Political Profit in a Cause

California politicians are raising tens of thousands of dollars on behalf of their favorite charities from special interests with business before the state.

Although the practice is legal, some government watchdogs say it gives donors another way to influence the political process, and it allows officeholders to burnish their image outside the normal scrutiny applied to campaign finances.

Since 1997, California legislators and statewide officeholders including the governor have been permitted by state law to seek donations for charities, school booster groups and other nonprofit organizations, without having those donations count as gifts or campaign contributions to them.

In some cases, the donations exceed what the politicians would have been able to collect for their own campaigns under state and federal laws, or have come from tobacco companies and other groups from whom they had publicly pledged not to take money.

In the last two years, California Treasurer Phil Angelides has raised more than $100,000 in charitable donations from New York investment banks and underwriting firms working on the state’s $11.1-billion bond to finance electricity bought during the energy crisis, state records show. The donations went to benefit the Michael Dukakis internship at UCLA and the drama club at Sacramento’s Luther Burbank High School, among other causes.

“They love the theater; we know that,” joked Robert Stern of the Center for Governmental Studies, a Los Angeles group that tracks the flow of political money, referring to the Wall Street bankers. “They are not doing this for altruistic purposes.”

Federal “pay-to-play” laws prohibit the underwriters working on the lucrative bond deal from giving Angelides, a Sacramento native and former Dukakis fund-raiser, more than $250 in campaign cash if they want to do business with the state. But the laws do not cover charitable contributions made at his behest.

Angelides declined to discuss the donations but issued a written statement defending them.

“Over the last 25 years, my family and I have proudly contributed to and raised funds for charitable causes,” the statement said, “and we will happily continue to do so.”

A number of politicians contacted about the practice made similar statements, noting the benevolence of the charities and causes that benefited from their actions. However, some of the solicitations clearly benefited the politicians as well.

In 1999, for example, Lt. Gov. Cruz Bustamante solicited $150,000 from the Los Angeles Galaxy professional soccer team to cover Spanish-language advertising for a goodwill soccer match at the Rose Bowl between the Galaxy and Guadalajara’s Chivas Rayadas club.

He and Alberto Cardenas Jimenez, governor of Jalisco, presided over the event, billed as a way to promote friendship and trade among neighboring states, and the winner, Los Angeles, received ... the Cruz M. Bustamante Cup.

“This was an appropriate and legal event,” said Bustamante spokeswoman Deborah Pacyna. “It was more of an international trade and goodwill event than a personal political event. If it was the Irish Cup, I could see how it would be a political advantage, but these are his people.”

Assemblyman Carl Washington (D-Paramount) raised money from Park Water Co. of Downey to help finance his Operation Gobble, a campaign to distribute 1,000 turkeys to constituents in his Los Angeles County district before Thanksgiving. The donations he solicited went to a variety of local groups that took part in his campaign.

“It’s totally innocent,” said Washington spokesman Angelo Williams. “It’s turkeys for the homeless.”

Assemblyman Tom Calderon, an unsuccessful candidate for state insurance commissioner this spring, raised $25,000 from Allstate last winter for the Southwest Voter Registration and Education Project, a Latino advocacy group.

Calderon (D-Montebello) also solicited more than $100,000 from companies, including Kaiser Permanente and Albertson’s Inc., for the Public Health Assn., 58th A.D., a group that held a diabetes awareness event he attended, featuring raffles, food and mariachis.

Calderon could not be reached for comment. A spokeswoman said he solicited the money for the diabetes event after learning that there were high rates of it in his district, and that he sought money for the Southwest Voter Registration and Education Project because he strongly believes in increasing Latino voter participation.

In all, legislators and statewide elected officials have collected more than $5 million on behalf of charities and nonprofits since the law, passed by the Legislature in 1997, went into effect.

Campaign finance watchdogs say they are pleased that politicians have to publicly report raising the money. But some say they believe the threshold for disclosure--$5,000 from a single source in a calendar year--is too steep, while others say policing of the little-known rule by the state’s Fair Political Practices Commission appears to be lax at best.

“It is important for these types of payments to be disclosed,” said Jim Knox, executive director of California Common Cause. “My experience, however, leads me to believe that the disclosure has been rather spotty, and enforcement has not been happening.

“I think there is an undeniable political benefit” to many of the solicitations, he added. “It’s a gray area. Oftentimes, legislators can be appropriately involved in raising funds for charities. The danger is when it crosses the line and the donors are attempting to curry favor.”

The FPPC, the state’s official political watchdog agency, has never taken formal action against a politician for violating that law, a spokeswoman said.

California legislators created the reporting requirement out of concerns that the donations they sought on behalf of nonprofits would count as gifts or campaign contributions to themselves.

State voters in 1990 had approved strict limits on the gifts politicians could accept from special interests.

Because of that and other changes in campaign laws, the FPPC notified a top Senate official that it would review charity solicitations case by case to determine whether they had political overtones and thus needed to be listed on campaign filings.

The result was a flood of letters to the agency asking for preliminary approval of charity pitches--and state legislation to ensure that the solicitations were not listed on the political finance forms, which receive wide public scrutiny. Sen. Richard Polanco (D-Los Angeles) carried the original legislation. It failed, despite support from Common Cause, but an identical bill by Sen. Betty Karnette (D-Long Beach) passed in 1997 and took effect that same year.

“One gets the feeling that at that point, the issue was swept under the rug,” Knox said. “Once [lawmakers] were freed from the danger these contributions were to them,” and the solicitations were declared legal, the issue faded from public view.

Unlike campaign finance statements, the information on charitable donations is not available over the Internet, and until recently most news reporters and campaign finance experts were apparently unaware it even existed. The information is available in Sacramento and provides the public with insight into the financing of some events they might not otherwise have learned about.

Gov. Gray Davis, for example, disclosed more than $1.5 million in donations that his inaugural committee, a nonprofit, received from special interest groups ranging from the California Teachers Assn. to the Cabazon Band of Mission Indians.

Davis and some prior governors had voluntarily made that information public after inquiries from the press about the funding of the lavish galas, but others had not, said Stern of the Center for Governmental Studies.

Atty. Gen. Bill Lockyer, who pledged not to accept any more money from tobacco companies during his successful 1998 campaign for the state’s top law enforcement post, did solicit a $20,000 donation from Philip Morris through his inaugural committee, records show.

The money was used to buy food for needy families in the Pasadena area and to recognize Haven House Inc., a shelter for battered women.

“He wasn’t taking contributions,” said Lockyer spokesman Nathan Barankin, noting that his boss has not, in fact, accepted any campaign contributions from tobacco companies. The Philip Morris money, he said, “serves a potential public policy purpose, to give funds to a shelter.”