Chief Complaint

[April 23rd, 2008]

Last week, a memo from IRS headquarters in Washington, D.C., told staff to be on the lookout this campaign season for violations by nonprofits.

Federal law says nonprofits “are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign.” Penalties can be severe, including loss of an organization’s tax-exempt status.

That warning resonates here in Multnomah County, where Gresham Police Chief Carla Piluso has been accused recently—and repeatedly—of using her ties with nonprofits to boost her campaign for county commissioner.

The IRS isn’t investigating the allegations, however, because no one has filed an official complaint.

“Until those things are ferreted out and investigated,” says IRS spokesman Bill Steiner, “it’s just a he-said, she-said kind of thing.”

Piluso has a long history of involvement with local nonprofits serving children and the homeless. She says she’s aware of the IRS rules and hasn’t accepted any inappropriate help.

“I took on the campaign very seriously and have worked hard to keep those separations,” Piluso says. Any mistakes, she says, were the fault of her “enthusiastic supporters,” not of her campaign.

But Piluso lost former Gresham City Councilor Jacquenette McIntire’s endorsement last month after Piluso asked fellow board members for the nonprofit Human Solutions to endorse her in the race to represent East County.

“That made me uncomfortable,” says McIntire, who sits on the 12-member board with Piluso. “I don’t know if it’s illegal or it’s just inappropriate.”

Based in Southeast Portland, Human Solutions provides services for the homeless. Piluso asked board members to endorse her campaign after a board meeting Jan. 28. Piluso says she made her pitch outside the Human Solutions building, but McIntire says Piluso’s pitch came in the lobby.

After McIntire withdrew her endorsement of Piluso on March 6, Piluso removed McIntire’s name from her campaign literature.

Piluso also angered Human Solutions executive director Jean DeMaster after Piluso’s campaign included DeMaster’s name and title on a list of supporters even though DeMaster says she told Piluso not to use her title. Using DeMaster’s title is a violation of IRS rules that say leaders of nonprofits can’t endorse on behalf of their organization.

“Carla’s campaign made a huge mistake,” DeMaster says. She still supports Piluso, but her title has been removed from the campaign’s website.

Rob Meeker, owner of Central Cafe in Gresham, was surprised when he bought tickets to four Portland Beavers games and four Portland Timbers games at a Piluso fundraiser. The tickets were marked as having been donated to Human Solutions, but the $50 Meeker spent for the eight tickets went to Piluso’s campaign.

Piluso says she won the tickets at a Human Solutions raffle in September, then donated them to her campaign. DeMaster says Piluso should have removed the Human Solutions tag when she sold them at her own auction, calling it another “huge mistake.”

Human Solutions isn’t the only nonprofit to be entangled in Piluso’s campaign. Judy Alley, executive director of SnowCap Community Charities in Southeast Portland, sent letters of apology to about 360 people who attended the nonprofit’s annual Valentine’s Day dinner auction Feb. 9.

The letter, which explained that the charity doesn’t back any political candidates, came after candidate Diane McKeel’s husband, Mike, complained to Alley that an auctioneer at the dinner announced Piluso was running and asked the crowd to support her. Piluso was emcee at the event. The McKeels were seated in the front row.