California Nonprofits: Should Politicians Disclose More?

In summary

After a one-year wait, the state’s campaign finance watchdog proposed to require elected officials to provide more information about special interest donations to their nonprofits. .

In the months before California lawmakers in June awarded prison guards a $ 5,000 bonus and an 8% raise over the next two years, the Guards Union made a few charitable donations. The beneficiaries included two nonprofits run by the very lawmakers who were preparing to vote on the pay increases.

State senators who lead the Black and Latino caucuses in the Legislature have asked the Corrections Union to donate to the foundations they lead – and the union has complied, according to files from state, by donating $ 15,000 in March to the foundation managed by the Latin caucus and $ 60,000 in February and March towards the foundation of the black caucus.

Donations like this – from groups that lobby the legislature, to nonprofits controlled by lawmakers, their staff, and their families – have been watched by the California political watchdog since CalMatters reported last year that they have become an increasingly common way to spend money outside the confines of the state’s strict campaign finance laws.

The survey found that a dozen nonprofits run by state lawmakers and their staff said they raised nearly $ 3 million in 2019; that a non-profit organization linked to the legislature’s technology caucus was keeping its donations secret; and that a lawmaker – now Attorney General Rob Bonta – regularly asked interest groups to donate to his personal foundation as well as non-profit organizations that employed his wife.

Much of the money comes from companies and unions with affairs before the legislature, which can get tax relief for giving to charity while currying favor with influential politicians. While nonprofit grantees can do charitable work, they also pay lawmakers to travel overseas, enjoy steak dinners with Silicon Valley tech executives, and spend weekends chatting. with lobbyists at the Disneyland hotel.

Now, after a year of considering whether to change the rules governing transactions known as “orderly payments,” the Fair Political Practices Committee is expected to discuss new regulations on Thursday:

  • One would require officials to disclose when asking interest groups to donate money to charities that politicians or their family members control or for which they are employed.
  • Another would require officials to disclose when they are involved in a decision that affects the person or group donating to charity at their request.

“These are relationships that raise concerns about the personal interest of the official and the possibility of undue influence or access for the recipient as a result of the payment,” the commission staff wrote in a statement. report explaining the proposed rules. “As such, these are relationships with potential for influence or self-operation that the public would like to have disclosed.”

The Fair Political Practices Committee is expected to vote on the proposed rules this fall. The commission is limited in the extent to which it can radically change the rules on ordered payments, which can only be prohibited or significantly revised by legislation.

The proposal includes a major derogation

The rule requiring disclosure of official decisions that affect the donor comes with an important caveat: it does not include legislation. This means the rule would not change anything for state lawmakers who regularly vote on bills affecting the businesses and unions they solicit for donations to their nonprofits.

“We have to have a balanced and deliberate approach. I truly believe that the required payments do a lot of good for many worthy causes. “

Richard Miadich, President of the Fair Political Practices Commission

Richard Miadich, chair of the Fair Political Practices Commission, said the legislation should be treated differently because its impact is usually broad and not designed to grant specific benefits to individuals or interest groups. Asked about the example of the prison guards union donating to lawmakers’ charities just before lawmakers voted on their raise and bonus – a contract that the Legislature’s own analyst described as providing for ” substantial pay increases… without clear justification ”- Miadich said the existing disclosure is sufficient.

However, he wants more transparency in situations where, for example, a city council decides the fate of a permit requested by a promoter who makes donations to a council member’s charity.

“We have to have a balanced and deliberate approach,” Miadich said in an interview on Monday. “I truly believe that the required payments do a lot of good for many worthy causes. And I don’t want to inadvertently interrupt this, especially in the wake of a global pandemic. “

In contrast, the rule requiring disclosure of donations to nonprofits controlled by politicians and their family members would appear to have an impact on many elected officials on Capitol Hill. Gov. Gavin Newsom said he raised $ 881,297 for the California Partners Project, a non-profit organization run by his wife Jennifer Siebel Newsom.

