Following is a letter to the editor of the February 25th Weekly Standard about an editorial on a bill that passed the California Assembly. The same argument was made in a Wall Street Journal editorial on February 4th.
The letter is self explanatory. The Greenlining Institute has been a client of mine for expert witness work for over a decade. The editorial arguments against the California Assembly legislation is that the bill is (1) too politically correct, (2) unnecessary and (3) will drive foundations out of California.
Here is my letter:
"I am a longtime reader and supporter of the Weekly Standard and a friend of the Greenlining Institute that is blamed in your editorial for the California Assembly bill to require charitable foundations with assets over $.25 billion to report on the status of minorities on their boards, staff and among grant recipients. The Weekly Standard is on the wrong side of this battle. You should always give priority to transparency for investors and taxpayers. This is precisely the issue in this case; taxpayer transparency.
If the editorial writer (M. Continetti) had described the subject correctly, the issue for Weekly Standard
readers would have been clear. What is being made transparent by the
proposed California law are public non-profit investment portfolios
that pay no State or Federal taxes on their portfolio revenue because
they ostensibly give their money to charity for the public benefit.
The First Amendment protects religious orders from taxes. The First Amendment does not protect privately operated investment portfolio's that have no religious purpose. When these portfolios are tax exempt they have a responsibility to the public that exempts them from taxes. If any investment portfolio wishes to pay taxes on their revenues, they can do whatever they want with the revenues and they can run their operation in any manner they wish. If they choose tax exemption they should expect some public scrutiny.
My fellow
Weekly Standard readers also
need to understand our own interests in restraining tax subsidized
investment portfolios from being used as 'Old Boys Clubs.' One of the
great achievements of America in the past 40 years has been to replace
the 'private club on top of the hill' and the 'Social Registers of the
birth-right WASP aristocracies' with a meritocratic society. This has been
a source of American vigor and free market success since the early
1960s.
Most investment portfolios that call themselves public charities are in fact self-dealing 'Old Boys Clubs' that give most of their money to associations, schools, colleges and social organizations that are arcane relics of the sad WASP era.
Transparency in public charitable foundations over $.25 billion in size is a long over-due movement to keep America on the meritocratic pro-commerce track. I believe that Weekly Standard readers will understand the value of this California Assembly legislation when it is fairly described and understood."