Brown’s fund-raising prowess targets his favorite charities

During the past year, Gov. Jerry Brown directed more than $2.5 million from some of the state’s most powerful interests – including those who often have business before the state — to his favorite nonprofit causes, according to the state’s political watchdog.

Many of his charitable donations – known in the Capitol as “behested payments” because they are made at the behest of a politician – provided critical funding for the Oakland Military Institute and the Oakland School for the Arts, both of which Brown founded when he served as mayor of Oakland from 1998 to 2006. Between them, the two schools during that period received about nearly $22 million.

“It’s hard to see how you restrict those people who give money to charities for political access without restricting genuine charitable donations.” — Dan Schnur

Behested payments, which have been solicited for years by numerous state politicians, are legal and are tracked by the Fair Political Practices Commission, which enforces the state’s campaign finance laws. The payments must be restricted to legislative, governmental, or charitable purposes, and may not be donated towards “election-related activities.”

But of the politicians who have solicited charitable donations, Brown by far is the top fund-raiser. From 2006 through September of 2013, he has raised a total of $22.5 million through behested payments for his favorite charitable causes. As a point of comparison, the amount is more than half the price-tag of his 2010 gubernatorial campaign, which racked up some $40.5 million in political contributions.

Behested payments, while legal, raise questions among campaign finance reform advocates, who see them as a means of using money to curry favor with important elected officials.

“As a principle, charitable donations are great. However, the problem is when special interest groups only give at the request of a public official and it’s to the public official’s pet charity,” said Common Cause spokesman Phillip Ung. “There is influence that can occur with the public officials, especially when the behested payments are made to close friends of legislators or charities run by family members.”

Behested payments allow special interest groups and individuals to contribute on behalf of a candidate by making charitable donations to a government agency or charity of the candidate or elected official’s choice. Aside from the charitable benefit of the contributions, the process enables the donors to be viewed positively by a politician – at least, that’s often the hope on the part of the giver.

Among the more well-known donors to Gov. Brown are Anheuser Busch, Intel, Walgreens, Comcast, Fedex, UPS, Google, AT&T, Wal-Mart, Chevron, PG&E, Kaiser, VISA, and Verizon.

Dan Schnur, a former chair of the Fair Political Practices Commission, suggests that, “sometimes, some people give to a politicians favorite charity cause they want access and influence, but a lot give cause they want to give to a legitimately good cause, and some do both, so it’s hard to separate the two through law,” but emphasizes that, “on the other hand the last thing you wanna do is discourage charitable giving.”

Schnur, who now heads the Jesse M. Unruh Institute of Politics at USC, says that “it’s hard to see how you restrict those people who give money to charities for political access without restricting genuine charitable donations.”

Ung believes that “absolutely there is a hidden motive. These companies can give to any charity, but they use behested payments to get a favor….The frustrating thing to the voters is that the companies or special interest groups are influencing legislators and getting tax write offs in the process.”

The donors’ motives, however, are not the watchdog’s concern.

FPPC spokesman Richard Hertz said in an email that the FPPC is “not permitted to give our thoughts on the motivations of legislators, those who donate to them or who make behested payments, or our opinions regarding the relative priorities of the issues.”

Behested payments have no monetary limit. However, amounts over $4,999 from a single source in a calendar year must be reported to the FPPC to be tracked. Presumably, this means that the amounts reported may be significantly lower than the reality if multiple individuals or entities donate less than the threshold for public disclosure.

Among the more well-known donors to Gov. Brown are Anheuser Busch, Intel, Walgreens, Comcast, Fedex, UPS, Google, AT&T, Wal-Mart, Chevron, PG&E, Kaiser, VISA, and Verizon.

The two largest donations, excluding those from charitable foundations, came from Lytton Rancheria of California and San Pablo Lytton Casino, both for $100,000, and one each to the Oakland Military Institute and the Oakland School for the Arts.

Apart from the recent $500,000 and $100,000 donations from charitable foundations, those were the only two donations above the $50,000 range. There were 94 donations in the $5,000-to-$10,000 range, and 42 in the $10,000-to-$50,000 range.

