Jesus Cardenas, who works as chief of staff to Councilmember Stephen Whitburn, is paid more than $10,000 a month to serve the people of San Diego.
Cardenas also owns a political consulting firm that racked up at least $120,000 in campaign billings this year ahead of the June primary election, even though state tax officials suspended the business on Jan. 3, legally barring it from doing business.
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The work as a political consultant raises questions about potential conflicts with his work for a public official. According to his own state-required filings, Grassroots Resources Corp. is worth up to $1 million.
Last year, the company generated more than $10,000 each from a host of political consultants, a San Diego pot shop and even the county Democratic Party, according to his Form 700, an annual disclosure public officials are required to file under state law.
The same records also show Cardenas personally collected up to $100,000 in supplemental income from the firm.
Cardenas, whose public-sector job calls for him to run the District 3 office and provide policy and political advice to Whitburn, said there is no conflict between his work for the city and the money he earns from his private business.
“Although I have an interest in Grassroots Resources, I no longer manage operations, seek clients or engage in day-to-day activities,” Cardenas said in a statement. “I have not received any financial compensation from any entity doing business in front of the city.”
Cardenas was listed as the sole incorporator of Grassroots Resources when the business was set up in March 2016, Secretary of State’s Office records show.
The company filed an updated statement in November 2017 listing Cardenas as president and Romel Gomez Castro as chief financial officer.
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Grassroots Resources took in at least $10,000 last year from 10 separate clients, including county Supervisor Nora Vargas’s 2020 campaign, political action committees, independent expenditure committees and political consulting firms, public disclosures show.
One client is the San Diego County Democratic Party, which until recently was directed by Will Rodriguez-Kennedy, Whitburn’s roommate and close friend who stepped away earlier this year amid a sexual-assault allegation — an accusation the party chairman vigorously denied.
The company also reported more than $10,000 in revenue from a Harbor Drive pot shop licensed by the city of San Diego.
Whitburn, who was elected to the City Council in 2020 with guidance from Cardenas, said he has no concerns with Cardenas owning a political consulting business at the same time he runs the District 3 office.
“Jesus is a highly sought-after adviser whom I respect greatly, which is why I asked him to help me get things done for the residents of our district,” Whitburn said. “He brings a wealth of successful business experience to our city.”
Whitburn said he directed Cardenas to seek advice from the ethics commission regarding any potential conflicts between his company and his work for the district as soon as he joined the city payroll.
Sharon Spivak, the commission’s executive director, confirmed that Cardenas had reached out to her office for advice and had also attended various ethics training sessions provided to all City Hall newcomers. But she said the office has issued no formal written opinions on the arrangement.
“We provide advice that is fact-specific to given situations to all members of the regulated community who seek advice,” she said. “We try to educate people so they know when to seek additional guidance from us in the future, as situations arise and facts change.”
Spivak also noted that the advice portion of the commission’s work is separate from its enforcement division.
San Diego ethics rules allow employees to have outside business interests or income. But the municipal code makes it illegal for city employees to benefit from personal businesses during hours when they are being paid by the city, and it bars them from using public resources to further their businesses.
An elected official’s chief of staff is generally responsible for implementing their boss’ vision and managing the office. Like the politicians they serve, chiefs of staff are regularly called upon to work whenever needed.
“Jesus and I communicate throughout the day and often into the evening and on weekends about city issues affecting my constituents,” Whitburn said. “I could not have a harder-working, more dedicated chief of staff serving the residents of District 3.”
Cardenas said his employees do virtually all the work at Grassroots Resources, and when important company decisions or contacts are required, he is careful to separate those obligations from his public-sector responsibilities.
“As part of the city hiring process, we are provided multiple ethic trainings for guidance in regards to conflict of interest,” he said. “These trainings provide us with the tools to understand what we can and can’t do while working for the city.”
Robert Fellmeth directs the Center for Public Interest Law at the University of San Diego. He said chiefs of staff perform duties that are far different from those of a typical government employee who runs a small business on the side.
“This is a full-time position, and as such I believe the FPPC (Fair Political Practices Commission) should be required to approve any major work obligation that is separate from those public obligations,” Fellmeth said.
“There is an inherent conflict between a generalist public official and an avenue involving political influence,” he added. “It is bad enough that a public official is visited by lobbyists without any disclosure whatever.”
Cardenas, who is 39, has been politically active for more than a decade, especially in the South Bay and in the Democratic Party.
He and his sister, newly elected Chula Vista Councilmember Andrea Cardenas, have told many constituents their personal story about growing up poor in the South Bay and having to stay with friends.
In his early 20s, Cardenas took a job as a field organizer with the California Democratic Party and later worked with the Orange County Democratic Party, according to his LinkedIn profile.
In 2012, he and another Democrat helped organize a group called Conservatives for Gay Rights that purported to support then-Councilmember Carl DeMaio in his race for San Diego mayor against then-Rep. Bob Filner but actually aimed to highlight that DeMaio was gay to damage his campaign.
The entity paid for phone surveys asking voters if they would still support DeMaio if they knew he was openly gay and that he wanted city employees to pay “their full and fair share of the cost of their pension benefits,” the ethics commission found.
In 2013, the group was fined $7,500 by the commission for failing to properly identify its officers, failing to disclose a street address and failing to maintain adequate records, according to a stipulation Cardenas signed.
Three years later, Cardenas launched Grassroots Resources, listing himself in state records as the sole incorporator. Its offices were situated in a 23rd-floor suite inside the Copley Symphony Towers in downtown San Diego.
A statement of deficiency was filed in December 2016, apparently for failing to file proper paperwork, state records show. Notices of deficiency are designed to inform business owners they are out of compliance ahead of any further regulatory action.
