Capitol Chronicle

Whose Money Is It?

The prevailing mantra of the anti-government brigade -- led in chorus by their tax-burning Bush in D.C. -- is that "It's your money," and the government shouldn't tell you what to do with it. Yet in post-Bush Austin, state employees are apparently about to be told to whom they can donate -- not their tax dollars, but their own charitable contributions.

At issue is the State Employees Charitable Campaign (SECC), the annual fund drive designed to encourage state employees to allow deductions from their paychecks to be contributed to various charitable organizations. If you work for an employer of any size, you know the drill: You get a form listing all the organizations eligible for support, and you check off the groups you want to earmark for your contributions. Sometimes there's a kickoff rally or an information seminar where you can learn more about the organizations and their programs.

State employees have participated in their own campaign since 1994 (prior to that, the Lege balked at any paycheck deductions, fearing they might be used to support -- gasp! -- unions), and employees contribute to hundreds of groups represented through the United Way and a half-dozen other fundraising federations -- America's Charities, Earth Share of Texas, Another Way Texas Shares, and so on. Note again: The funds to be donated are not tax dollars -- this is the employees' own money, simply administered by the state through payroll.

The only restrictions are that the groups cannot use the SECC money for "lobbying or litigation" and must provide "direct or indirect" health or human services, which has traditionally meant a very wide variety of activities that, in the words of the law, "demonstrably benefit residents of this state." Most 501(c)3 nonprofits (under IRS rules) readily meet those standards, and in the past the practice has been that nonprofits in good standing with an eligible federation have generally been approved.

Until this year, that is. The State Policy Committee, which reviews the applications of the charities, comprises state employees appointed by the governor, the lieutenant governor, and the comptroller. When the committee met last month to consider applications for the fall 2001 campaign, numerous groups were abruptly rejected, generally on the mixed grounds that they are either suspected of "lobbying and litigating" with their SECC funds, or else of not providing "health and human services" -- as narrowly defined by a majority of the current committee members. The rejections struck hardest against environmental organizations (28 of the 50 applications of groups within Earth Share of Texas were rejected, including Environmental Defense, Public Citizen, Save Barton Creek Association, the SEED Coalition, and the Sierra Club Foundation), and organizations that work to support abortion rights, civil rights, or other causes that might generally be deemed "liberal." Six of 19 applicants of Another Way Texas Shares were rejected: the Immigrant and Refugee Rights Project, Texans for Gun Safety, Texas Abortion and Reproduction Rights Education Fund, the Texas Civil Rights Project, the Texas Family Planning Association, and Texas Rural Legal Aid.

Hmmm. That list alone is enough to make even a casual observer suspect that Kae McLaughlin of TARAL might have a case when she said of the committee's rejections, "They're definitely targeting the progressive side of the spectrum." The rejected groups can appeal the decisions -- to the same committee.


Strict Constructionists

SPC acting chair John Hofmann works for the governor on legislative matters, and is in his fourth year of reviewing SECC applications. Hofmann insists that any implication the committee based its decisions on arbitrary or ideological grounds is inaccurate, and that the committee must "protect" state employees from contributing to groups that aren't legally eligible. Hofmann says the reviewing process has simply "matured" and the committee is now holding applications to a high standard. Without citing particular groups, Hofmann says that while he generally didn't agree with committee votes to reject on lobbying and litigation grounds, he would have voted against several because they don't provide "health and human services." Hofmann believes the law dictates a narrow interpretation of support for human health-related matters (e.g., "providing potable water for colonias"), not the more generous "indirect" benefits used heretofore. "The folks on the receiving end of the negative decisions," Hofmann said, "would like to interpret the law that way." He said one Catholic pro-life group (which Hofmann couldn't name, but is presumably Catholics United for Life) was also rejected on lobbying and litigation grounds. "In my judgment," said Diane Fanning of Another Way Texas Shares, "one red herring can easily bloody the waters."

