Slices of Life in a Major Democrat-Run City -- Nose Downwind from San Francisco's Version of Billy Blythe POTS OF CASH, SECRET DONORS: Nonprofit groups that pay for mayor's trips and gifts may skirt disclosure laws by Erin McCormick San Francisco Examiner, Jan. 25, 1999 Mayor Willie Brown, perhaps the most astute political fund-raiser in California history, has found a multimillion-dollar way around the tough disclosure laws governing public life in San Francisco and the state. Three nonprofits set up to fund mayoral junkets to foreign cities, gifts and events have been collecting money from secret donors at a rate of $3.5 million a year, according to reports filed with the Internal Revenue Service covering parts of 1997. The donations, which are allowed under laws governing nonprofits, have even outpaced the record-setting $2.8 million Brown raised for his 1995 election. But critics question whether the nonprofits' fund-raising is skirting strict San Francisco campaign contribution laws that require public disclosure of all donors and limit gifts to $750. "Three million dollars is an amazing amount," said Supervisor Leland Yee. "The mayor's got a lot of activities he's involved in, and I guess he's got to find some way to pay for them. But people are being kept in the dark as to who is giving donations. I think it skirts the reporting process under fair political practices laws." Brown refused an Examiner request that he make public the names of donors to the mayoral nonprofits: the San Francisco Special Events Committee, the San Francisco Host Committee and the Mayor's Youth Fund. "By law we are not required to do that and the mayor does not choose to do it," said Ron Vinson, a spokesman for Brown. "If the donors wish to make their donations public they can." Federal returns from the three nonprofits show such expenditures as $182,000 for the mayor's overseas junkets, $192,000 to buy gifts for visiting dignitaries and $2.2 million to host the 1997 U.S. Conference of Mayors. Vinson said the Conference of Mayors, which brought the top officials from more than 300 cities to San Francisco, drove up the amount of fund-raising. "It was a big deal," he said. "More money was raised for that event because of the magnitude of hosting mayors from all over the country." All three nonprofit organizations were in place before Brown took office in 1996. But, since his term began, Brown has increased the organizations' annual intake by more than 800 percent - turning a kitty that once provided city leaders a few hundred thousand dollars a year in extra spending money into a multimillion-dollar mayoral war chest. A few names made public While most of the groups' federal filings bear headings stating that names of donors are "not open to public inspection," a few donor names have been made public. Records for the San Francisco Mayor's Youth Fund show that the nonprofit, which paid for two citywide youth conferences sponsored by the mayor, received large contributions from several corporations that were involved in development deals and contracts with the city during 1997. *The San Francisco 49ers, which won a ballot measure to use city bonds to finance a new stadium and mall with the mayor's support in June 1997, gave $10,000. *The Crystal Springs Golf Partners company, which holds a city contract to run a golf course on public land, gave $20,000. *The foundation for the Gap, which got help from The City Redevelopment Agency in 1997 to win the exclusive right to buy a prime piece of state-owned waterfront property for a proposed headquarters building, gave $10,000. Other contributions to the youth fund came from the McDonald's Corp., Levi Strauss Foundation, Macy's department stores, Sumitomo Bank, J.C. Penney Co., the Charles Schwab Foundation and Nestle. Only one donor to the other two nonprofits has been revealed. Democratic booster and Ralph's grocery chain owner Ron Burkle, who is seeking an exclusive Treasure Island development contract from The City, gave $100,000 to the San Francisco Special Events Committee to help Brown pay for the Conference of Mayors events. "It's vexing because of the inability to find out who these donors are," said former state Sen. Quentin Kopp last month, days before he won an appointment to a San Mateo judgeship. "There's a question of whether they're buying influence. I bet if you look at the list you'll find more than one (donor) who's seeking some sort of public benefit." While politicians must file disclosures several times a year about their political contributions, only the sketchiest information is available about money given to nonprofits - even those controlled by politicians. The only public information about charities' fund-raising activities comes from annual IRS returns that don't have to be filed for more than a year after the money is raised and spent. "It's a huge loophole," said Kim Alexander of the California Voters' Foundation. "The whole purpose of having campaign disclosure rules is so that the public can know who