When Diane Harkey ran for state Senate (unsuccessfully) and Assembly (successfully), she claimed she financed her campaigns with her own money, earned during her “six-figure” banking career.
But later came disclosures that some of the Dana Point Republican's campaign funds–$16,000 worth–came from three developers who received millions in loans for her husband's investment company, Point Center Financial of Aliso Viejo.
The assemblywoman claims she, her husband Dan Harkey and the developers did nothing wrong or, at least, unlawful. But the Securities and Exchange Commission (SEC) launched an investigation in Point Center Financial in 2009.
One developer contributed $5,000 to Diane Harkey's campaign in 2005, two months later received a $19.5 million loan from Point Center Financial for a Palm Springs development, then defaulted on the loan, leaving a property in disrepair to the city and investors.
A second developer did the same: gave to the Harkey campaign in 2005, two months later received a $16.5 million loan through Point Center Financial and defaulted on the loan, leaving investors holding property worth far less than what they were promised.
Investors, who do see something wrong and unlawful about the whole mess, have sued the Harkeys. A trial alleging fraud is scheduled to begin Monday.
Matt Coker has been engaging, enraging and entertaining readers of newspapers, magazines and websites for decades. He spent the first 13 years of his career in journalism at daily newspapers before “graduating” to OC Weekly in 1995 as the paper’s first calendar editor. He went on to be managing editor, executive editor and is now senior staff writer.