Legislators take secret trip to Cuba with Sacramento lobbyist

Legislators take secret trip to Cuba with Sacramento lobbyist
April 5, 2013
By John Hrabe and Katy Grimes
Ag Day 2013.thumbnail

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 order to comply with the State Department's ban on travel to Cuba,
the trip was arranged by Californians Building Bridges, a shadowy
non-profit organization controlled by Anderson.

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.
Well-connected lobbyists

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.

http://www.calwatchdog.com/2013/04/05/legislators-secret-trip-to-cuba-with-sacramento-lobbyist/