Betting to Win: Julie Engell views large campaign gifts from her 501(c)(4) as leveling the playing field. “My side generally isn’t in power,” she says. “Unless you are in power, you’d better be prepared to assume significant risk.”
Pocket Politics
As election nears, critics of biggest local campaign donor file IRS, FPPC complaints.
Thursday, November 1, 2012
In the post-Citizens United era, SuperPACs have been cast as the demons of corrupt national politics. But they’re not to be outdone by 501(c)(4)s.
That’s IRS-speak for social welfare organizations, tax-exempt “civic leagues or organizations” that include groups like chambers of commerce and Karl Rove’s notorious Crossroads GPS.
With the tight race for District 5 county supervisor exceeding $500,000 in contributions as of Oct. 20, big givers account for a surprisingly small portion of the donors. But the single biggest giver in Monterey County races this year is a 501(c)(4).
The open-space advocacy group North Salinas Valley Fund for Responsible Growth has contributed nearly half of the $290,000 in candidate Marc Del Piero’s campaign coffers.
Comparatively, County Supervisor Dave Potter’s top four donors combined account for about a quarter of his contributions. They are Salinas Valley Leadership Group ($20,000), Monterey County Business PAC ($17,500), Carmel Mayor Jason Burnett ($10,000), and UCP East Garrison, the developer of a housing project on the former Fort Ord ($8,000).
Potter accepted upwards of $40,000, about 16 percent of his $248,000 raised, from political action committees. He claims the North Salinas Valley Fund is buying the election.
Fund President Julie Engell responds, “That’s horseshit.”
She distinguishes between developer-backed interests and her group, which formed in 2008 with $600,000 won in a settlement with the county and developer HYH Corporation, after two successful referendums on the proposed Rancho San Juan development.
“Nobody within the fund is going to make one thin dime on whether or not [a development] gets approved,” Engell says. “We are not a special interest. We are a community interest. There’s a significant difference.”
Monterey Peninsula College political science department chair Lauren Handley agrees: “While at the national level it’s very controversial, at the local level most organizations with 501(c)(4) status are community organizations.”
Fund board member Chris Fitz, who’s contributed $5,000 to Del Piero’s campaign, is on deck to become Del Piero’s chief of staff if he wins.
But Engell says that has nothing to do with the Fund’s contributions to Del Piero. “I don’t know what his agreement [with Fitz] is or isn’t,” she says.
Ron Chesshire, CEO of the Monterey/Santa Cruz Building & Construction Trades Council (which gave $2,000 to Potter), has lodged complaints with the California Fair Political Practices Commission for alleged filing errors, and with the Internal Revenue Service regarding the group’s allowable amount of political activity.
A spokesman for the IRS would not disclose whether investigators are looking into the Fund, citing tax confidentiality rules.
“Although the Service has been making an effort to refine and clarify this area, 501(c)(4) remains in some degree a catch-all for presumptively beneficial non-profit organizations,” according to a 2003 IRS publication. The FPPC has not yet completed a review of the complaint.
Engell was unaware of the complaints, but says, “It doesn’t surprise me. I know people are really pissed off.”
Still, she considers the group’s role as leveling the playing field against developers and other special interests.
After the Fund’s predecessor, the Rancho San Juan Coalition Opposition, led two separate battles for referendums against development proposals, the settlement money was intended to be used for similar skirmishes.
But when the county approved the 2010 General Plan, with safeguards against sprawl that exceeded the group’s expectations, it shifted focus.
“The next biggest threat to the North Salinas Valley is the damn water supply,” Engell says. “Dave Potter was willing to commit his constituents to some really awful [water purchase] agreements.”
Fund Racing
Fernando Armenta out-raises Tony Barrera eight-to-one in District 1 county supervisor race.
If District 1 Supervisor Fernando Armenta counts labor unions safely in his arsenal of supporters, his challenger, Salinas City Councilman Tony Barrera, counts laundromats in his.
Barrera’s raised barely $15,000 compared with Armenta’s $121,000. Barrera’s largest single gift is $1,000, with at least that much coming from a series of cleaners in East Salinas.
It’s a hardscrabble campaign against a four-term incumbent. Thanks to the nearly $100,000 war chest Armenta had before the 2012 campaigning even began, he’s outspent Barrera by more than 10 to one.
Armenta’s biggest gift ($10,000) came from the Salinas Valley Leadership Group, a political action committee of business interests led by Prunedale construction magnate Don Chapin. His group consistently gives some of the largest contributions to local candidates, but he sees larger gifts (including those from groups like the North Salinas Valley Fund for Responsible Growth) as too much.
“I think 10 percent from any one giver, that’s a lot,” Chapin says. “I’m not sure where you draw that line.”
After Chapin, Armenta’s biggest donors were the Monterey/Santa Cruz Counties Building & Construction Trades Council PAC ($5,280), Rosa Boutonnet of Ocean Mist Farms ($5,200) and United Farm Workers ($3,100).
Comments
What is missing from Mr. Potter's 460 report are all the expenses paid for by other groups that DON'T have to be reported. Examples? All you have to do is look at the side bar right here on the Weekly's website. See the ad for Potter? The one that is a picture of a park? Now look who paid for the ad....not Mr. Potter's campaign, but the SEIU. The SEIU also sent out multiple fliers for Mr. Potter's campaign...doesn't have to be reported because the union paid for it. Mr. Potter has had several fundraisers. Who's paid for that? Yep, more PACs and unions. Additionally there is at least $30,000 from 3 developers, 2 from out of town that is sitting on Mr. Potter's FPPC 700 Report. And this is from the guy who told the Monterey Herald that his business had "not done business in years"
Put a reply saying "your'e obviously intimately engaged in this election...probably on del pieros staff , so stop spewing bullshit and learn the facts. Independent expenditures do have to report unlike 501 c4s funding your guy. If you're going to put it out there, get it right!
Well and then there's a certain contractor who "donated" to a Salinas group to sweeten the deal to endorse Potter. That's the worse kept secret in the Salinas business circle these days. I wonder how many other "donations" this contractor has made to other politicians and organizations around the area to "encourage" them to endorse Potter. Now that's what I call buying an election!
No, I am not on Delpiero's staff, so stop with your potty mouth and your false accusations. I have learned the facts, you need to do the same.
That's ok Katherine_Lauritsen. If my guess is right, this guy is on Potter's staff and has been paid a nice tidy sum by Potter to say this kind of stuff. I think he would say that Mark grew fangs and howled at the moon if Potter paid him for it. You look like you have done your research on the FPPC filings, just go look at the 460's on the Monterey Election website and look for someone who has the initials D Mc and you'll know who I am talking about. No worries, as they say "desperate times call for desperate measures."
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