Tech companies are spending millions on California political giveaways
SACRAMENTO, Calif. (AP) — Governor Gavin Newsom has sought donations totaling nearly $227 million from Facebook, Google, Blue Shield and other private California companies and organizations to help fight the coronavirus pandemic and help manage some parts of his administration, according to a report Thursday by the state’s political watchdog agency.
“Imposed payments” are contributions solicited by an elected official to be paid to another person or organization. They are less regulated than campaign contributions and grew 10-fold between 2019, Newsom’s first year in office, and 2020, when the pandemic arrived.
Facebook has contributed nearly $27 million to the Democratic governor’s causes, mostly for gift cards for nursing home workers. California’s Blue Shield donated $20 million to homelessness programs. Those companies were the top two donors, said the Fair Political Practices Commission, which oversees and enforces California’s campaign finance and political ethics laws.
Recipients listed include the Governor’s Office for $42.5 million and the Governor’s Office of Emergency Services for $26 million. There was also money to support the California Alzheimer’s Task Force, Newsom’s California Climate Action Corps initiatives, a California Day of Climate Action, and consulting services for the master plan of administration for aging.
While California limits the amount of gifts and campaign contributions to politicians, there are no limits on payments imposed. They are reportable only if they are made at the suggestion of a public official to someone else for legislative, governmental or charitable purposes, and only if the payments from one source reach $5,000 during a calendar year.
“Unprecedented times call for an unprecedented response,” Newsom spokesman Daniel Lopez said in a statement.
He said the governor is “committed to harnessing the innovative spirit of our private sector” and “leveraging that strength to help improve the lives of all Californians.”
There is no suggestion that Newsom or his donors acted improperly. But critics say that while the payments may not directly benefit the politician, they may indirectly curry favor.
For example, former Governor Jerry Brown repeatedly solicited contributions from casinos, unions, wineries, insurers and big business to benefit the Oakland Military Institute Charter School that he founded in 2001 when he was mayor of the city.
Despite the nature of those enforced payments, Lopez said hundreds of companies, including Facebook and Blue Shield, contacted the governor’s office, not the other way around.
Campaign watchdogs are split into two camps on taxed payments, said Loyola Law School professor Jessica Levinson, former chair of the Los Angeles Ethics Commission.
Some believe these contributions “are the work of the devil, and they are clearly a loophole around contribution limits and people are simply giving them to curry favor with elected officials,” she said.
She tends to fall into the second camp, which is that the money will inevitably flow through politics and would otherwise go into campaign accounts or independent spending commissions.
“So if people are going to try to curry favor with elected officials, which they will, then let’s at least make sure that money goes to a good cause,” she said.
She said the big issue was disclosing payments transparently, so voters can make informed decisions about donations and results.
“Not every taxed payment is harmful, but every taxed payment deserves careful scrutiny,” said Jonathan Mehta Stein, executive director of the good government group California Common Cause. “And the recent explosion of enforced payouts is certainly creating a perception among the public that corporations and state policy actors are using this as a way to get around our pay-to-play rules.”
Blue Shield and Facebook, now Meta, each said they were proud to help Californians during an unprecedented pandemic.
In addition to the governor, mandatory payments can be made on behalf of numerous local and state officials, including statewide legislators and officials.
Several other states, including Alabama, Florida, Hawaii, Maryland, New Mexico and New York, limit or prohibit such solicitations for the benefit of third parties, according to the California Ethics Committee.
Newsom mentioned some of his contributors during his almost daily press conferences at the start of the pandemic, giving publicity to certain donors.
Ethics commission spokesman Jay Wierenga said requests for donations can take a variety of forms and don’t have to come from the governor himself. They could start with an informal request from an assistant to the governor at an event or a formal solicitation letter, and the nature of that request does not have to be disclosed, just the outcome.
Payments made at Brown’s behest reached less than $11 million in 2018, his last year in office, and Newsom’s about $12 million in 2019 when he took over and sought money to pay for his inauguration festivities and various governor’s task forces.
Newsom kicked these donations into a whole new gear in 2020.
In 2019, there was one contribution exceeding $1 million. The following year, there were 50. Contributions between $500,000 and $1 million increased from 3 to 18.
The overall amount of state-imposed payments in 2020 was more than 30 times the amount in 2016. Substantial increases also occurred in local-level reporting, the commission said.
The growing use shows “the continued importance of transparency in ensuring that our elected officials are accountable for the enormous sums collected, even as they make very commendable efforts,” said commission chairman Richard Miadich.
So the commission now requires officials to disclose any connection they might have with a nonprofit organization receiving the money, and whether the person making the payment is involved in any proceedings before the official’s agency.
This increased disclosure is a good step, Mehta Stein said, but he said the legislature should outright prohibit solicitations that benefit an office holder’s spouse or other relative.
Among other donors, Google gave $10 million for the COVID-19 public health awareness campaign in California, while Fox, YouTube, TikTok, Twitter, Snapchat, Spotify, Netflix, Pandora, Comcast, ABC and NBC were among those who contributed lesser amounts.
Blue Shield’s $20 million was used to support Project Homekey, Newsom’s program to use vacant unused hotels, motels and other properties as permanent supportive housing for homeless residents.
Tens of millions more from the Kaiser Foundation, the IKEA US Community Foundation, the Chan Zuckerberg Initiative and individual donors Reed Hastings and Tom Steyer have all gone to California’s COVID-19 response fund.
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