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Community Commentary: City should push for audit of chamber

February 04, 2012|By Bob Rush

For years, the Newport Beach Chamber of Commerce has been a willing recipient of taxpayer dollars, via city "waived permit fees."

At expense to other community uses for the funds, the city (from its General Fund) forgave thousands of dollars in un-reimbursed city services provided to profit-oriented chamber events, thereby "freeing up" chamber operating funds for "other" uses.

In 2009 alone, the chamber had more than $55,000 costs waived. As documented in tax returns, the chamber generally runs its operation at a loss, yet continues donating to its own Political Action Committee (PAC), which provides campaign support (political donations and advertising) for the same council members who approve such waivers.

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So where do the chamber's PAC donations come from and what controls exist to prevent abuse of these taxpayer funds?

Chamber President and PAC Vice Chairman Richard Luehrs offers that the chamber's PAC donations were from chamber members making PAC donations along with their annual chamber membership renewal, and these member donations were "cleared out regularly" to the PAC. (Editor's note: Luehrs has told the Pilot that the chamber suspended this process at the start of the year.)

However, state reports show the chamber typically makes PAC donations only once or twice a year, usually in fall months of election years, despite year-round membership renewal activity. Chamber PAC donations historically occur during the same period PAC expenditures are made, suggesting Chamber PAC donations are co-mingled with chamber general funds and really not "cleared out" a regular basis, as Luehrs claims.

To complicate matters, the city has never audited the chamber nor introduced any control procedures to prevent taxpayer money from going into PAC coffers. In 2011, the chamber flatly rejected calls to direct its PAC to document chamber donations on a donor name-by-name basis, as does Newport's firefighter PAC.

Such an approach would calm concerns of chamber co-mingling or redirection of taxpayer money into its PAC by showing each donation's origins. Instead, the PAC continues to report such donation activity in a single, lump-sum line item called "Monetary Contributions Received — NB Chamber of Commerce."

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