Bane Returns Gift to Avert Tax Risk to City of Hope

Assemblyman Tom Bane (D-Tarzana) has returned a 1986 campaign contribution of $1,000 to the City of Hope National Medical Center because it may have jeopardized the hospital’s tax-free status, worth millions of dollars a year.

Bane, who serves on the Duarte institution’s volunteer board of trustees and heads a foundation that supports research at the City of Hope, returned the money late last month after The Times inquired about the contribution. Bane’s campaign committee had listed it on a March, 1986, campaign report filed with the state.

The episode occurred amid controversy over the aggressive political fund-raising tactics of Bane and his wife, Marlene, who handles fund-raising for Bane and Assembly Speaker Willie Brown (D-San Francisco) in Southern California. Both lawmakers have raised millions of dollars in recent years, much of which has been used to support Democratic Assembly candidates who back Brown.

Valentine’s Day Dinner

City of Hope President Sanford M. Shapero was solicited to buy tickets to Bane’s annual $500-a-person Valentine’s Day dinner in 1986 shortly after Shapero joined the hospital, said Richard Ziman, chairman of the hospital’s executive council.

“Sandy Shapero didn’t know what the rules were,” Ziman said. “He didn’t know it was inappropriate for the City of Hope to make a contribution.”

As a nonprofit organization, the City of Hope is prohibited from making campaign contributions and, by doing so, could risk losing its tax-exempt status, said Robert Giannangelico, spokesman for the Internal Revenue Service in Los Angeles. This could cost the hospital millions of dollars annually.

“It’s their mistake, not mine,” Bane said. He maintained that his solicitors invite individuals, not institutions, to the dinner. He noted that Shapero attended the 1986 dinner. Shapero was out of town and could not be reached for comment.

Known for Funding

Ziman said that when Shapero made the contribution, which was recorded as coming from the hospital’s corporate headquarters, he was “aware that Bane and the state of California had been very effective in funding institutions like the City of Hope.”

Bane has been instrumental in obtaining state funds for a three-person state Lupus Appropriations Board, which awards grants to universities and hospitals for basic research on lupus, an incurable and potentially fatal disease of the autoimmune system. His wife has headed the board since its inception in 1977.

The board has given nearly $1.2 million, or 19% of its $6.2 million in total grants, to the City of Hope since 1978, records show.

The Banes have been criticized by some grant applicants, who said they were pushed to buy tickets to fund-raisers for Bane and Brown after seeking money from the lupus board. These scientists, most of whom are not politically active, said this raised questions about whether the quality of their proposals was the sole criterion on which they were judged.

Bane responded that the proposals were evaluated on their merits alone.

National Lupus Group

In addition to sitting on the City of Hope’s board of trustees, which raises money but does not make policy, Bane is head of the National Lupus Erythematosus Foundation. The private, nonprofit foundation, which operates out of Bane’s legislative office, raises money for research at the City of Hope. It is not affiliated with the better-known Lupus Foundation of America, an international self-help organization.

The national lupus foundation has raised $343,362 since 1977, much of it from special interests regulated by the state, according to its annual reports filed with the state. The largest contributor has been the H. F. Ahmanson Co., which gave $135,000 between 1978 and 1984, the last year for which the foundation listed contributors.

Ahmanson’s principal subsidiary is Home Savings of America. Bane, a longtime member of the Assembly Finance and Insurance Committee, is the legislative champion of California’s savings and loan industry. The industry generously bankrolls his campaign committee.