‘Behested Payments’ Add Another Layer of Money in Politics

Workers pack up at the close of Sen. Janet Nguyen's annual health fair July 16, 2016.

Tracy Wood/Voice of OC

Workers pack up at the close of Sen. Janet Nguyen's annual health fair July 16, 2016.

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Behest. It’s a word that isn’t used much anymore but, according to the Merriam-Webster Dictionary, can be traced to 12th century Old English and means “an urgent prompting.”

These days in statewide and Orange County politics “behested payments” have taken on a larger meaning, as they increasingly are part of the money and influence game played by office holders and their supporters.

Under California law, lobbyists and wealthy political contributors can make large cash donations requested, or behested, by the office holders for their favorite charities.

It works the other way too.

Elected officials can curry favor with large donors by creating government programs or events that promote causes, businesses or hobbies popular with wealthy contributors. There are no limits to the amount of an individual behested payment — with some as high as $100,000 — but the office-holder has 30 days after donations of $5,000 or more are received to publicly report who gave the money and the amount.

The reporting requirements have been in place since a 1997 amendment to the state Political Reform Act and are enforced by the Fair Political Practices Commission (FPPC).

FPPC spokesman Jay Wierenga said behested payments were added to the disclosure law because a number of legislators were seeking advice on how to report vendor contributions to events like senior, health and job fairs. The donations weren’t going to campaign accounts but instead, at the request of the lawmakers, to non-profits or other groups putting on the events.

The amounts were a drop in the bucket 20 years ago when the requirements were instituted, but they’ve become big political business in recent years.

An analysis last year by San Francisco public television and radio KQED determined $120 million was raised for charity and other groups by legislators and top state officials since the behested payment law took effect.

But because the behested payment forms for local elected officials are filed with either county Registrars of Voters or the hundreds of California cities, no comprehensive study has been done of the total amount raised. Generally, members of the public must visit each city separately and review paper copies of the forms.

The KQED study showed payments behested by state lawmakers rose slowly from $243,533 in 1997 to $2,820,175 in 2005. In 2007, the total jumped to $8,114,409 and generally stayed in the $8 million to $9 million range until last year when it spiraled to $28,272,453.

Gov. Brown Leads the Way

By far, California’s biggest statewide user of behested requests is Gov. Jerry Brown, who, according to the San Jose Mercury News, averages more than $3 million a year for his favorite causes, two Oakland charter schools he helped create when he was the city’s mayor.

So far this year, according to the FPPC, Brown has raised close to $1.8 million, primarily for the two schools.

Brown’s donors often are groups that have business before the Legislature or with state government agencies and contributions of $100,000 have come from the California Real Estate Political Action Committee and the California Association of Realtors while smaller donations of more than $5,000 each were made by groups like the California Association of Hospitals and Health Systems ($25,000) and AT&T ($25,000.)

“Public officials raise money for charity because they’re public officials and people want to be on their good side,” said Bob Stern, who co-authored the state’s campaign finance law, but did not play a role in writing the later section on behested payments.

But Stern said he strongly supports the requirement that such donations be reported and believes the $5,000 threshold should be lowered to $1,000.

“They (elected officials) raise money from people who are doing business before them as public officials,” he said. “The reporting is very important. It makes sure everybody knows what’s going on.”

Locally, there has been controversy in recent months over the reporting of behested payments.

For example, Supervisor Todd Spitzer, a likely candidate for District Attorney, questioned during a Board of Supervisors meeting this year why District Attorney Tony Rackauckas hasn’t filed behested payment forms for money he raised for a DA’s office event.

And after years of no apparent interest among members of the Orange County Board of Supervisors in seeking the payments, two current members of the board (Andrew Do and Shawn Nelson) and three former supervisors, who now are in the state Senate (Republicans Janet Nguyen of Garden Grove, Pat Bates of Laguna Niguel and John Moorlach of Costa Mesa), have reported seeking such donations.

