Núñez Ties To Charity Raise Questions About Donations
Assembly Speaker Fabian Núñez (D-Los Angeles) used charity donations as a channel for funneling almost $300,000 to pay for political events that he organized, the Los Angeles Times reports. Donors included Blue Cross of California, the California Hospital Association and other groups with stakes in measures before the legislature.
By contributing to Collective Space, a Los Angeles-based charity, the donors earned tax deductions and were able to give more than the $7,200 maximum allowed under California's fundraising laws.
According to records filed with the state, the donations ranged from $2,500 to $50,000 in 2005 and 2006, the last year in which Núñez channeled funding through the charity.
Núñez's staff directed the charity to spend the money for political events hosted by Núñez, including a toy drive and a student summit. The charity, however, was suspended by the state two years ago, before the donations began, for failing to file federal tax returns.
Núñez said he was unaware the charity had been suspended and maintained that it was "absolutely appropriate" to solicit donations from companies and organizations, especially if the funds are put "in the hands of the neediest Californians."
Núñez, as well as the charity's donors, contends that contributors did not receive anything in return for the contributions.
Some experts argue that the charity's function as a conduit violates federal tax laws and that Núñez's role in directing how the funds are used may violate state ethics laws (Vogel/Halper, Los Angeles Times, 11/2).
However, Malcolm Segal, a Sacramento attorney who deals with tax issues, said, "It's not the best public relations at the moment, but I really don't see it creating the kind of legal problems that people are talking about" (Sanders, Sacramento Bee, 11/3).