1 VOL. 41.27 VOL. BOHEMIAN.COM • BOHEMIAN.COM | charitable business NOVEMBER 20-26, 2019 20-26, NOVEMBER | Uncovering problems with PG&E and the Rebuild North Bay Foundation p8 SERVING SONOMA & NAPA COUNTIES & NAPA SONOMA SERVING DIVERSITY LESSONS P18 EMERGING ARTISTSP22 OLIVER! P25 8 independent audit and tax 8 returns and hundreds of emails THE obtained from local governments under the California Public Records Act reveal that Rebuild North Bay Foundation functions more as a lobbyist than a disaster relief group. • During its first year of existence, most of the foundation’s expenses Peter Bryne Peter | BOHEMIAN.COM went to management and administration; it spent relatively little money on Paper grants to the public, according to its audit. • The foundation made erroneous claims in its tax return regarding its lobbying activities; serious errors which the organization says they will NOVEMBER 20-26, 2019 20-26, NOVEMBER correct. • The law prohibits the foundation from making campaign contributions. Yet, the campaign committee of a Sonoma County supervisor disclosed a contribution from the foundation, which also “gifted” money to the mayor of Santa Rosa, public records show. NORTH BAY BOHEMIAN | BAY NORTH • According to an aide for North Bay Congressman Mike Thompson, some of the foundation’s lobbying activities may be doing harm by “injecting politics” into the disaster-funding process. SWAG BAGS Rebuild North Bay Foundation distributed 5,000 ‘GO! Bags,’ like this one, to North Bay residents. They do not • Rebuild North Bay Foundation contain the standard emergency items that are recommended by the California Department of Public Health. is mostly funded by PG&E. While Rebuild North Bay Foundation has performed some charitable acts, it has focused on creating a network of Charity Case businesspeople and local public officials to lobby bureaucrats and legislators in Washington, D.C., Investigating PG&E-funded Rebuild North Bay on specific issues. Under IRS rules and regulations a charity Foundation BY PETER BYRNE & WILL CARRUTHERS is allowed to do some lobbying related to its nonprofit purpose— n October 30, 2017, the Press Democrat. their jobs due to the wildfires.” but focusing on lobbying can The foundation would also as thousands of In a subsequent application result in the loss of a nonprofit’s work with local governments to Sonoma County for 501(c)(3) tax-exempt status, tax-exempt status, tax experts say. help residents rebuild in a “fire homes smoldered Anderson told the Internal According to a nationally Oin ruins from the Tubbs Fire, safe” fashion, “for example, by prominent expert consulted by Revenue Service his charity would Darius Anderson established assisting with the construction the Bohemian, the Rebuild North “provide immediate disaster of fire-retardant roofs,” Anderson Bay Foundation crossed over the nonprofit Rebuild North relief to those residents of the wrote. According to a six-month the boundary between charity Bay Foundation. Anderson North Bay who were hardest hit: investigation of Rebuild North and lobbying. Ellen Aprill is the is a longtime lobbyist for families and individuals with low Bay Foundation by the Bohemian, John E. Anderson Professor of Pacific Gas and Electric incomes who have been displaced that’s not exactly what happened. Tax Law at Loyola Law School Corporation and owner of from their homes and/or lost The organization’s in Los Angeles. She reviewed 9 the foundation’s IRS Form 990 It matters because Anderson’s federal tax return for 2017–2018, Sonoma Media Investments LLC 9 which discloses its financial owns the major news, business BOHEMIAN | BAY NORTH information and lobbying and and lifestyle print publications charitable activities. Aprill in the North Bay, including the concluded, “It’s not even a Press Democrat, Petaluma Argus- close call, it’s blatant lobbying. Courier, Sonoma Index Tribune, The foundation is primarily a North Bay Business Journal, lobbyist, not a charity.” Sonoma Magazine, Spirited Philip Hackney is a professor Magazine, La Prensa Sonoma and of nonprofit law at the University of Pittsburgh and a former- Emerald Report. IRS lawyer. He explained that It matters because Anderson asking public officials to support is the power broker in Northern specific legislation or funding California—politicians, government 2019 20-26, NOVEMBER requests is the definition of officials, businesspeople, editors lobbying. Hackney said that and reporters avoid incurring spending a substantial amount his displeasure. of an organization’s effort It matters because, as first on lobbying can violate the reported in the Bohemian, the charitable mandate. San Francisco Superior Court It is up to the IRS to determine ruled in 2018 that Anderson whether the Rebuild North Bay and his partner in Kenwood Foundation has fallen afoul of Investments, Doug Boxer, son of | BOHEMIAN.COM nonprofit rules and regulations the former senator for California, by focusing on lobbying. “Trying Barbara Boxer, had defrauded to give a definitive answer about the Federated Indians of Graton the legality of this