Among them, Do reported raising $60,490 through behested donations to build statues of Ronald Reagan and a 13th century Vietnamese general in Fountain Valley’s Mile Square Park. His opponent in his November re-election campaign, Phat Bui, has complained to state campaign enforcement officials about the donations.

At Nguyen’s request, local lobbyist Bert Ashland said he formed the nonprofit, the Central County Foundation Inc., to co-sponsor her annual community health fairs.

This year, for the first time, Nguyen reported receiving a behested payment. A Sacramento lobbying firm that represents seven major insurance companies donated $10,000.

Rackauckas declined to be interviewed and Nguyen didn’t respond to a request to discuss behested payments. A Do spokesman said he would get answers to some questions, but didn’t.

‘Beat the HEAT’

Spitzer, during a May 24 Board of Supervisors meeting, questioned why Rackauckas hasn’t filed behested payment forms for an October, 2014 event his office sponsored that Spitzer said raised $45,285.72 for the DA’s office Human Exploitation and Trafficking (HEAT) unit.

Among other requirements, the law says “…’made at the behest of’ means made under the control or at the direction of, in cooperation, consultation, coordination, or concert with, at the request or suggestion of, or with the express, prior consent of the elected officer…”

Contributions from unidentified donors to the Rackauckas 2014 HEAT event included one for $25,000 and another for $5,000, apparently qualifying them for reporting as behested payments, but details surrounding the money aren’t known. Rackauckas has not filed reports with the county Registrar of Voters, according to its records and declined to be interviewed about the event.

Fundraising was channeled through a county contractor, the non-profit County Service Programs Inc. (CSP). A spokeswoman for the non-profit said they would not release the names of financial contributors to the official county event.

According to records obtained by Voice of OC under the California Public Records Act and other public information, Rackauckas, through his Chief of Staff Susan Schroeder and other workers, solicited support for the event from potential donors.

Schroeder and Spitzer could end up running against each other for DA in 2018, if Rackauckas doesn’t seek re-election. Schroeder is a member of Rackauckas’ inner circle and his 2014 re-election campaign manager.

In one June 12, 2014 email with the subject line “Re: 2nd Annual Beat HEAT Rocking & Rally,” DA’s office spokeswoman Roxi Fayed asks Schroeder “How are we handling the money this year? Make it out to CSP?”

Schroeder replied: “Yes. I think CSP has a form.”

That same day, Schroeder sent an email to Orange County Republican Chairman Scott Baugh giving details for when and where the HEAT event would take place.

“Dear Scott,” she wrote, “This is the event I talked to you about. It would be great if can add your name as a sponsor and also the Orange County Republican Party. Please let me know if I can…. Sincerely, Susan Kang Schroeder Chief of Staff Orange County District Attorneys Office.”

Baugh replied “Yes — you may add my name and the OCGOP”

An April news release on the DA’s office web site, with Rackauckas’ name prominently at the top, announced the H.E.A.T. event would be held Oct. 24, 2014 at Chapman University.

In addition to supporting the DA’s HEAT unit, the event helped promote the music career of Schroeder’s then business partner, Scott Foster. He performed at the 2014 event and a similar one in 2013 and used the DA’s 2013 video on his web site to promote his career. Foster’s web site video has been taken down.

The day before the 2014 event, the DA’s office issued a news release announcing former Broadcom chairman Henry Nicholas III, who is also a music company executive, would be a sponsor.

A concert at the event, said the news release, would feature a new band that included Foster, providing him an informal audition opportunity with Nicholas, co-founder of Aliso Viejo-based Level-7 media, which promotes music bands.

Nicholas was the driving force behind Marcy’s Law, a 2008 ballot initiative approved by voters to amend the state constitution and create a crime victims “bill of rights.” Marcy Nicholas, Henry Nicholas’ sister, was murdered in 1983 by a former boyfriend.

(Update: The FPPC confirmed Monday it is investigating whether Rackauckas should have filed behested payment reports for the 2014 HEAT event as well as a separate event sponsored by the DA’s anti-gang program.

