Dave Lister points out campaign violations of City Council
Superb Guest Column in The OregonianFebruary 04
By Dave Lister
When I ran in the 2006 primary for a Portland City Council seat, I recruited one paid campaign worker. After we negotiated the terms and rate of his compensation, I dutifully had my accountant set up federal and state employer ID numbers so I could make the proper tax withholdings from his paychecks. I did this despite the advice of many that I pay him as a contractor. The reason was simple. To pay him as a contractor would have been illegal. Unfortunately, many campaigns and candidates make the choice, either through ignorance or indifference, to pay their staffers illegally. They also get away with it.
The IRS test for paying an employee as a contractor is not only stringent, but clear. If an employee is a contractor, you can tell him or her what to do, but not how to do it. You can't tell him when to come and go. He must provide his own work space and tools. He must provide similar services to other clients. In effect, he works for you when he chooses to and then bills you for it.
A case in point is Portland Mayor Sam Adams' last campaign. An examination of his campaign expenditure reports shows that he paid Jennifer Yocom, who managed his slash-and-burn campaign against Sho Dozono and was subsequently rewarded with a cushy job on his mayoral staff as "arts and culture director," about $30,000. The records also show that his campaign paid nothing to the IRS and nothing to the Oregon Department of Revenue. Ergo, Yocom was paid as a contractor, as were all of Adams' campaign workers. And I seriously doubt that any of them met the IRS test as independent contractors.
Running a legal payroll for a campaign is a lot of extra work and a lot of extra expense. Money that could otherwise be used to promote your message has to go to Social Security, Medicare, state unemployment, federal unemployment, Workers Compensation and TriMet. And as any businessperson knows, the record-keeping is time consuming, and making the proper filings is laborious.
When I watched the city races in 2008, the split between the candidates making the proper filings and those who did not was about 50-50. Amanda Fritz, who was scrupulous with her use of public campaign finance funds, made all the proper withholdings and filings. Other publicly financed candidates handed out five-figure lump-sum payments like candy to friends they'd recruited for their campaigns, with no withholdings whatsoever.
Oregonians just approved two tax measures that they believe will make our state's tax structure more fair. Many, if not most, of the candidates that will be running in the local primaries supported these measures. Isn't it also only fair that they conform to the rules and pay their campaign staffers legally, with all the proper withholdings and tax filings?
Nearly all the electable candidates in the greater Portland area are big supporters of mass transit. Is it appropriate that they evade paying TriMet's payroll tax by improperly defining their workers as contractors? Statewide, all the candidates claim to have great concern for people out of work and our high unemployment rate. Is it appropriate that they evade paying state and federal unemployment taxes by paying their employees as contractors? I don't think so.
I'd like you to join me this election cycle in carefully watching the candidates' expenditure reports. If they're making payments to staffers and not to Oregon and the IRS, then they're breaking the rules. And if they're breaking the rules, do we really want them representing us on public policy matters?
Dave Lister is a small-business owner who served on Portland's Small Business Advisory
Council.
Running a legal payroll for a campaign is a lot of extra work and a lot of extra expense. Money that could otherwise be used to promote your message has to go to Social Security, Medicare, state unemployment, federal unemployment, Workers Compensation and TriMet. And as any businessperson knows, the record-keeping is time consuming, and making the proper filings is laborious.
When I watched the city races in 2008, the split between the candidates making the proper filings and those who did not was about 50-50. Amanda Fritz, who was scrupulous with her use of public campaign finance funds, made all the proper withholdings and filings. Other publicly financed candidates handed out five-figure lump-sum payments like candy to friends they'd recruited for their campaigns, with no withholdings whatsoever.
Oregonians just approved two tax measures that they believe will make our state's tax structure more fair. Many, if not most, of the candidates that will be running in the local primaries supported these measures. Isn't it also only fair that they conform to the rules and pay their campaign staffers legally, with all the proper withholdings and tax filings?
Nearly all the electable candidates in the greater Portland area are big supporters of mass transit. Is it appropriate that they evade paying TriMet's payroll tax by improperly defining their workers as contractors? Statewide, all the candidates claim to have great concern for people out of work and our high unemployment rate. Is it appropriate that they evade paying state and federal unemployment taxes by paying their employees as contractors? I don't think so.
I'd like you to join me this election cycle in carefully watching the candidates' expenditure reports. If they're making payments to staffers and not to Oregon and the IRS, then they're breaking the rules. And if they're breaking the rules, do we really want them representing us on public policy matters?
Dave Lister is a small-business owner who served on Portland's Small Business Advisory
Council.
Exactly my point regarding John DiLorenzo advocating for a sales tax.
Why would any right thinking businessperson want to add to their already mandatory,"laborious" and "time consuming" tasks by becoming UNPAID Sales Tax Collectors?
Collecting, reporting & paying sales taxes is a nightmare for businesspeople, especially those who collect the tax from their customers, spend it on paying bills, and then WHOOPS, come up short and can't pay the state.
The state's ORESTAR system makes it very easy to access the information.
If this practice is as widespread as Mr. Lister claims it is, the only thing more outrageous than the act itself is that we seem to hear precious little news of a candidate getting caught by the authorities for pulling this nonsense.
