Brown Answers Tax Bill Question Before It’s Asked

Assembly Speaker Willie Brown, who has had his fill of newspaper stories suggesting impropriety on his part, took the offensive Monday by calling reporters with an unusual tip--about himself.

Brown, the San Francisco Democrat and dean of the Assembly after 29 years in office, disclosed that one of his many private financial interests could have benefited from a business tax break he helped engineer at the end of the legislative session.

Brown said he learned Monday that a radio station he owns with the mayor of Oakland qualifies as the kind of closely held corporation that a provision of the bill was meant to aid.

Owners of corporations with fewer than 35 shareholders--known as sub-chapter S in the tax code--are allowed to file tax returns as individuals rather than corporations but must pay a surcharge for that privilege. The bill Brown helped draft reduced that surcharge by 40%.

The Speaker said he will tell his tax preparers to file the radio station’s returns as a regular corporation, denying himself any benefit from the bill. If need be, he said, he will pay his co-owner--former Assemblyman Elihu Harris--for any money Harris would have gained from the tax break.

Had he known of the radio station’s status earlier, Brown said, he would have announced it on the Assembly floor and would not have voted on the bill.

Brown could take advantage of the break and still not run afoul of state ethics laws. Under the California Political Reform Act, a public official has a conflict of interest only when his action gives him a financial benefit distinct from the general population’s.

But Brown said he was making a round of calls to the state’s major newspapers in case any reporter “snooping around” might come across the connection and decide to publicize it. He said he feared such a story might prompt an investigation that would sully his reputation.

“I don’t want to be the subject of a conflict-of-interest probe,” said Brown, who retires in 1996 under term limits. “I never have been in all my years in office, and I don’t intend to start now.”