This week, Forbes dropped a bombshell on Democrat Brad Avakian, Oregon’s labor commissioner who is running for secretary of state.
The article claims that Avakian has regularly commingled his official duties with his campaigns for his current position for the secretary of state post he is seeking. In particular, it is alleged that three employees at Oregon’s Bureau of Labor and Industries headed by Avakian, worked on his political campaigns while on-the-clock at BOLI. It also alleges that the BOLI employees, Charlie Burr, Jesse Bontecou, and Paloma Sparks were paid bonuses out of Avakian’s campaign warchest.
Burr received payments totaling of $3,000, Bontecou $1,000 and Sparks $500 in payments from the Committee to Elect Brad Avakian. In The Oregonian it states that he, Bontecou, and Sparks “volunteered” for Avakian’s campaign in 2015 and 2016. Webster provides a simple definition of volunteer as “a person who does work without getting paid to do it.”
As Labor Commissioner, Avakian has a reputation of hostility toward independent contractors, preferring that workers be classified as employees subject to the BOLI oversight. Given his stand on the contractor vs. employee issue, it seems clear that Burr, Bontecou, and Sparks were/are, in fact, employees of the Committee to Elect Brad Avakian.
The cash payments indicate that Burr, Bontecou, and Sparks were not “volunteers” for the Committee to Elect Brad Avakian.
Brad Pyle, Avakian’s campaign manager, says payments from the Committee to Elect Brad Avakian, to the three the BOLI employees in 2014 and 2015 were “fairly routine” holiday bonuses. Independent contractors are rarely paid a holiday bonus. BOLI, however, describes a “Christmas bonus for all employees” as a discretionary bonus. Notice it says employees, not contractors.
Pyle also says the bonuses Burr, Bontecou, and Sparks received in 2014 and 2015 were in appreciation for “advice and counsel” given in those years. BOLI characterizes such bonuses as nondiscretionary bonuses, “offered as part of the wage agreement.”
Under Oregon law, an independent contractor must satisfy the following conditions:
1. Free from direction and control over the means and manner of providing the services, subject only to the right to specify the desired results. There is no evidence that, as workers on the Avakian campaign, Burr, Bontecou, or Sparks were free from direction and control over the means and manner of providing their services to the Committee to Elect Brad Avakian.
2. Customarily engaged in an independently established business. None of the three BOLI employees had an independently established business to provide services to the Committee to Elect Brad Avakian.
3. Is responsible for obtaining licenses or certificates necessary to provide the services. There is no evidence that Burr, Bontecou, or Sparks had obtained any licenses or certificates to provide the necessary services (such as a City of Portland business license).
Because Burr, Bontecou, and Sparks were paid cash bonuses, they were not volunteers.
Because Burr, Bontecou, and Sparks fail the three-part contractor test (that BOLI imposes on private businesses), they were not contractors.
Burr, Bontecou, and Sparks were employees of the Committee to Elect Brad Avakian. As an employer, the Committee to Elect Brad Avakian is subject to the same wage, workplace, and tax obligations as any other employer in the State of Oregon.
Were the bonuses paid by the Committee to Elect Brad Avakian to Burr, Bontecou, and Sparks reported to the IRS and the Oregon Department of Revenue?
As employees, Burr, Bontecou, and Sparks should have W-2 income reports from the Committee to Elect Brad Avakian. The W-2s should have been provided to the IRS and the Oregon Department of Revenue and taxed as income.
Even if Burr, Bontecou, and Sparks are classified as contractors, some or all of the cash bonuses should have been reported on 1099s sent to the campaign advisers as well as to the IRS and the Oregon Department of Revenue. Whether or not Burr, Bontecou, and Sparks received 1099s, the income should have been reported as income.
Cash payments to Burr, Bontecou, and Sparks should have been reported and taxed as income.
Did Burr, Bontecou, and Sparks violate state restrictions on campaigning and moonlighting?
Burr claims: “We didn’t and don’t do campaign work on state time.”
That’s not good enough. Salaried public employees are always on “state time” unless they clearly indicate otherwise, according to the Secretary of State’s Restrictions on Political Campaigning by Public Employees.
If the work performed falls generally within the job duties of the public employee, the work is performed in an official capacity regardless of the time of day or location.
Even if the activities of the BOLI employees were not considered campaigning, Oregon’s Guidelines for Public Officials apply to moonlighting. The guidelines state clearly and unambiguously:
A governmental agency’s supplies, facilities, equipment, employees, records or any other public resources are not to be used to engage in private business interests.
In other words, it’s more than just working off the clock. The BOLI employees must demonstrate that they exited state offices, got off the state’s wireless network, and used their own computers, phones, or other communication devices to engage in their moonlighting work for Avakian’s campaign.
In the absence of such demonstration, Burr, Bontecou, and Sparks appear to have violated either or both the state’s restrictions on campaigning by public employees and/or the state’s restrictions on outside employment by public employees.