Press Clips: One Woman I-Team Sacks Tax Board

Aug27

Mega-kudos to Laura Mahoney, Sacramento correspondent for the Daily Tax Report and the winner of the Calbuzz Little Pulitzer for Investigative Reporting, for a superb, 25,000-word probe of the powerful, under-the-radar state Board of Equalization.

The only journalist who regularly covers the board, she  spent 18 months reporting and writing the five-part series, which reveals an incontrovertible pay-to-play connection between campaign contributions to its elected members and the outcome of tax appeals on which they rule.

“I realized when (the project) took me as long as it did to gestate my babies, I was in trouble,”  said Mahoney, a mother of two.

Known as “the Board of Eeek!” to generations of California reporters who quake with fear at the mere thought of covering complex financial stories, the BOE not only administers billions of dollars of tax collections, but also adjudicates disputes about them between the state and corporations or individuals.

Mahoney reports that California’s is the only such elected board in the nation with those dual roles. With its members (four are elected from districts of about 8 million people each, the fifth is the state controller) as dependent on special interest campaign cash as every other state pol, the  big accounting, law and other professional firms that do business with the board, along with their  PACs and high-end clients, are only too happy to accommodate.

Mahoney is a 20-year veteran of the Daily Tax Report, the flagship of BNA, a Washington-based publisher of  periodicals focused on high-level, specialized policy reporting for business and government. Besides the extraordinary level of detail and data analysis in her pieces, the strength of her reporting is the understated, dispassionate style and tone of her writing (kinda like us!), which makes her relentless accumulation of fact upon fact upon fact, and the conclusions she derives from it, that much more powerful. A summary of her findings begins:

Taxpayers with complex tax dispute cases before the California State Board of Equalization were more likely to win their cases if they or their representatives made campaign contributions to the elected board members, either directly or through political action committees, according to a detailed examination by Daily Tax Report, a BNA publication.

In a series of reports, BNA examined the outcomes of 70 complex, high-stakes cases argued before the board between 2002 and 2009, and compared those cases to publicly available campaign finance records.

BNA found more than $1 million in contributions to board members from taxpayers or their representatives who argue those cases before the board. All of the contributions were legal and contributors who spoke to BNA denied any causality between their contributions and success before the board.

We just bet they did. Check this:

However, a correlation appears to exist between contribution levels and success before the board, based on BNA’s original research.  BNA found that 20 of the 70 cases examined had less than $250 tied to them, and those taxpayers won their cases 30 percent of the time.

Success rates rose with higher contribution rates. Dividing the remaining cases in equal groups, BNA found another 17 cases had between $250 and $16,000 in contributions tied to them, and those taxpayers won 53 percent of the time. The next group of 16 cases had $16,000 to $50,000 tied to them, and those taxpayers won 75 percent of the time. The last group of 16 cases had $50,000 to $137,000 tied to them, and those taxpayers won 88 percent of the time.

Huh. Imagine that.

There’s lots more good stuff, as Mahoney names names, dissects the politics of the board’s operations and weighs the policy implications of what she found.

One of the conclusions of the final report of the governor’s tax reform commission released last year was that California should create an independent board to handle the politically charged issue of tax appeals.  So far, no one in the Administration or Legislature has seen fit to try to push such a reform.

After reading Mahoney’s special report, someone really, really should.

Cutting room floor:

Finally someone notices that the  “anti incumbent wave” of primary season is all about Republicans.

Lou Cannon’s take on mid-terms: mercifully free of heavy breathing

We’re still working our way through Todd Purdum’s big Vanity Fair piece on what’s wrong with Washington ‘cuz we keep stopping where he says $3.5 billion got spent on lobbying last year – $1.3 million for each day Congress was in session.

World’s only human shorter than Barbara Boxer gets it pretty much right.

Judge Vaughn Walker: liberal elite insider. Uh, wasn’t he appointed by a Republican?

What’s Obama’s problem?

A-He’s too condescending.

B-He thinks he’s Prime Minister.

C-He sold out much too fast.

D-He’s totally incompetent.

E-He doesn’t have a problem.

F-He’s easily intimidated.

G-His problem lies in the very nature of man.

Calbuzz sez: B, C and F.

In case you missed it: Since the whole dispute over the Manhattan Islamic community center erupted, we’ve been determined to keep Calbuzz a Ground Zero Mosque Free Zone. But we finally came across something that sums up our take, thanks to Aasif Mandvi.


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