Is Ed Lazere flouting federal tax-exemption laws that prohibit the involvement of nonprofit organizations in political activities, including endorsing any candidate in an election? Is he skirting local campaign finance laws he championed during recent rounds of reform? Those are some of the questions and concerns TBR heard as she talked, privately and publicly, with people around the District of Columbia about the surprising decision by the executive director of the DC Fiscal Policy Institute (DCFPI) to launch a bid against incumbent DC Council Chairman Phil Mendelson.
A DC resident for 30 years, Lazere lives in Ward 5’s Brookland neighborhood with his wife, who is African American, and their two sons. He has led DCFPI since 2001 when it was established under the auspices of the Center on Budget and Policy Priorities. According to DCFPI's website, it “conducts research and public education on budget and tax issues in the District of Columbia, with a particular emphasis on issues that affect low-and-moderate income residents.”
Lazere said he has taken a leave of absence to mount his campaign. What does that mean exactly, since he has not retired or resigned? “It just means that I can keep my health insurance, which I pay for,” he told TBR. Technically, he remains a DCFPI employee, although he is not receiving a salary. Could that last bit be interpreted as a violation of federal nonprofit laws by the DCFPI?
“I think it’s something BEGA [Board of Ethics and Government Accountability] or the inspector general should look at,” said one civic leader who, like a few others TBR spoke with, requested anonymity.
Lazere declined to comment on the issue. “I think you should get a comment from someone who works at the organization, not from me,” he said
Shannon Buckingham, vice president for communications and external affairs at the Center on Budget and Policy Priorities, said the organization takes “very seriously our compliance with the legal requirements that apply to 501c3 organizations.” She added that “employees may lawfully participate in electoral activity as long as it is on their personal time, in their personal capacity, and does not use any Center resources.
“Consistent with this policy Ed Lazere began a leave of absence on Monday January 22,” added Buckingham.
Lazere could return to his post should he lose the primary election. That’s exactly what Elissa Silverman did when she lost her initial bid to join the council in 2012. She returned to her post as policy analyst at the Fiscal Policy Institute before finally resigning to run, yet again, for the council. She won that race as an Independent in 2014, and is up for re-election in November.
Asked about his intentions should he lose, Lazere said, “I don’t know. Right now I’m working on winning the June [Democratic] Primary.”
The Primary election in the District will be held on June 19, 2018. In addition to Mendelson, incumbent council members vying for Democratic nominations are Ward 1’s Brianne Nadeau, Ward 3’s Mary Cheh, Ward 5’s Kenyan McDuffie, Ward 6’s Charles Allen and At-large member Anita Bonds.
Adding fuel to the worries of some residents about Lazere’s ethics is the fact that many of the people in the nonprofit community with whom he worked made contributions to his campaign, according to his January 31 finance report filed with the DC Office of Campaign Finance. Teresa Lamaster of the Center of Budget and Policy Priorities, for example, contributed $250; Elizabeth Schott also from the Center contributed, as did Stacy Dean, who threw in $500. Katharine Richards gave $1500..
“I made that contribution as a private citizen,” Richards told TBR earlier this week. Buckingham echoed a similar position, noting that Center staff “are free to contribute to any political campaign they choose using their personal resources.”
Interestingly, Richards had been a policy analyst at the DCFPI as recently as 2011. She later became an advisor to Vice President Joseph Biden. She left that job to manage Silverman’s 2014 council race. When Silverman won, Richards stayed on as chief of staff. Richards said she left that council post about a year ago. She was writing law reports until early January 2018, when she returned to DCFPI as its acting executive director.
It’s easy to understand why some residents are beginning to feel that the Fiscal Policy Institute is attempting a quiet takeover of the government.
Lazere defended his fundraising within the nonprofit community which, according to his finance report, seemed to have begun in earnest on January 24. He disputed any claims that he may have left with donor files to assist his political fundraising. “I reached out to people I know who share my values and my goals,” he told TBR. He said he also received contributions from family members, many who live outside the District. “I knew I needed to raise a lot of money if I were to be considered a serious candidate.”
Mendelson declined to comment about the controversy surrounding Lazere’s employment and fundraising among nonprofits.”
Lazere pushed back on TBR’s assertion that his extensive solicitation within the nonprofit community seemed similar to what he and others complained the business community has done: pulled multiple donations from employees and relatives of business owners. “Developers give money in part because they are protecting their financial interests,” continued Lazere. “Nonprofits are not giving me large checks for themselves. They are acting in the interest of the city."
He made no mention of the fact that each year dozens of nonprofit organizations make tens of millions of dollars or more from government contracts derived from public policy proposals or programs for which they have lobbied.
Bretton Wolfingbarger, head of the city’s Office of Ethics and Government Accountability, said he had not seen Lazere’s report and could not comment on whether there had been any violations. Tax attorneys with the Office of the Chief Financial Officer said through the agency’s spokesperson that District law “prohibits an organization that participates in, or intervenes in, any political campaign on behalf of any candidate for public office from qualifying for income tax exemption as a charitable organization.” Wesley Williams, public information officer for the DC Office of Campaign Finance noted that under the city code, a business could include nonprofit corporations and self-employed individuals. Moreover, a business and its affiliates share “a single contribution limit.”
No one has taken a look at the employment arrangement between Lazere and the Fiscal Policy Institute. If it is providing Lazere's health insurance at a rate lower than he would pay on the market could that be perceived as a contribution? If only to ally the public's concerns, the Office of Campaign Finance may want to take a closer look to ensure Lazere's campaign hasn't crossed any ethical line.
Part 2: Why is Ed Lazere running and can he beat incumbent Phil Mendelson?