'Behested Payments' Let Private Groups Curry Favor with Politicians -- New Law Will Limit Disclosure

Lawmakers help direct private donations to charities and other groups through 'behested payments.' (Jupiter Images)

AT&T. Pacific Gas & Electric Co. Chevron. Indian gaming tribes.

It sounds like a who’s who list of campaign contributors -- and it is. But these groups also excel at another type of giving, one that’s often overlooked and is about to get a little less transparent: Behested payments.

It’s no secret to even casual political observers that politicians raise money for their own campaigns. But once they’re in office, elected officials in California can also use their clout to help raise cash for pet projects outside of state government. Gov. Jerry Brown has directed the bulk of his $30 million in behested payments to two Oakland charter schools. State Superintendent of Public Instruction Tom Torlakson has funneled most of his $3.7 million to the Department of Education and a nonprofit that supports the state department he oversees.

The amount they can raise for these private groups is unlimited -- but officials must file reports when the donations top $5,000 from a single source in one year.

And the donations add up.

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In all, politicians have directed more than $120 million to private groups since state ethics regulators started requiring disclosure in 1997 -- $28 million this year alone.

Critics say the payments may go to good causes, but are simply another way for special interest groups -- largely powerful corporations with business before state government -- to curry favor.

“It’s not quid pro quo,” said Kathay Feng, executive director of the government accountability group California Common Cause. “But there clearly is an expectation that if I give this large amount of money, you are going to pay attention, and I am probably going to have an easier time being able to come into your office and talk to you than a local constituent who didn't give a dollar.”

And with a swipe of his pen, the governor just severely limited what has to be disclosed. Last week, Brown signed Assembly Bill 1544, which removed a special category of lawmaker requests from disclosure requirements: Those that cover when an elected official lobbies a government agency to give taxpayer money to a private company.

These sorts of payments have ballooned in recent years as the available money for grants and tax breaks rose -- this year, it topped $15 million, accounting for more than half of behested payments disclosed.

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The Fair Political Practices Commission -- the state ethics watchdog agency that oversees campaign finance, behested payments and other financial disclosures -- opposed the changes implemented in AB1544.

“You have to look at it like a triangle. It's not just a public official asking for government money -- it’s where does the money end up,” said FPPC chair Jodi Remke. “When a public official is asking a government agency to give money to a for-profit organization, I think the public has a right to know.”

Remke said her concern isn’t simply about whether a conflict exists now, but whether it could arise down the road.

“So it’s who’s getting the money and why are they getting it?” she said. “(If) an official wants to make sure this particular company gets all this money, well, would I be surprised or would you be surprised if this official goes and works for that company in a year or two?”

Assemblyman Rob Bonta, D-Oakland, was one of the lawmakers who reported helping secure public funds for a private business this year, the very kind of money that lawmakers won't have to disclose under the provisions of AB 1544. Bonta wrote a letter in support of giving a biofuel company in his district a $3.4 million grant from the California Energy Commission -- and soon after, received two campaign contributions from leaders of the company that won the grant, Viridis Fuels.

Bonta said he initially sent a letter simply calling on the commission to fund a biofuels company in the Bay Area, because all the grants in recent years went to other areas of the state. He said he filed the behested payment report out of an “abundance of caution” and probably didn’t even need to, because Viridis hasn’t actually received any of the money yet.

Still, Bonta defended his vote on the floor of the Assembly for AB1544, saying the burden of disclosure should be on the state agency in these types of cases -- not the elected official.

“I think the disclosure is appropriate and fine. The public should have access to information anytime a legislator is influencing or making a request to help get a government grant,” he said. “I just don’t think the assemblymember should be the one burdened with the report, for very practical reasons. There are times when we put in a request and we don’t know what happens yet, and we shouldn’t have the burden of having to monitor a state department or agency to check.”

But FPPC chair Remke said it’s unreasonable to think the public would have the time or expertise to monitor every government agency and to know when to inquire about an elected official’s influence on a particular grant.

“As a member of the public, how am I going to find what that official did, unless that official has to to report it?” she said. “The best way to trace money from for-profit entities or government entities is by doing it through the official that you are interested in.”

Feng agreed, saying the change in law means that it’s impossible for the public to scrutinize the giveaway of millions of public dollars. She also wasn’t surprised that a KQED News analysis found the most prolific behested payment donors, other than government agencies, are the same businesses and tribes that hedge their bets when it comes to political donations.

“The thing that drives us crazy, when it comes to campaign finances and behested payments, the problem is, the people making laws -- the legislators -- and those that have the most influence on those laws -- special interest groups -- also have the ability to craft those laws in a ways that can hide those relationships,” Feng said. “It is pretty maddening they have made a mockery of California disclosure laws by creating carve-outs that allow them to not to have to disclose how they are spending public money.”

Feng noted that there have been abuses in the past, including when former Assembly Speaker Fabian Nunez received blowback for funneling money from corporate and labor groups with business before the Legislature to a tiny charity that threw events that carried his name and helped raise his political profile.

But Bonta said bringing resources to constituents is part of a lawmakers’ job, noting he’s helped raise money for community events, including one that gave low-income kids glasses.

“That's what we are supposed to be doing. We are supposed to be putting glasses on kids who don't have access to care,” he said. “And if I can help bring a mobile eye clinic because I am a legislator and I could reach out to someone who can provide those services, to bring them into the district, I mean, I think I should. I think my constituents expect me to do that.”

KQED News producers Lisa Pickoff-White and Guy Marzorati contributed to this report.