ALL ABOUT THE BENJAMINS: We Show You The Money in the City Council Race

By Amanda Biers-Melcher

In the interest of transparency, California law requires that candidates for public office disclose certain financial information in filings which are available for review by the public.  

Candidates running for a seat on Burbank’s City Council are required to file scheduled financial reports disclosing any contributions over a hundred dollars, loans made to their campaign and any expenditures on CA Form 460.

Candidates must also disclose any financial interests so voters can be made aware of any potential conflicts of interest on CA Form 700.

I reviewed both of these forms for each of our council candidates to see what I could learn about them. If you’d like to do the same, you can see both the 460 for the quarter ending 6/30 —and 700 forms filed earlier this month — here.

Who’s ahead in the money race?

With $25,183 in his campaign coffers (including a $7,000 loan from the candidate himself), Assistant District Attorney Nick Schultz edged out two-time council candidate Konstantine Anthony — who reported $15,473.

In third place with $6,733.74 was Tamala Takahashi, the only candidate to score a star-studded contribution (with Mayim Bialik of “Blossom” and “Big Bang Theory” fame pitching in the maximum allowed amount, $500). Fifteen hundred of Takahashi’s take was a loan the candidate made to her own campaign.

Only three other candidates reported contributions: Linda Bessin added $6,019.72 to her war chest; incumbent Tim Murphy posted $2,770; and, while real estate developer Paul Herman did not collect any contributions, he did loan his campaign $2,500.

(Note – donations of under $100 are not required to be itemized on Form 460 – although some candidates did include them and I counted them in their totals).

Take it to the Limit

By law, donations to campaigns from any individual — including the candidate himself — are capped at $500. The two financial front runners — Nick Schulttz and Konstantine Anthony showed themselves a little love last quarter, kicking in the $500 maximum contribution.

Linda Bessin. . .took things one step further. 

If you take a look at page 4 of her CA Form 460, you’ll see the top line of Schedule A indicates the candidate made a $1,500 contribution to “Friends of Linda Bessin” on 4/29/2020. 

That’s three times the allowed amount which is . . .strange.

Burbank Municipal Code says “ No person shall make to any candidate and/or the controlled committee of such a candidate and no such candidate and/or the candidate’s controlled committee shall accept from a person a contribution or contributions totaling more than five hundred dollars ($500.00) for each election in which the candidate is on the ballot or is a write-in candidate.”

Hmmmm. . . Very interesting

By law, every elected official and public employee who makes or influences governmental decisions is required to submit a Statement of Economic Interest, also known as the Form 700. 

The Form 700 serves two purposes — it provides the public with enough information about an official’s personal financial interests to police that official and make sure they’re acting in the public’s interest and not their own — and identifies potential conflicts of interest so the official can recuse him or herself when necessary and abstain from making discussion or decision-making. 

In Burbank City Council races — at least in recent years — these forms are typically short and reveal few surprises. They list the candidate’s source of income — usually from a job or business — both theirs and their spouse’s — and maybe a few stock or mutual fund holdings.

The exception, in this race, is the Statement of Economic Interest filed by Linda Bessin.

You can look at it Here

Not only is it a whopping thirty-six pages long, it lists investments in an impressive array of stocks and, most significantly — a partnership stake in a New York City-based hedge fund, Bloom Tree Fund Q.P, L.P.  

According to the hedge fund database whalewatcher.com, shares in Amazon make up the largest percentage of this fund’s portfolio. Bessin’s partnership in the fund nets this self-described retired claims adjuster more than a hundred thousand dollars a year (although we can’t determine, from the disclosure form, how much more).

Now, there’s no shame in savvy investing, and Amazon certainly seems like a smart investment given its record-setting profits as of late.. But, in my opinion, voters should be cognizant of the fact that the behemoth online bookseller may soon become a major player in the Burbank landscape as the company solidifies plans to lease most of the Avion complex adjacent to the airport and use it as a distribution center. 

