Special interest groups are donating money to causes supported by California's Latino legislators – potentially buying influence – without any public disclosure.
The Latino Legislative Caucus two years ago stopped revealing which Capitol interest groups give hundreds of thousands of dollars to a nonprofit group it controls.
As California's fastest-growing minority group, Latinos have rising political clout. Twenty-three Latino Democratic lawmakers are in the legislative caucus, whose work extends to sponsoring community events through its foundation.
More than $856,000 was donated to the Latino nonprofit over a two-year period ending in 2008, including more than $706,000 that was solicited by then-caucus leader Joe Coto, a San Jose Democratic assemblyman.
Many of the biggest checks came from powerful Capitol players, ranging from the California Correctional Peace Officers Association to the Agua Caliente Band of Cahuilla Indians.
Since then, solicitations have continued – but disclosure has stopped.
Donors were not identified in 2009, 2010 or thus far this year. Contributions totaled nearly $250,000 in 2009, the most recent year for which tax records are publicly available.
Fundraising continues, however.
A flier for the foundation's "Latino Heritage in California" event last month at the Capitol sought contributions of up to $25,000, which entitled donors to "20 tickets and stage recognition." No donor has been identified.
"I think special interests see a way to help legislators that can help them, too," said Jamie Court of Consumer Watchdog, a nonprofit political group. "If they can use charitable funds, which don't have contribution limits, then why not?"
The secrecy surrounding the Latino nonprofit group stands in stark contrast to practices of a similar foundation run by the Black Legislative Caucus, which has identified donors in each of the past two years.
Charity vs. politics
Assemblyman Gil Cedillo, a Los Angeles Democrat who led the Latino Legislative Caucus in 2009 and 2010, said that nondisclosure does not violate state law, which distinguishes between money donated for charity and politics.
"There's a higher standard, appropriately, for strict political activity vs. activity that in the nonprofit world is considered educational or philanthropic," Cedillo said.
Nonprofit groups are not required by law to disclose contributors, which honors their privacy and avoids the possibility of retribution by someone angry about support for a particular cause.
Elections law carves out a narrow exception, however, by placing the onus on lawmakers to disclose donations above $5,000 that they solicit for community or charity causes.
The legal obligation on a lawmaker is less clear, however, when the elected official is acting as part of a caucus or group and does not personally make the pitch for money.
Cedillo contends the exception applies to the Latino caucus's nonprofit, even though its name – Latino Legislative Caucus Foundation – draws a clear connection to Latino legislators who determine how its money is spent.
"We have really good disclosure in California, but there are some ways around it – and it's hard to tighten up those rules when it's the legislators who are getting around it," said Bob Stern, president of the Center for Governmental Studies and a co-author of the state's Political Reform Act.
Derek Cressman, Western regional director for Common Cause, said disclosure of charitable contributions is important because Capitol interest groups would not donate unless they felt confident the money would buy them good will.
A Who's Who of donors
Donors from 2008, the last year of disclosure, read like a corporate Who's Who – including AT&T, Oracle, Verizon, and ConocoPhillips, all of which were pushing legislators to vote their way on multiple bills that year. The largest contribution was $75,000 from Eli Lilly & Co.
Cumulatively, the 10 largest donors to the Latino foundation spent $7.6 million on lobbyists in 2008, records show. Watchdog groups contend that unlimited charitable donations can wield as much political clout as campaign contributions that are capped at $3,900 per election.
The Latino caucus's nonprofit was launched seven years ago to benefit Latino Californians – to promote and support their culture, bolster their participation in society, and educate the public about issues affecting them.
The Capitol's annual Latino Spirit Awards are sponsored by the foundation, which also has supported a Latino youth leadership project and helped to commemorate Cesar Chavez Day and Hispanic Heritage Month. In its incorporation papers, the foundation said it would not intervene in political campaigns or legislative issues.
Coto's two years of disclosure were an aberration, apparently, because the foundation's donors were not identified before or after his stint as Latino caucus leader. Current Chairman Tony Mendoza, a Democratic assemblyman from Artesia, could not be reached for comment.
The Latino Legislative Caucus also has strong ties to a separate nonprofit "policy institute" that typically raises about a half-million dollars annually – the high was $735,736 in 2006 – for public programs serving Latinos statewide. It is not required to disclose contributions and did not respond to a request by The Bee to do so voluntarily.
The policy institute was created by the Latino Legislative Caucus in 2002. Its name is almost identical – the Latino Legislative Caucus Institute for Public Policy – and two nonvoting seats on its governing board are reserved for leaders of the legislative caucus. But the institute is not controlled by lawmakers.
Led by former state Sen. Richard Polanco, D-Los Angeles, the Latino institute runs a student fellowship program – named after Polanco – and oversees events ranging from public policy discussions to ethics training for local government officials.
Wal-Mart, AT&T, Pfizer, Chevron, Sempra Energy, Southern California Edison, Southwest Airlines, Heineken USA, Bank of America, Chrysler, Pepsico and Union Bank are listed as sponsors on the policy institute's website, but the size of contributions they have made, if any, are not disclosed.
Contact Jim Sanders, Bee Capitol Bureau, (916) 326-5538 or [email protected]