Claims Money for L. B. Committee Sidetracked : PAC Says Chamber Misused Funds

The former political action committee of the Chamber of Commerce has accused the financially strapped chamber of improperly spending about $7,000 in committee funds and then refusing to promptly pay the money back.

In a March 3 letter to the chamber, the Long Beach Political Action Committee demanded a precise accounting of all money contributed to the PAC through the chamber and payment of those funds by Monday.

“If a businessman contributes to the PAC and the chamber uses that money for something else, then I think we’ve got a problem,” said Henry Meyer, the political committee’s chairman.

“They should have taken that money and put it aside in a trust fund the way they were instructed to by the (chamber) board of directors,” Meyer said. “But they didn’t . . . and now it’s the proverbial blood out of a turnip.”

Chamber President Christopher Pook confirmed that about $7,000 is owed the PAC from contributions made before he took office July 1. In addition, about half of the $1,300 contributed since July 1 is still due the PAC, he said. The chamber has made two payments on that $1,300 since late January.

Falling Membership Cited

Pook heatedly insisted, however, that it has always been the chamber’s intention to pay all the money owed to the PAC. The chamber has been unable to immediately do that, he said, because of falling membership and cost overruns during the previous two fiscal years.

Pook estimated the chamber debt at about $150,000 last fall, but he declined to update the debt figure on Tuesday.

The chamber’s executive board will meet next week to decide how to respond to the PAC’s demand for payment, Pook said. Rather than paying the money to the PAC, the chamber could simply return it to contributors, he said.

Rolfe Arnhym, executive director of the 3,300-member chamber, was out of town and unavailable for comment.

The PAC was formed in 1983 as the political arm of the chamber, and until last fall chamber members were encouraged to contribute to the PAC as they paid their monthly dues. However, that option was deleted from the chamber’s January billing after its board of directors voted to sever its last formal tie with the PAC. Directors said they wanted to remove the chamber from local partisan politics.

‘Continuously Stalled’

At the same time, the political action committee began lobbying even more strongly for payment of past contributions, Meyer said. He said a few payments had been made to the PAC in its first months of existence, but for the next two years nothing was paid.

“We were continuously stalled,” Meyer said. “Then the PAC board got unhappy and told me to contact Mr. Pook and find out what the heck was going on.”

Meyer and Joseph Saucedo, both former chamber presidents, met with Pook and Arnhym in January to renew their demand for payment, Meyer said. Pook said the PAC could not be given preferential treatment over other creditors, while Meyer argued that the PAC had a special relationship with the chamber, was not a creditor and should be paid first, Meyer said.

In the end, Pook told Meyer, “ ‘Well, go ahead and sue us,’ ” Meyer recalled. Pook would not comment on the details of the meeting. Saucedo said he did not recall Pook making such a statement.

Each side contacted attorneys, Meyer said. Last week, Meyer said, Pook “called to say they were changing their position. They said we did have a trustee-beneficiary relationship and were not creditors.”

Pook confirmed that change of position by the chamber, but he would not comment on when the remaining debt might be paid.

‘Accelerated Payoff’

The PAC has never threatened legal action against the chamber, Meyer said. “We have three past presidents of the chamber on our board, and we are well aware of the chamber’s financial position,” he said. “We’re willing to work with the chamber . . . toward some accelerated payoff.”

The political action committee is also seeking a formal acknowledgment from the chamber that the PAC had nothing to do with the chamber’s expenditure of the contributions, Meyer said. The statement would protect the committee if disgruntled chamber members file suit because their contributions were not forwarded to the PAC, Meyer said.

As a show of good faith, the chamber promised two months ago to “immediately” pay the PAC the $1,300 contributed since July 1, Pook said. So far, the PAC has received two checks totaling $670, Meyer said.

Even without the more than $7,000 owed by the chamber, the PAC has “several thousand dollars” to contribute to City Council races after the April 8 primary election, Meyer said. It will endorse no candidate until then, he said.