California Scheming? Funneled Donations Raise Ethics Queries

State Sen. Jerry Hill (D-San Mateo) said Tuesday that he introduced a bill that would forbid members of the state Board of Equalization from acting on any tax matters involving donors who had given any amount of money to their political campaigns in the previous 12 months.

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Related article:  California lawmakers propose anti-corruption law for state tax board

Jerome Horton has served on the Inglewood city council, the assembly and is now the chair of the Board of Equalization.

Both the Los Angeles Times and Bloomberg have reported on the behested donations their nonprofit received, which is run by his wife.

Los Angeles Times reported:

Two days after California’s elected tax board gave SpaceX exemptions worth millions of dollars last year, the Hawthorne rocket company donated $7,500, at the request of board President Jerome Horton, to a nonprofit group founded by his wife.

SpaceX made the donation as a sponsor of a public conference headlined by Horton as he was running for reelection.

* ”Behested” payments of $5,000 or more for legislative, governmental or charitable purposes must be reported to the state. Unlike campaign contributions and gifts, they are not subject to limits.

Source: California Fair Political Practices Commission

Excerpt from Bloomberg

Those donations, known as “behested payments” and considered legal as long as they meet disclosure guidelines, include hundreds of thousands of dollars from companies with business before the tax board. Critics, who question the ethics of the payments, say they allow the nonprofit to promote him and his wife through events and advertising loosely related to the board’s tax mission.

Events Cost Four Times More

On top of using behested payments to put together events the Hortons co-host, the SBOE chair called on the tax agency to spend an average of $75,000 on mailers, programs, venue rentals and staff travel to promote and conduct each of five events in 2014, the year for which Bloomberg BNA was able to obtain agency cost information.

Horton has accelerated the pace of behested payments from companies including Space Exploration Technologies Corp. (SpaceX), Time Warner Cable, Intuit Inc. and AT&T since Bloomberg BNA first examined such payments in 2011, when other board members first questioned the ethics of partnering with outside organizations.

The agency’s spending on Horton’s events was almost four times more than the average of $19,282 it spent to promote and hold 53 other tax-focused outreach events hosted by board members in the same year without ties to behested payments.

The Hortons’ five events involving behested payments in 2014 brought in 5,365 attendees, compared to 10,107 total attendees at the 53 tax-specific outreach events, which were usually seminars focused on tax compliance for small businesses or nonprofit organizations, according to data from the SBOE.

Read the full article in Bloomberg titled California Scheming? Funneled Donations Raise Ethics Queries or Donors to state tax board candidates bypass contribution limits.