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Original post made
on Jun 22, 2011
This is a very thorny problem. The issue is not how to make donations to the police department anonymous, but how to stop them and ensure that there are no more private shadow donations.
What do I mean by this? First, I am not going to mention the teen's name, so the Almanac should not delete this. But when a "scholarship" is provided by a local school through resident donations to a police chief's child, this is bad practice.
THe whole reason all of this is wrong goes back to the 18th century and the constitution. The Equal Protection Clause means we all get the same treatment by governmental authority, whether they like us or not. Soliciting special favors from people runs completely afoul of this.
The problem is the cops have figured out that by giving special treatment to council members (no scholarships required on this ring of the ladder), many of their problems get solved. Only Kathy McKeithen and Bill Widmer have had the courage to avoid this.
I hope the Almanac does an article on this police chief private school scholarship. It isn't going away.
The Town can and should encourage citizens who wish to do so to make contributions over and above their property taxes. However, the Town should carefully regulate how such gifts are used to ensure that the best interests of the Town are met and the Town should aslo take steps to ensure that such contributions do not lead to preferential treatment.
Having citizen contributions go through an existing third party community foundation like the Philanthropic Venture Foundation (as is done by the Fire District) would permit donor anonymity. The Town would still have to make an independent decision as to whether the proposed use of the funds was consistent with the Town's best interests. For example, a proposed gift of $X to establish a mounted police unit might properly be turned down.
It would seem that the "scholarship" donation specifically for the chief's child is more akin to a political donation which should disclose the donor's name. But then if the donations were made to a PAC then they could be kept anonymous?
Also if donations are made to a private school for a specific student's tuition there should be a question as whether they are a legit tax deductible donation. I believe it would just be considered a tuition payment and thus not deductible.
So are these "donors" evading taxes and thus subject to fines and penalties by the state and feds? The private school could also be penalized if they are sending out "donation" confirmations.
Sounds like California FTB and the IRS should be brought in to this matter.
One more point, or actually two more.
Should the "donations" to the chief's child's "scholarship" be considered a taxable benefit as part of the chief's compensation?
BTW the issue of the "donations" could be said to be reminiscent of the old Tammany Hall the efficient and corrupt political machine based on patronage and graft.
Web Link (GrantSpace is part of the Foundation Center)
Summation of IRS rules regarding scholarship donations and deductibility.
The scholarship must be awarded on an objective and nondiscriminatory basis. The group of applicants from which the recipients are selected must be sufficiently broad as to be considered a charitable class. The donor of a scholarship cannot take a charitable deduction for a scholarship that is earmarked for the benefit of a specific individual, not even if that individual is unrelated to the donor. Moreover, donors may not circumvent this restriction by tightly delineating the selection criteria.
Is it possible for wealthy benefactors and or the Board to just wave a particular child's tuition, call it a "scholarship" and then collect a large donation to the school's general fund from those "motivated" to contribute? I believe the tuition is a very substantial 34,000 per year, so 34,000 x 4 years of high school = 136,000.
I wouldn't care too much if it weren't for this Police preferential treatment question which is unhealthy for society in general and a particularly bad message for already very fortunate teenagers.
Will The Menlo College now also be extending a similar "scholarship "arrangement? Or after this scrutiny-will someone now actually have to just pay the collage fees outright on the Chief's behalf?
Country Clubs and vacation homes use are other topics to consider.
All elected and must senior appointed local officials must file a Firm 700 annually disclosing ALL gifts received from anyone who lives or works in their jurisdiction. Those firms are public records.
So even if the Board is scrambling for damage control on a way to spin this to protect the school--what is the best that they could come up with?
A completely broke Atherton pays its Police Chief enough money to afford the tuition on his own?
When is the next Board meeting?
Who cares about whether this is properly tax deductible; whether it should be taxable income to the chief; etc. It stinks and its wrong!
To Peter Carpenter - you say: "All elected and most senior appointed local officials must file a Firm 700 annually disclosing ALL gifts received from anyone who lives or works in their jurisdiction. Those firms are public records."
But let's face it, a "scholarship" isn't going to get reported on this form, even though under these particular circumstances it should, since the former police chief will say it was a scholarship that his daughter earned, not a gift.
If you have read the Almanac over the past few years, and I know you have, there are umpteen other examples of Atherton officials twisting the purpose of various laws to escape ethical conflicts, and the city attorney writing them a pass. Of course we all know this happens because the San Mateo D.A. won't challenge any government body on any issue, no matter what they do to break the law, so there is no disincentive for them to do anything else.
I simply wonder when enough is enough. We already have a parcel tax. The police department is already getting "anonymous" donations, "anonymous' scholarships are being given to a chief's daughter, Dudley and Janz want to raise yet more money for the police department. It goes on and on. The true kicker for me is when the police department, not the town itself, is the financially capable entity to become the videographer of all town meetings to chronicle the town going bankrupt.
Many of you keep complaining the city atty and county DA won't do anything. Well if you can show a violation of FTB and or IRS regs you might be able to get the state atty general and or the feds involved. [Portion deleted.]
"The true kicker for me is when the police department, not the town itself, is the financially capable entity to become the videographer of all town meetings to chronicle the town going bankrupt."
To clarify, it's the APOA which videos the meetings, not the PD. The APOA is a private organization comprised of non-management Officers, Sergeants, and Dispatchers. The members pay dues to the organization.
The videos are hosted for free on YouTube.Com. They are "produced" during off-duty hours at no cost to the Town. The videographer is paid a nominal fee.
In short, the heavy lifting is being done by volunteers, driving down the cost.
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