Is a Council Member Who Runs a Local Charity Giving Back to the Community?
<a href="http://www.nytimes.com/2010/09/06/us/politics/06charity.html?_r=1&adxnn…; target="”_blank”">The
lead article in yesterday's New York <i>Times</i></a> was on charities set up
by members of congress. I've written a few times about the use of
charities to get around campaign finance and gift provisions (<a href="http://www.cityethics.org/content/officials-soliciting-charitable-contr…; target="”_blank”">1</a>
<a href="http://www.cityethics.org/node/239" target="”_blank”">2</a> <a href="http://www.cityethics.org/node/588" target="”_blank”">3</a>), but this is an area
of special creativity, where new ideas, and new reasons for regulation,
arise frequently. For example, the foundation on which the article
focuses employs the congressman's son, a Rialto, CA council member, as
its CEO and President.<br>
<br>
According to <a href="http://online.wsj.com/article/SB123111072368352309.html" target="”_blank”">an
article in the Wall Street <i>Journal</i></a> last year, the <a href="http://www.joebacafoundation.com/" target="”_blank”">Joe Baca Foundation</a> gave
away $36,000 in scholarships in 2008, but paid the son and council
member (Joe Baca, Jr.) $51,800 (according to IRS documents; the son said he was receiving only half that amount). In
2008, the foundation also gave $20,000 in fire equipment to the son's city,
paid for totally from a contribution by another nonprofit, <a href="http://www.ameridream.org/WhoWeAre/Accomplishments/" target="”_blank”">AmeriDream</a>.<br>
<br>
I could find no other figures on the foundation's website, a serious lack of disclosure for a charity founded and run by public officials.<br>
<br>
According to the <i>Journal</i> article, AmeriDream is a sponsor of <a href="http://www.hogarinc.com/" target="”_blank”">Hogar</a>, an initiative to promote
Latino homeownership created by the Congressional Hispanic Caucus
Institute Inc., a nonprofit entity founded and run by leaders of the
Congressional Hispanic Caucus along with corporate and nonprofit
representatives. It was funded by mortgage lenders, especially
sub-prime lenders, including Countrywide and Washington Mutual. Joe
Baca chaired the Congressional Hispanic Caucus 2007 to 2008.<br>
<br>
AmeriDream had a seller-financed down-payment assistance program,
whereby builders would put up down payments for buyers who couldn't
afford them. In 2008, this program was prohibited by law, according to
the <i>Journal</i> article, and Baca cosponsored "a bill that
would allow AmeriDream and similar nonprofits to resume arranging
seller-financed down-payment assistance to low-income Federal Housing
Administration borrowers."<br>
<br>
Why would a nonprofit focused on increasing housing opportunities fund
firefighting equipment for Rialto, California?<br>
<br>
According to the <i>Times</i> article, the foundation has raised $200,000 in
contributions this year. One of the donors to the foundation is <a href="http://www.rentechinc.com/rialto.php" title="Rentch">Rentech</a>,
a California-based biofuels company that wants to build a new fuel
plant in Mr. Baca’s district. After it made two <a href="http://documents.nytimes.com/congressional-charties-corporate-sponsors-…; title="Promotional material about Rentech’s sponsorship" target="”_blank”">donations
last year</a>, Mr. Baca’s son ... voted to endorse federal assistance
for the project — even before the company had completed the local
environmental permit reviews. Then the congressman sent a <a href="http://documents.nytimes.com/congressional-charties-corporate-sponsors-…; title="Mr. Baca’s letter" target="”_blank”">letter</a> to the Energy Department on his
office stationery urging approval of the assistance."<br>
<br>
The son/council member defends the foundation by saying, “We have
always been about giving back." I'd like to take him at his word and
ask the question, Is it right for a council member to give back to his
or her community by setting up a charity for which he seeks funding
from individuals or entities that do business with the community's
government?<br>
<br>
No one is in a better position to help his community than an official
who can twist the arms of potential contributors. Isn't it better that
the twisting be done for charitable purposes than just to get the
official re-elected? And isn't it a great boon for the community that
the council member can make use of the even greater power of a family
member who sits in Congress?<br>
<br>
The <i>Times</i> article talks about the influence that companies seek to get
by giving contributions, but this situation has nothing to do with
influence-peddling. This is about pay-to-play and paying back for
favors done.<br>
<br>
The problem is that favors shouldn't be done by government officials.
That's preferential treatment. Nor should arms be twisted by government
officials or employees. That's misuse of office.<br>
<br>
Local legislators give to their communities by doing their jobs. Once
they've retired, it might be nice to use their fame to work with local
charities. But setting one up on their own while they are still in
office, or even soliciting for community charities from anyone doing
business with the government, only sets up a series of conflicts of
interest. And it is coercive, because many of those who give will be
those who feel they have to. If businesses want to help their
community, they have a thousand ways to do this without doing it
through a charity run or selected by a local official.<br>
<br>
In short, setting up a charity is not a way for an official to give
back to his community. It's a way of taking. It's nicer than pocketing
the money, although in this case, with the council member getting a
salary incommensurate with the foundation's programs (and not declaring
it publicly on the website), it's pocketing money, too.<br>
<br>
In fact, the apparent generosity of the foundation is itself a taking.
What better campaign publicity can there be than another community
program paid for by the Joe Baca Foundation, a name held by both
congressman and councilman?<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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