The allegations are startling: Two months after Andrea Cardenas was elected to the Chula Vista City Council, she conspired with her brother to defraud the U.S. government of more than $170,000.
At the same time, prosecutors say, Jesus Cardenas falsely claimed dozens of pot dispensary workers as employees of his own consulting firm. He had just been sworn in as chief of staff to newly elected San Diego Councilmember Stephen Whitburn.
Then, according to a six-page criminal complaint filed last week, the brother and sister used the money for personal expenses, credit card bills and even to pay off campaign debts.
Jesus Cardenas is the political consultant and founder of Grassroots Resources, which he ran even as he served the people of San Diego. He is now due to be arraigned Thursday on five separate criminal charges.
Andrea Cardenas came from nowhere to win her 2020 campaign under her brother’s management. She is facing the same charges, and two extra counts of failing to file tax returns. The Chula Vista councilwoman, whose day job is at Grassroots Resources, also is scheduled to appear in court Thursday.
Prosecutors say the Cardenases lied in order to collect $176,227 from the Paycheck Protection Program, one of the U.S. Government’s early responses to the nationwide shutdown prompted by the COVID-19 pandemic.
They told federal officials that Grassroots Resources employed 34 people, qualifying the company for a six-figure loan.
But, according to the District Attorney’s Office, the company did not have 34 employees. Instead, the defendants claimed workers from a San Diego pot dispensary as their own, prosecutors say.
They collected the COVID-19 relief funds by misrepresenting Grassroots Resources to the U.S. Small Business Administration, the complaint asserts. According to prosecutors, others who have not yet been named or charged also were involved in the conspiracy.
The siblings could receive up to five years and change in state prison if convicted on all charges.
The allegations against the high-profile siblings remain to be proved or disproved in court.
In the meantime, the charges have sparked a slew of questions across the community — for elected officials, for the San Diego County Democratic Party and, perhaps most importantly, for thousands of voters just months ahead of the primary election.
The local Democratic Party chair said members will reconsider the endorsement they gave Andrea Cardenas’ re-election campaign. They also are no longer doing business with Grassroots Resources.
San Diego city officials, who licensed the Harbor Collective marijuana shop identified in the criminal complaint, said they have no plans to reconsider the status of the dispensary — at least until the company or its principals are charged with a crime.
Andrea Cardenas was a no-show at the Friday meeting of the San Diego Association of Governments, the regional planning agency known as SANDAG.
Vice-Chair Sean Elo-Rivera, a San Diego council member, noted the criminal charges during the meeting and said they may need to schedule a discussion about Cardenas’ ability to represent Chula Vista on the board.
“I want to acknowledge that there is a member of the board who is currently facing serious charges that could potentially implicate some of our board policies,” Elo-Rivera said.
So far, Cardenas’ colleagues on the Chula Vista City Council are staying quiet about the alleged criminal conspiracy, ducking questions about whether Cardenas should resign from office.
Grassroots Resources and Jesus Cardenas managed campaigns for Chula Vista Councilmember Carolina Chavez and Deputy Mayor Jose Preciado.
But people who formerly served in public office — or hope to soon — were not so reticent.
Mary Salas, who served Chula Vista as mayor, state representative and councilwoman for more than 25 years, said Cardenas should step away.
“It’s going to create too much of a distraction for our city,” she said.
Humble beginnings
For many years, the Cardenases appeared to be an American success story.
Before moving to San Diego County, their father was a labor attorney in Mexico, but an illness caused him to retire. That brought along housing and food insecurity for the family of five, she has said on multiple occasions from the dais, at community events and interviews.
The Cardenases made no secret of their difficult childhood, growing up poor in the South Bay and sometimes having to stay with other family members to fend off homelessness.
In explaining more than one council vote, Andrea Cardenas referenced her personal challenges before casting her vote on topics such as affordable housing, microenterprise home kitchen operations and the city’s first bridge shelter.
