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Nunez accused of misusing charity

Assembly speaker denies using funds given to a nonprofit for political purposes.

January 23, 2008|Nancy Vogel and Evan Halper | Times Staff Writers

SACRAMENTO — A complaint filed with state ethics officials Tuesday accused Assembly Speaker Fabian Nunez of using a charity to illegally funnel donations into political activities.

The complaint cites more than $270,000 that Nunez solicited in 2005 and 2006 from corporations, utilities and other interests with a stake in legislation to pay for toy giveaways, scholarships, youth summits and other events that featured Nunez and were arranged by his staff.

The donations were the subject of a Times investigation in November, which showed how a small charity -- Collective Space -- in Nunez's downtown Los Angeles district wrote checks at the direction of the speaker's staff for events that benefited his constituents.

In a complaint filed with the Fair Political Practices Commission, the Foundation for Taxpayer and Consumer Rights accused Nunez of dodging state restrictions on campaign donations by asking donors to give to the nonprofit, then using the money for his political benefit.

"The speaker and Collective Space claim it was only a 'conduit' for the speaker's funds," wrote foundation Executive Director Doug Heller in the complaint. "If this is the case, the contributions were never intended for the charity and should be considered direct donations to the speaker and his events."

Heller asked the ethics panel to either punish Nunez or close "a glaring loophole" in state campaign finance rules.

The Fair Political Practices Commission has 14 days to determine if it will investigate the complaint or request more time to make such a determination.

Nunez said the complaint misinterprets the law. He called the allegations "a huge stretch from where reality is of what law allows a member of the Legislature to do."

"People can file complaints every day of the week about whatever they want to file complaints about," said Nunez, adding that there was nothing illegal or unethical about his work with Collective Space.

Under a 1997 state law, politicians must file public reports whenever donors give to non-campaign causes -- such as a charity -- at the politician's request. Such donations are not presumed to be gifts or campaign donations, according to the law, if made "principally for charitable purposes."

In its complaint, the foundation argued that the money Nunez solicited for Collective Space should be considered campaign contributions, and not charitable donations, because charity officials had no involvement in deciding how to spend the donations and the money was spent in ways that highlighted Nunez's political profile in his district.

The filing also says Collective Space was suspended by state tax authorities at the time it underwrote Nunez's events.

The donations Nunez solicited for the charity ranged from $2,500 to $50,000. At least six of the 20 donors -- Blue Cross of California, California Correctional Peace Officers' Assn., Pacific Gas & Electric, Southern California Edison, Southern California Gas Co. and Zenith Insurance -- also gave the maximum $6,600 to Nunez's political committee before they gave the tax-deductible donations to Collective Space.

Collective Space was created in 2002 by MacArthur Park and Westlake neighborhood leaders to work for better housing, affordable child care and access to open space. For its first five years, it failed to file U.S. tax returns required of all nonprofits that get more than $25,000 a year in donations.

It was suspended in 2005 by the Franchise Tax Board and Secretary of State's office. That suspension was lifted last month.

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nancy.vogel@latimes.com

evan.halper@latimes.com

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