Plot thickens in District 15 after lawsuit

Sacramento Bee ^ | 10/25/4 | Jim Sanders

[SmithL]

Assemblyman Guy Houston planned to campaign on what he's done for his district, not fight accusations he says are false.

But the race between the Livermore Republican and Democrat Elaine Shaw took an unexpected turn this month when four Bay Area investors filed a lawsuit accusing Houston of cheating them out of $306,015.

Shaw and Houston are running in the 15th Assembly District, which is largely in Contra Costa County but extends into Stockton, Galt and Elk Grove.

Houston considers the lawsuit political sabotage and said it stems from the collapse of his father's firm, Winning Action Investments. The lawmaker has denied any wrongdoing.

"Look at the timing of this, 30 days before an election," Houston said. "I think that tells most of the story."

But Steve Maviglio, a spokesman for Assembly Democrats, who are mailing fliers questioning Houston's character, counters that the lawmaker "has a lot of explaining to do, and instead of answering to voters he's chosen to clam up."

[SmithL]

Why wouldn't they try this again, it worked against Simon.

[calcowgirl]

The timing stinks, but it is past time that the GOP starts vetting their own.

AP via recordnet.com

Houston blames father for lost funds
But documents name him as officer of firm

SACRAMENTO -- Shortly after he took office, Assemblyman Guy Houston's family's investment firm filed for bankruptcy last year, taking millions of investors' dollars with it.

While investors clamor for some of their lost money, the Republican from Livermore blames the failure of Winning Action Investments Inc. on his father. The assemblyman said he was among the losing investors and was out hundreds of thousands of dollars.

Houston represents the 15th Assembly District, which includes Stockton's Weston Ranch development, parts of Alameda and Contra Costa counties, Galt and part of Elk Grove.

Houston has said he never even knew he was an officer of the company, an assertion echoed by his attorney as recently as last Friday. He has acknowledged to local newspapers that he sold houses for the firm but last year distributed a signed statement from his father that he never signed documents for the company or held any stake in it.

However, official documents obtained by The Associated Press, along with letters, interviews and lawsuits, show that Houston was closer to the troubled company than his public comments would indicate. For example:

• He signed bank forms as Winning Action's vice president on April 11, 1997.

• The California Department of Corporations cited Houston by name, along with his father and Winning Action, when it ordered them to stop selling securities without a license in March 1993.

• Last month, he settled a bank's August lawsuit stemming from Winning Action's $5.5 million collapse and Houston's deep involvement in the interconnected web of family businesses that ranged from commercial and residential real estate to an elder-care home.

And now, a new lawsuit levels the most serious allegations: that Houston helped defraud investors by coaxing them to invest in a family-owned real estate firm backed by Winning Action's assets.

Houston no longer is talking to reporters... (snip)