Committee member Mary Banda (employed in the attorney general's McAllen office) said she could not explain the committee's actions, because in previous years many of the same organizations received approval. "I work with a lot of these charities," said Banda, "and I really don't see anything wrong with some of the ones that have been denied. ... I take their applications at face value, and when they tell me they're not going to use the Campaign money for lobbying or litigation, I believe them."

Hofmann's explanation also doesn't ring true with Max Woodfin, director of Earth Share of Texas, who believes every group on his list does meet the health and human services standard. "For example, the committee rejected Wildlife Rescue and Rehabilitation," said Woodfin. "I guess they never heard of rabies or distemper." Kae McLaughlin said the TARAL Education Fund provides abortion support to low-income women and statewide clinic information on abortion and reproductive services. Hofmann responds that if these or other groups come back to the committee with revised information, the rejections may well be reversed. "I'm an elk hunter, but I wouldn't vote to approve the Rocky Mountain Elk Foundation just because it supports biodiversity," Hofmann said. "I don't believe biodiversity in and of itself is a 'health and human service' as defined in the statute."


Politically Incorrect?

Yet it seems likely that strict construction of the law is not the only issue. Reportedly, certain members of the committee -- in particular the three members appointed by Comptroller Carole Keeton Rylander -- seemed determined from the outset to find ways to reject applications. Richard Munisteri, Rylander's general counsel, initially proposed eliminating the Earth Share federation from the campaign entirely, on the basis of his jaundiced reading of one historical reference on the federation's Web site. Several observers got the impression that Munisteri had targeted environmental and progressive groups for exclusion, and was simply looking for technical reasons to reject their applications -- a project in which he was joined by the other two Rylander appointees, John Barr and Lisa Minton. Munisteri and the others did not return calls requesting comment, but a spokesman for the comptroller, Will Holford, said that in his view the committee's decisions were simply "democracy in action." "I can't speak for the members," said Holford, "but it's my understanding that they are interpreting the statute in a rather literal way." (In 1998, Rylander reportedly promised an "investigation" of the SECC, but later announced that the eligible charities were indeed following the law.)

Committee members did not want to judge their colleagues' motives, but if the critics' charges are true, it wouldn't be the first time the comptroller's office was caught subjecting state employees to ideological litmus tests. When she first took office, Rylander began screening new job applicants with a form designed (by the right-wing Texas Public Policy Foundation) to weed out the ideologically impure (that is, anybody to the left of far-right Rylander patron James Leininger). The inevitable bad publicity forced her to retreat, at least publicly. Now, Rylander's henchmen appear to be determined to prevent state employees from spending their own money to support any cause that doesn't meet the hard right's rigid standards of political correctness.

Each rejected group stands to lose precious donations of anywhere from several hundred to several thousand dollars, as well as the unique opportunity to reach out to state employees about the beneficial causes the groups support. "For each group it means different things," said Dianne Fanning, "and it also closes out a venue -- an opportunity to talk to the employees about the work that they are doing.

"The biggest concern to me," Fanning added, "is that this should be a fair and equitable campaign. I don't think that is being honored."

Once they receive their official notification, rejected groups have 10 business days to appeal the decision to the SPC, scheduled to meet again in early May. Most groups plan to appeal, and Max Woodfin says Earth Share has retained legal counsel to fight the rejections. In the meantime, state employees might wish to inquire with the governor, the lieutenant governor, and -- most especially -- the comptroller about why their appointees insist on taking such an uncharitable view of employee donations.

You might want to remind them politely: It's your money.

Editor's Note

On Wednesday, just before this article went to press, Comptroller Carole Keeton Rylander issued the following statement:

"I want the organizations that have historically been approved for the campaign to continue to receive these charitable donations. It has been brought to my attention that there were some glitches in the application process. I am sure they will be resolved at the next board meeting. I believe state employees should be able to contribute to the charity of their choice."

According to spokesman Mark Sanders, several groups which had been rejected by the State Policy Committee had brought the matter to the attention of the comptroller's office, and Rylander issued this statement in response to their concerns.

State employees may wish to make certain that the committee shares Ms. Rylander's remarkable change of heart.

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