Editorial: Charitable donations are a form of influence-peddling. And they should be stopped – About Your Online Magazine


It is a truism about politics that money follows power.

And in California, those with money who want to influence those with legislative power have a myriad of legal ways to do so. Individuals, companies and special interests seeking to obtain favors from elected officials can donate to reelection campaign accounts through political action committees, give gifts, pay for exotic travel and dinner and wine for employees – all within the limits set by law .

There are also indirect ways to buy goodwill, often without limits; one of the most problematic is through the use of “orderly payments”. It is when elected officials ask donors to donate to a specific non-profit organization or government program. The only legal requirement is that donations over $ 5,000 be reported to the state’s Fair Political Practices Commission.

These are just campaign donations disguised on a charitable facade – and must be stopped, or at least severely restricted.

Unfortunately, this is unlikely to happen. Politicians are reluctant to give up their power to solicit charitable contributions from companies, wealthy individuals and other donors with a lot of money. Behested payments support noble causes and make politicians appear generous and engaged without having to spend a dime. Naturally, non-profit organizations and service providers who receive money also like the system.

The system has resisted reforms, even modest ones, at the state and local levels. In 2014, the California Legislature passed a bill prohibiting orderly payments to non-profit organizations owned or controlled by the employee or the family of the employee who requested the funds, which is hard to believe was allowed. In fact, it is still allowed because the project was vetoed by then Gov. Jerry Brown.

But let’s be clear about what is at stake: elected leaders use their power and position to ask for donations, often from people who have commercial interests in their jurisdiction. These people make donations knowing that it will please the elected leader, who can help their business interests.

And it seems to help in some cases. THE Analysis of the L.A. Times of payments ordered to Governor Gavin Newsom revealed that some of the companies that contributed $ 226 million to government causes on behalf of Newsom last year received government contracts without bidding. Others had business pending before the governor or sought favorable nominations on important state councils. The governor’s office says this was a case of the private sector eager to help the state respond to the COVID-19 pandemic, but it seems uncomfortable how to pay to play, however.

A few years ago, the Los Angeles Ethics Commission analyzed charity donations induced by politicians and found that more than half of the requested payments reported by elected L.A. officials came from donors doing business with the city. For this reason, and to reduce the appearance of paying for gambling, the commission recommended banning payments made by people with businesses before the city. The City Council, however, rejected the reform.

Elected officials justify donations as invaluable because the money goes to good works. But limiting requested payments would not prevent civic-minded companies from donating to nonprofits or supporting community events on their own initiative. For the sake of their own reputations, they would still have a responsibility to be good neighbors and corporate citizens. And even if the requested payments end tomorrow, elected officials could still make broad public appeals via email or social media to help their favorite charity. What makes ordered payments so insidious is direct ordering.

Worse, an increasing number of taxpayers are able to donate to favorite causes of politicians anonymously, forwarding requested payments through donor-recommended funds. These funds are a type of charity donation account offered by some nonprofit foundations and for-profit investment firms, and they allow the donor to receive income tax deductions and remain anonymous.

For example, after Newsom’s office reported a $ 1 million payment from the Silicon Valley Community Foundation, L.A. Times reporter Melody Gutierrez confirmed the money it did not come from the foundation itself, but from the account of an individual or company with the foundation. The name of the actual donor remains a secret from the public, but probably not from the governor who requested the donation.

That’s it a problem at the local level, also. L.A. Mayor Eric Garcetti raised about $ 3.8 million in donor funds for his charity, the Mayor’s Fund for Los Angeles. While it is a small part of the $ 60 million that Garcetti raised for charity, the evasion of transparency requirements is worrying. But even when fully publicized, ordered donations of interests that seek city approvals or contracts are corrosive.

It is not surprising that donor-advised funds are the fastest growing vehicles for charitable giving. Lawmakers must recover and close gaps in state law that allow these donors to avoid disclosure. At a minimum, they should also ban donations made by companies and individuals actively seeking government contracts. Better yet, they should get rid of incorrect payments completely and clean up the pay-to-play spot.



Paula Fonseca