these officials are indebted to." Millions spent on conference The report filed in December for the Special Events Committee covers the year 1997. It shows that the committee, headed by Brown's protocol officer Charlotte Mailliard Shultz [Mrs George Schultz of ex-President Reagan's cabinet], hired a professional fund-raiser to solicit $1.5 million in donations to pay for the lavish Conference of Mayors in June 1997. The committee spent $2.2 million - including more than $300,000 in city funds - on the mayors' conference, during which Brown hosted municipal leaders from around the nation to glitzy, closed-to-the-public cocktail parties, dinners and a Bay cruise. The special events committee also reported spending $194,000 on sponsoring Fleet Week festivities and $1,000 on a 49ers parade. In all, the charity's fund-raising totaled $2.6 million, including a city grant of $844,000 that came from the public protocol fund that Mayor Brown established for himself in 1997. That fund was outlawed by voters in 1998. The Special Events Committee reported that of the $2.5 million it spent, $1.1 million dollars went to "event production / entertainment" costs, including a contracting fee of $207,000 paid to party planner Rita Barela, who organized the mayors' conference event. The committee also reported spending $114,000 for gifts given at events, $120,000 for plants, banners and decorations, $13,000 for uniforms for event employees and $6,400 for portable toilets. The San Francisco Host Committee, which pays for the mayor's overseas trips and city ceremonies welcoming visiting dignitaries, reported raising $724,000 in the fiscal year ending in June 1997, the most recent one for which it has reported. Mayor Brown serves as the chairman of the board of this nonprofit. According to its IRS report, the committee raised $282,000 in "participation fees" - charges assessed to corporate officials for the privilege of going along on his overseas trips. It also received $307,000 in donations and a city grant of $100,000. The nonprofit reported spending $182,000 on lodging, transportation and meals for trips, including Brown's official visits to Paris and Asia. It also bankrolled $194,000 in gifts and flowers and $55,000 in photography and printing. "Do the right thing' The smallest of the mayoral nonprofits, the San Francisco Mayor's Youth Fund, reported raising $167,000 in the fiscal year ending in September 1997. Brown serves as its president. The group spent $89,000 on sponsoring a two-day youth summit in October of 1996 and $31,000 on a separate youth empowerment conference. The rest of its spending, $96,000, went for grants of $1,000 to $7,500 given to 27 local youth organizations, including Galileo High School, Mission Youth Soccer League and the Juneteenth Inner Beauty Pageant. Of all these groups, only the Youth Fund donors were made public - and even that disclosure appeared to be inadvertent. By contrast, Alexander pointed out, when newly-elected Gov. Davis set up a similar nonprofit to raise millions of dollars in donations for this month's inaugural bash, he agreed to voluntarily make public the sources and amounts of all donations to avoid any appearance of influence trading. "People need to ask Willie Brown to publicly disclose contributions to any of his causes," she said. "It shouldn't have to be required by law for politicians to do the right thing." --------------------- Business booming for S.F. lobbyists: Money spent on political hired guns DOUBLED under Willie Brown by Chuck Finnie San Francisco Examiner, Jan. 28, 1999 The lobbying business has exploded under Mayor Willie Brown as corporate and other interests doubled their spending - to more than $3.3 million a year - on hired guns at City Hall, records show. The bulk of the money, described alternately as a scourge on democracy or the welcome by-product of robust times, has gone to a trio of lobbyists with close business, personal and political ties to the local Democratic Party establishment. "I think it is excessive and obliterates the relationship between local government, neighborhoods and communities," Board of Supervisors President Tom Ammiano said of the spending to influence government decision makers. But Brown's spokeswoman, Kandace Bender, cheered the activity as another indicator that the local economy was on a roll under the mayor. "It is a sign of an economically healthy city," Bender said. "There's no stall at City Hall." Veteran lobbyist Marcia Smolens, whose clients range from United Airlines to a man who wants to build a museum devoted to butterflies, was the top earner among lobbyists. Smolens' firm, HMS Associates, collected $1.1 million in 1998, according to documents filed this month with the Ethics Commission. Meanwhile, William G. "Billy" Rutland Jr., who launched his local practice just months after Brown - his friend and former boss - was sworn in as mayor, reported earning $728,000 last year. And Solem & Associates, the firm opened 22 years ago by former Democratic Party chief