LA Philanthropy Watch

This week the Los Angeles Times ran a story headlined, “Card clubs and other special interests give to Jerry Brown charities.”  I discussed the issue of ‘behested payments’ – philanthropic giving at the behest of an elected official – from the standpoint of a nonprofit organization and of a donor (who might lack charitable intent) earlier this week.  In this post  I will comment on this issue with a focus on Jerry Brown – the solicitor.

1. First, let’s acknowledge that Mr. Brown is a great volunteer.  He is committed to the organization(s), he understands the importance of fund raising, and he is prepared to step up and do it.  If every nonprofit board or committee member were prepared to rise to the occasion in this way, the world would be a different place.  (I say this as someone who has worked in partnership with volunteers for many years.)

And let’s acknowledge the strategic decision-making that is an essential element of any thoughtful solicitation plan: we select the volunteer (or executive) in the best position to make the ask.  Who has a relationship with the prospect?  Who might wield some influence over her/his decision?  Whose vision and judgment does s/he respect?  Who will the prospect find it harder to say ‘No’ to, or easier to give an affirmative response to?

For the two Oakland charter schools we have discussed, Jerry Brown was the go-to volunteer.  We don’t know how many folks said ‘No’ to him, but we know a number of individuals and institutions came through with major gifts at Brown’s behest.

2. But Mr. Brown is also the Attorney General of the State of California (and may be elected Governor within the year) – with jurisdiction over many matters of concern to the folks he solicited.  That leads to this predicament: these gifts pose obvious conflicts of interest.

In fact virtually all fund raising by elected officials raises conflicts of interest.  It doesn’t matter whether the money is to elect someone to office, to enact a proposition, or (as in this instance) to support a favorite charity.  One naturally feels gratitude (and perhaps some sense of obligation) upon receiving a gift; it would be natural for a donor to expect Mr. Brown at the least to “keep an open mind…” [see the Times article for the full quote] in any future conversations about matters of public policy … which leaves open the possibility of staking out a position amenable to the donor’s interests.

“It’s great to give, but are they giving because Jerry Brown is a great guy or because he’s attorney general?” asks Robert Stern, president of the Center for Governmental Studies in Los Angeles (as quoted in the Sacramento Bee’s CapitalAlert blog).  Mr. Stern also notes that such gifts cannot be banned.  The best we can do is to require disclosure, which is why we can find lists of behested payments at the Fair Political Practices Commission website.

With full disclosure – and much additional information – we are in a position to make judgments about behested payments and about the public officials who made the successful solicitations.  What considerations might we bring to bear on our judgments?

Via Google, it is simple enough to find any number of allegations of improper behavior related to elected officials’ relationships to nonprofit organizations.  I will not bother with the links, but the examples include: 501(c)(3) organizations that funded activities unrelated to any charitable purpose, including organizations that functioned as illegal conduits for money-laundering.  Nonprofits that provided income for a politician or spouse.  Nonprofits that funded activities to generate crowds and publicity to benefit the politician, including nonprofits conveniently named after him.

When we review the list of individuals or industries that have made ‘behested payments’ we make judgments about the nature of the charity involved and the political figure’s relationship to it.  We make judgments about the character of the public official and the measure of charitable intent we perceive.  We also – if we are vigilant – make judgments about any decisions the office holder makes that may benefit or disadvantage donors who responded with a behested payment.

Jerry Brown responded to the suggestion that behested payments might influence the performance of his official duties with these words, “I have an unimpeachable record of integrity.”

This brings to mind the words of the late Jesse Unruh, who said of legislators, “If you can’t take their money … and vote against them, you don’t belong here.“   (The whole quotation is more colorful – the legendary ‘Big Daddy’ of California politics was a colorful figure – but this excerpt makes my point clearly.)

Can Jerry Brown do that: make decisions and undertake activities opposed by special interests that have made gifts at his behest?  Perhaps.  I actually don’t think this is at all far-fetched.  His long political career has generated considerable attention and controversy, but has been remarkably free of the suggestion of scandal.  I see no reason to question his genuine commitment to the Oakland School for the Arts or the Oakland Military Institute.

For my part, I will keep in mind the Fair Political Practices Commission’s list of behested payments as I watch Mr. Brown’s decisions and activities as Attorney General.

