Former staffer says Khanna twice stiffed him for campaign work; Khanna says it was extortion, blackmail

Ro Khanna directed his campaign to pay Bill Ferguson for work in 2014 as token of goodwill, not to satisfy any debt from 2004.

CONGRESS | 17TH DISTRICT |
A Santa Clara County Democratic Party insider named Bill Ferguson says Ro Khanna refused to pay him $6,000 for two months work following Khanna’s unsuccessful 2004 congressional campaign. It’s a debt emails show Khanna initially acknowledged, but now denies. Then it happened again in 2014, according to Ferguson, who was briefly employed by the Khanna campaign and paid half of what he was promised. Khanna maintains the payments in 2014 were intended to placate Ferguson and his repeatedly attempts at what Khanna called “extortion.”

Emails provided by Ferguson, however, show Khanna acknowledged he owed some sort of compensation. Starting in July 2004, just over four months following Khanna’s primary defeat that March to Lantos, Ferguson sent a cordial email to Khanna. “I’ve been needing to put in writing or email for you the outstanding amount due, as you requested. Here it is:” The invoice, totaling $6,000, included two $2,500 paychecks and $1,000 in miscellaneous expenses.

Bill Ferguson called Khanna “dishonest” for not paying him on two occasions.

Khanna responded the next day: “Nice to hear from you. I’m in D.C. for a few months serving as executive director of the Indo American Council at the DNC, raising money for [John] Kerry. I have been unable to raise money for the campaign debt because everyone is focused on Kerry. but I know I owe you some money — it will take time but I will pay. Let’s catch up when I’m back in CA.”

More than a month later in August 2004, Khanna again acknowledges money owed to Ferguson and told him he was planning to “work off” earlier debts by returning to practice law. “I know that I personally owe you money, and will repay you at some point. I am a man of my words and live up to my obligations,” wrote Khanna.

In an interesting aside, in the same email Khanna tells Ferguson that while working on Kerry’s 2004 presidential campaign, he met Bill Clinton, Nancy Pelosi, then-California State Controller Steve Westly and Honda. “I’ve forged a close relationship with Honda. I hope he gets into the cabinet. Who do you think would be a strong contender for his seat (who is worth supporting) if that happens[?]”

Without a reply from Ferguson, Khanna sent another email two days later. “Bill, didn’t hear from you. Hope you aren’t mad at me…..just wanted to assure you I remember my personal obligation. Please do reply and let me know what you are up to. Very much want to help you with your run as well.”

In an interview, Khanna said Ferguson “didn’t do a damn thing” while working on his 2004 protest candidacy against then-San Mateo Rep. Tom Lantos. Ferguson was paid, nonetheless, said Khanna, except for the last month of the primary race when Khanna announced to his staff that the campaign was broke and he couldn’t pay them. Those who stayed, said Khanna, did so knowing they would not be paid.

In addition, said Khanna, if a campaign debt was still outstanding, the Federal Elections Commission would not have allowed the campaign committee to be closed. “We paid him,” said Khanna. “He keeps popping up asking for money and jobs every few years.” Later, Khanna added, “The guy didn’t do a damn thing for me. He just kept blackmailing me.”

Khanna said if he believed money was owed to Ferguson, he would pay him. “This is not about the money,” said Khanna. “I’m not going to set precedent and pay a guy for extortion.” He also believes Ferguson’s decision to come out with his story is politically-motivated and timed to come out within the last few weeks of this June primary campaign. Ferguson is now a supporter of Honda.

Meanwhile, Ferguson said Khanna is merely trying to demonize him. “He’s a lawyer and he’s really good at explaining things, said Ferguson. “This is what he does. He just makes things up.” The bottom line, said Ferguson, is “He owes me money. He didn’t pay me.” He added, “It’s the principle of the thing. It’s dishonest.”

Ferguson said he periodically dropped the matter, but would make contact with Khanna over few years to keep in touch and politely ask for payment. Khanna, however, said he doesn’t recall any contact with Ferguson until the run up to his 2014 race. In the meantime, Khanna went back to practicing law and teaching before accepting an appointment by President Obama in 2009 as assistant undersecretary for the U.S. Department of Commerce. Ferguson ran three unsuccessful campaigns for the Milpitas City Council, but gained influence as an insider within the Santa Clara County Democratic Party. He is currently a member of the county Democratic Central Committee. “I thought we were friends,” Ferguson said of Khanna. “I didn’t push it, but he kept saying, ‘I’m running for office and I’ll pay you back.’”

