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From the Publisher

June 9, 2005


Follow the yellow brick road


I LOVE THE SCENE IN THE WIZARD OF OZ where the curtain is ripped back and the wizard turns out to be just a gray-haired guy with an inflated notion of self-importance.

As we go to press Tuesday, the Samoa Cookhouse is preparing for the Taxpayers League monthly lunch gathering tomorrow at 11:45 a.m. The manager better be ordering extra vittles, because there's going to be a crowd. Not the usual eight or 10 who show up other months, but an angry group of Taxpayers League members and other community leaders who want answers.

Now we may actually learn who is really behind the curtain called the Taxpayers League lawsuit that put the brakes on two waterfront developments -- developments that have been in the works since 1995 and 2001.

First, a taxpayers league is a good idea. We all can use a watchdog group to sniff around and ferret out wasteful government spending. Generally we can count on them to oppose new taxes, or taxes disguised as fees, and that's not necessarily a bad thing either.

Second, just for a moment let's assume the assertions in this lawsuit are correct because they may well be: (1) That two members of the Redevelopment Advisory Board in Eureka, Delores Vellutini and Glenn Goldan, who both have been on the RAB board since 1994, subsequently came up with waterfront projects they promised to build if the city sold them property at a certain price (Vellutini in 1995 and Goldan in 2001). (2) That RAB's track record as an advisory board shows most of its recommendations -- 48 of 50 -- are approved by the Redevelopment Agency/City Council. However, (3) even though the two developers did not participate in any discussions related to nor did they vote on their own projects, they still had an inherent conflict of interest and the projects should be voided.

The legal nut of this lawsuit is a California code that says, "when one makes recommendations that are routinely followed, one is treated as the contracting party for the purpose of conflict of interest laws ."

My question is, where has the league been for 10 years?

All the progress to date, remember, has come with transparency of public scrutiny. There have been unlimited opportunities to comment. I am more familiar with the Vellutini project, which is finally set to break ground in the fall. In all those public meetings on this project, which we've written about several times, where are the letters of protest from the Taxpayers League saying, "Hey, maybe Delores shouldn't be on the RAB board at all because she has a project?" I remember Delores purposely not attending some meetings because the RAB was working on how the city might help get that particular blighted property back on to the tax rolls. And I know that when the C Street hotel project fell apart and the RAB board began to develop a new request for proposal, Glenn said he could not participate even in the planning because there was a chance he might want to submit a project someday.

Here is what we do know about the Taxpayers League: It has undergone a transformation recently, and not for the good. For instance, we just learned (as of noon on Tuesday) that the league board of directors revised its bylaws a few years back and neglected to tell its own members or even to post the new bylaws on its website. The old bylaws were still posted -- and presumed valid -- on Tuesday morning.

What is missing from the new bylaws? Section 3, which reads: "The league shall work constructively with public officials in overcoming difficulties rather than censure them for mistakes."

So, the league shall no longer work constructively with public officials and others? "Let's just surprise them with a lawsuit when those developers are ready to break ground!"

Last year this same board decided to let itself be used to run a "No on Measure L" campaign that was ultimately successful. Maybe Measure L should have been defeated anyway. Maybe it was a tax on the poor, an angle to the story that was overlooked. But league directors repeatedly stonewalled requests for information about who was responsible for paying for the $22,800 media blitz that helped defeat Measure L, they neglected to file proper state reports in a timely manner and then, we believe, they knowingly misrepresented facts in the report.

The amount -- $22,800 to defeat Measure L -- was the largest single item in the league's annual budget of $24,312 -- not exactly hard-to-trace petty cash for even the most casual of bookkeepers. But in a Nov. 15, 2004 filing of California Form 460, League Executive Director Judy Billingsly wrote: "We have no formal accounting system or separate accounts that would allow for the tracking of individual dues or donations, and no way of tying individual moneys to the Vote L No campaign.

Really? I hope the board of directors, who voted to approve Billingsly's statement before she filed it, did not perjure themselves. The case before the state Fair Political Practices Commission is still open and unresolved.

Here is what we have learned since the beginning of the year regarding the defeated Measure L: One member of the Eureka Chamber of Commerce admitted that he and others were directly solicited to contribute to the No on Measure L and to write checks to the Taxpayers League. His advice to me was, "follow the money." Who would be hurt by an increase in sales tax? Who sells big ticket items? Car dealers? So I went to Gary Barker (Northcoast Auto) and here is what he said on March 8:

"Hell yes. I gave them $1,000. It [Measure L] was a negative thing for this county. It's a harvest on the poor and they don't need another tax. We have families living on $25,000 a year here in Humboldt. They've got rent, basic necessities, utilities, household stuff -- and they [the government] want $600 more from them when they have to replace their car?"

He was on the record. So was Harvey Harper (Harper Motors) who told me he worries that our elected officials, with very few exceptions, do not come from a business background. "It's not that they are antibusiness. They're just all pretty liberal and not too interested in business. We can't all live on grants. You have to generate taxes." Harvey said he not only gave $14,000 to the No on L campaign, he made quite a few phone calls personally.

You may not agree with these two men, but they acted honorably and admitted their involvement. Other as-yet unnamed donors brought the amount up to $22,800.

My point is, by checking their deposits, I'm sure the league directors can provide us with the names of the others who contributed directly to defeat Measure L. It's time for honesty and transparency in our 401(C)4 nonprofits as well as government.

As to the lawsuit, does this really boil down to just a few disgruntled directors (one of them, President Leo Sears) who don't believe in redevelopment? If that's the case, it's also time for the league members to take back their organization from the few who have abused their power.


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