Anaheim’s Corruption Scandal Implicates 501(c)(3) Straw-Organizations

Out in Anaheim, home of the Angels, there is a big scandal over seemingly small potatoes.  My characterization might be wrong, but the $1.5 million fee paid to the law firm exposed graft of $1 million.  Graft already exposed by an FBI investigation.  Last year, the Mayor resigned because the FBI disclosed affidavits supporting a wide ranging corruption investigation into the Mayor’s role in negotiating the sale of Anaheim Stadium, where the Angels play.  As near as I can tell, the Mayor solicited a $1 million donation from the Angels in exchange for insider information the given to the Angels — the prospective buyer, the stadium having only been rented to the team heretofore.  He also caused a city chartered 501(c)(3) to give its mailing list to a fellow incumbent, apparently to assist in the incumbent’s reelection campaign.  Its all still kind of murky to me and the stadium deal, negotiated over a couple of years, is on hold.  It will probably have to be done all over again.  If you are left coaster with clearer information than I have time to hunt down, do tell!

The gist of the tax related problems is that the Mayor, who resigned last year after the FBI investigation broke, sought to use the charitable organization to launder political donations. Allegedly.  The FBI apparently has wiretapped recordings .   The “donation” from the Angels would be funneled through the (c)(3) and then into the Mayor’s campaign.  I don’t know how these Einsteins get elected in the first place.

Anyway, if you are writing something about public corruption and increasing involvement of 501(c)(3)s, all the way to the Supreme Court, this story might make a good footnote.  Here is the 353 page report the city commissioned for which it paid $1.5 million.  The report talks about the role the (c)(3)s were gonna play in the scheme.  Its not too good for the mayor and a bunch of others waiting to get heads lopped off in the public square.  

darryll k. jones