(Photo by Steve Rhodes at Flickr.)

Yesterday’s Los Angeles Times – front page above the fold – featured a story (with the headline above) by Shane Goldmacher about California Attorney General Jerry Brown soliciting millions of dollars in donations for two charter schools (which Brown founded while Mayor of Oakland) from a number of special interests.  The list includes Southern California card clubs “some 400 miles away” (as the Times put it); other powerful, well-connected industries and individuals are also represented.  The haul has been more than $9 million since Brown (widely expected to be the Democratic nominee for Governor next year) became Attorney General.  His fund raising success was more modest when he was still Mayor of Oakland.

There is a whiff of the unsavory here because there is the appearance of currying favor with a powerful public official, rather being moved to give by a philanthropic spirit.  Here’s how the Times put it, quoting an anonymous source identified as the advisor of one of the deep-pocket donors:

“It looks altruistic rather than something that’s sheer, raw politics,” the advisor said. Groups are giving to Brown “with the hope that he will keep an open mind should you need to communicate with him in the future.”

The Times has access to this list  of donors because California’s Fair Political Practices Commission tracks “behested payments” – that is, philanthropic gifts to nonprofit institutions made at the behest of elected officials.  Here’s the link, if you’d like to check it out.

So is there anything wrong here?  Can we identify any unethical behavior?

1. First let us consider the situation from the standpoint of the two charter schools – Oakland School for the Arts and Oakland Military Institute College Preparatory Academy.

Have these institutions done anything wrong in accepting big gifts from these sources?  Is it wrong for a charter school to accept money from a source solicited by a statewide public official?  Last month (October 16) Mike Burns, discussing the charitable giving of New York Mayor Michael Bloomberg (re-elected yesterday), recalled the dictum, “the only thing wrong with tainted money is there ‘taint enough of it.”

In this case, I suppose ones view of gambling may determine whether one views the money as tainted.  I am interested in the question of behested payments by public officials, so let’s set aside the card clubs – and the casino operators and the winery – and focus on the other contributors mentioned in the Times account: Zenith Insurance, Pacific Gas & Electric, AT&T, Wal-Mart, Bank of America, the (for-profit) University of Phoenix, and Hollywood’s Steven Bing – was it wrong to take their cash?  (We’ll put aside the Annenberg Foundation, the LEF Foundation, and the Hearst Foundation – all also mentioned in the story.)

It’s not clear to me in any of these instances that the cash is tainted (or dirty or corrupted).  And, while the motives of the donors may be suspect, I do not believe that the institutions accepting the donations have compromised their institutional integrity, or fidelity to their missions, or any principles of nonprofit governance.

In my view, the institutions are guilty of no breach.  (I can think of instances where I might decide differently: if they had accepted money from gangsters, drug-runners, or terrorists, for instance; but not from Bank of America or Wal-Mart – even if a public official made the ask.)

2. Next, let us consider the donations from the point of view of the powerful players who made the gifts.  The anonymous advisor suggests that these donors are giving at the behest of the Attorney General (and possibly the next Governor) “with the hope that he will keep an open mind should you need to communicate with him in the future.”  In other words, in the vernacular, they’re buying access.

Their motives are suspect.  And perhaps because we have such a strong sense of this – regarding their motives as uncharitable, selfish, even socially harmful (since they may wish to influence the government to act against what we regard as the public interest) – that we hesitate to offer them praise for their giving (though we would expect the charter schools to express appreciation).

But their actions – making contributions for a good cause – are good.  Period.  In my view, the donors (in the absence of a concealed quid pro quo) have done nothing wrong – regardless of their motives in making these gifts.

The gifts will benefit the charter schools and their students.  Giving the money was a good thing.  There is no reason to fault this philanthropic giving to a pair of good causes.

3. And from the perspective of Attorney General Brown?

I’ll consider this question tomorrow.  This post is long enough already.  And, at least in my view, evaluating the case from the perspective of Mr. Brown is a bit more complicated.

By the way, in doing research on this issue, I found a link to an October 16 post on the Sacramento Bee’s CapitalAlert blog, which covered some of the same ground as the Times account.

(March 2008 photo from Wikimedia Commons.)