Issue:  Vol. 44 / No. 40 / 2 October 2014
 
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Online Extra: Wedding Bell Blues: Thousands in fines could result from No on Prop 8-related errors

NEWS


s.hemmelgarn@ebar.com

Equality California's No on Prop 8 campaign committee was the subject of a state audit that found some irregularities. (Photo: Rick Gerharter)
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Three years after California voters passed Proposition 8, California's same-sex marriage ban, a state audit reveals campaign finance reporting violations made by an Equality California committee involved in efforts to defeat the measure.

The problems could result in the statewide LGBT lobbying group being fined tens of thousands of dollars, at minimum.

The No on 8-Equality California committee, now known as the Equality California Issues Political Action Committee, funneled money from donors to the No on Prop 8 campaign.

Among other findings, the audit says that reported contributions were either understated or overstated on initial statements filed from January 1 through October 18, 2008. The net understated amount during that time totaled about $540,000.

Most of that figure came from reported amounts of unitemized contributions of less than $100. The reports were corrected after the election, the audit says.

The state Franchise Tax Board's Political Reform Audit Program performed the analysis. The board submitted its report to the Fair Political Practices Commission, the secretary of state, and the attorney general on May 31, 2011. The investigation into the funds remains open.

The FPPC provided a copy of the audit to the Bay Area Reporter recently in response to a public records act request.

Opponents of Prop 8 raised more than $40 million to try to defeat the measure, and the backers gathered about the same amount to support it. Almost all the money was spent.

In response to emailed questions, Franchise Tax Board spokeswoman Denise Azimi said that the report was a result of a mandatory audit under the state Political Reform Act. An audit is required for each committee who worked primarily to support or oppose a state measure if the committee has spent more than $10,000 on the measure. The state's audit says that the EQCA committee raised $13.2 million and spent $12.6 million.

"Except as indicated in this audit report, the filers have, in our opinion, substantially complied with the disclosure and recordkeeping provisions of the Political Reform Act" and related FPPC rules, the report says.

Azimi said it's up to the FPPC whether any enforcement action is to be taken.

FPPC spokeswoman Tara Stock said in an email that each Political Reform Act violation is punishable by a fine of up to $5,000.

In a phone interview, Stock said she didn't know yet how much EQCA could be fined, since the investigation remains open. However, she said errors related to individual contributions, such as when people didn't list their occupation, would each be considered separately.

Reporting problems

Where errors did occur, it appears they were often related to the committee's problems keeping clean data and getting full information from donors.

EQCA board member Cary Davidson is listed as the representative for EQCA in the audit and is mentioned frequently in the state's report. Through an assistant, he declined to comment for this story, referring questions to EQCA spokeswoman Rebekah Orr.

Orr said the reporting irregularities weren't unusual in a campaign as large as No on 8.

"Large statewide campaigns of this size and scope are bound to have reporting errors and have to plan to hold funds in reserve (which we did) should there be any reporting issues that could result in fines for routine discrepancies," for problems such as the ones noted in the report, Orr said in an email response to questions.

"When reporting errors were identified by the campaign, it filed amended reports to correct errors and properly report all contributions," Orr said. "Ultimately, it is up to the FPPC to decide if those honest and inevitable errors warrant fines or penalties," but the campaign did its best to comply with reporting laws, she said.

Davidson didn't explain the committee's understatement of more than $500,000 to auditors, according to their report, but he did talk to them about other matters.

State officials found that occupation and/or employer information wasn't provided for more than 300 funders. Related contributions totaled almost $67,000. Most of the contributions were returned in the months after the election, although they weren't returned within 60 days.

Davidson told auditors that the campaign had tried to get people's occupation and employment information, but "given the volume of transactions, it was impossible to make refunds within the customary time frame," the report says.

Auditors also found that the EQCA committee didn't file pre-election statements from January 1 through May 17, 2008. During that period, EQCA contributed almost $549,000 to the No on Prop 8 campaign, according to the report. (The same-sex marriage ban didn't officially have a name until after June 2008.)

Davidson reported that although the pre-election statements weren't filed, the committee submitted eight electronic reports disclosing contributions and other data.

"He added that these filings disclosed the same information which would have appeared on the pre-election statements, but much earlier," the report says.

Another finding was that election cycle reports weren't filed for 56 contributions received totaling approximately $308,000, according to the state's auditors.

Additionally, late contribution reports that should have been filed in the last week of the campaign but went unreported totaled about $128,000.

The report says that Davidson told state officials that "well over half" of the contributions came from donors who made multiple contributions under $1,000.

"He added that keeping track of the cumulative total for each contributor was difficult because donors who made more than one contribution often would provide slightly different information," such as using a middle name in one record but not in another, the audit says. Davidson told the auditors that after the election, the committee manually corrected duplicate contributor files.

Data on the secretary of state's website shows that the Equality California Issues Political Action Committee included almost $470,000 in cash as of June 30, 2011.

Orr has said about $200,000 listed for the committee is from the No on Prop 8 campaign. She recently told the B.A.R. that the secretary of state's office was reviewing the leftover Prop 8 money, and that EQCA was holding that money in reserve during that process.

The secretary of state's office referred questions about the audit to the Franchise Tax Board and the FPPC.

EQCA already troubled

If fines for EQCA are issued, they are sure to be an unwelcome addition to the organization's list of troubles.

Former Executive Director Roland Palencia resigned from EQCA in October, just over three months after he started the job. Joan Garry, a former executive director for the national Gay and Lesbian Alliance Against Defamation, is set to help EQCA with its transition, the organization announced last week.

But Garry won't be the interim director, and the group won't be selecting anyone for that position until next year.

EQCA also doesn't appear to have any specific plans on how to stop the flow of hundreds of thousands dollars it has lost in the last two years.

To view the full audit, click here: http://www.ebar.com/downloads/Scan001.PDF.

Feinstein asks for support to repeal DOMA

Senator Dianne Feinstein (D-San Francisco) is asking for help in pushing repeal of the Defense of Marriage Act. The law forbids federal recognition of same-sex marriages.

In an email blast sent through the national Human Rights Campaign, Feinstein, who introduced the repeal legislation, said 50,000 signatures are needed on an HRC petition to the Senate by Wednesday afternoon, November 9.

The petition is available at http://action.hrc.org/site/R?i=iEnYBXhmpMRttA6a9AhCLw.

On Thursday, the Senate Judiciary Committee will meet to consider the repeal bill, known as the Respect for Marriage Act.

"This is a huge opportunity – and I need your help," Feinstein said. "On Wednesday HRC staffers will march up to Capitol Hill to hand-deliver petitions urging the Senate to move this legislation forward without delay."

She added that because of DOMA, same-sex couples and their families are denied benefits including Social Security survivor funds and unpaid leave under the Family and Medical Leave Act. The anti-gay law also puts many same-sex, binational couples at risk of being split up when the spouse is deported.

Wedding Bell Blues is an online column looking at various issues related to the marriage equality fight in California and elsewhere. Please send column ideas or tips to Seth Hemmelgarn at or call (415) 861-5019. Wedding Bell Blues appears every other Tuesday.






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