“When I vote, it’s about the question, not who gives me the money or who hasn’t.”

Assembly member Blanca Rubio, a Democrat from Baldwin Park who raised money for a foundation run by her sister

Lawmakers routinely ask donors to give to nonprofits run by their legislative caucuses and, in some cases, to family members. Assembly member Blanca Rubio, a Democrat from Baldwin Park who wields significant power to kill progressive bills as the leader of a moderate Democratic bloc, said she raised $ 62,000 for the Rubio Foundation, run by her sister Sylvia Rubio. Donors include pharmaceutical, oil and dialysis companies who regularly lobby Capitol Hill.

“When I vote, it’s about the question, not who gives me money or who doesn’t,” Rubio told CalMatters. “And I’m very clear with them … that one doesn’t have to do with the other.”

Rubio pointed out that most of the donations she requested went to other nonprofits that were not her sister’s. The money she raised for her sister’s foundation helped donate a turkey on Thanksgiving and fund field trips for children at a low-income school, Rubio said. She had no objection to the rule proposed by the political watchdog that would require further disclosure from her.

“I am happy to follow all the rules,” she said.

Then-Assembly member Rob Bonta, left, and his wife, Mia Bonta, at a press conference in March shortly before his appointment as attorney general Bonta California Progress Foundation funds are now prohibited from going to any organization employing either Bonta. Photo by Anne Wernikoff, CalMatters

Bonta, a Democrat appointed attorney general in March, started his own nonprofit called Bonta California Progress Foundation in 2017, while he was a member of the assembly. He said he raised $ 132,500 between 2017 and 2020 and said the money supported dozens of scholarships for students in his district. Last year, CalMatters reported that Bonta donated $ 25,000 from her foundation to the non-profit organization where his wife worked and helped her employers raise more than $ 560,000, mostly by soliciting donations from companies that put pressure on the legislature. The practice is legal, but political ethics experts have called it inappropriate.

Bonta’s wife Mia Bonta is now one of the main candidates to replace Bonta in the assembly in a special election on August 31.

Earlier this year, Bonta resigned from the board of directors of his namesake foundation and established several new rules, his campaign spokesperson Nathan Click said. “Both Bontas are prohibited by the organization from making decisions about how funds are spent,” Click wrote in a post. “Funds are prohibited from going to any organization that employs Bonta. “

An explosion of donations

Reports in recent months have highlighted both the explosion in demanded payments – with Newsom soliciting $ 226 million in corporate donations to support the state’s response to the pandemic – and the proliferation of donations to non-profit organizations run by political spouses.

Charities led by Annie Lam, wife of Democratic Assembly Speaker Anthony Rendon, have received more than $ 500,000 from businesses with pre-legislature affairs, the Sacramento Bee and a nonprofit reported. run by Newsom’s wife received more than $ 800,000 from a dozen companies that regularly lobby the state government. However, these donations were not made at the “request” of Rendon or Newsom and would therefore not be covered by the new rules envisaged by the FPPC.

One thing the commission may consider changing is the way donations are reported if they come from a donor advised fund. Indeed, such funds can obscure the original source of a donation, The Los Angeles Times reported, raising concerns that donors trying to curry favor with politicians have found a way to avoid scrutiny. The FPPC is also expected to discuss the funds advised by donors at its meeting on Thursday.

The commission is yet to complete its investigation into Congressman Evan Low, launched after CalMatters reported that the Silicon Valley Democrat stopped reporting donations to the nonprofit affiliated with the Legislature’s Tech Caucus. .

SWEET CHARITY PROJECT

What’s new for California politicians? Sweet charity

Steak dinners with lobbyists, overseas trips, spousal favors – nonprofits created by California lawmakers and their employees test campaign finance laws even as they buy into the good work elected officials. Here as elsewhere, they are multiplying.



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