Assemblyman Peter Chacon was paid $7,500 by the California Check Cashers Assn. last year, more than half of the payment coming on the same day he abandoned legislation to cap the fees that check-cashing businesses can charge their customers, state records show.
Chacon, in his annual statement of economic interests filed Wednesday, reported receiving $4,000 of the money from the check cashers’ trade group, which had opposed the bill, on April 14, the day the bill was shelved in the Assembly Finance and Insurance Committee.
The San Diego Democrat received another $3,500 from the organization three months later, according to the statement.
Chacon said Thursday that the group paid him the money as an honorarium to compensate him for touring several check-cashing stores in Los Angeles and meeting with the association’s board of directors.
“My visits were very revealing in terms of the difference between a check-cashing facility and a bank,” Chacon said. “I believe now that most of them are charging a fair fee. There are probably some that charge excessive fees.”
Tom Nix Jr., president of the Check Cashers Assn., said the group invited Chacon to take the tour because his bill could have put many of the group’s 300 members out of business.
“He knew nothing about our business,” Nix, whose company owns 19 check-cashing locations, said. “He came in and talked to managers and employees and actually observed the whole process. We did our best to educate him to the vital services we are providing at reasonable rates.”
Nix said the amount of the group’s payments to Chacon were “arbitrary.”
“We wanted to show our thanks for him spending a couple of days with us, so we provided those honorariums,” he said.
Chacon said he saw nothing wrong with being paid by a group that would be affected by his legislation. He said he got the idea for his bill by reading newspapers and had no qualms about taking money to be educated about the industry he was proposing to regulate.
“They offered an honorarium, and I accepted it,” Chacon said. “It’s not illegal. I reported it.”
Aside from the $7,500 for his two appearances with the check cashers, Chacon was paid $2,250 for seven other speeches last year, averaging $321 for each of those events.
The state’s political reform act
prohibits legislators from participating in a decision that would have a material financial effect on any individual or business that paid the legislator more than $250 in the 12 months before the decision.
That prohibition would not apply in the Chacon case if the money hereceived came after, not before, he participated in the decision affecting the check cashers.
In any case, the Fair Political Practices Commission, which enforces the act, has ruled that payments from trade associations are exempt unless the decision in question actually affects the association, not the individual businesses that are members of the trade group.
Proposition 73, a political finance measure approved by California voters last year, limits honorariums of the kind Chacon received to $1,000 a year from each source. The new rules took effect Jan. 1.
Chacon said the payments from the trade group did not prompt him to drop the bill. He said he abandoned the measure at the urging of Assemblyman Patrick Johnston (D-Stockton), chairman of the Finance and Insurance Committee. Johnston confirmed that he advised Chacon to drop the bill so that the issue could be studied in more depth between legislative sessions.
“Only the author was supporting it,” Johnston said. “The Department of Corporations was opposed to the bill. I felt the bill would not be successful in the form it was in, and there was not time to amend it and have sufficient hearings to consider it.”
As introduced Feb. 18, 1988, Chacon’s bill would have limited the fees to 1% on government checks, payroll checks, traveler’s checks, money orders or cashier’s checks. Fees for cashing other checks would have been limited to 1.5%. Nix, of the Check Cashing Assn., said most check cashers now charge 1.5% to 2%.
Chacon amended the bill April 11, three days before it was scheduled for a hearing in the Finance and Insurance Committee. The amendments raised the allowable fees to 1.75% and 3%, depending on the kind of check being cashed.
In its amended form, the usefulness of the bill was questioned by the committee’s staff, an analysis of the bill shows.
“The allowable fees seem excessive and probably not warranted by the risks associated with items offered by the payees,” the analysis said.
According to Betty Yearwood, the committee’s secretary, the committee voted 19 to 0 April 14 to shelve the bill and hold it for further study after the end of the legislative session. Chacon said he agree with the action and didn’t push the bill any further.
The interim hearing that was scheduled to study the issue was canceled because not enough committee members could attend, Johnston said.
Chacon said he may resurrect the bill at some point.
“There is probably a need to look into the issue further,” he said. “The issue is not dead yet.”
The fees gave Chacon a total of $9,750 in honorariums for 1988, more than was collected by any other legislator representing San Diego, according to the delegation’s financial disclosure statement. Sen. Marian Bergeson, a Republican who represents part of North County, collected $7,500.
Assemblywoman Sunny Mojonnier (R-Encinitas), who was criticized a year ago for accepting $10,000 from a prison guards group after leaving her sickbed to vote for a bill the organization supported, reported accepting no honorariums in 1988.