The complaint was filed in June by Orange County political watchdog Shirley Grindle and William R. Mitchell, former chairman of the government accountability nonprofit Orange County Common Cause.)

Statues and Health Fairs

Do filed behested payment reports this year for the $60,490 he raised for the statues in Mile Square Park. The money came in in June and December 2015; and January of this year, but he missed the 30-day deadline for filing the public reports. His reports weren’t filed until April 14, according to date stamps in the Registrar of Voters files. A Do spokesman did not provide a reason for the delay.

Similarly, Supervisor Shawn Nelson reported in 2012 that he solicited two donations totaling $11,000 for the Orangewood Children’s Foundation in Santa Ana. The checks for $5,000 and $6,000 were paid in June and July 2012 but he didn’t report them until November 28, 2012. Nelson didn’t return phone calls to discuss the missed 30-day deadline.

So far this year, Nguyen has reported soliciting and receiving $15,000 from two groups for causes that she backs. One donation was $5,000 from Blue Shield of California for the May 9 Asian & Pacific Islander Americans (APIA) Gala in Sacramento, according to her behest payment filing.

The other contribution was $10,000 from the Personal Insurance Federation of California, the lobbying arm for State Farm, Farmers, Progressive, Allstate, Liberty Mutual, Mercury and Nationwide insurance companies. That donation went to the Central County Foundation Inc., in Garden Grove, which was created at Nguyen’s request and helps sponsor her annual community health fair.

Nguyen’s health fairs are an example of how an elected official can enhance his or her community reputation with donations from public bodies they help run.

Ashland said Nguyen asked him to form the Central County Foundation but health problems caused him to resign as its leader within six months and before any money was received.

Since Ashland left, the foundation has been led by its former treasurer, Garden Grove real estate agent Scott Weimer, who also owns the building where Nguyen has her campaign headquarters and was treasurer of the Garden Grove Downtown Business Association, which solicited donations for the fair before the Central County Foundation got its tax exempt status.

Directory on the outside wall of the building when Sen. Janet Nguyen has her campaign office adjacent to the parking lots where her annual health fair is held.

Tracy Wood/Voice of OC

Directory on the outside wall of the building when Sen. Janet Nguyen has her campaign office adjacent to the parking lots where her annual health fair is held.

The big parking lot adjacent to their offices is the site of Nguyen’s annual health fairs and Concorde Career College and Coastline Community College, on the far side of the lot and the lot owners, have helped over the years.

In 2011, while Nguyen was the only supervisor on the board of directors of CalOptima, the county health plan for elderly, disabled and low income residents, Weimer asked it to donate to the health fair, making the check payable to the Garden Grove Downtown Business Assn., according to public records provided to Voice of OC.

That year, CalOptima donated at least $5,000.

The county Health Care Agency, Social Services Agency, Office on Aging and Housing Authority also were involved.

A Feb. 1, 2012 email from Weimer to CalOptima asks it to participate in two health events that year that “will be co-hosted by First District Supervisor Janet Nguyen (sic) …and the Central County Foundation, in partnership” with five county departments and the two colleges whose parking lots were the site of the fairs.

Weimer did not respond to a request to interview him about the health fairs.

After Nguyen was elected to the Senate, her use of the health fairs to also promote her name among constituents with posters, photos and radio and TV programs, provoked a heated exchange at a Board of Supervisors meeting. Of particular concern was the cost to taxpayers in the salaries of county staff from the various departments that participated in those and some other events hosted by supervisors.

Since she no longer is a supervisor, Nguyen’s access to county resources for her fairs have been limited, but she still held her 7th annual fair this month, although it was a scaled down version of earlier events which often began early in the morning and lasted until late afternoon.

This year, exhibitors largely closed down shortly after 1 p.m. and by 2:30 p.m. her volunteer crew, wearing Sen. Janet Nguyen T-shirts (link to photo) with big red lettering on the back, folded up the last of the pop-up canopies and hauled them up the stairs to her campaign office.

You can contact Tracy Wood at twood@voiceofoc.org and follow her on Twitter: @TracyVOC.