After Khanna briefly flirted with the idea in 2011 of challenging long-time Rep. Pete Stark the next year in the East Bay’s newly-redistricted 15th Congressional District, Khanna focused his efforts instead on Honda in 2014. In the meantime, Khanna amassed one of the largest off-year fundraising efforts in Bay Area political history. With the 2014 June primary still a year and a half away, Khanna was already swimming in nearly $2 million in campaign contributions. Figuring Khanna’s campaign coffers were good for it, Ferguson asked to be paid for his past work using the 2014 campaign’s coffers.

Khanna’s 2014 consultant Leah Cowan, though, said “it wouldn’t look right to pay him for work in 2004,” according to Ferguson. “That’s when I started to get irritated,” he added. The Khanna campaign apparently had second thoughts. “If you work on the campaign, we’ll call it consulting,” Ferguson recalls Khanna telling him. Khanna, in an interview, agreed with the characterization to essentially over-pay Ferguson for minimal work on the campaign starting in early 2014. Khanna said he approved the payments out of “goodwill” to Ferguson because he was “hard up for money,” in addition, to thanks for “taking a chance on me” against Lantos in 2004, a bid predicated on opposing the congressman’s support for the Iraq War. “Unfortunately, Bill lost that idealism to stand up to the war in Iraq and the Patriot Act,” said Khanna.

However, it is still unclear whether Ferguson viewed this as a method to recoup money for his past work, although he called the 2014 arrangement “a compromise.” Ferguson maintains Khanna still owes $6,000 from 2004. Emails from late 2014, however, suggest Khanna feared Ferguson would take the story to the press in an effort to besmirch him and his campaign. Ferguson denies ever threatening to tell his story to the press, but admits to saying he would tell other staffers and local politicos about it.

In one email from Oct. 2, 2014, after expressing an opinion that Khanna was again making an attempt to avoid paying him, Ferguson wrote, “Ro, I really need you to take care of this. I have been talking and talking with you and Leah. I’ve been friendly and not caused any problems. Please, can we just solve this and get it over with?” At this point, Ferguson said he was only paid one installment of the four agreed $1,500 payments. On Oct. 20, 2014, Ferguson wrote, “Again, I’ve not publicized this, but I feel I’m just getting the runaround from you. And I have walked many weekends, additional, for you.”

With Election Day just two weeks away, Ferguson wrote to Khanna on Oct. 22, 2014, “Ro, you still don’t get back to me. I’m ready to assume that you’re fucking with me. That you’re telling Leah to lead me on and pretend like you’re planning on paying me. That you would like to do this thru Election Day.” Later in the same email, Ferguson, added, “I guess my next step would be to start telling people. I’ll start with telling your staff what is happening and ask them to pressure you. I’ve tried and tried to be nice. And it’s not getting me anywhere. Ro, PAY ME NOW.” The email was signed, “Please, Bill.”

Ferguson eventually received a second $1,500 check in late October, but in another email to Khanna, he referenced two more future payments. “Ro, Thank you for the check for $1,500. I did receive it last week. That’s good. Thank you. So, we’re now up to half. I would like you to tell me the plan for the next half.” Ferguson contends he actually did work on Khanna’s 2014 campaign, primarily door-to-door canvassing. However, he said he no longer was personally supporting Khanna’s candidacy against Honda at the time, not after the manner in which Khanna had treated him over the years. Khanna said he doesn’t believe Ferguson did any tangible work in 2014. Meanwhile, Ferguson never received the additional $3,000 he said was promised to him in 2014. In an interview, Ferguson said he dropped the matter, but felt used by Khanna for a second time. “They made me work more,” Ferguson said of the 2014 deal. “I feel like they were taking advantage of me again because I still wasn’t paid for the $6,000 they owed [from 2004].”

If any animosity between Ferguson and Khanna exists, Khanna sure does not recognize it. That’s because in January of this year, Khanna asked for Ferguson’s endorsement to unseat Honda. According to an email from Khanna on Jan. 19, he wrote, “I’d love to chat and earn your support if you are willing. Would love to catch up.” Ferguson said he never responded.