Legislation to ease the disclosure rules on the millions of dollars worth of politician-directed donations that unobtrusively flow to charities has been yanked from the governor’s desk. The head of the state’s political watchdog agency raised an alarm about the bill–which was approved unanimously in both houses–and the governor himself apparently expressed concerns before returning it to the Legislature at the Senate’s request.
“I am pleased that it was withdrawn, and I can only hope that cooler heads will prevail. Clearly, I believe this is a bad bill,” said Ross Johnson, chairman of the Fair Political Practices Commission. The governor did not comment on his action, which was requested by the bill’s author, Sen. Ron Calderon, D-Montebello.
The donations to charities and nonprofits are known as “behested payments” because they are made at the behest of a politician to a particular group, often a favorite charity in the politician’s district. They have been in existence for a decade, but have drawn relatively little attention.
Unlike campaign contributions, the donations do not go to the politician, and there are no limits on behested payments, which have reached more than $10.6 million since January 2005 alone. Also, there are also no online records of the payments, which are tax exempt when made to charities and which are tracked only on paper at the J Street offices of the Fair Political Practices Commission.
The bill that was removed from the governor’s desk is Calderon’s SB381. Current law requires that behested payments of $5,000 or more be publicly reported within 30 days. Calderon’s bill would have raised the threshold to $$7,000, added an annual, automatic increase pegged to inflation and extended the reporting period to 90 days. The bill drew criticism from, among others, Johnson and Robert Stern, head of the Center for Governmental Studies in Los Angeles, which tracks politics and campaign finance. Stern is a former general counsel of the FPPC. Calderon’s bill was placed in the Assembly, where it is expected to be considered next year.
“My problem is that we’re talking about disclosure, and we should have more disclosure, not less. The bill goes the wrong way. We should lower, not raise, the threshold, maybe to $1,000,” Stern said.
Johnson said disclosure of behested payments should parallel campaign donations, in which amounts of $100 or more are required to be publicly reported by the donor’s name, occupation and employer. As elections approach, campaign donations are required to be reported with greater frequency. There are no such restrictions on behested payments.
“Who is kidding whom?” Johnson said in an interview at his FPPC office. “Someone writes the checks (to the charity) because someone picks up the phone and calls.” There is, Johnson said, “considerable political benefit to the official and the payments can be totally outside the limits.”
Supporters say the payments help charities and other worthy community causes, and note that 1996 legislation authorizing the donations followed earlier FPPC “advice letters” allowing the payments to be exempt from contribution limits. Critics, such as Johnson and Stern, said the payments carry political benefits for the elected official, and that the donation’s unlimited nature makes it difficult to trace their impact.
“It raises the real potential of abuse,” Johnson said.
On July 5, Capitol Weekly reported details of the behested payments, which cross party lines and are solicited by rank-and-file lawmakers, legislative leaders and constitutional officers.
Republican Gov. Arnold Schwarzenegger in the 12-month period last year behested a record $1.62 million to his inaugural campaign committee; this year through mid-year it was nearly $1.2 million. The money came from nearly an extensive array of companies and interests that included real estate, banking, manufacturing, energy, beverages, utilities and others. The donors include some who have had legislative or political business in the Capitol. Some $450,000 came in nine donations of $50,000 each, including payments from Chevron, the California Real Estate PAC and PG&E.
Attorney General Jerry Brown, a Democrat and former mayor of Oakland, has behested more than $900,000 in six months for two entities – the Oakland Military Institute and the Oakland School for the Arts. The largest single donation, $100,000, came from the Kaiser Foundation Health Plan.
Senate Leader Don Perata, a Democrat, behested nearly $90,000 a month since January to a variety of groups, including a breast-cancer research organization, the United Way, a Livermore-area school district and a group called the Third Wednesday Peacekeeper Fund. The money came from Kaiser Permanente and several others who each gave $25,000; Del Mar businessman John J. Moores and the CSU Institute of Long Beach, who each gave $100,000; and $50,000 each from Chartwell Partners, a national law firm, and the California Alliance for Jobs, a political campaign committee.
More than half of the $530,000 went to the Rebuilding California Foundation, a new nonprofit–not to be confused with a political committee with a similar name–that was created in January.
Perata said at the time that the aim of the new foundation was to educate the public and advocate on behalf of the voter-approved infrastructure bonds.
“The aim of the Rebuilding California Foundation is to make sure the infrastructure bonds get done. In essence, to keep policy makers, civic leaders and the general public informed of and involved in the process of funding and building the new roads, new schools, safe housing and flood control projects our state needs to keep our economy strong,” Perata said.
In 2006, former Sen. Jackie Speier, D-San Francisco, reported $714,000 in behested payments, and a number of current or former lawmakers in both houses–Kevin Murray, Gloria Romero and Joe Dunn–reported behested payments totaling six-digits or higher.
Assemblyman Mervyn Dymally, D-Compton, listed more than $640,000 in behested payments last year, with all the money going to the Legislative Black Caucus. The scores of donors–more than 130 separate donations by one count–came from companies large and small, such as AT&T, American Express, racetracks, labor unions, pharmaceutical makers, hotels and others. The largest donation, apparently an in-kind contribution, totaled more than $65,000 from the Regent Beverly Wilshire.
Assembly Speaker Fabian N