  • OCservant_Leader

    Since the current DA took office – the County and most Cities in the County -entire Bureacracies (paid by taxpayers) has turned over to working for the Politicans and their special interests.

    Who’s going to stop them?

  • Jacki Livingston

    Janet Nguyen received large sums of money from local nursing home provider called Sun Mar Nursing, who had been hauled into federal court for a class action suit charging that 18 of their facilities were so filthy, negligent and corrupted that there were huge numbers of bedsores, embezzled funds, abuse of patients and one woman was killed when an untrained minimum wage worker dropped her on her head, on a tile floor. Both the facility and their attorneys were huge donors, as were many of the employees. When I found numerous residents not only had their lump sum patient trust accounts stolen, but also that they were multiple billing the state using multiple billing numbers for the same patient, the office manager at the facility in Ms. Nguyen’s district dropped her name and said that they had been working closely with dear Janet. When I wrote, emailed and faxed Ms. Nguyen, she ignored me. Not only did she ignore me, but all of the other BoS members did, even when I sent them all internal documents to show the fraud. It was the beginning of the end of my career. Janet Nguyen isn’t really any more criminal than any of the others, she is just more arrogant about it.

  • Cynthia Ward

    I checked City of Anaheim, search the open gov portal for those behested payments dating back to January 2011 when current council took office and get NO DOCUMENTS. You think they are not pushing for donations to MUZEO Council members sit on the board) or the dog statue or any of their favorite pay to play funds? COME ON..

  • kburgoyne

    Great article. Thanks, Tracy. I’m once again reminded my recurring donation is worthwhile.

    So all things considered, a rather complicated double-edge sword situation. It is good when good things are done using the money, but how can it be done without the clearly obvious potential for influence peddling?

    Perhaps VofOC should lead the media charge to press for “open data” in California like we now have somewhat in DC. Many fed agencies are providing public Internet access to databases of public data. The “OData” (“open data”) Internet protocol is made for this.

    If all this political money in all these reporting silos were forced to be published on the Internet in OData format (as well as downloadable XML files, etc), it would be possible to write applications which link to all those data sources and aggregates the information. New outlets like VofOC could reach the point of pressing a button and getting the latest reports aggregated from multiple cities, counties, etc.

    Another change would be to require all this political money to pass through a reporting agency on its way from the source to the destination. The agency has one sole purpose to record and publicly publish the data IMMEDIATELY as it is transitioning from the source to the destination. None of this “oh we need at least 30 days to be able to file our reports” contrary to what we all know can be accomplished in our modern electronic world. We can implement a system where the money gets reported AS it is transitioning from source to destination, even before the destination can make use of the money, and for that matter before the money probably even makes it out of the source’s bank account.

    There is no reason why all such politically oriented donations could not be reported immediately and included immediately in a publicly accessible database where watchdogs could “see” and report on the transaction in near real-time. Imagine VofOC being able to write an article in the afternoon reporting on how some corporation made a donation at the behest of a politician just that morning and — surprise, surprise — there is a vote involving that corporation that evening.

    Once the politicians and corporations became used to that speed of reporting and sunlight, I think we’d actually start seeing the politicians and corporations trying to get out ahead of the news report by publishing press releases to accompany the donations in order to eliminate any air of secrecy. Thus they themselves would be further exposing their own activities, and therefore they’d be a LOT more concerned about any political issues.

  • Paul Lucas

    A backdoor to graft. It should b closed up permanently.

  • David Zenger

    What a charming way to peddle influence.

    • Jacki Livingston

      Oh, Mighty Todd, champion of victims…yeah, including a judge over at the Worker’s Comp courts who stated, publicly, that she “owed him her life” because he was her attorney when she was attacked and they worked closely for years to pass “victim’s rights law”. But you can bet the Toddy’s wifey poo is still assigning county employee cases to this judge. Can YOU say “conflict of interest”? There is nothing charming about what these people do. It isn’t peddling…it’s prostitution.