Donations Sway Tax Panel, Member Says

State Board of Equalization member William Bennett, charging that campaign contributions are influencing the board’s decisions in tax cases, called Monday for legislation that would require members to abstain from voting when they face a potential conflict of interest.

Saying that the time has come for “cleansing the stable,” Bennett called for passage of a bill by state Sen. Quentin L. Kopp (Ind.-San Francisco) that would prohibit fellow members of the tax board from participating in decisions affecting campaign contributors who gave them $250 or more.

The five-member Board of Equalization, although relatively obscure, decides more than 4,000 tax cases a year, including some that can be worth millions of dollars to the individuals or companies involved. In recent years, the incidence of campaign contributions to board members has risen dramatically.

“If this system endures, there will be a scandal,” Bennett said.

Bennett, first elected in 1970, said members of the board serve in a quasi-judicial capacity in deciding tax cases and should not have any financial link to the outcome of the cases they decide.

He identified several decisions of the board that he alleged were influenced by campaign contributions, including the case of the Crystal Cathedral, the Garden Grove church headed by evangelist Robert Schuller.

In 1982, the church lost its tax exempt status after it staged a series of commercial concerts. The church, represented by the law firm of Latham & Watkins, appealed its case to the Board of Equalization.

While the matter was pending, 18 attorneys who belonged to the firm, including at least one in the Chicago office, gave $1,900 in campaign contributions to members of the board, Bennett said. Conway Collis, who is now chairman of the board, received most of the money.

The Board of Equalization granted a partial victory to the church and voted to give back more than $200,000 in taxes. Collis voted with the majority.

In recent years, Bennett said, his colleagues have all received thousands of dollars in contributions from utility companies, railroads, department stores, insurance companies, entertainment figures, accountants and others who had cases before the board. Bennett, whose district includes most of Northern California, said he does not accept campaign donations.

“It is impossible to dislike a person who has made a gift to you or a contribution,” he contended.

Have Potent Weapon

Members of the board who might want to use their position to raise campaign funds have a potent weapon, Bennett said, because they have access to the names and addresses of all California taxpayers. It would be an easy task, he said, to identify people and businesses interested in a particular tax issue and solicit donations from them.

Under existing law, public officials are prohibited from making decisions that affect their own sources of income, but the law does not extend to campaign contributions.

Among the backers of Kopp’s bill are Common Cause, a citizens’ lobbying group that advocates campaign reform. A similar measure died in a legislative committee last year.

Board Chairman Collis, a Democrat who represents parts of Los Angeles, the central California coast and San Francisco, has been a major campaign fund raiser in the past. In January, two other seasoned fund raisers joined the board: Democratic state Controller Gray Davis, who has gubernatorial ambitions, and former state Sen. Paul Carpenter (D-Norwalk). Carpenter represents the eastern two thirds of Los Angeles County.

As evidence of an increasing politicizing of the board under its new composition, its critics point to the long-awaited departure Monday of executive secretary Douglas D. Bell, who has held the post for 10 years. Bell, who announced his resignation, had been under pressure to leave so the new board majority could choose a more politically conscious replacement.