Menlo Park resident files ethics complaints against two council members

The California Fair Political Practices Commission confirmed July 26 that it will investigate ethics complaints made by Menlo Park resident George Fisher against City Council members Kirsten Keith and Catherine Carlton.

In his complaint against Keith, Fisher alleges that she violated political ethics law when, during two trips to China in 2016, she accepted gifts in the form of airfare, lodging, food and other transportation reimbursements of more than the state’s maximum permitted $470 gift-value limit. He also alleges that she did not disclose the funding source of another trip to China that she took in September 2015, and didn’t say whether she paid for it herself or was reimbursed.

According to California law, only governments and 501(c)(3) nonprofit organizations may fund politicians’ travel in excess of that gift limit. But two organizations Keith reported receiving gifts from do not appear in directory searches of 501(c)(3)s and appear to be trade organizations. Trade organizations are typically 501(c)(6) organizations and are subject to the gift limits, says Fisher, who is an attorney.

In her 2016 annual report to the FPPC, Keith reports accepting a gift of $1,608 from the Beijing Digital Content Industries Association for boarding, food and transportation between May 27 and 31. During that trip, she participated in a panel, she noted in the report.

That year, Keith also reported receiving gifts of $3,462 from the Chongqing Municipal Government, $4,011 from the Zhengzhou Municipal Government, and $5,365 from the Zhangjiang management committee for airfare, other transportation costs, food and boarding.

In an amendment to that report, Keith disclosed receiving a gift of $2,000 from the China-USA CEO Association to cover travel expenses, lodging and food in Shenzen, China, as part of a “2016 China Economic and Trade Exchanges Trip” that took place between November 20 and 27, 2016. She noted that she made a speech or participated in a panel on that trip too.

Fisher alleges that neither the Beijing Digital Content Industries Association nor the China-USA CEO Association appears to be a 501(c)(3), after searching the IRS databases of tax-exempt organizations and finding no matches.

In response to questions from The Almanac, however, Keith provided a May 2016 letter from the FPPC stating that the Beijing Digital Content Industries Association is a nonprofit organization that is supervised by local Chinese government agencies, and noting that if the organization met the U.S. standards for a 501(c)(3), then the funding sources for that trip would be permitted to exceed the gift limit.

She also provided a formal letter from the FPPC in November 2016, which stated that the commission had received verification that the China-USA CEO Association organization is a 501(c)(3) organization.

Fisher further alleges that Keith informed the City Council before and after traveling to China on a separate trip with a group called China Silicon Valley in September 2015, but did not disclose who paid for it.

In March 2018, Keith traveled to China on another trip, which was described by Chinese media as being sponsored by the Palo Alto-based US-Asia Innovation Gateway, which is a registered 501(c)(6) organization, or a trade association, and therefore, Fisher maintains, is not eligible to provide elected officials with gifts in excess of the state gift limit.

In a written statement, Keith said, “Although the FPPC will investigate concerns raised by Mr. Fisher, the FPPC has not made any determination about the validity of his concerns. I’m grateful that Mr. Fisher has initiated this process because it allowed me to work with the FPPC to have confidence that my financial disclosure documents are accurate and complete.”

Carlton

Fisher has also filed a complaint alleging that Carlton reported receiving travel and lodging reimbursements from organizations that do not appear to be 501(c)(3) nonprofits: $4,649 in value from the U.S.-Asia Friendship Association for travel in China between July 6 and 17, 2015; $8,816 in value from U.S.-Asia Friendship and Networking for travel in China between December 13 and 17, 2015; and $8,500 in value from U.S. Asia Innovation Gateway for travel in China and Korea between November 12 and 21, 2016.

Carlton informed The Almanac that she made an error in listing U.S. Asia Innovation Gateway. The organization’s proper name is US-China Innovation Gateway, which is a 501(c)(3) nonprofit and subject to the gift exemptions under state law, she said.

“A name correction is being sent to the FPPC,” she added. “I was on exactly the same legal trips as nine other Bay Area council members.”

In addition, she reported receiving a $5,080 gift from the government of Dalian, Yunnan, which likely would be permissible.

The FPPC informed Fisher that since it already has an investigation of Carlton in progress, a new case would not be opened, but his allegations would be added to the existing case.

Carlton reported an incident in which her husband’s retirement portfolio manager had purchased and held Facebook shares for the portfolio while she voted on matters pertaining to land use and development on Facebook property.

According to the FPPC, no further notification will be provided until the case’s final disposition. In a letter addressed to Fisher, Galena West, chief of the commission’s enforcement division, noted that the FPPC has not made any determination about the validity of the allegations or the culpability of those the complaint is about.

Editor’s Note: This story has been updated since it was first posted.