Lack of rules allow Sacramento politicians to blur private, public interests

Sacramento City Council members keep inventing new, creative ways to collect money and funnel it into their own political “brands.” And we need new rules to keep up with their inventions.

Last week, some local pro-labor Democrats asked the California attorney general and Fair Political Practices Commission to investigate Mayor Kevin Johnson’s 501(c)(3) organizations, and the collection of hundreds of thousands of dollars from Walmart, leading up to the vote on Sacramento’s contentious big-box store policy this week.

But when the Walmart battle is over, the problem will remain: These nonprofit organizations lack transparency, they lack clear rules, and they mix public resources with the council members’ political interests.

City Councilman Jay Schenirer’s organization, WayUp Sacramento, has gotten considerably less attention than the mayor’s efforts. But it blurs plenty of lines.

WayUp helps to fund programs for at-risk youth in Oak Park, and that’s a perfectly good thing to do.

But last year, Sacramento City Manager John Shirey said it was inappropriate for outside nonprofits—such as Johnson’s education nonprofit Stand Up, or his arena-booster group Think Big Sacramento—to operate out of City Hall or use city resources.

In some ways, Schenirer’s WayUp looks quite similar to Johnson’s groups. WayUp has a website, paid staff and receives big donations through the city’s “behest” system, just as the mayor’s nonprofits do—including checks from businesses like Walmart, AT&T, and Sutter Health, along with foundation support from the California Endowment. WayUp has taken in nearly $800,000 since Schenirer was elected in 2010.

So, why does WayUp get to operate in City Hall after K.J.’s nonprofits were shown the door? The short answer is that WayUp isn’t really a nonprofit, not yet. According to Schenirer, it’s a “brand.”

Schenirer says WayUp will one day move out and be housed at the offices of the nonprofit Nehemiah Community Reinvestment Fund, one of WayUp’s many partners.

In fact, last year, WayUp applied for a grant from the U.S. Department of Education, which stated that WayUp had already been merged into Nehemiah. But a year later, the merger hasn’t actually happened. So, WayUp continues in its in-between state, almost a nonprofit, almost a public entity.

“There’s going to be a transition period. It will depend on funding,” Schenirer told Bites. He said another $300,000 from the California Endowment was due soon.

WayUp’s staff includes Schenirer and his district director, Joe Devlin, though neither of them are compensated by WayUp. WayUp’s program director Talia Kaufman is paid $89,000 a year by the brand. Two more staff members are paid with a blend of city money from Schenirer’s district office budget and private money from WayUp. And their jobs are a mix as well. “Some of it is under the brand of WayUp, some of it is under the [council] district,” explained Schenirer.

“It’s somewhat curious that ‘brand’ is the word they use,” says Jessica Levinson, professor of election law at Loyola Law School. “’Brand’ can certainly be seen as PR for the candidate.”

Like when Schenirer toured his district during National Night Out last week, handing out WayUp tote bags and buttons.

She’s not sure Schenirer is doing anything wrong, though, she adds, “The thing that feels a bit funny is that it is using government resources.”

Schenirer says “brand” applies to the community work WayUp does. But of course it’s an extension of Schenirer’s brand as a politician, and an extension of his professional brand, too.

Schenirer is an education consultant; that’s how he makes his money. Among WayUp’s stated goals are “an ambitious, rigorous, and comprehensive strategy of reform” for schools in Schenirer’s district. He told Bites that school reform is “a generic term,” and that, in this case, it means noncontroversial things like school nutrition programs.

But the project description that WayUp sent to the U.S. Department of Education advocates policies that are related to the work done by Schenirer’s consulting business, Capitol Impact LLC, and its principals.

The WayUp brand seems to be where Schenirer’s interests as a public office holder, politician and professional education consultant all intersect. How much intersection is OK? That’s where some sort of city policy would be helpful.

“The lack of any clear definitions means there is a lack of rules,” says Phillip Ung with the political watchdog group Common Cause.

“What Mr. Johnson and the other council members are doing is … innovative. Our biggest fear is that in California, we’ll start to see models like the one Kevin Johnson set up,” he added.

They might want to keep an eye on Schenirer’s variation as well, which Levinson says makes for a “fascinating” but potentially problematic new tool for politicians.

“Until there’s more guidance, politicians will continue to do this. They’d be foolish not to,” she said.