smith said:
“Misappropriation? What’s he going to do, take the money and go the Las Vegas? He has no life but the party.”

Feinstein said he will “go above the court of public opinion for now” until all financial matters have been settled with the government, at which point he will release all the paperwork at a State Green Party meeting in March.

“I don’t think there is a long-term rift, but certain individuals have shown they cannot handle a situation like this,” Feinstein said. “Despite the irresponsible recklessness of a handful of people in my party they’re not going to drive me away.