Watchdog to review rules letting California politicians raise money for charity

Citing the potential for ‘self-dealing,’ California's Fair Political Practices Commission is rethinking the rules governing political behests.

The California Capitol on September 12, 2019. Photo by Anne Wernikoff for CalMatters

California’s political watchdog agency is rethinking state rules allowing elected officials to solicit donations to nonprofits, following a Calmatters investigation into millions of dollars raised by state politicians for charities controlled by them, their relatives or their staff.

The Fair Political Practices Commission has not yet proposed how the rules could change, but it’s making plans to begin gathering input from the public on an update to the regulations and laws that govern what are known as “behested payments.” 

The Fair Political Practices Commission is preparing to update the regulations and laws that govern “behested payments” — donations made to charities at a politician’s request. 

Such donations, made to charities at a politician’s request, have become an increasingly common way for California politicians to raise and spend money outside the limits of campaign finance law. 

“We have a plan to take a look at this in a thoughtful and comprehensive way,” said commission chairman Richard Miadich. “It is something that is clearly on our radar and something we need to be focused on.”

Miadich particularly cited CalMatters’ recent Sweet Charity series, which revealed that the amount of money flowing to nonprofits controlled by California legislators or their staff has skyrocketed over the last decade — from $105,000 in 2011 to $2.9 million in 2019 — and showed that much of the money comes from corporations and unions that lobby the Legislature.

Meetings to discuss changing the rules have not yet been scheduled because Californians are under an order to stay home to prevent the spread of coronavirus, and government agencies are still figuring out how to conduct business remotely. Miadich said he first wants interested parties to offer ideas on updating the behested payments rules, and then he plans to bring recommendations to the commission. They could include regulatory changes that the commission can make, he said, or proposals for new state laws.

The focus should be on the potential for charitable donations to mask “self dealing” by politicians, said commissioner Allison Hayward.

“I’m concerned more about the behested payments process being used for the personal profit of the person doing the solicitation, whether it’s to a foundation that person controls and (uses to) subsidize their lifestyle or their income or their family’s income,” she said.

“I don’t think we‘re worried about elected officials who also happen to be leaders of their communities raising money for the Boys and Girls Club. It’s more these self-dealing areas that trouble me.”

The FPPC already is investigating  another situation CalMatters revealed — a nonprofit affiliated with the Legislature’s technology caucus that has stopped disclosing where its money comes from.

CalMatters found that one assemblyman helped raise $588,000 for organizations that employed his wife by soliciting donations to nonprofits she worked for, and to his own foundation that in turn loaned $25,000 to his wife’s employer. Experts said the arrangement was legal; the author of California’s political ethics law said the law should be changed to prohibit politicians from soliciting money for nonprofits that employ their spouse.

Miadich declined to comment on the situation, saying he doesn’t want to prejudge what changes are necessary to the behested payment rules before hearing from the public. 

The FPPC already is investigating another situation CalMatters revealed — a nonprofit affiliated with the Legislature’s technology caucus that has stopped disclosing where its money comes from.

Miadich voiced concern that legislation introduced earlier this year could wind up limiting how much information the public gets about charitable donations solicited by politicians. The bill, by Assemblywoman Cristina Garcia, a Bell Gardens Democrat, says elected officials would not have to report donations made in response to an invitation to an event hosted by a nonprofit organization unless the officials make “a direct written or verbal request for a payment for a legislative, governmental, or charitable purpose.”

“It seems to be written to significantly restrict the instances where the public would have information on a behest,” Miadich said. 

Garcia has said that she doesn’t intend to broadly exempt politicians from disclosing their charitable fundraising activity to the public. Instead, she wants her bill to only apply to situations where elected officials’ names appear on an invitation as one of dozens of politicians on an “honorary committee” supporting a nonprofit’s fundraising event — instances where the officials typically play no role in soliciting donations. 

Good-government advocates said they were happy to hear that state regulators are considering changes to the rules about behested payments, and called for stricter rules to prevent abuse.

“We are concerned that behested payments damage the public trust,” said Dora Rose, deputy director of the League of Women Voters California. 

Though her organization has not yet proposed specific changes, Rose said she thinks the FPPC should consider banning officials from raising money for organizations that employ their family members, lowering the threshold for disclosing behested payments, and requiring faster reporting to the public. Currently, officials must report payments of at least $5,000 made at their behest within 30 days. 

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