organization is Rancheria when the tribe was like sticking my hand into a pile trying to develop a casino in of goo,” Hackney said. “What is Sonoma County in 2003. (The most interesting is that Rebuild Press Democrat did not report told the community it was going to do one thing and then ended up the finding of fraud in its brief doing another.” coverage of the court-ordered Why does that matter? It matters $725,000 award to the tribe.) The account of Anderson’s TRANSMISSION PG&E’s poorly-maintained equipment has led to fires because Anderson chartered the and, more recently, sweeping planned power outages. Darius Anderson’s Rebuild North Bay Foundation unsavory dealing with the lobbying firm represented them until Nov. 1, 2019. for providing disaster relief; Indians resulted in the Bohemian not for sending politicians and taking a closer look at Rebuild businesspeople to lobby politicians North Bay Foundation and other in Washington. It matters because Anderson ventures. The Fund the activities of Rebuild North for Investigative Journalism Days of fire Shadowing the board is a Bay Foundation intersect with its supports “The Power Brokers” 43-member Advisory Council founder’s business, publishing and series, which receives pro bono The founding directors of packed with vintners, politicians, political interests. Rebuild North Bay Foundation legal assistance from attorneys nonprofit executives and Sonoma, For example, until Nov. 1, 2019, were Anderson and Marisol at the Reporters Committee for Lake, Mendocino and Napa PG&E was a client of Anderson’s Lopez of Platinum Advisors. The Freedom of the Press. county officials. Congressman California- and Washington, D.C.– 18-member board of directors is Rebuild North Bay Foundation’s Mike Thompson and Governor based lobbying firm, Platinum executive director, Jennifer a Who’s Who of local business Advisors. PG&E is bankrupt and elite. Elizabeth Gore is the Gavin Newsom compose the Gray Thompson, provided Honorary Board. facing $30 billion in liabilities the Bohemian with financial president; she runs Alice—an for sparking wildfires around artificial-intelligence website for The foundation does have information and responses to California. Two PG&E executives business owners—and is married charitable accomplishments. It questions. In early September, have served on the foundation’s to Sonoma County 4th District organized businesses, including board of directors; it names PG&E as Thompson and four members of Supervisor James Gore. PG&E, to help replace burned its “partner” in charitable activities. the foundation board met with Directors include Henry street walls fronting several And a disaster-debris removal firm Bohemian reporters at Mountain Hansel, the auto dealer; and neighborhoods. It gave a county named Ashbritt Environmental Mike’s Pizza in Santa Rosa. four vintners, including Michael government $25,000. It is hired Anderson’s lobbying firm, Subsequently, Thompson and Mondavi; and United Way of the partnering with United Way of and gifted the foundation with the board declined to answer Wine Country–CEO Lisa Carreño. the Wine Country to distribute $450,000, after Anderson and its any further queries. Anderson In the tax filing, Anderson’s $300,000 of the United Way’s board members lobbied federal did not reply to requests from business partner, Press Democrat money to community groups in officials to change debris-removal the Bohemian for comments on publisher Steve Falk, is titled small grants. reimbursement regulations. factual issues raised in this story. “FOB,” friend of the board. For these charitable )10 10 10 Rebuild ( 9 North Bay Foundation. During his brief tenure, Witt averaged five hours a week on the job, according to the foundation’s tax return. It paid Witt’s firm $64,838 for its services. Notably, the tax return records a conflict of interest, reporting Witt Global Partners as “disqualified” | BOHEMIAN.COM because they hired Witt’s firm under a consulting contract managed by himself. IRS regulations call for repayment of a payment to a disqualified entity if the amount is determined to be an “excess benefit.” Witt kept the money because the foundation’s board of directors determined the payment NOVEMBER 20-26, 2019 20-26, NOVEMBER to be “reasonable compensation,” said Thompson, who the Foundation hired to replace him in January 2018. Thompson declined to make Witt’s invoices available or to reveal details about his firm’s services. Witt did not reply to requests for comment. PG&E to the rescue? NORTH BAY BOHEMIAN | BAY NORTH The day after Christmas in CORPORATE CASH PG&E contributed $2 million to the Rebuild North Bay Foundation in December 2017. 2017, PG&E cut Rebuild North Bay Foundation a check for $2 million. The utility’s donation came with a prohibition: “It is our understanding that these acts, Rebuild North Bay in massive fire relief efforts director, and for sponsoring a funds will not be used for Foundation has received lots of in Sonoma, Lake, Napa and lobbying trip to Washington, federal, state, or local campaign coverage in the Press Democrat in Mendocino counties.