K.J.’s dark money machine

If you managed to choke down SN&R’s 5,000-word report on Mayor Kevin Johnson’s nonprofit network a couple weeks back, there’s more where that came from. Plenty more.

First, a quick clarification. In that story, “K.J. Inc.” (SN&R Feature Story, August 16), we reported that Mayor Johnson was funneling his leftover campaign money into one of his 501(c)(3) groups, called the Sacramento Public Policy Foundation.

The Sacramento Public Policy Foundation has received more than $1 million in so-called “behested” payments through the mayor’s office, in addition to unknown amounts given by anonymous donors. That was explained in the story.

But, in fact, the $180,000 in campaign money from Johnson’s re-election account was actually slushed into yet another fund, controlled by a 501(c)(4) group called the Sacramento Public Policy Forum.

Part of the confusion stems from the Forum’s low profile since its formation in 2009. It was formed—by Johnson and his attorney Fred Hiestand—to do lobbying on behalf of Johnson’s Sacramento First initiative, the mayor’s first attempt to boost development of a new Kings arena.

Sacramento First is defunct, but the Forum actually lived on, somewhat under the radar. Until this year, when it got a big infusion of cash from Johnson, to do … something.

Like the Foundation, the Forum is run by Johnson’s attorney Hiestand, along with political consultant Chris Tapio. The address is still the same address as David Townsend, the guy who ran both of Johnson’s election campaigns.

“The Forum is there to do lobbying when it’s necessary. It sits there waiting for the appropriate time,” Hiestand told SN&R last week.

Hiestand said the Forum could lobby anyone, including the city council. And it could spend its money trying to influence public opinion on any matters before the council.

One potential problem with the Foundation is that it allows the mayor to raise unlimited amounts of money from donors who have business before the city.

The Forum, which as a 501(c)(4) organization can do unlimited lobbying, adds another dimension: The mayor has his own lobbying group to influence city policy and his peers on the council—using a mix of campaign cash along with unregulated amounts of money from anonymous donors.

Bill Moyers and other critics call this sort of thing “dark money.” And even though the mayor of Sacramento is the person who controls these groups, the public has no ability to know who these anonymous donors are.

But Johnson’s lawyer makes no apologies about the organization’s secrecy.

“People are curious about all sorts of things, that doesn’t mean they have a right to know them,” said Hiestand. “There are a lot of nosy people, the K.J. haters, who have nothing better to do than to ask for more than the law requires. But we have no plans to deviate from what the law requires.”

Doesn’t the public deserve more disclosure than that? Bites asked. After all, this is the mayor of the city.

“What the public deserves is what the law requires. If the public wants more disclosure, the public should change the law,” Hiestand said.

The Sacramento city manager has decided to make some of his own changes. He wants the mayor’s nonprofits to stop using city property and resources. “No, I’m not comfortable with it,” City Manager John Shirey told Bites last week.

“The people who are here need to be engaged in city work. Those nonprofit organizations cannot be using city resources unless they are sanctioned by the city council.”

For now, it’s an administrative matter, and not on the council’s agenda. Shirey explained that City Clerk Shirley Concolino has taken over administration of mayor and council offices. That’s the job formerly held by Lisa Serna-Mayorga, a longtime friend and aide to Johnson, who resigned from the post in July after reports that she had misused city credit cards.

Concolino and her staff are sorting out who is occupying the seats and offices on the third floor of City Hall. “What we’re doing now is identifying people who are working for these nonprofit organizations and making arrangements for them to not be here anymore,” Shirey explained.

He added that he had been looking for a while, even before Kerri Asbury, chairwoman of the Sacramento County Democratic Party, sent a letter to Shirey in July asking for an investigation. But he had other priorities, like the city’s budget deficit, to deal with.

“I inherited this situation. It never should have been allowed in the first place,” said Shirey.

Calls to the mayor’s office for this column went unreturned.