Add to that Amazon’s stated intention of boosting its Amazon Air delivery service, to compete with FedEx and UPS,  and the fact that such a business plan would likely seek to capitalize on the proximity of its distribution center to Burbank’s soon-to-be-expanded airport. — and you can see why this particular financial arrangement could become problematic.

More Money Matters

According to the City Clerk, only one city council candidate took advantage of a provision in the law that allows him or her to postpone payment for the cost of printing and mailing Candidate Statements — a $3,200 expense — by requesting a waiver on the basis of indigence.

The clerk granted this relief to Konstantine Anthony — who, on his Form 700, reported his rideshare business and money derived from work as an In-Home Supportive Services Provider each provide him with less than ten thousand dollars in income. He is still, according to the Burbank Municipal Code, responsible for paying the money after the election and may use personal or campaign funds to do so.

It is interesting to note that in months prior to requesting that taxpayers front him thirty-two hundred dollars, Anthony’s financial position allowed him to make a nine thousand dollar loan to the Burbank Tenants Rights Committee, according to the ballot committee’s disclosres. 

Also, according to his campaign manager’s claims on social media, the candidate has accumulated more than $20,000 in campaign contributions — if you also count those under one hundred dollars and not reported on a Form 460 — and has his sights set on collecting forty to forty-five thousand dollars by November 3rd. 

To make her determination, however, Burbank Municipal Code required the City Clerk to review only a “Statement of Financial Worth” — on which the candidate must disclose his income, personal property and real estate holdings and pending financial obligations — and the most recent federal tax statement, without investigating further.

Konstantine Anthony was required to sign a promissory note with the city and agree to a payment plan for reimbursing taxpayers for the expenditure on behalf of his campaign. In other words, it is a loan, not a gift.

Coming Soon!

Does “Dark Money” belong in Burbank politics? We investigate how tclose financial ties between a candidate and a non-profit that can legally keep its donors secret might play a role in the City Council race.

12 thoughts on “ALL ABOUT THE BENJAMINS: We Show You The Money in the City Council Race

  1. Hi Amanda – I think I should comment on your post to clarify a few things.
    You failed to include a very important section of the Burbank Municipal Code that answers your question about my own contributions to my campaign. The Burbank Municipal Code that you referred to, # 2-3-209, discusses campaign loans, and it also contains this statement:

    “Nothing in this section shall prohibit a candidate from making unlimited contributions to the candidate’s campaign.”

    You might want to include this fact in your commentary, as this is not “strange”

    Also, I cashed out of Bloom Tree at the beginning of this year and closed my account with them. I was not happy about the investments being made. As you say, there is no shame in investing but I am concerned about responsible investing as well. So I am happy to let you know that I no longer have this “problematic” investment.

    Please feel free to contact me at linda@bessin4burbank.com and I would be more than happy to discuss and clarify the information in my Form 700.

    Linda Bessin

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    1. If that $1,500 payment was a loan it should not have been listed in that particular section. There is another part of the form where candidates list loans. I confirmed with the clerk that the limit for donations is $500 per individual. If you look at, for example, Nick Schultz’s 460, he loaned his campaign $7,000 and accurately listed it in the “loans” section. There is a link to your filing where you can see your $1500 contribution on the top of page 4. Maybe you can file an amendment.

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      1. I discussed this situation directly with Zizette Mullins. My contribution to my campaign is a donation, not a loan. The other candidates chose to make loans to their campaigns as I guess they want to be paid back by their campaigns. I feel that if people donate to my campaign, it is not their intention that their money would go to pay me back. Every cent donated, either by me or by my supporters, will go towards funding campaign efforts. Burbank Code and State law both say a candidate can donate an unlimited amount to their own campaign. I have savings that I am using for this purpose (didn’t take a vacation this year for obvious reasons) and I feel strongly that if my friends and neighbors are willing to donate to show their support during these difficult times, without being paid back, then I should do the same. You will see in the next filing that I have continued to make donations to my campaign. All of this is within the law. Again, happy to answer any questions that you have.

