Grand Jury: Benoit’s Senate Campaign Received Illegal Contributions

A real estate developer charged in a bribery and money laundering scheme allegedly arranged to benefit a former San Jacinto city councilman is also accused of funneling illegal contributions to a 2008 state Senate campaign, the Riverside County District Attorney’s Office announced today.

Stephen Russell Holgate, 63, was indicted by a grand jury last week on a felony charge of conspiracy and eight misdemeanor counts of making illegal campaign contributions.

Calls to Holgate’s attorney, Paul Grech, were not immediately returned.

The indictment stemmed from an earlier investigation that resulted in more than 150 charges being filed against the defendant and eight others in November 2009.

That case involves alleged money-laundering, bribery, perjury and filing false affidavits to sidestep state laws regulating the amount of money that can be received by a candidate for state office. The candidate was former San Jacinto City Councilman James Ayers, who ran unsuccessfully to be the Republican nominee for the 65th Assembly District seat.

The race was won by Paul Cook.

Prosecutors allege that Ayers’ campaign received hundreds of thousands of dollars in illegal contributions, utilizing a network of friends, family and unwitting accomplices, who funneled money into his political warchest using laundered assets.

It’s unclear how much Holgate allegedly contributed. The developer, who divides his time between residences in Southern California and Florida, owns property throughout Hemet and San Jacinto.

Ayers, San Jacinto Mayor Dale Stubblefield and Councilmen John Mansperger and James Potts were recalled by San Jacinto voters in the last election.

According to the D.A.’s office, Holgate allegedly engaged in another money laundering conspiracy in 2008, this time making illegal contributions to the Friends of John Benoit campaign.

Benoit successfully ran for the 37th Senate District seat. He left a year later after being selected by Gov. Arnold Schwarzenegger to represent the fourth supervisorial district in the wake of Supervisor Roy Wilson’s death.

Benoit’s chief of staff, Michelle DeArmond, said the supervisor would be releasing a statement later today reacting to the charges against Holgate.

Holgate is free on bond. If convicted of all charges, he could face up to 30 years in state prison.

“Money laundering allows voters to be misled,” said District Attorney Rod Pacheco. “Constant vigilance and aggressive action is necessary to prevent public corruption.”