Jesus, who is now 40, skipped college. Instead, he came up as a field organizer for the California Democratic Party in Los Angeles, recruiting volunteers and performing basic campaign work, according to his LinkedIn profile.
He opened Grassroots Resources in 2008 and set to work building his business.
“We specialize in all aspects of campaign management, including strategy, messaging and material design, staffing, scheduling, endorsement outreach, canvassing, media outreach, grassroots organizing and volunteer management,” the profile states.
By the mid-2010s, Jesus had returned to San Diego County, where his firm was not only organizing voters, but also helping would-be cannabis entrepreneurs navigate the challenging and fast-changing licensing process.
He also organized a slew of young people, creating regional clubs that began attracting campaign contributions and affecting Democratic Party politics. He became an influential voice in the county party.
By the fall 2020, Jesus Cardenas had managed a stable of winning candidates, including his sister’s campaign for Chula Vista and Whitburn, who finally won public office after years of failed campaigns.
The freshman San Diego City Council member was so impressed he named Cardenas as his chief of staff, the highest-ranking aide to any public official, even though he was still running the political consultancy.
“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 told The San Diego Union-Tribune in an August 2022 story disclosing the potential conflicts of interest.
“He brings a wealth of successful business experience to our city,” Whitburn said.
Andrea Cardenas, now 31, was independent growing up, ultimately leading her toward a different career path.
She often kept to herself growing up as the age gap between her and her two siblings spanned between 10 and 15 years. In 8th grade, she has often said, she took it upon herself to read the dictionary as a way to improve her English because children would often tease her thick accent.
She was accepted into UC Riverside and earned a degree in political science, even interning with the Riverside County registrar of voters.
Right out of college, Andrea went to work for her brother, spending the first 10 months of her career as an administrative assistant for Grassroots Resources, according to LinkedIn.
Her biography on the Chula Vista website omits that assignment, instead referencing her two-plus years working as a community representative for then-San Diego Mayor Kevin Faulconer.
Andrea Cardenas returned to Grassroots Resources in 2016, this time as the director of community affairs, her social media profile says.
She jumped into politics in 2020, challenging Mike Diaz for his District 4 seat on the Chula Vista City Council. She finished second, collecting 40 percent of the primary vote to the incumbent’s 45 percent.
But she bested Diaz that November, winning the seat by 4 percentage points.
Delfina Gonzalez, who finished third in the 2020 primary election, announced Wednesday that she was running again. She joins Cardenas and challenger Christina Brady on the March 2024 primary ballot.
Gonzalez said Cardenas should resign from the council now.
“Any vote that she has for our city moving forward is going to be very concerning,” she said.
‘Let the process play out’
There’s no roadmap for how public officials should respond when confronted with criminal charges.
Former San Diego councilmembers Ralph Inzunza, Charles Lewis and Michael Zucchet were charged with conspiracy and other federal charges in 2005. None of them resigned until they were convicted.
A judge later overturned seven of Zucchet’s nine convictions; he now runs the labor union that represents the city’s white-collar workers.
Former San Diego Mayor Bob Filner was accused of sexual harassment by multiple women in 2013. He waited months to resign, only leaving office as part of a deal that kept him out of jail after pleading guilty to a felony and two misdemeanors.
Political science professor Carl Luna said many elected officials choose to retain power in the face of criminal charges to help mitigate any penalties.
Chula Vista and its residents may be better served if Cardenas were to resign from the council in the wake of her indictment, Luna said, but he does not believe it would be in her personal interest to leave now.
“From a legal defense perspective it probably behooves Ms. Cardenas to hold on to office as long as possible,” he said. “Resigning could be taken as an admission of guilt.”
Luna said he doesn’t blame Cardenas’ colleagues for not calling on her to quit — just yet.
“For now, the council members should let the process play out and give Ms. Cardenas the opportunity to do the honorable thing,” he said. “Should she not … they should encourage her to either recuse herself from all council business or resign.”
