2011-07-01 "Private money, public service; by employing certain safeguards, the public's interest can be maintained when private donors help fund government programs"
Last Sunday, The Times reported that Gov. Jerry Brown has been taking thousands of dollars each month from donors to pay the rent on his Sacramento loft, while refusing his official state housing stipend.
In the same day's paper, it was reported that as part of a "public-private partnership," corporations and foundations would pay several million dollars toward the successful Summer Night Lights anti-gang program in L.A. parks this year. And a few weeks earlier, the paper noted that the Los Angeles Unified School District was taking money from developer Eli Broad, entrepreneur Casey Wasserman and the Bill & Melinda Gates Foundation to pay the salaries of about 20 top officials in the school bureaucracy.
In each of these cases, government officials are accepting private dollars to cover the kind of costs that used to be borne by the taxpayers. And why shouldn't they? Times are tough and money is scarce. The state and city are cutting billions of dollars' worth of vital services, and struggling Californians seem strongly disinclined to tax themselves further to pay for the common good.
So if a generous, civic-minded citizen like Broad, or a rich corporation like Wal-Mart or AT&T, offers to step forward to fill some of the gaps, it would be foolish to say no, right?
Unfortunately, it's not always that simple. Consider, for instance, the group that wants to pay Brown's rent. It's a nonrofit organization called the Governor's Residence Foundation, and it has been around for years; it also gave money to Gov. Arnold Schwarzenegger and, before him, to Gov. Gray Davis and others. The problem is that it and a similar foundation that exists to pay much of the governor's travel and other expenses have historically received many of their donations from corporations and individuals with business before the state. Some of the donations have exceeded $100,000.
Although the California Fair Political Practices Commission has been tightening up some of the rules regarding such nonprofit organizations, there is no legal requirement that names of donors to the residence foundation be disclosed and no limit on the size of donations. So, theoretically, a company could make an anonymous $100,000 donation and be rewarded the next month with a $20-million state contract or enactment of a helpful piece of legislation, and voters might never know it happened. Presumably this won't occur under Brown, because the current leaders of the foundations have promised to voluntarily disclose the names of donors and limit the size of the contributions.
L.A. Unified's decision to take money from Broad, the Gates Foundation and Wasserman to pay the salaries of top district officials raises a different set of issues. In this case, there's no secret about who the donors are. And it seems unlikely that any of the three has a personal financial interest in cozying up to the school district. Bill Gates doesn't secretly want to win the concession to run L.A. Unified's cafeterias. But Gates and Broad do have strong opinions about public education, and there's little question that their donations are designed to further their reform agenda, whether that means empowering charter operators or encouraging smaller schools or making it easier to fire teachers. There's nothing necessarily wrong with any of those positions, and frankly, we appreciate that billionaires like Gates and Broad care about public education and are willing to spend their own money on it.
But ultimately, education policy has to be set by the school board, the superintendent and the other state and local public officials involved in education, and not skewed by the personal philosophies of deep-pocketed donors. Not because the officials always make the right calls but because they're the ones who were elected by the voters and are accountable to them.
So should the city, the state and the school district refuse to accept this badly needed money? Not necessarily. When money is scarce, philanthropic dollars can play an important role. But here are a few basic rules that could help guide the use of private dollars for public purposes. Obviously, these are not exhaustive, nor should they be written in stone; each situation should be handled on a case-by-case basis.
• When private donors give money to help government do its job, the law should require that the donor's name and affiliation be disclosed.
• Private donors should be required to disclose whether they have any direct interest in pending legislation or are seeking government contracts or other assistance. Transparency is essential so the public can make judgments about potential conflicts of interest.
• If private money is accepted, it should be used to advance the goals of the government, not the giver. The government should be responsible, and accountable, for how the money is spent. If Gates likes what L.A. Unified is doing, he should by all means contribute. But if he wants to spend the money differently or his own way, then thanks but no thanks.
• Private money shouldn't pay the personal expenses of public officials or enrich them in any way. If a donor wants to give to a successful, existing, legitimate government program — such as Summer Night Lights — that's one thing. But paying the governor's rent is something else. If Brown chooses not to take the $35,000 that has been officially budgeted to help cover his housing costs, that's up to him. But that doesn't make it OK to take gifts from donors who may have reasons for ingratiating themselves.
There are many other issues raised when private donors fund public programs, including when and whether government should allow companies to piggyback on it for advertising and branding purposes. Should a company like Altria — formerly Philip Morris — be allowed to plant a billboard in a state park if it helps reforest that park with private dollars? If Coca-Cola funds a city after-school program, should the program be renamed for the company?
All in all, the system works best when government pays for government. Not only is it ethically complicated to rely on private dollars, but even Bill Gates and Eli Broad don't have enough money to fund California for very long. The state's voters have to acknowledge eventually that if they still want to live in a first-class state with the kind of services they've long been used to — great and affordable state universities, safe streets, magnificent parks, public schools that rival any in the nation, and a safety net for those who fall on hard times — they're going to have to pay for those things. For too long, Californians have been encouraged by politicians to believe that they can have all the services they want without the responsibility of paying for them. That myth has been shattered. And there aren't enough white-knight billionaires to make up the difference.