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    2. So I took a look at this section again — it says that loans are subject to the same limits as contributions unless it is the candidate making the loan in which case they can loan their campaign as much as they want. But they still have to adhere to the other two requirements in the section — B and C — which are different for loans and donations. Notice the other candidates disclose the terms of their loans on their 460s.

      2-3-209: LOANS:
      A. Except as provided in subsection D of this Section, a loan shall be considered a contribution from the maker and the guarantor of the loan and shall be subject to the contribution limitations of this Article.

      B. Every loan to a candidate or the candidate’s controlled committee shall be by written agreement and such written agreement shall be filed with the candidate’s or committee’s campaign statement on which the loan is first reported.

      C. The proceeds of a loan made to a candidate by a commercial lending institution in the regular course of business on the same terms available to members of the public and which is secured or guaranteed shall not be subject to the contribution limitations of this Article.

      D. During the election cycle, no candidate shall personally make loans to the candidate’s campaign or the candidate’s committee which total more than twenty-five thousand dollars ($25,000.00).

      E. Extensions of credit (other than loans pursuant to subsections C and D of this section) for a period of more than thirty (30) days are subject to the contribution limitations of this Article.

      F. Nothing in this section shall prohibit a candidate from making unlimited contributions to the candidate’s campaign. [Added by Ord. No. 20-3,933, eff. 4/17/20.]

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  2. I reviewed this section in detail with Zizette and my campaign treasurer also reviewed the Burbank and State laws in detail. All responses that we received from the City Clerk and FPPC were that what I am doing is well within the law. If you go back and look at past filings from previous elections, there were City Council candidates who did exactly what I did, they donated over the limit to their own campaigns. I researched this thoroughly, and, again, discussed it at length with our City Clerk. The very last thing I would want is to be inappropriate in my donations or my filings. I appreciate that you are being thorough as well.

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    1. It seems inconsistent that one section says quite clearly that no individual can exceed the $500 limit — and then in a section titled “loans” which says that a loan is a type of contribution which is subject to different requirements and limits unless that kind of contribution (again, under the section called “loans”) is made by the candidate. Candidates can forgive loans which makes them, in effect, donations, but the language here does not support the interpretation that you suggest. Perhaps the council should revisit this and rewrite the language so it is not contradictory.

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      1. That sounds like a good idea to me. We spent a lot of time and effort getting this clarified. But it really is the same rule with the FPPC as well. They have a long section about the limits on donations, then state, if you are a candidate you have no limit.

        Liked by 1 person

  3. Good afternoon, Amanda. I’m Linda Bessin’s campaign treasurer, and the person responsible for preparing and submitting our required documents, including the Form 460 you refer to in your article. I can assure you as one with accounting and business analysis experience, I go to great lengths to ensure our campaign complies with applicable state and local election law – primarily because compliance is the law, but also because I serve Ms. Bessin and do my best to make sure there’s nothing that will detract from her position and image as a candidate. Linda sought clarification in an email addressed not only to City Clerk Mullins, but also cc’d to City Attorney Amy Albano. Ms Mullins replied directly to Ms. Bessin with the conformation that, in fact, under Burbank election code candidates are allowed to make unlimited contributions to their own campaigns (Ref: Sec. 2-3-209(F)). I take pride in the accuracy and clarity of what I submitted in July. If you look closely at other Forms 460 submitted by other candidates, you may find that at least one is darn near illegible and not filled out correctly, which I think would raise a bigger red flag than anything on Ms. Bessin’s campaign docs. Furthermore, Burbank election code Sec 2-3-209(B) states that “(e)very loan to a candidate or the candidate’s controlled committee shall be by written agreement and such written agreement shall be filed with the candidate’s or committee’s campaign statement on which the loan is first reported.” I can find no such agreements on file for any candidates declaring loans so far on the City Clerk’s website link to campaign disclosures. A written agreement is a formal signed (and oftentimes notarized) document and is not the same as a disclosure of terms on the Form 460. To me it seems this would constitute a lapse of great concern if none were submitted. You can contact me directly regarding any question or concern.