By July 2017, the company received a penalty for the same violation, and the proper paperwork was filed in November. But the firm was in trouble again by 2019. Records show it was found delinquent in April, issued a penalty in July and notified of a pending suspension in December of that year.
The public affairs firm nonetheless prospered, collecting clients and working to elect some candidates and to oppose others. Many current and former Grassroots Resources clients have direct business or policy interests before the city.
Soon after being named Whitburn’s chief of staff, Cardenas reported that his company received at least $10,000 from former council candidate Kelvin Barrios’ campaign, Laborers’ International Union of North America Local 89 and several cannabis and public affairs firms.
‘Certain legal ramifications’
According to the Secretary of State’s Office, Grassroots Resources was suspended in 2020, for failing to submit what’s called a Statement of Information — a document spelling out an entity’s address, officers and other identifying data.
The suspension was lifted after the missing paperwork was sent to Sacramento early last year. But the company was suspended again early this year, this time by the Franchise Tax Board. In California, companies that are suspended are not supposed to conduct business.
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“When an entity is suspended, per statute, the entity loses all corporate powers, rights and privileges until the entity is placed into active status,” said Shannon Delgado, an assistant chief with the Secretary of State. “As a result, a suspension has certain legal ramifications for a corporation.”
Cardenas said he didn’t know Grassroots Resources had been suspended in January, even though the state regularly alerts companies to changes in status by mail.
“I will ensure that this issue is addressed promptly,” Cardenas said. “I am fully committed to serving our constituents and upholding the high standards of our city.”
Public records also show Cardenas has at least 10 separate state and federal tax liens filed against him totaling more than $240,000. The earliest was recorded in June 2010; the latest was dated March 2019.
Cardenas said he is working to resolve the debts.
Thousands of dollars
State law requires every elected official and public employee who makes or influences government decisions to file California Form 700 each year.
The document is designed to promote transparency by providing voters, constituents and anyone else basic information about an official’s personal wealth, income, holdings, gifts and other information.
The annual disclosures typically cover the previous calendar year, meaning the income Cardenas reported this past April was received in 2021 — before his company was suspended by the Franchise Tax Board.
But other records required to be filed under state and local elections rules show that Grassroots Resources has continued to do a brisk business despite the latest state suspension.
The San Diego Democratic Leadership PAC, for example, a political action committee that works to elect Democrats to state and local offices, reported that it paid Grassroots Resources $5,000 on Feb. 11 for campaign consulting work.
It also paid the company $15,700 on June 13, election filings show.
While the records show when invoices were paid, it is unclear whether the work were performed before or after the Jan. 3 suspension.
Over the reporting period between April 24 and May 21, Residents for a Brighter Chula Vista, a committee supporting Ammar Campa-Najjar for Chula Vista mayor, paid Grassroots Resources $50,000 for help with online ads.
The same committee reported a $50,000 debt to Grassroots Resources on its filing for the reporting period between May 22 and June 30 but had not yet made the payment, another filing stated.
Last year the company collected $30,000 from the Affordable Housing Coalition, a third-party political committee formed in September 2020 in Elk Grove, Calif.
The Affordable Housing Coalition last year also paid $10,000 to Political Strategies Inc., a consultancy that lists Grassroots Resources as one of its founding members.
Political Strategies paid Grassroots more than $10,000 in 2021, prior to the latest suspension, Cardenas reported on his Form 700. It is not clear what specific work the company performed for the payment.
In the family
The success Cardenas has enjoyed in politics has been shared by his sister, 30-year-old Andrea Cardenas, who was elected to the Chula Vista City Council in 2020.
Council members in Chula Vista serve part-time, and many of them have day jobs or other outside income. According to the State Controller’s Office, they are paid just over $70,000 a year for their work on the council.
On her Form 700s, Andrea Cardenas lists herself as a salaried employee at Grassroots Resources who earns between $10,001 and $100,000. She does not disclose the company’s major clients.
The Chula Vista council member said there are no conflicts of interest between her public duties as an elected official and her work as an administrative and outreach director for her brother’s firm.
“My responsibility as a member of the City Council and a public servant is to ensure transparency and accountability to our constituents,” she said by email. “As a rule, I have not taken responsibilities with company clients that could present even the perception of a conflict of interest.”
Chula Vista City Attorney Glen Googins said he does not recall the council member seeking a legal opinion examining her role on the council and her day job.
“Any legal advice my office would have provided Councilmember Cardenas would be attorney-client privileged,” he said. “That being said, I do not believe she has requested, or that we have provided, any formal legal advice with respect to her work at Grassroots Resources.”
Andrea Cardenas did not respond to questions about whether she should disclose clients on her Form 700. According to an archive of the company website, she is in charge of the business.
“Today Grassroots Resources is run by Andrea Cardenas, and a team of political professionals,” it states.
In 2021, she signed a state document representing herself as a Grassroots Resources official.
The Statement of Information that Grassroots Resources relied on to be reinstated by the Secretary of State after the firm’s 2020 suspension features the newly elected council member’s electronic signature.
According to the state, when corporations file the statements every two years, the forms must be signed by the chief executive officer, secretary or chief financial officer.
Andrea Cardenas said her signing of the record does not indicate she is a principal in the firm. “This in no way makes me a partner or an owner in Grassroots Resources,” she said.
If the council member did hold an ownership interest in the business, she would be required to disclose the company’s clients on her Form 700s, and Chula Vista voters would be privy to the source of its revenue.
Googins said city staff regularly conducts analyses of real estate interests disclosed by elected officials in order to identify potential conflicts. If any are identified, council members are advised to recuse themselves from a particular vote, he said.
But “we generally rely on the council members to make us aware of possible conflicts related to their investments or other business interests,” he said.