PACs’ money must leave a trail

By David McGrath Schwartz

Thursday, Dec. 3, 2009 | 2 a.m.

For years Las Vegas Mayor Oscar Goodman has used his political action committee to give money to charities and community groups, all without publicly reporting on its activity. Now, not only will Goodman’s OPAC — Oscar’s Political Action Committee — have to report its contributions and expenditures, but it will also be prohibited from engaging in nonpolitical activity.

In a clarification of state disclosure laws released this week, Secretary of State Ross Miller said political action committees cannot skirt campaign finance laws and be used to funnel money to nonprofit organizations.

Former North Las Vegas Mayor Mike Montandon also has used his political action committee to donate to charitable causes, although he has disclosed the identity of donors and detailed expenditures.

Goodman has declined to report expenditures and contributors to OPAC to protect the identity of his donors, claiming he wasn’t required to make such disclosures because he has used the committee to donate to charities and community groups in downtown Las Vegas and not for political purposes.

The opinion released by Miller this week clarifies that state law.

Miller — who said the opinion was prompted by a recent story and editorial in the Las Vegas Sun — will send a copy of the opinion to each of the state’s 595 political action committees accompanied by a letter explaining the reporting requirements.

“The suggestion that there’s a loophole is not correct,” Miller said in an interview. “No loophole exists. You can’t claim you’re a political action committee and then turn around and claim you’re not required to report because you’re not engaged in political action. You cannot have it both ways.”

Additionally, the opinion says the legislative intent of the law was to allow the formation of political action committees to work toward an election result — not to be used as a vehicle to fund charities or community groups.

Miller said candidates’ campaign accounts can be used for charitable contributions.

“The point of the campaign law is to provide transparency so that people are aware of money contributed to elected officials, so they can determine for themselves if there’s undue influence,” Miller said. “If there’s an interpretation out there that allows public officials to have unlimited amounts of money contributed to them without reporting, it’s disconcerting and in conflict with current law.”

Candidates may accept up to $10,000 from a single donor, but there is no cap on the amount an individual can donate to a political action committee.

It’s unknown how many of the state’s political action committees have been operating as charitable funnels without reporting donations and spending, Miller said.

If a PAC doesn’t take in money or expend money, it doesn’t have to file with the secretary of state’s office. That means some PACs can legitimately not file with the secretary of state.

Miller said his office doesn’t have the staff to perform audits or “go on fishing expeditions unless facts are uncovered” into PACs that may have been skirting reporting requirements.

Goodman said he would release information on donors and expenditures. But he balked at the suggestion that he couldn’t use OPAC to fund charities. “The moment they tell me that’s wrong, I’ll be out of office so fast,” he said.

He said he has never had a problem releasing what the PAC spent money on, including donations to downtown Las Vegas projects such as the Las Vegas Philharmonic and Whirlygig, the nonprofit group that sponsors the First Friday art events downtown, $10,000 to the Fifth Street School for its unveiling celebration, and gifts to aid small conventions of city attorneys and city clerks offices from across the country. The biggest contribution made by Goodman’s PACs is believed to be a $50,000 donation in February 2007 to Keep Memory Alive, the foundation for what was then called the Lou Ruvo Brain Institute.

Goodman said he didn’t want to disclose the donors to OPAC to protect donors from reporters asking them why they donated.

“People in your profession don’t care about privacy,” Goodman said in an interview with the Sun. “They focus on everybody’s business.”

Montandon said his PAC was aimed at benefiting his city. He has used it to donate to community groups such as the Boys & Girls Clubs, as well as to Republican candidates. He has voluntarily reported donors and contributions.

Miller said PACs that violated the law in the past are unlikely to be prosecuted. “If it appears their past activity and any past violations were not willful, in all likelihood we will grant them waivers, should they come under compliance,” he said.