Silicon Valley Bank donated $39,999 to the Bay Area Council in May of this year on behalf of Gov. Brown, with the note that this money was governmentally purposed, “to support the operation of the California-China Trade and Investment Office.”

Bank spokeswoman Carrie Merritt noted in an email that “Silicon Valley Bank was invited to be on the advisory board for a new California-China Trade and Investment Office in Shanghai, a partnership between the Governor’s Office of Business and Economic Development (GOBiz) and the Bay Area Council.”

As an advisory board member SVB made a contribution paid to the Bay Area Council in the amount of $39,999.” When asked about the odd number of the donation, she said that it “was generally $40K, but since this is an unlucky number in Chinese (signaling death) the amount changed to $39,999.”

“The goal of our participation in this effort is to promote and deepen California business relationships with China. We have offices and a joint venture bank in China that supports local and global technology businesses that work cross border between the US and China,” she added.

This donation operates cleanly within the rules for behested payments, and therefore makes Silicon Valley Bank’s behested payment a prime example for how these payments should be used, which is to further governmental, charitable, or legislative development.

AT&T made donations in December of 2012 in the form of “2,650 long distance telephone calling cards for distribution to California National Guard Troops serving overseas” worth nearly $23,000 as listed in the public records for the behested payments for 2012-13. The company this year also donated $50,000 to the Oakland Military Institute and $25,000 to the Oakland School for the Arts.

Since 2006, there has been a noticeable drop each year in the amount of payments made between July and November.

AT&T spokesperson Lane Kasselman said in an email that the company “has been a long-time supporter of both military veterans and active duty personnel. The company has provided calling cards for California National Guard troops serving in combat overseas for close to 10 years through collaboration with the governor’s Heroic Families program and the California National Guard.”

Kasselman also noted that the donations to the Oakland Military Institute  furthered the goals of education, and “specifically programs that encourages and supports college readiness in at-risk youth…The company supports the mission of the Oakland Military Institute which is to prepare at-risk youth in Oakland and neighboring communities for college and leadership roles in their community.”

Brown’s donations came under scrutiny in 2011, when numerous payments were made to the “Governor’s 2011 Inaugural Committee, Inc.” At the time of these donations, some Capitol observers were critical of large amounts of money being raised for a party while the state had such a large debt. Nearly all of the donations made at that time were for only $5,000, and mostly from California Associations, Councils, and other groups. The Committee raised nearly $580,000.

Brown spokesman Evan Westrup said the “donations represent an opportunity for foundations, businesses and individuals to invest in their communities and help students succeed.”

“The governor is very proud of the two schools he founded in Oakland more than a decade ago, which have served thousands of Bay Area students – many the first in their family to go on to college,” Westrup said.

Ung notes in defense of Gov. Brown that, “he has always been the major fundraiser for these schools, but has no day-to-day management of the schools, and gets no financial benefit.”

However, the payments’ timing remains controversial.

Since 2006, there has been a noticeable drop each year in the amount of payments made between July and November. More recently, this drop has been more pronounced. Starting in 2010, there have been none or very few payments in this time period – which included a statewide election and legislative recesses.

The same thing seems to be occurring this year: There were no payments since August recorded on the Secretary of State’s website. Schnur says that “when a special interest doesn’t need access, they are less likely to give money to a campaign or to a candidate’s favorite charity.”

Since the Legislature is out during the fall, there might simply be no motivation for donations to gain favor with the Governor. “The fact that the Legislature is in recess gives very few incentives for people to give,” Ung said.

Is the suspicion justified that these donations are only taking place whilst there are pending pieces of legislation involving individual or company?

“It’s not a coincidence at all, but does not provide a rationale for restricting charitable donations,” Schnur said.

However, it cannot solely be about special interest groups, Ung said.

“It’s a two-way thing: it’s not only about the special interest groups giving, but also about the legislators accepting,” he said.
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Ed’s Note: Summer ParkerPerry is a Capitol Weekly intern from the UC Sacramento Center. She currently attends classes at UC Santa Cruz.