A Donor By Any Other Name

[November 25th, 2009]

Large Portland companies are contributing big money to defeat two tax increases on the statewide January ballot—but voters will have a hard time determining that.

The opposition campaign, Oregonians Against Job-Killing Taxes, is not hiding the contributions against Measures 66 and 67.

Rather, local companies such as Portland General Electric, the Standard, City Center Parking and Nike are funneling contributions to the anti-taxers through intermediaries, primarily the Portland Business Alliance and Associated Oregon Industries.

Donors are careful to deny they are “directing” contributions to the tax fight because that could violate election law prohibiting donations given in a false name. “We know where PBA stands on the issue [the tax hikes],” says PGE spokesman Steve Corson. “But once we send them a check, it’s up to them to know how to spend it.”

But representatives of the pro-tax Vote Yes for Oregon campaign say such donations, which account for more than $300,000 of the $1.5 million the anti-taxers have raised so far, are an attempt by the companies to distance themselves from the controversial measures. And they question whether the gifts violate the false-name law.

“It seems clear these guys know their participation in this campaign could anger their customers,” says Kevin Looper, director of Vote Yes for Oregon. “They are trying to actively conceal the source of money going into the ‘no’ side of these measures.”

In Portland and other tax-loving parts of Oregon, there are reasons to worry about fallout from contributions made to opponents of such a hot-button issue. Columbia Sportswear CEO Tim Boyle, for instance, contributed $10,000 to the tax foes Aug. 25. Critics responded with a Facebook page targeting Boyle. It currently has 135 friends.

In the Jan. 26 election, Oregon voters will decide on the two measures, which propose raising personal and corporate income taxes by a total of $767 million.

Business interests implored Democratic legislative leaders to make the increases temporary, but those pleas fell on deaf ears. That breakdown in negotiations during the 2009 session may be contributing to corporate contributors’ generosity now. And the fact that there is nothing else on the January ballot sharpens their financial focus.

Regardless, Looper contends the Portland Business Alliance and Associated Oregon Industries are simply bundling contributions and passing them along to the anti-taxers.

Taking the PBA as a test case, it’s easy to see how the money is flowing. Its political action committee has made $117,000 in political contributions this year. Of that total, $112,000 has gone to the anti-taxers.

In a typical sequence of events, the software company Tripwire gave $5,000 on Oct. 31 and PGE gave $30,000 on Nov. 5; then, PBA gave the anti-taxers $35,000 on Nov. 9. The city and state business associations appear to have repeated that cycle at least five times each since August: collect a few big checks, bundle the money together and then send it on to the anti-tax campaign.

Looper says since the PACs are spending virtually all contributions on the tax measure, such conduct may violate a statute that prohibits giving contributions under a false name. Multnomah County prosecuted Portland developer Tom Moyer for making such contributions in 2004, saying he gave others money to give to then-City Commissioner Jim Francesconi’s failed mayoral campaign. The case is currently in front of the Oregon Supreme Court.

PBA President Sandra McDonough says such analysis is wrong because her members disclose their contributions to the PBA and her organization discloses its contributions to the anti-tax measure. “Nobody is hiding anything here,” says McDonough, who notes the business alliance is active in other campaigns, having given $500 on Sept. 30 to the unsuccessful re-election of Vancouver Mayor Royce Pollard.

She also denies contributors are using the PBA to avoid any unfavorable publicity that might arise from being associated with the anti-tax measures.

“Our members are very sophisticated givers,” McDonough says. “They know that disclosure happens.”

She says the PBA was talking with legislative leaders in June and their members’ contributions now are simply an expression of their collective dismay with the choice to make tax measures permanent.

“We want to make sure people understand the Portland business community favors a more moderate approach,” McDonough says.

The Standard, a large Portland insurance and financial services company, gave $15,000 to AOI on Oct. 30 and $15,000 to PBA on Nov. 12. Spokesman Bob Speltz says his company chose not to give directly to the anti-tax campaigns because it preferred to work through associations of which it is a member.

“There was no attempt to be evasive,” Speltz says. “We think we get better results when we work through a coalition [such as the associations].”

Nike gave $5,000 to the PBA on Aug. 18, as did Qwest the same day. Four days earlier, City Center Parking gave $10,000 to PBA. The business alliance donated $20,000 to the anti-taxers on Aug. 25.

Despite that sequence of events, Nike spokesman Erin Dobson says Nike’s contribution was not directed at the tax measure or any specific purpose.

In a statement, Nike indicated frustration with the taxes, saying they will “not foster job creation in Oregon.”

That’s the real question, of course: whether tax hikes will bail out public services or submarine Oregon’s faltering economy. From an analysis released this week by the bipartisan Urban Institute in Washington, D.C.:

“Even with the increases in both the per capita and corporate taxes, Oregon will remain in the middle of the pack in terms of per capita taxes (moving from 34th to 31st),” the institute found, “and is still estimated to have one of the lowest business tax burdens [moving from third-lowest to fifth-lowest].”