But the San Diego County Democratic Party is not waiting to respond to the criminal allegations.
Chair Rebecca Taylor said she already has scheduled a vote to reconsider the party’s recent endorsement of Cardenas for re-election to the Chula Vista council.
“Given the gravity of the criminal charges filed against Councilmember Cardenas as (a) candidate for public office, central committee members should have the opportunity to revisit our position,” Taylor said last week.
The re-vote will be held at the next full central committee meeting, now scheduled for Nov. 21.
Taylor also sought to distance the party from Jesus Cardenas, whose company has raised and spent hundreds of thousands of dollars on Democratic candidates in recent years.
“We have not worked with Grassroots Resources directly for more than two years, though last year one of our vendors retained them as a sub-vendor for digital advertising,” she said.
“Following the last election cycle, I have stipulated that we will not be entering into any arrangements with that business or its officers directly or indirectly.”
Party activist Nadia Kean-Ayub has already decided how she plans to vote on whether to rescind the Cardenas endorsement, which came on a 31-15 vote weeks before the indictments.
“For the betterment of our other Democratic candidates,” it should be withdrawn, she said.
History of non-compliance
Both Jesus and Andrea Cardenas were under serious scrutiny long before they were charged with fraud, grand theft, money laundering, conspiracy and failing to file tax returns.
Grassroots Resources has been found non-compliant with state tax and business rules on multiple occasions.
California Secretary of State’s Office records show the company continued working even after its license was suspended in 2020, even managing the winning campaigns for Whitburn and Andrea Cardenas while legally banned from doing business.
The consultancy was formally suspended by state tax officials early last year, months after receiving the $176,227 federal loan, other records show.
Jesus Cardenas acknowledged his regulatory difficulties in prior interviews with The San Diego Union-Tribune, saying he was working to correct the deficiencies and pay off any liens or tax obligations.
“I will ensure that this issue is addressed promptly,” he said in August 2022. “I am fully committed to serving our constituents and upholding the high standards of our city.”
Earlier this year, The San Diego Union-Tribune reported that Grassroots Resources continued to do business with the county Democratic Party even though it had been suspended by the state Franchise Tax Board.
State campaign reports filed by the party disclosed more than $200,000 in spending with Grassroots Resources. Chair Taylor said at the time that the money was not paid directly to the suspended company, but rather to another consultancy.
Andrea Cardenas, meanwhile, has her own history with record-keeping and public disclosures.
Barely six months into her council term, she was found to have violated multiple election laws during her successful campaign. More specifically, she accepted political contributions that were higher than limits imposed by city law, an investigation found.
But under Chula Vista’s arcane campaign accountability rules, the case was referred to a second tier of investigation. In May, she was cleared of any wrongdoing when another review said the city election rules were too murky to say whether Cardenas violated them.
“Based on my investigation, I have found insufficient evidence to support the violations of the code as claimed in the complaint,” said Roger Geddes, the Coronado lawyer hired to conduct the secondary investigation.
The Chula Vista council member also is the subject of an open investigation at the Fair Political Practices Commission, the agency in charge of enforcing the California Political Reform Act.
That complaint was filed by Laura Wilkerson Sinton, a cannabis business owner who successfully sued the city after she was denied a license to open a marijuana dispensary.
According to the complaint, Andrea Cardenas failed to disclose Grassroots Resources clients on her Form 700, a state-mandated report that public officials must file each year to alert people to their income, business activities and gifts.
Cardenas also participated in closed-session council discussions related to the Wilkerson Sinton lawsuit even though Grassroots Resources — her official employer — represented rival cannabis companies, the FPPC complaint alleged.
While state elections officials continue to review the allegations, Cardenas recused herself from the closed-session debate over the Wilkerson Sinton case for the first time late last month.
Both Jesus and Andrea Cardenas have retained criminal-defense attorneys but neither provided any comment on the pending charges.
