Councilwoman’s Votes Involve Donors to Her Charity

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Anaheim City Councilwoman Lorri Galloway in recent years has cast a number of council votes on matters involving individuals, businesses and public employee unions that donated to her charity, documents with the city and charity show.

The votes include decisions on city contracts, financing for a development project and appointments to commissions. In a majority of the cases reviewed by Voice of OC, Galloway’s votes favored the interests of the donors to her charity, the Eli Home, which provides shelter and other services to abused children.

The donors are at least indirectly funding Galloway’s personal income. She drew $64,105 in compensation for her position as executive director of the charity, which has received nearly $2 million in donations, according to finance disclosure forms for 2010, the most recent year available.

Her husband, Michael Galloway, who is vice president of the board of directors and works as thrift manager, drew $53,400 in compensation that year, the documents show.

Good-government experts say that the donations and Galloway’s votes exploit a common loophole in campaign finance laws and raise conflict of interest questions. While there are usually limits on contribution amounts to candidates’ campaign committees, there are typically no such limits on charities controlled by the candidates.

“It creates an end run around the campaign contribution laws,” said Tracy Westen, CEO of the Los Angeles-based Center for Governmental Studies. “It creates the appearance of quid pro quo, which is probably best avoided in my view. But politicians unfortunately do it often.”

Galloway insists that she has never allowed an Eli Home donor to dictate her vote on an issue and cites two high-profile cases in which she voted against donors.

She also cites a 2004 opinion from the Anaheim city attorney’s office, which states that should her vote benefit some person or entity, it’s not a conflict of interest “merely because such person or entity has previously made donations to the Eli Home.”

“My vote is never bought by anyone,” Galloway said. “I’ve got nothing to hide.”

The following are examples of votes Galloway cast on issues in which Eli House donors had a stake. Many of the donors also contributed to Galloway’s City Council campaigns. Galloway provided the amounts listed because Eli Home’s 990 forms, which are disclosures that charities must make to the Internal Revenue Service, do not list donation amounts.

  • CARE Ambulance Service: A donor to Eli House and sponsor of the charity’s 2009 Christmas Ball. The donations were between $2,000 to $2,500. Galloway voted to renew a city contract with CARE.
  • SA Recycling: The metals recycling company donated between $3,000 and $5,000 to Eli House. Individuals involved with SA Recycling — including company CEO and President George Adams and Corporate Counsel Jeff Farano — also donated. Galloway voted in July 2009 to extend a 9 percent discount on electricity service to the company.
  • Anaheim Municipal Employees Association: The association sponsored an Eli House poker tournament with a $500 donation and is listed as a 2009 donor. In January 2010, Galloway voted against plans to layoff library employees, who are members of the union. She also voted for, among other things, a voluntary furlough program for employees and a cash incentive program for employees who resign.
  • Bill Taormina: In addition to donating to the charity, Taormina sat on its board of directors in 2007. Galloway declined to disclose Taormina’s contribution amounts. Galloway voted in 2010 to award a contract to Taormina’s firm, Clean City, to manage properties on behalf of the city.
  • Northgate Gonzalez Markets: Northgate donated to Eli House in 2010. Galloway voted in March 2010 on the initial approval of $20 million in bond financing for the Latino supermarket chain to buy equipment for a corporate headquarters and warehouse construction project.

 

 A Stand Against Disney

In making her point that as a councilwoman she is not swayed by her donors, Galloway refers to her past opposition to the Disneyland Resort, which has been the Eli Home’s largest donor.

In a fight over resort area housing in 2007 between Disney workers and the resort, Galloway took the workers’ side.

Galloway claims Disney cut its donation to the charity, which she said has been $50,000, in retaliation for her stand on the issue. “My politics are a reflection of where my heart it is,” she said.

The housing project the workers had wanted eventually died. The resort’s new president, George Kalogridis, took over in 2009 and has restored Disney’s donations to the charity, Galloway said.

Disney officials did not respond to phone calls or emails seeking comment.

In January, Galloway voted against granting a $158-million subsidy to the developer of two proposed four-star hotels at the GardenWalk center, an issue that has outraged many in the community.

Hotelier William O’Connell, one of the partners in the development, sponsored an Eli Home event last year, Galloway said. O’Connell has been a consistent donor, Galloway said, though he did not appear on the contributors lists for 2009 and 2010.

Closing the Loophole

Political patrons donating to charities run by politicians is so common that the issue was identified in a 2009 report by the Center for Governmental Studies titled “Loopholes, Tricks and End Runs: Evasions of Campaign Finance Laws, and a Model Law to Block Them.”

“Special interests seeking access to decision makers can donate generously to a favored project or charity organization at the request or suggestion of politicians,” the report reads.

In one example cited by the report, North Carolina state Sen. Frank Balance “was convicted of fraud in connection with a scheme to divert money for his own, his friends and his family’s use from a charity he had formed and then funded largely with taxpayer money …”

The center’s report outlines a model law that would plug loopholes, including charitable donations. The center’s model law stipulates that while it’s permissible for politicians to control charities, they wouldn’t be allowed to draw personal benefits from those charities.

Correction: A previous version of this story incorrectly stated the amount Disney donated to Lorri Galloway’s charity, Eli Home. The incorrect amount came from a Los Angeles Times story. Galloway had previously refused to provide the amount.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: twitter.com/adamelmahrek.

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