City Beat

FPPC will investigate allegation that Mayor Johnson had conflict in ‘big-box’ store vote

Sacramento Mayor Kevin Johnson is the subject of an investigation by state election regulators over allegations that his solicitation of thousands of dollars in donations from Wal-Mart and a charity funded by the company’s founding family created a conflict of interest in his recent vote to ease regulations of big-box superstores in the city.

The Fair Political Practices Commission’s investigation, revealed Tuesday, will also examine whether Johnson solicited money from the Walton Family Foundation for an education organization he started in order to pay for trips he made last year – and whether those payments resulted in Johnson receiving gifts in excess of state limits.

Stand Up for Sacramento Schools paid $22,713 for Johnson to attend education conferences and speaking engagements around the country in 2012, according to the mayor’s statement of economic interest filed with the city. That same year, the Walton Family Foundation donated $500,000 to Stand Up in behest payments arranged by the mayor, according to separate records filed by the mayor’s office.

The Walton Family Foundation has no direct affiliation with Wal-Mart. However, the Walton family started Wal-Mart and Rob Walton – son of company founder Sam Walton – is the chair of the company’s board of directors.

The third focus of the FPPC probe will examine whether Walton Family Foundation donations to the national education reform group launched by Johnson’s wife led to a financial conflict for Johnson in the big-box vote. The Walton Family Foundation announced earlier this year it was giving $8 million to StudentsFirst, the Sacramento-based organization started and run by Michelle Rhee.

Johnson could face fines of up to $5,000 for each allegation, said Gary Winuk, the head of the FPPC’s enforcement division.

Johnson was unavailable for comment Tuesday. He was traveling to Birmingham, Ala., where he was scheduled to lead a panel discussion for the U.S. Conference of Mayors on economic equality and combating racism.

The mayor’s spokesman, Ben Sosenko, said in a statement that “the mayor is fully cooperating and is confident that the FPPC will find no conflict."

Daphne Moore, a Walton Family Foundation spokeswoman, said the foundation and Wal-Mart have separate governance structures and that Walton Family Foundation staff members are not involved in Wal-Mart business decisions.

The Walton Foundation has invested heavily in education reform initiatives around the country, donating $158 million to those causes last year.

“Mayor Johnson is engaged in some national work related to education reform and that’s why we invested in his organization,” Moore said.

Johnson’s position on the big-box ordinance and his involvement in arranging the behested donations came into focus after a Sacramento Bee report in June revealed Wal-Mart and the Walton Family Foundation had made nearly $800,000 in donations to nonprofits and charities associated with the mayor and City Council since 2005.

Eric Sunderland, a Sacramento Municipal Utility District employee and former city school board candidate active in local Democratic Party politics, filed a complaint with the FPPC alleging the conflicts of interest following The Bee’s report.

Sunderland also called for Johnson to recuse himself from the big-box vote at the City Council last month. The City Attorney’s Office determined that the mayor did not have a conflict and could vote on the matter. Sunderland could not be reached for comment on Tuesday.

The mayor, a pro-business politician, voted in favor of easing restrictions on big-box superstores within city limits. The 6-2 City Council vote reversed most of a 2006 ordinance that required big-box chains such as Wal-Mart and Target to conduct wage and benefit studies of businesses before being allowed to construct new stores.

City development officials argued the rules led to a de facto ban of big-box stores in the city.

A repeal of the big-box ordinance was opposed by many organized labor leaders and small business advocates. Labor in particular has battled Wal-Mart over wage and benefit issues.

Johnson and other elected officials at City Hall have come to rely on behests to help fund and promote nonprofits and charities. In 2005, council members raised just $15,750 in behests. So far this year, more than $1.5 million has been donated on behalf of city politicians. Of that, $935,629 has been donated through the mayor, records show.

At the same time, scrutiny of behested payments has increased.

Just last year, Johnson was fined $37,500 by the FPPC for failing to report more than $3.5 million in behests in a timely matter.

Those behests, which included some of the donations from Wal-Mart and the Walton Family Foundation, were not reported to city elections officials within the 30-day period set by state law.