September 28, 2006

Mayoral campaign heats up

Chavez requests Reed apologize to taxpayers regarding reimbursements

By Carol Rosen
Staff Writer

For the past six years, San Jose has reimbursed District 4 City Councilmember Chuck Reed for a variety of expenses—such as donations, memberships, events and ads—totaling more than $38,000 according to city records.

The news, which came out when Reed’s mayoral opponent Vice Mayor Cindy Chavez opened her tax returns and city reimbursements to the public and urged him to do the same, sparked political rhetoric and turned campaign discussions away from the issues and onto spending.

The Chavez camp accused Reed of spending taxpayer money for political gain by writing personal checks for memberships, donations, events and advertisements and then requesting reimbursements “using taxpayer money” from the city.

“Organizations felt the donations were coming from Mr. Reed; that his money was supporting them, but it was actually taxpayer money,” said Chavez. “Councilmember Reed broke the rules. He has made a political career out of examining other people’s ethics. He should have spent more time focusing on his own behavior.”

Reed and his officials called the action dirty tricks, claiming Chavez “is way behind in the polls.”

“This is a political strategy to attack me and to drive up negative opinion about me,” said Reed.

The council member said that he would be writing a check for all his reimbursements. “I talked to the city clerk [who will research and tally up all the reimbursements over six years] and I will write a check to cover them,” he said. “I don’t want all the nonprofits that I supported to be dragged through these things.”

Chavez suggested that he should apologize to the taxpayers. “It’s a shame that ethics rules should apply to everyone but him. He should apologize to the taxpayers of this city and not attack me because he made a mistake.”

Taxes, reimbursements
Chavez provided her taxes and city reimbursements on Sept. 22. Within the tax documents were charitable contributions by receipt and by listing. Over the weekend, Chavez’ husband Mike Potter went through the couple’s checkbook records and provided a listing of donations from the couple’s checkbook registers totaling $13,125.36, which does not include 2002 and part of 2003 because of stolen checkbooks nor does it contain expenses from the couples’ credit card statements.

While many of the amounts were contributions—such as an annual contribution to CityTeam Ministries—the list also included dinners, memberships and events similar to Reed’s reimbursements, such as Rotary Club dues, the Asian Law Alliance, the Sierra Club and the VAREPA Vietnamese Real Estate Association dinner.

Reed’s tax statements did not itemize the charitable deductions, except partially in 2005, when Reed and his wife Paula donated non-cash contributions of a tuba to a school and clothing to Good-will. However, the information delivered by Robert Han-son, his campaign treasurer, shows that Reed’s bi-weekly pay stubs include deductions of $100 per check or a total of $2,600 per year to United Way, Earth Share, Combined Health Charity and the Arts Council.

Chavez’ supporters put together a 13-page listing of Reed’s reimbursements. While more than $230 was spent on parking for functions and city meetings, the remaining $38,600 was spent to attend events, as a donation, for membership in local groups or to advertise, including a $250 ad in the Jewish Community News in August of this year.

Some of the money was used to purchase membership in various ethnic groups such as African American, Japanese-American, Italian American, La Raza Roundtable, military groups, Hispanic Chamber of Commerce, as well as citizen groups, public television station KTEH, the Arts Council, the Museum of Quilts and Textiles and the Friends of Guadalupe River Park and Gardens.

Taxpayer money
Several council members note they have a “friends” account that can be used to attend events or pay for dinners, memberships and other occasions when a district representative should go to a function. Chavez says she thinks nearly “every elected official has a friends account to pay for dinners and events.”

Both current and former District 10 representatives Nan-cy Pyle and Pat Dando used friends’ money. “I paid for most events through my friends account,” said Dando. “I used it for community events that were on weekends or after hours. It’s important because you want to be at such events to stay connected to the people of San Jose,” she said.

Councilmember Pyle agreed. “In the first month [of my term], I spent about $700 to attend events. I had to have an officeholder account, because I was spending too much of my own money.”

It’s a good thing to have, both agreed, because the district account should be limited to spending for the district instead of using it for memberships or events. Pyle says she uses that account for the constituents of District 10. An example would be when a school sports team’s uniforms are stolen; District 10 money could help pay for new uniforms, she said.

District 6 Councilmember Ken Yeager had a friends account set up, but it was frozen by law when he opened an account for his campaign for Santa Clara County Supervisor. Money for these accounts comes from a number of sources, Yeager indicated, generally from people doing business with the city. Contributors, under specific guidelines of the Fair Practices Political Commission, are limited to $250 annual contributions and the fund is capped at $10,000.

Yeager explained that he had joined the Friends of Guadalupe River Park and Gardens by charging it directly to the city. However, he also noted the difference between Reed and himself. Reed wrote a personal check and was reimbursed, Yeager said, while the city directly paid for Yeager’s membership.

Like several other council members the Times interviewed, Yeager said he had a city credit card, but rarely uses it. Most council members typically do not use their credit cards.

“I was pretty tight using city credit cards,” said Dando. “It’s an opportunity that could lead to abuse. I seldom used it, as did my staff.”

Need for new rules?
There was a difference of opinion about the need for rules regarding council member expenditures and reimbursements. Reed said he plans to present a recommendation to the rules committee requiring parameters for expenses because currently there are none.

“Everyone out there should be clear on what the rules are,” he told the Times.

“Reed is right, the current rules and guidelines are not clear,” said former council member Dando. “I think Reed was trying not to raise money from special interest groups, but it turned out to cause a dilemma.”

Pyle agrees about the rules. With several new council members coming in January, she thinks all members should be clear about what accounts are used for what purposes. However, she currently “ relies on advice from my attorney,” she said.

However, “most of the council didn’t need rules to spend tax payer money respectfully,” said Chavez. “There are rules already in place. I have a hard time believing Mr. Reed. Why do we need new rules that we shouldn’t use taxpayer money for political purposes?” she asked.