Caviar seller stayed with California treasurer and her staff on work trips, ex-staffer says

A businessman preparing to buy a California caviar company stayed with state Treasurer Fiona Ma and her aides at a property they were renting for work trips, the lawyer for a former employee suing the treasurer said.

At the time, Ma and the businessman were copied on emails about a potential tax break for the company. The company ultimately did not file an application for the tax break, which is administered by Ma’s office.

Waukeen McCoy, who is representing former Treasurer’s Office employee Judith Blackwell, told The Bee that Eugene Fernandez, who purchased Sterling Caviar in October 2020, stayed with Ma and her staff “more than five times” that year at a short-term rental the Treasurer’s Office used for state business trips.

The claim that a non-state employee stayed with the treasurer and her staff is the latest issue to raise questions about Ma’s conduct as the state’s banker, a position she was elected to in 2018. Previous reporting by The Bee revealed Ma is the only statewide official who routinely expenses lodging in Sacramento, where she would frequently stay with staff. Experts have said it’s inappropriate and risky for a superior to share lodging with a staff member.

McCoy is representing Blackwell in a lawsuit that alleges Ma sexually harassed her while the two stayed together on business trips in Sacramento. Ma has denied the allegations in the lawsuit, and says she is confident the truth will come out in court.

During the time Ma and her staff were staying at rentals, a company that works with businesses to secure tax breaks from the state was communicating with Fernandez about helping Sterling apply for a sales tax exclusion program run by her office, according to the state emails, which The Bee obtained through a California Public Records Act request.

McCoy said Ma rented the property first, then Fernandez did. He said he could not provide further details on the timing.

McCoy said his client told him Fernandez would stay in one of the rooms of the rental while Ma and her staff stayed in other rooms. Fernandez would eat at restaurants with the treasurer and other staffers and would bring caviar for them, which they ate at the restaurants and at the rental property, McCoy said.

“I did not stay at corporate housing rentals with non-state employees,” Ma responded in a statement. “This is the latest in a series of false public allegations by Judith Blackwell’s attorney in a desperate attempt to use the media to coerce settlement and avoid a trial, where the facts will come out.”

Ma did not respond to follow-up questions about what she meant by “corporate housing rentals,” whether she had ever stayed with Fernandez at any kind of rental or whether he had ever brought caviar to rental properties or meals with her and staff.

In response to a question about whether he had stayed with Ma in Sacramento, Fernandez said he never stayed “at a rental property where Fiona Ma or the state paid” the bill. He said he has known the treasurer for more than four years.

Asked if he ever brought caviar to Ma and her staff, he wrote in an email that he “would on occasions bring Caviar for social gatherings like I still do with friends.”

Elected officials must report any gifts, including meals, that they receive from any source who gives them more than $50 worth of gifts in a year, and cannot accept gifts from a source totaling more than $520 in a year. California makes exception for gift exchanges on birthdays, holidays and similar occasions, where officials can exchange gifts of roughly equal value with others.

Ma’s financial disclosure forms do not list any gifts from Fernandez. She has reported gifts from other sources, including a $70 bottle of wine from the Napa County Farm Bureau and $4,800 in airfare, lodging and meals for trips to Portland and Seattle from the California Foundation on the Environment and the Economy.

If Fernandez did bring Ma and her staffers caviar, or if she ever stayed in a rental he paid for, she likely should have reported it, said Dan Schnur, the former head of California’s political ethics watchdog agency.

“It’s one thing if he bought the treasurer and her staff a hamburger or a soda, but caviar in any type of quantity almost certainly would require gift reporting,” said Schnur, who teaches politics at UC Berkeley, Pepperdine University and the University of Southern California.

In May 2020, Alex Tran of California Incentives Group, a company that helps businesses apply for tax breaks, wrote to Fernandez saying, “Hi Eugene – as a follow up to our call. See below for the opportunities that we believe we can secure for Sterling Caviar by year end.”

The email included a description of how California Incentives Group could help Sterling apply for two sales tax exclusions through the California Alternative Energy and Advanced Transportation Financing Authority, a program within the Treasurer’s Office that gives tax breaks to advanced manufacturing and transportation companies working to reduce greenhouse gas emissions.

Tran forwarded the pitch to Ma’s Gmail account in June 2020, the emails show, and attached several memos drawn up by the California Incentives Group for Sterling about applying for the tax breaks.

Tran did not return a call from The Bee asking about the emails.

Ma did not respond to a question about whether she had discussed the possibility of Sterling applying for a tax exclusion with Fernandez.

Fernandez told The Bee he had “NEVER” explored applying for a sales tax exclusion through Ma’s office. He did not respond to a follow-up question about the email and memos from the California Incentives Group.

Sterling does not appear to have formally applied for or received one of the sales tax exclusions, according to a list of companies that have applied.

Five days after Tran emailed Ma about Sterling, one of her staffers emailed her saying he wanted to talk about “Grants for Eugene” and linked to a webpage on grant programs administered by the California Department of Fish and Wildlife. Ma forwarded the email to Fernandez with the message: “Check these out?”

Schnur said the emails don’t suggest Ma did anything improper related to Fernandez, as long as she acted similarly when dealing with other business owners.

“There’s nothing wrong with elected officials helping business owners. It only becomes a problem if they’re showing preferential treatment,” Schnur said. “If she didn’t do anything for him that she wouldn’t have done for others in a similar situation, then she simply needs to make that clear publicly.”

Loyola Law School Professor Jessica Levinson said the actions McCoy described and the records obtained by The Bee don’t suggest that Ma violated any laws or regulations, but she noted that the situation described was “weird.”

“A lot of what this brings up is larger questions about how she’s spending taxpayer dollars and who might have influence in her office,” said Levinson, whose work focuses on politics and government ethics.

Blackwell “couldn’t understand” the relationship between Ma and Fernandez and didn’t know why he was staying with them, McCoy said.

Expense reports filed by the treasurer show that she rented properties in Sacramento for four four-night business trips in May and June 2020. The expense reports make no mention of Fernandez, but one does specify that the treasurer stayed at a three-bedroom rental property “with 4 staff.” Another notes that a property was rented for “2 guests,” but gives no further details. Expense reports for the other rentals don’t specify whether other people stayed with the treasurer.

Ma declined to say who stayed with her at the rentals, saying she could not answer the question because of the pending litigation.

In her lawsuit, Blackwell says that, while she was working in the Treasurer’s Office as the director of the California Tax Credit Allocation Committee, Ma encouraged her to share rooms and lodging with her in Sacramento instead of making a one-hour commute home after work. While the two were staying together in hotel rooms and at a rental property, Blackwell says Ma exposed herself and crawled into bed with her.

Ma has denied the claims in the lawsuit.

Ma’s chief of staff Genevieve Jopanda, who frequently shared lodging with Ma, reported renting rental lodging for six additional trips from August through December of 2020. She doesn’t specify in her expense reports whether she stayed with other people in those rentals.

A Sacramento Bee review of Ma’s travel expenses previously revealed that Ma frequently shared lodging with staff. Business experts told The Bee that the practice is risky for a public official like Ma because it opens her office to liability and puts staffers in a position where they may not feel they can say no if they don’t want to share lodging with their boss.