Tag Archives: 501(c)(6) Organizations

Why In The World Did City Employees Avak Sarafian And Huizar Staffer Kevin Ocubillo Attempt To Get The Historic Core BID An Illegitimate Waiver From Its Statutory And Contractual Obligation To Disclose The Profits It Made From Slavery?!

In 2003 the City of Los Angeles passed a Slavery Disclosure Ordinance,1 which, in short, requires most firms that contract with the City to disclose any profits they2 made from American slavery prior to 1865. The L.A. Times published a good contemporaneous summary of the issues, which is worth a read.

This measure was promoted by pro-reparations advocates as a (mostly) symbolic expression of the City’s opposition to slavery. It’s mostly symbolic in, first, that it only requires disclosure. In fact, the only actual tangible requirement of the law is that contractors complete a disclosure affadavit. No firms that profited from slavery are prevented from doing business with the City. Also, any number of types of firms are exempt from the law. An exhaustive list of exceptions can be found at §10.41.3.

Among these are, most crucially, financial institutions. Since banks, stockbrokers, and other such firms doing business in finance are likely either to have existed prior to the ratification of the Thirteenth Amendment or else to have acquired financial firms that were, and since every major business in the U.S. during slavery times made money from the stolen labor of slaves,3 this is no minor exception.

Another huge exception is that the law only applies to slavery in the United States before 1865.4 Of course, slavery in present-day Los Angeles is not only rampant, it’s not only tolerated, but is probably pretty acceptable, at least to elected City officials given the likely level of campaign contributions made by slavers. After all, it’s not poor people buying those slaves, and probably not politically uninvolved people, either. Just for instance, between them, modern-day slaveholders Ray and Ghada Irani have given more than $22,000 to various candidates.5 Given the obsessive contribution-seeking behavior of our Councilmembers, this is more than enough explanation for the narrow scope of the law.6

And finally, for whatever reason, §10.41.3(E) exempts 501(c)(3) corporations, and that brings us to this morning’s actual subject, which, believe it or not, is the Historic Core Business Improvement District.
Continue reading Why In The World Did City Employees Avak Sarafian And Huizar Staffer Kevin Ocubillo Attempt To Get The Historic Core BID An Illegitimate Waiver From Its Statutory And Contractual Obligation To Disclose The Profits It Made From Slavery?!

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BIDs Benefit Immensely From Coercive Collection Of Mandatory Assessments And Complain Incessantly About Being Subject To The California Public Records Act. They Can’t Have One Without The Other, Yet Both Are Voluntary, So Why Don’t They Grow Up And Quit Whining About The Consequences Of Their Choices?

A business improvement district (BID) in Los Angeles1 is a geographical area in which the owners of commercial property are assessed an additional fee for various services that aren’t provided by the City. These fees are collected either by the City of L.A. via direct billing2 or, more usually, by the County of Los Angeles as an add-on to property tax bills.

The state law authorizing BIDs requires each BID to be administered by a property owners’ association (POA).3 In the normal course of things these organizations are conjured up by the City at the time the BID is established, although sometimes previously existing nonprofits will end up as a POA. One example of this is the Hollywood Chamber of Commerce, which serves as POA for the East Hollywood BID, although it predates its existence.

The law requires these POAs to be nonprofits, although it doesn’t specify what kind of nonprofit they should be. For various reasons, at least in Los Angeles, they are usually 501(c)(6) organizations. Because the City is handing over what’s essentially tax money to these POAs,4 they have a great deal of control over their activities and what they spend their money on.
Continue reading BIDs Benefit Immensely From Coercive Collection Of Mandatory Assessments And Complain Incessantly About Being Subject To The California Public Records Act. They Can’t Have One Without The Other, Yet Both Are Voluntary, So Why Don’t They Grow Up And Quit Whining About The Consequences Of Their Choices?

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The Story Of How The Central City East Association Evidently Violated City Ethics Laws Restricting Campaign Contributions, Gave Illegally To Mitch O’Farrell and Marqueece Harris-Dawson In 2015, Lied About It On Their Tax Form, And I Turned Them In To The IRS And The Ethics Commission

CCEA: The truth may be out there but it’s not out there on our tax forms.
This story begins with the fact that the Central City East Association, which runs the infamous Downtown Industrial District BID, contributed $700 each to two City Council candidate campaigns in 2015. The money was given to Mitch O’Farrell of CD13 and Marqueece Harris-Dawson of CD8. You can see the record at the City Ethics Commission and also if it’s more convenient, here is a PDF of the same information.

This turns out to be a huge problem for a number of unrelated reasons. First and most simply, the CCEA is a nonprofit 501(c)(6) organization. Unlike the more famous 501(c)(3) organizations, 501(c)(6) groups are allowed to engage in lobbying, but it’s unclear whether they’re allowed to support candidates for office.1 However, irrespective of any restrictions on donations, there are very clear reporting requirements.

Take a look at the CCEA’s 2015 tax form. In particular, take a look at question 3 of part IV, found on page 3 of the form. It asks unambiguously:

Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office?

And, as you can see in the image that appears somewhere near this paragraph, the CCEA unambiguously stated that they did not. It’s hard to imagine a less ambiguous form of direct political campaign activities than giving actual money, amirite? Hence I turned them in to the IRS and also to the Franchise Tax Board for this lacuna. Stay tuned in case anything happens!

And it turns out that there are some more subtle, but potentially equally serious, problems with these two donations involving various municipal laws. Turn the page for the highly sordid but highly technical details!2
Continue reading The Story Of How The Central City East Association Evidently Violated City Ethics Laws Restricting Campaign Contributions, Gave Illegally To Mitch O’Farrell and Marqueece Harris-Dawson In 2015, Lied About It On Their Tax Form, And I Turned Them In To The IRS And The Ethics Commission

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Further Speculation on Why BID Patrols Aren’t Registered with the Los Angeles Police Commission

This is not a police officer, it's unregistered-with-the-police-commission BID Patrol officer M. Gomez (Badge #148) looking a lot like a police officer.
This is not a police officer, it’s unregistered-with-the-police-commission BID Patrol officer M. Gomez (Badge #148) looking a lot like a police officer.
Recently I discovered that BID security contractors weren’t registered with the LA Police Commission and that no one seemed to know why. Further investigation suggested that perhaps registration had just fallen through the cracks. Well, after rereading the material from the Council file and requesting and receiving the Police Commission minutes from April 25, 2000, I noticed that there was at least one possibly significant difference in the April 25, 2000 version of LAMC 52.34 that the Commission sent over to the Council on April 27 as compared to the version that the City Attorney sent to the Council on March 31 and that it’s possible to make some kind of a case that this difference answers the BID security question. It’s not a likely case, though. Read on for details on both the potential argument and some potential objections to it.
Continue reading Further Speculation on Why BID Patrols Aren’t Registered with the Los Angeles Police Commission

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