Jarvis Group Takes Aim At Leagues Of Cities Politicking

This just came over the transom from the Howard Jarvis Taxpayers Association:

Proposed Ballot Measure Prohibits Use of Taxpayer Dollars for Political Activity Opposition to Eminent Domain Reform Funded by Anonymous Campaign Fund

Sacramento, CA – Today, the Howard Jarvis Taxpayers Association, the National Taxpayer Limitation Committee and the California Alliance to Protect Private Property Rights announced that they have introduced the “Taxpayer Protection Act of 2008,” a ballot measure that strengthens existing laws that prohibit the use of taxpayer dollars for political activity by making it illegal for taxpayer financed organizations, such as the League of California Cities, the California State Association of Counties and the California Redevelopment Association to finance their political activities through anonymous campaign accounts.

Over the past two years, taxpayer financed public agency organizations have used anonymous campaign accounts to contribute nearly $7 million to oppose eminent domain reform ballot measures. Unlike traditional political action committees, these so-called “non-public funds” accounts do not disclose the source of their financing or contributors, limiting the ability of regulatory agencies, the media and watchdog groups to determine whether taxpayer dollars are being used to finance political activities.

“Organizations that accept taxpayer dollars should be held to the highest standard and they should disclose all the sources financing their political activities” said Howard Jarvis Taxpayers Association President Jon Coupal. “To ensure that these taxpayer financed organizations are serving the public interest, the law needs to be changed.” 

In 2006, these taxpayer financed organizations contributed more than $4.7 million from their anonymous, “non-public funds” accounts to oppose Proposition 90, an eminent domain ballot measure which was narrowly defeated. More recently, they have spent over $2 million to oppose the California Property Owners and Farmland Protection Act, a ballot measure supported by proponents of eminent domain reform. As evidence that these campaign accounts have become the taxpayer funded agencies’ preferred method of financing their political activities, 81% of the money spent so far this year to oppose the Jarvis-sponsored eminent domain reform ballot measure have come from these anonymous accounts.

“This kind of political activity certainly explains why California is not among the more than 40 states that have reformed their eminent domain laws,” said Senator Jim Nielsen (ret.), Chairman of the California Alliance to Protect Private Property Rights. “These taxpayer funded organizations should not be financing political efforts that undermine private property rights.”

The “Taxpayer Protection Act of 2008” would:

• Require taxpayer financed organizations to fund political activities with non-taxpayer funds and through a political committee required to disclose receipts and expenditures like other committees.

• Ensure accountability by imposing fines and possible imprisonment for using taxpayer dollars for political purposes.

“This ballot prohibits taxpayer financed groups from using our tax dollars for political purposes,” said Lew Uhler, president of the National Taxpayer Protection Committee. “They need to play by the same rules as everyone else.”

For additional background on these so-called “non-public funds” accounts, see the attached letter from the Howard Jarvis Taxpayers Association to the board of directors of the League, CSAC and the CRA.

The Act is sponsored by the Howard Jarvis Taxpayers Association, the National Taxpayer Limitation Committee and the California Alliance to Protect Private Property Rights, two of which are also sponsors of the California Property Owners and Farmland Protection Act, an eminent domain reform measure slated for the June 2008 ballot.  For the Taxpayer Protection Act of 2008 to qualify for the November 2008 ballot, 433,971 valid signatures must be collected.

(Letter sent to the board of directors of the League, CSAC and CRA)

November 14, 2007

The Honorable Jim Madaffer
City of San Diego
202 C Street, MS 10A
San Diego, CA 92101

The Honorable Jim Madaffer:

I am writing in regards to a matter of grave concern to my organization and to the millions of taxpayers in our great state: the apparent disregard by the California League of Cities, California State Association of Counties and the California Redevelopment Association (hereinafter “public agency associations”) of the prohibition against political activity by public agencies. In this case, we strongly object to political activity by associations that represent public agencies and which are funded in part by member dues from public agencies – i.e. taxpayer dollars.

As a member of the board of directors, you most certainly know that the public agency associations have set up a clever scheme by which these organizations have contributed nearly $7 million dollars – and, let me stress, anonymous dollars – directly to a ballot measure committee since May 2006. Unlike a normal political action committee that discloses the source of its campaign contributors, there are no records that indicate the source of the millions of dollars contributed by the three public agency associations. Instead, these three associations cloak the source of this money by simply claiming that it all comes from an aggregated “non-public funds” account.

The “non-public funds” scheme appears to be a relatively recent effort, with most of the campaign money going to the No on Proposition 90 campaign (November 2006 ballot) and the current eminent domain battle. Incredibly, this anonymous giving represents 81% of all the money raised in the current eminent domain campaign as shown below:

Total Contributions to No on Prop. 90                         $12,409,493.03           100%

   Total “Non-Public Funds”                                        $4,750,381                  38%
      League of CA Cities Non-Public Funds                   $3,540,000                  29%
      CSAC Non-Public Funds                                         $650,000                    5%
      CA Redevelopment Assn. Non-Public Funds            $560,381                    4%

Total Contributions to Current Eminent Domain           $2,622,882                100%
Ballot Measure Effort (through November 10)

   Total “Non-Public Funds”                                        $2,122,882                 81%
      League of CA Cities Non-Public Funds                    $1,515,947                58%
      CSAC Non-Public Funds                                          $406,935                  16%
      CA Redevelopment Assn. Non-Public Funds             $200,000                   8%

This lack of transparency and failure to properly disclose the source of millions of dollars of political contributions raises the following serious questions:

• What is the source of these “non-public funds”?

• How do the public agency associations segregate taxpayer funds from “non-public funds”? And, when did they begin segregating funds in this manner? Has this internal accounting ever been made available for review by independent sources (media, the FPPC, good government group and so forth)?

• Was there a vote by each respective public agency association board or directors to transact political business in this manner? If so, how did you vote on this matter? Did you personally approve the decision to provide millions in anonymous funds to a ballot measure committee rather than doing so in a more transparent manner consistent with standard campaign finance disclosures?

• Do you personally believe that the public agency associations can directly engage in political activity by contributing to ballot measure committees?

• Do the public agency associations use taxpayer funds to generate “non-public funds”? For example, do the associations use member dues to pay the publication costs for a magazine, but then consider all of its advertising revenue fair game to use to fund political campaigns? If this is case, do the associations notify their advertisers that this is going on?

• How can voters, the media and the FPPC be sure that the public agency associations aren’t contributing taxpayer dollars to political campaigns in violation of the law?

• If taxpayer financed organizations are mostly financed by corporate and other business and other private interests, as is the case with the League of California Cities, shouldn’t such revenue be disclosed to members and to the public to ensure that taxpayer financed organizations are truly representing “public” interests and not “private” interests?

• How can voters, media and/or the FFPC be sure that the public agency associations aren’t soliciting money from vendors and other entities directly impacted by the activities of local elected officials, and routing the money into their respective “non-public funds” accounts simply to avoid public disclosure?

As a taxpayer representative, I want to believe that you are not personally complicit in this effort to hide the sources of campaign contributions. As such, I would like to hear back from you regarding the issues contained in and questions posed by this correspondence and whether you will continue to support such political expenditures in the future. Please contact me in confidence at (916) 444-9950. Thank you for your consideration of this matter.