By Marty Graham and Sharon Bernstein
SAN DIEGO/SACRAMENTO, Calif. (Reuters) - Republican U.S. Representative Duncan Hunter and his wife Margaret pleaded not guilty on Thursday to federal charges alleging misuse of $250,000 in campaign funds, in a case that could help Democrats seize control of a traditionally Republican seat.
Hunter, an early supporter of U.S. President Donald Trump, is the second Republican member of the U.S. House of Representatives to face criminal charges this month. On Aug. 8, U.S. Representative Christopher Collins of New York was charged with taking part in an insider trading scheme. Collins, who has suspended his re-election campaign, has called the charges baseless.
On Thursday, bail for Hunter was set at $15,000, and for Margaret Hunter at $10,000.
"There are serious allegations in the indictment with a large amount of money stolen from the campaign by both defendants," Assistant U.S. Attorney Phillip Halpern said of the Hunters on Thursday, as protesters shouted "Shame! Shame!" outside the courthouse.
Ashen-faced and wearing a muted plaid sport coat, Hunter spoke quietly in court, saying only "not guilty" when asked to enter a plea by U.S. Magistrate Judge William Gallo.
"The charges against me are politically motivated and without merit," Hunter said in a letter to Republican House Speaker Paul Ryan that was forwarded to Reuters after the hearing. "I intend to fight them fully."
In the letter, dated Thursday, Hunter asked Ryan to remove him from his congressional committee assignments, an action Ryan had already said he was planning to take.
While he and Margaret Hunter were inside the courthouse being fingerprinted, protesters outside changed their chant to "Lock him up!," a nod to the Trump campaign's rallying cry to imprison Democratic candidate Hillary Clinton, who was investigated by the FBI for use of a private email server but never charged.
The indictment against Hunter and his wife on Tuesday came the same day that Trump's former campaign chairman, Paul Manafort, was found guilty of tax and bank fraud, and former Trump lawyer Michael Cohen pleaded guilty to crimes including tax evasion, bank fraud and campaign finance violations.
The highly detailed indictment by a grand jury in San Diego alleged that the Hunters used campaign accounts to pay for their children's private school tuition, lavish travel including a trip to Italy and restaurant meals that frequently cost hundreds of dollars.
It also alleges the Hunters lied about how the money was spent, with the couple saying it went to charity or campaign events when prosecutors said it was really used for groceries, restaurant meals and clothing.
"The Hunters’ improper use of campaign funds for personal expenses occurred despite numerous warnings about the prohibition against using campaign funds for personal expenses and repeated inquiries from Duncan Hunter’s campaign treasurer about questionable purchases," U.S. attorney Adam Braverman, an interim Trump administration appointee, said in a news release on Tuesday.
TARGET LIST
Hunter, whose father, Duncan Hunter, Sr., also served in Congress, represents conservative portions of San Diego and Riverside counties in a seat that is generally considered safe for Republicans.
But the Hunters' legal woes could put the seat in play, according to political analysts.
California is key to Democrats' efforts to wrest control of the U.S. House of Representatives from Trump's Republicans.
The Democratic Party added Hunter's district to its list of targets months ago, and on Wednesday, election handicappers at the Cook Political Report assessed the district as merely "leaning" Republican, a change from its prior rating of "solid Republican."
The campaign of his Democratic opponent, Ammar Campa-Najjar, has already referenced the case in several news releases this week, and Campa-Najjar was on hand at the courthouse on Thursday, briefly addressing reporters and protesters.
The area will be difficult to pry away from Republican control, but in a sign of the Democrats' determination, top strategist Joe Trippi - whose advice helped Democrat Doug Jones defeat Republican Roy Moore in a U.S. Senate race in deep-red Alabama last year, signed on last month to lead Campa-Najjar's campaign.
Trippi told Reuters in an interview on Tuesday he expects the criminal case against Hunter will lead more voters to support Campa-Najjar.
"This is something that is going to hang over him for a long time," he said, referring to Hunter. "And with that I think a lot more people will be taking a closer look at Ammar."
