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.”
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).