The practice of political office holders looking at taxes as something only the little people pay is a common and corrosive trait one finds in societies in decline. Politicians become increasingly divorced from the effects of the laws they pass thus causing the people to view government as a racket run for the enrichment of the few.
An employer claiming a lot of independent contractors on a payroll is red flag number one to the taxing authorities. The fact that they have not cracked down on this is absolutely shameful.
WARNING - INSTANCES OF THE SPECIFIC SHOULD NOT BE TAKEN TO MEAN THEY ARE DESCRIPTIONS OF THE GENERAL.
WARNING - USE OF SUCH TERMS AS "A LOT" OR "SEVERAL" SHOULD NOT BE TAKEN AS MEANING THE SAME AS "ALL" OR "EVERY".
Sorry but Lister is merely making a mountain out of a mole hill. Of course this may explain his disastrous campaign six years ago. Probably running out of ways to provide anything of value to the local discussion. The fact that he has picked this silly issue as his new cause celeb is merely indicative of how shallow his well of ideas has become.
Could it be that some campaign staffers are indeed "employees?" Sure. However I have known a lot of campaign managers and not one of the one's that I know could have, at any time, been classified as an "employee" under the IRS standards.
In the past I have personally managed campaigns myself and never once had an office or had "tools" owned by the campaign. I worked from home or on the road. No one ever told me when to come and go and the only thing I had to answer to was whether the job was getting done (As an aside, I was also successful in a number of those campaigns. Which might suggest the problem with DLister's.). I have also been part of a consulting team as recently as last cycle, in which we were part of the decision in the hiring of a campaign manager. The successful "applicant" had their own computer, cell phone, paper (tools) etc... That person was never told when to "come and go" and quite honestly it was THAT person who was telling the candidate when to "come and go."
Every campaign manager that I know owns their own computer, does work from home, comes and goes as they deem necessary for the campaign they are working on and many do indeed work for other campaigns.
Are there some lower level staffers that might be considered "employees?" Oh ya, I'm sure that may happen from time to time. So let's start a massive watch dog movement to make sure that some new college graduate is making his contribution to the Portland tax base. Heck, let's start a new city department for it. Perhaps the taxes on those relative few campaign jobs will cover a third of the cost of the new department's overhead.
Oh wait, I know, a new computer system needs to be purchased to track such violations every two years. We also need to make sure the new furniture in the new department is manufactured with only eco-friendly material.
The new director of this watchdog bureaucracy? Why not Dave Lister?
Did Sam Adam's campaign manager land a cush job at City Hall afterward? Sure, but that happens all the time. So how does THAT make a case against the previous position? The one has no bearing on the other.
It doesn't. It is just Lister's way of taking something that appears unseemly, that has no bearing on one case and try to show the previous as unseemly. A sort of guilt by association.
Is Sam Adams a creepy big government socialist? Sure. But this? This issue is just dumb.
Yip Yip
BTW how many campaigns have you won? I've won a couple. How much money have you raised for conservative causes and candidates? Hint: If it is not over $400k stop now.
Dave Lister #7,
Don't be silly that would not classify her as an employee. There are lots of contractors, in many fields, that will work on only one project for a season in time.
You need more than that.
And again...This is a pressing issue that requires the watchdogs why?
I happen to agree with Dave on this. Everyone whined about Bernie the sleaze bag banging Neil's wife when Goldschmidt was Gov, and then all the crap Bernie did since then. Well, somebody finally did something (hint: it was not a Coyote). People laughed at first, but then Bernie was having to answer some questions.... that led to him being ousted. Same with Clinton.
If Sambla is skirting the law here, could it be possible that Sam is skirting the law elsewhere? If he is written up here, and the authorities look into it and find something, it might just be the straw that breaks Sambla back. And for that everybody (well, except one or two bitter people who really don't like DL) would have lots to thank Lister for!
PS I gotta agree with Coyote on the airline article, though. Not one of Dave's shining momments.
But I have ran businesses for the last thirty years and I know the difference between employees and contractors.
And you and I both know it's not about what I wrote, but the fact that I wrote it.
Yip yip.
However a couple hundred thousand dollars and a shrewd campaign later we delivered the shocker of the decade.
That same cycle I ran the campaign to defeat the Portland measure that was to fund the new Convention Center. I think it was Nelson running that campaign at the time. Happened to win that one too Dave.
Oh wait there was also the Portland Parks bond. That one was pretty special too. Because that was a Fransesconi led tax increase in which the counting went down to the wire. Funny thing was that I thought that when all the late ballots were case we would have lost it. But I got a call from the reporter while they were at the oppositions "victory" party (they thought so too). The place cleared out pretty fast.
So "Davey" if you live in Portland you can probably thank me for the several thousands of dollars that my work has saved you.
Oh and then there was the Matt Lindland primary in which I was up against the campaign prowess of Elaine Franklin. Won that one too.
And Dave here you go again thinking more highly of yourself than need be. You have written plenty of other things that I have easily ignored. So it is not just about the fact that you wrote it. Although the fact that you have been trying really hard to find some relevance in Portland politics for the last six years, AND that this is going to be your next big issue, do combine to make a pretty good funny.
Yip Yip