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    1. Thank you, yes, Linda said (in the comments above yours) that this is what the City Clerk says. In my opinion, the ordinance is written in a way that invites confusion. If it is referring to contributions and not loans — and means to say candidates are not subjected to contribution limits — it should indicate that after the section that says individual contributions are capped at $500 and not under the sub heading “Loans.” As for your point that candidate loan agreements which are required to be filed with the clerk alongside the disclosure forms, I think it absolutely makes sense that those documents should be available, on the web site, for public viewing whether we’re talking about loans to the candidate’s campaigns or loans made to ballot measure committees. I am not sure what the requirements are as far as which documents the clerk needs to provides links to — but maybe you should ask her which section of the code governs that. Also, if they were filed, maybe a FOIA request would enable you to take a look at them. I would certainly support an ordinance requiring these documents to be made available for public viewing — maybe that is something to suggest to the City Council. I am guessing that because the disclosure forms provide the particulars about the loan — and these forms are signed under penalty of perjury — a determination was made that the actual loan agreement documents don’t need to be made public. But that’s just a guess. And I am not sure if that’s the right call. I have a lot of questions about loans made to a ballot committee measure and am exploring that right now.

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      1. In the interest of transparency and disclosure, it makes sense to me, too, Amanda, to have all these docs available for public review. Loan docs are especially important. Say, for example, a candidate makes a loan to herself at a rate of interest that would be significantly higher than the current market rate. When repaying the loan to herself with campaign funds, she’s effectively found a way to legitimately transfer campaign funds to herself, for eventual personal use, and writing it off as a campaign expense. In any other scheme, this would be considered a form of money laundering, at least in the sense that state campaign reform legislation strictly prohibits the direct use of campaign monies for personal expense. All documentation regarding a campaign should be out in the open for public scrutiny – including analysis by one’s opponents for any violation that would provide unfair advantage. As for Zizette Mullins’ ruling in Ms. Bessin’s case, we had already filed our Form 460 as is when the city clerk’s office contacted us stating that her donations to her campaign should be listed as loans rather than donations. In response, we cited Sec.2-3-209(F) and cc’d the city attorney in case Ms. Albano had a legal opinion that would clarify. Ms. Mullins almost immediately got back to us that in fact our reading of the election code was correct, and she let our documents stand. I intend to continue to report Ms. Bessin’s contributions to her campaign this way, out of respect for the accounting standard of consistency in reporting. As I indicated earlier, some other candidate’s forms are so sloppily prepared that the only way they could be worse would be if they were written in crayon. This leads me to two conclusions: 1) Our City Clerk really doesn’t pay attention to what’s submitted to her office and apparently doesn’t care, as long as she receives SOMETHING; and (2) if that is in fact the case, a professional such as myself is putting way more attention and care into proper documentation prep and compliance than I probably should. Perhaps a good topic for your column in the near future would be to look into who exactly is minding the store at the city clerk’s office with regard to required election filings. Respectfully, John Echeto

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      2. Oh, that’s very interesting — that there was some back and forth on this. Agree that looking at the preparation of the forms can be illuminating in its own way and hope people take the time to take a look. Please reach out if you see anything unusual on any candidate filings moving forward because I welcome the extra eye. If you have time you might look at the disclosures for the ballot measure. I’d be interested in your insight on the loans listed there and what to look out for in terms of communication and financial relations between candidates and the committees they have ties to.

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  4. Amanda: you have my campaign email. You can always contact me directly that way. We can discuss an analysis, if you’d like.

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