Legislators take secret trip to Cuba with Sacramento lobbyist
April 5, 2013
By John Hrabe and Katy Grimes
At least two California state legislators secretly traveled with Sacramento’s “best connected” lobbyist to Cuba during the legislature’s spring break, an exclusive CalWatchdog.com investigation has revealed.
State Sen. Cathleen Galgiani, D-Livingston, and Assemblyman Katcho Achadjian, R-San Luis Obispo, confirmed through their offices that they spent the spring holiday in Cuba with lobbyist Darius Anderson.
The founder and president of the influential lobbying firm Platinum Advisors, Anderson and his firm agreed in 2010 to pay out half a million dollars to settle pay-to-play allegations.
Both legislators’ offices said the elected officials paid their own way on what one Capitol source described as a “super-secret trip.” The source, who spoke on the condition of anonymity, said that participants “shredded their itineraries when they landed.”
“He went on the annual trip to learn and study about Cuba,” said Craig Swaim, Achadjian’s chief of staff.
“Sen. Galgiani did travel to Cuba on the Darius organized trip,” said Trent Hager, the senator’s chief of staff. “As opposed to other trips, the costs for this one are fully borne by the participants.”
Anderson did not respond to requests for comment regarding the trip.
Nonprofit: “Wholly-owned subsidiary of lobbying firm”
One ethics expert said that the trip raised multiple ethical questions, including why legislators were traveling with lobbyists, the true purpose of the nonprofit and why officials felt compelled to hide the trip from the public. “It absolutely raises ethical questions when lobbyists travel with elected officials,” said Jessica Levinson, a Loyola Law school professor who specializes in campaign finance issues. “We want elected officials to hear from all of us, not just those who are taking trips.”
In addition to Anderson, the nonprofit’s board of directors includes Holly Fraumeni and Melinda McClain, both of whom are registered lobbyists with Platinum Advisors. Only two other individuals serve on the board of directors, Kevin Murray, a former state senator and lobbyist, and James Bruner, the director of Orrick’s Governmental Affairs Practice Group in Sacramento. The foundation shares the same phone number with Platinum Advisors.
The organization’s website was registered by Fraumeni in August 2010 and the provided contact information was for Platinum Advisors.
That information, Levinson believes, raises the question of whether “the nonprofit is a wholly-owned subsidiary of the lobbying firm.”
CA Building Bridges: “Renowned artists, fine arts museums & fabulous home restaurants”
In June 2012, the Sonoma News described a trip organized by the California Building Bridges Foundation, which served as a raffle prize for the Sonoma Valley Museum of Art:
“’This really opens it up to the community,’ says Kate Eilertsen, museum director. ‘Imagine, a chance for two people to spend a week in Cuba, seeing renowned artists in their studios, visiting the Rum and Fine Arts Museum, and dining in the fabulous home restaurants – all for a $100 ticket.
“Travel plans also include a two-day side trip to 16th-century tiny Trinidad with its Valley of Seventy Sugar Mills and French-inspired Cienfuegos.”
A 2011 San Francisco Chronicle column by former Assembly Speaker Willie Brown described a similarly lavish trip. “Having spent a few days in Havana as a part of a Californians Building Bridges junket,” Brown wrote, “the trip was put together by Darius Anderson, who turns out to be very big in Cuban investments. So big, in fact, that the night he was missing from the group, he was dining with the president.”
However, federal charitable tax documents and the group’s website present a very different mission for the 501(c)3 organization. “The organization’s primary purpose is to assist other charitable organizations in expediting projects, setting priorities and achieving goals,” the group stated as its charitable mission on tax forms. “Californians Building Bridges will develop humanitarian programs that help volunteers and corporate partners alike make a useful connection to a world in need.”
In 2011, the only year for which the organization filed a tax return, it spent $94,586 on travel-related expenses of $136,476 in overall expenses. The organization’s mission also listed as a priority, making “one-time financial grants and donations of supplies and materials to charitable organizations that lack their own resources or do not qualify for assistance through existing agencies and organizations in their region.”
Yet, in 2011, it paid out $0 in domestic and foreign grants, according to the group’s tax return. The organization’s tax return raises questions about whether the group is meeting its tax-exempt mission statement. Contributions to Anderson’s non-profit organization are tax deductible, according to an IRS database.
Conflicting history of group’s operations
According to his biography on the Platinum Advisors website, “Through Californians Building Bridges, Darius founded Project Havana, a humanitarian project dedicated to making a difference in the lives of the Cuban people through providing grants and donations of supplies to charitable organizations that lack their own resources. For the past 10 years, Darius and CBB have led over 50 missions to Cuba.”
Yet, according to the organization’s website, it did not receive a license to legally operate in Cuba until 2011. “On March 29, 2011, Californians Building Bridges (CBB) was granted a license by the United States Office of Foreign Assets Control, License # CT-16606, to travel and engage in transactions directly related to a new humanitarian project in Cuba,” the organization states under “Project Havana,” one of only four pages on its website. Guide Star, the independent organization that tracks nonprofit financial information, lists the organization’s founding and ruling year as 2012.
Only one tax return, filed on October 30, 2012, was publicly available.
According to state disclosure reports, Anderson’s firm is the lobbyist of record for thirty-four government organizations and special interest groups, including Anthem Blue Cross, AT&T, California Thoroughbred Breeders Association, Clear Channel Communications, Station Casinos, LLC, Sutter Health, United Food and Commercial Workers, UPS, and the counties of Alameda, Napa, Orange and San Bernardino.
In 2009, Anderson was voted by state legislators as the “best connected lobbyist,” according to a survey of all 120 legislators conducted by Capitol Weekly. In 2010, Anderson and Platinum Advisors “paid $500,000 to settle claims by New York Atty. Gen. Andrew Cuomo stemming from a yearlong investigation into so-called pay-to-play practices in city and state pension fund investment partnerships,” according to the Los Angeles Times.
Following the settlement, Dan Schnur, then chairman of the state’s Fair Political Practices Commission, appointed Anderson to serve on the Chairman’s Task Force on the Political Reform Act. The appointment was criticized by Common Cause.
The past three consecutive years, Anderson has ranked in Capitol Weekly’s Top 100, the list of the most influential people in state politics.
“Darius Anderson rose to prominence during former Gov. Gray Davis’ administration, handling fund-raising chores, then expanded his contacts and influence dramatically,” read Capitol Weekly’s 2012 profile, when Anderson ranked 76th on the list.
In November 2012, Anderson and former Democratic Rep. Doug Bosco were among a group of investors that purchased the Santa Rosa Press Democrat.
Cuba trip: One of three spring junkets
CalWatchdog.com contacted every member of the state Senate to confirm their whereabouts over the spring holiday.
Thirty-one offices confirmed that their bosses did not participate in any foreign travel over the holiday. Only the offices of four state Senators, Ron Calderon, Hannah-Beth Jackson, Curren Price, Jr. and Rod Wright, would not definitely confirm that their bosses did not participate in any trip to Cuba. Two state Senate seats are vacant.
State Senator Ricardo Lara, D-Bell Gardens, and Senate Republican leader Bob Huff of Diamond Bar were participating in a separate junket to Eastern Europe, which, according to the Los Angeles Times, was “sponsored by the California Foundation on the Environment and the Economy, which is bankrolled by groups lobbying the Legislature, including PG&E, Chevron, the International Brotherhood of Electrical Workers and Southern California Edison, among others.”
CalWatchdog.com was unable to reach all members of the State Assembly.
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