Núñez news sparks anger, shrugs

Assembly Speaker Fabian Núñez's channeling of corporate charitable funds through a nonprofit group to bankroll civic events planned in part by his staff sparked controversy Friday, but tax experts expressed doubt that any law had been broken.

Kevin Spillane, leader of a campaign opposing Proposition 93, a term-limits measure pushed by Núñez, blasted the arrangement as part of a pattern of "arrogance and abuse" by the Los Angeles Democrat.

"It demonstrates disdain for the law and contempt for the public," Spillane said, adding that his attorneys are likely to file a complaint early next week with the Fair Political Practices Commission.

But Malcolm Segal, a Sacramento attorney who handles tax cases, characterized the attacks on Núñez as more a case of "gotcha politics" than substance.

"At some point, people need to put that aside," Segal said.

Núñez solicited about $250,000 in corporate funds in 2005 and 2006 for Collective Space Inc., which then used the money to bankroll civic events – some of which carried the lawmaker's name, such as "Assembly Speaker Fabian Núñez's" toy drive or youth conference, state records show.

State law allows legislators to solicit donations to their favorite charities. Núñez's arrangement with Collective Space went beyond simple fundraising, however, because aides concede his staff helped plan the events.

Officials of Collective Space did not return calls seeking comment Friday.

Spillane contends the channeling of large sums of money through a nonprofit for events promoting Núñez personally, especially during an election year, might have been an illegal evasion of campaign contribution limits and a violation of tax laws and limits on legislative behesting. "It doesn't get more serious than that," Spillane said.

Núñez's selection of Collective Space as a partner also raised eyebrows because the nonprofit has been suspended by the state since February 2005 for failing to file required public documents about its income, expenses and organizational structure.

Steven Maviglio, Núñez's spokesman, said the bottom line is that the Assembly leader benefited his district without enriching himself.

"We partner with organizations to do things," he said. "That's what politicians do with nonprofit groups. ... The only favor (he curried) is with 7-year-old kids, and the last time I checked they don't vote."

Núñez knew nothing about the nonprofit's suspension, Maviglio said.

The state attorney general's office declined to comment Friday.

The Franchise Tax Board and Fair Political Practices Commission said they routinely were reviewing the matter but that no investigation had been launched.

Bill Steiner, spokesman for the Internal Revenue Service, said he could not comment on the Núñez case – only tax laws generally.

Steiner said donors cannot channel money to a nonprofit agency with the understanding that it would be refunded to benefit themselves or their families.

If the money was used to benefit the donor and numerous others, however, a key question would be the extent to which it served a "charitable activity for the greater good of the community," Steiner said. "We would have to look at all the facts and circumstances."

Segal, a former first assistant U.S. attorney, said Núñez's actions might "raise some concerns, particularly among his political opponents." But there is a public benefit to toy drives and other such events, he said.

Using Núñez's name to conduct or promote a civic cause would not be the deciding factor in determining legality, Segal said. "It's not the best public relations at the moment, but I really don't see it creating the kind of legal problems that people are talking about," he said.

Marcus S. Owens, a Washington, D.C., attorney in tax law who once directed the IRS' Exempt Organizations Division, said he sees no obvious impropriety in Núñez's channeling of contributions or his staff's participation in event planning.

"If the planning is done by someone's staff, the key question is: Who benefits?" Owens said.

Assemblyman Dave Jones, D-Sacramento, said the 47 members of the Assembly Democratic Caucus remain strongly behind Núñez. "I believe that everybody still strongly supports the speaker, for good reason," Jones said. "He's been a very effective leader."

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