executive Don Solem, received $396,829 in 1998 lobbying fees, records show. Overall, City Hall lobbyists have reported $3.3 million in fees for 1998, a figure that will increase when outstanding reports for the final three months of the year are filed by some lobbyists, including political strategist Jack Davis, the mayor's campaign manager. The 1998 fees were almost twice as much as the $1.7 million reported by lobbyists in 1996, when Brown took office. A need for advocates Ammiano, an outspoken critic of the role of money in local politics, says he feels so strongly he refuses to meet with hired advocates. But other supervisors, as well as lobbyists and the companies that hire them, contend paid advocates provide an increasingly important function that is made necessary by government regulation and bureaucracy. And, the lobbyists add, while relationships with elected and other government officials are important, they do not readily equate into influence over votes, contract awards and other high-stakes decisions. "One of the things that government relations people are able to do is present both sides of a story, do research and provide information," Smolens said. "Supervisors are swamped." Some of the public benefits escape notice, she said, such as when her client, Kaiser Permanente, helped underwrite the mayor's 1998 AIDS summit. "We do good stuff," she said. "We get our clients to do good stuff they might not have otherwise thought of ... These are great things and should be applauded." Under city law, all hired advocates paid to influence the outcome of legislation or administrative rule-making in San Francisco must file quarterly reports with the Ethics Commission. The reports identify clients and fees, and disclose political contributions and gifts to city officials. Currently, 32 individuals, firms and law offices are registered as lobbyists with The City. Strong link to Democrats The top earners, however, tend to share a pair of attributes: familiarity with the halls of government and close ties to local Democrats. Smolens' firm, HMS & Associates, uses powerful state Sen. John Burton as an attorney and has paid his law office at least $10,000 a year, records show. "He is a lawyer for me, but not in San Francisco," Smolens said. "We discussed it, and we decided we shouldn't do that." Rutland, who is a former Sacramento aide to the mayor during Brown's years as speaker of the Assembly, remains personally close to the mayor. Rutland did not return a telephone message seeking comment. He has generally refused interviews about his lobbying of Brown's administration. But Bender, the mayor's press secretary, defended the arrangement. "He is very good at what he does," Bender said, explaining Rutland's meteoric rise up the local lobbying ranks. "He is savvy. He is smart, and he understands business interests." Having connections Bender said she doubted Rutland's relationship with the mayor was the source of his good fortune. "There are any number of people at City Hall who have a good rapport with the mayor." Solem was executive director of the state Democratic Party in 1969 and 1970, and later worked for Mayor George Moscone when the late mayor was a state senator. He doesn't downplay the importance of political connections, but they get you only so far, he said. "The influence of the lobbyist is usually overstated, over suspected," Solem said. "It is not just relationships," he said, explaining why certain lobbyists get more business. "One reason is reputation. Another is judgment and the ability to play back their problems, to redefine them" and find solutions. Douglas Gardner, a senior vice president at Catellus Development Corp., said his company had turned to a lobbyist, Smolens, more for logistical help than out of a need for political know-how. After Catellus settled on a development plan for its massive Mission Bay project, the future home of a second UC-San Francisco medical school campus, it faced a daunting bureaucratic process: some 40-odd public actions or votes between Labor Day and November last year. "We had a very broad array of governmental jurisdictions we had to deal with," Gardner said. "Marcia is very familiar with the governmental approval process." But when there's an important policy decision ahead, an experienced, forthright lobbyist can help a supervisor better understand the issue, said Supervisor Leslie Katz. Dissecting the details Proposals such as those under consideration to extend health insurance to uninsured city residents and workers, or set new minimum wages for city contractors, are bound to touch off activity on all sides of the issues, she said. However, Katz said, "I pride myself on trying to make myself accessible to everybody," lobbyists included. She added: "I just like people to come in who are prepared. Some of the lobbyists are very fair in their presentations. They tell both sides and where they're coming from. I know who has misrepresented (the facts) and will scrutinize what they say more closely next time."
