One city councilman received nearly $3,000 in campaign
contributions, some of which were anonymous, and he can keep them
all private, thanks to campaign finance laws that only require the
disclosure of sources who donate $100 or more.
Gilroy – One city councilman received nearly $3,000 in campaign contributions, some of which were anonymous, and he can keep them all private, thanks to campaign finance laws that only require the disclosure of sources who donate $100 or more. And he’s not alone.
Since state campaign laws do not require the disclosure of donations $99 or less, a loophole exists for anyone to stuff 15 or 20 separate envelopes each with $99 in cash and then anonymously send them to their favorite city council or mayoral candidates. Nobody would know.
But Incumbent Russ Valiquette said Wednesday he handles anonymous donations ethically and responsibly because there is nothing else he can do.
Valiquette said he has received more unnamed contributions this year than he did in 2003, but he was not sure exactly how many were anonymous. His treasurer could not be reached for comment. All the sources of Valiquette’s nearly $3,000 in donations between July 1 and Sept. 22 were less than $100 thus need not be disclosed.
Councilman Craig Gartman is challenging Mayor Al Pinheiro for the mayor’s seat, and Planning Commissioners Tim Day and Cat Tucker, former Councilman Bob Dillon, lawyer Perry Woodward and incumbents Roland Velasco and Russ Valiquette are running for the three available council seats.
Woodward’s robust coffers include $15,000 he loaned to himself. Since September 2006, Valiquette has loaned himself nearly $3,000, Velasco $500, and Tucker $1,000.
Of the donations all eight candidates received between July 1 and Sept. 22 of this year, 46 percent have been nondisclosed donations of less than $100. Through this same window of time during the 2005 election, 38 percent of the five candidate’s anonymous donations were less than $100.
Valiquette has felt the increase the most. He credited it to donors who do not want to be solicited by other candidates or “dragged into the limelight.”
He also attributed it to a slight controversy during the 2005 election, when half the campaign funds accepted by then-incumbent councilmen Bob Dillon and Charles Morales came from just two development groups.
Although these two developers were not mailing dozens of anonymous $99 envelopes and instead were using different companies to pass along the money, the revelation is indicative of the loophole.
“It puts (candidates) in a really bad spot because now I get cash with no return address, not in check form. What do I do with that money? Hold on to it, or donate it at St. Joseph’s next Sunday at church?” Valiquette asked.
He said he tells potential donors of the anonymous route and all the other rules and then just files the unaccredited envelopes in case he is ever audited.
Tucker could not be reached for comment, but of the remaining candidates, only Bob Dillon said he had received “a couple” of untagged envelopes with $50, $75, or $99 and that he just files the anonymous donations. The rest of the candidates said they had not received any anonymous contributions.
“I don’t see it as a big deal. During (the ’05) election, people’s names were disclosed, and they didn’t want that,” Dillon said. He added that he could not recall the current prevalence of anonymous donations in the ’05 or ’03 elections, but it does not matter because “there’s not enough money involved for it to be a significant matter.”
Pinheiro sees it differently, though. He said he has never accepted anonymous cash donations.
“I don’t want cash involved in my campaign,” he said.
But for those who have accepted cash, filing the unnamed donations is all they can do since it is not illegal to accept anonymous donations. A politician could have a $10-per-plate spaghetti dinner, for example, according to state campaign laws.
Anonymous donations are illegal only if a candidate knows multiple sub-$100 contributions are coming from a single source trying to evade the $250 limit: One party can give $250 at most to one candidate per election.
Robert Stern is aware of this possibility since he helped draft the bulk of the state’s campaign finance laws, but the executive director for the Center for Governmental Studies in Los Angeles said the vast majority of politicians are more honest than the public suspects.
But, the Fair Political Practices Commission and its 80 employees must cover the entire state and do not have the time or resources to monitor small-town contributions unless a serious complaint is filed, according to FPPC Public Information Officer Roman Porter.
He said the body is concerned will all potential violations, though, and the commission’s Web site details the rules for candidates.
“The system is based on voluntary compliance, on assumption that most people will comply with law,” Stern said. “If the city of Gilroy wanted to, it could audit campaign statements,” but usually only big cities such as Los Angeles and San Francisco audit campaigns because they provide candidates with matching funds.
So for right now, Stern said the potential for corruption exists in Gilroy but remains unlikely.
But Woodward, who has declined to accept any donations from housing developers, said that some try to circumvent the $250 limit with multiple, smaller contributions.
“I have had developers offer me money and suggest that they have a bunch of friends who could also donate money, and I find that troubling,” Woodward said. “I think the vast majority of campaign money comes from developers.”
Candidates only have to publicize donors who give them between $100 and $250. They do not have to report donations less than $25 at all; they just have to keep a running tab.
Gartman said he thought there has been a “huge increase” in $99 donations since the ’05 election.
He added that he had received one named envelope with five $1 bills, but no anonymous donations so far. Many retired folks support him with small donations, Gartman’s treasurer said.
If candidates receive more than $99 in an anonymous donation, the difference must go to the California Secretary of State for deposit into the general fund, leaving the candidate with his fair share.
“We’re not talking about very much money here,” Stern said. “State law says under 100 contribution does not have much impact on an official.”
