Money Talks To State Hearing Board
- J.A.I.L. News Journal
October 30, 2000
Make your plans now to attend So. CA. JAIL's Nov. 11th (Veteran's Day) fundraiser. RSVP $20 (or $25 at the door) to Doug Johnson, (818) 895-1239, 8340 Columbus Ave., North Hills, CA. 91343. Event held 11 am., American Legion Hall, 7338 Canby Ave., Reseda, CA. Includes food and a J.A.I.L. T-shirt.While the below article does not deal in any way with the judicial system, but rather taxation, we deemed this article important because it shows behind the scenes how money talks in government. Huge corporations that make large donations to those politicians deciding their tax cases, are given tax breaks, while the working man is strapped with picking up the slack to pay the state's bills. How can anyone respect an agency (State Board of Equalization) charged with seeing that matters are honest, which itself is corrupt to the core? It proves that some are more equal than others, particularly, those who funnel money to the decision-makers. Imagine if a judge took bribes from parties standing before him! Yet these board members all say, the money they received did not influence their decision.We should point out that many citizens have lost everything they own, including their homes, jobs, cars, and even their freedom because of the rulings of this $tate Board of Equalization$. Yet the courts, when appealed to, invariably cover for them near 100% of the time.Does PAC money talk to tax panel?
BY MARK KATCHES
The Orange County Register
October 29, 2000
A state panel -- operating largely in secret -- granted multimillion-dollar tax breaks this year to companies that helped funnel $125,000 to board members' campaigns.
The contributions have flowed to state Board of Equalization members from energy, railroad, oil and phone companies despite a state conflict of interest law designed to restrict corporate campaign contributions. The board - the nation's only elected tax commission - has broad authority to set property assessments for some of California's largest landowners.
At a time when many property owners are seeing assessment increases thanks to a booming economy, the state panel has struck $4.3 billion from the property tax rolls this year. At 6.5 percent, it was the largest percentage decrease in state assessments since at least 1977, board officials say.
The biggest beneficiaries of these tax breaks have been corporate members of the Taxpayers Political Action Committee, or Tax PAC - including California's three largest electric utilities, Pacific Gas & Electric, Edison International and Sempra Energy. Tax PAC members Pacific Telesis and Union Pacific also got tax relief from the board.
Since 1994, four of the five Board of Equalization members have taken a total of $125,000 from Tax PAC, which gives exclusively to candidates for the board, campaign records show.
State Controller Kathleen Connell, who serves on the board, has received $42,500 from Tax PAC since 1998, state campaign records show.
Claude Parrish, who represents Orange County, took $20,000 in the same period. Board chairman Dean Andal has accepted $52,500 since 1994.
"They've circumvented the law, there's no question about it," said Quentin Kopp, the former state senator whose legislation limited direct contributions to $249 when a company petitions for tax relief. "I think it would be worth a complaint to the Fair Political Practices Commission. This violates the intent."
Then there is the matter of secrecy.
The board keeps confidential the supporting documents - including staff recommendations - that lead to its billion-dollar tax decisions every May.
The board also has eliminated hundreds of millions of dollars from the property-tax rolls - in response to appeals - without any discussion or public hearings, records and interviews show.
Petitions for tax relief are kept secret unless the company requests an oral hearing. If no oral hearing takes place, the petitions are automatically sealed. The votes and final dollar assessments are public record, and board meetings are open. But it can take two months for copies of the minutes to be made available. Board officials say California's Revenue and Taxation code restricts how much information is released.
"These things should be out in the public view," said Betsy Imholz, director of Consumers Union. "We're talking about huge public-policy decisions that affect the tax base of California. And these are campaign contributors benefiting. There needs to be sunshine here."
Board members say they have grappled with the conflict between protecting taxpayer confidentiality and disclosing more documents, especially when campaign contributors are involved.
"It's a tough one, and I'm torn," said board member John Chiang, who represents Los Angeles County. ...
Chiang, who has taken $10,000 from Tax PAC, acknowledged that the group sidesteps the campaign law.
"It would appear their existence is to reward who they like at the Board of Equalization," Chiang said. "People are going to find a way to support people they like whether they are at the Board of Equalization or in the Legislature or in Washington, D.C."
Jon Wood, a Pacific Bell lobbyist who chairs Tax PAC, said member companies decide as a group where to send campaign contributions.
Parrish and Chiang said they do not closely monitor the membership of Tax PAC and were not aware that most political donations come from companies or their subsidiaries with annual state tax issues before the board. Andal did not return phone calls seeking comment.
....The largest recipients of Tax PAC money - Connell, Andal and Parrish - voted in favor of Tax PAC members on a series of breaks over the past two years. Board members say they stand by their decisions, but the rationale for those votes is kept confidential unless a hearing is held.
Some of the biggest decisions have affected state energy and utility companies, which are large contributors to Tax PAC. Consider:
PG&E was granted $450 million in lower assessments in September on top of $2.8 billion in reductions granted in May. The company will be back before the board next month seeking an additional $153 million in relief. PG&E has given $23,000 to Tax PAC since October 1998, making it the single largest contributor, records show.San Diego Gas & Electric had its property assessments cut about $850 million in May. The company petitioned for a further $156 million reduction. It was granted Sept. 14 without any discussion or a hearing. The utility and its parent, Sempra Energy, have contributed $14,500 to Tax PAC. Southern California Edison's assessments were dropped $750 million in May. A second cut, of $205 million, was adopted in September - also without discussion or a hearing. In 1999, the company was granted $5 million in tax refunds - against the advice of the board's own legal staff, which argued that refunds weren't authorized by state law.
Johan Klehs, the only board member who has not received funding from Tax PAC, cast the sole vote opposing the Edison decision.
"The other board members simply ignored the law and voted the other way," Klehs said.
Companies with business before the board later this year include AT&T and a Chevron subsidiary, but the board will not release those petitions or say how much money is at stake. If the companies opt against hearings and want the issues decided solely based on their written filings, then the petitions will stay secret, said Ani Kindall, a board attorney.
"You can always ask the company for it. If they want to release that information, it is up to them," Kindall said.
None of the electric utilities agreed to release their petitions.
Copyright 2000 The Orange County Register
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