Investigation Shows Millions in Taxpayer Funds Diverted to Left-Wing Groups

A bombshell investigation conducted by the Transparency Foundation has identified at least $6.6 million in inappropriate taxpayer funding was diverted to Left-wing groups in San Diego county in 2020-2021 – all while those same groups engaged in significant lobbying, issue advocacy, and political activities.

The investigation details numerous taxpayer-funded contracts and grants directed to the Left-wing groups by politicians that investigators concluded were “padded” or even directly subsidized political activities. The investigation even uncovered coordination between government staff and a Left-wing group in advancing proposed redistricting maps that would benefit these same politicians.

The inappropriate funding allocations to the Left-wing groups came in the wake of Democrats taking control of the several local government agencies – including the gas tax-funded San Diego Association of Governments (SANDAG) and the San Diego County Board of Supervisors.

The Transparency Foundation has forwarded the findings of its investigation to several government oversight agencies and is now calling on local government officials to immediately suspend any funds going to what it deems ten “High Risk” political groups in San Diego county currently receiving government funding.

“The diversion of taxpayer funds to these overtly political groups is outrageous and highly inappropriate – and likely is illegal,” says Carl DeMaio, Chairman of the Transparency Foundation.

“We are so concerned about the pattern of abuse of taxpayer funds outlined in our report that we’re asking oversight agencies to look into the evidence we collected and the findings we have made,” DeMaio adds.

The Transparency Foundation says it launched the investigation after receiving a complaint from a whistleblower inside one of the government agencies that was directed by politicians to disburse funds to a local political group under a grant without proper definition of deliverables.

Among the evidence-based findings of the investigation:

• Extensive Targeted Voter Contact: While being awarded millions in taxpayer funds, the Left-wing groups simultaneously expended funds on running political campaigns and conducting significant outreach to voters – including “direct express advocacy” for ballot measures. In one email obtained during the investigation, a SANDAG government grant manager revealed interest in partnering with a Left-wing group based on their work on a ballot “initiative” regarding an increase in the minimum wage.

• Extensive Lobbying and Filing Violations: The Left-wing groups that received taxpayer funds all engaged in lobbying for and against passage of legislation before the boards that funded them – raising concerns the politicians on those boards used taxpayer funds to help finance public outreach and lobbying efforts to support legislation they championed.

• Padding of Expenses or Inappropriate Use of Funds: Politicians will claim they awarded the Left-wing groups contracts and grants for bona-fide services. To the contrary, the Transparency Foundation investigation identified multiple examples of intentional “padding” of expenses and the awarding of contracts and grants with dubious statements of work and/or non-existent deliverables. In addition, specific grants and contracts inappropriately covered shared facilities, equipment, software/information technology, and other overhead expenses for groups that engage in political activities and lobbying. A political canvassing group received $175,000 in a no-bid contract and charged the taxpayers at rates 5-10 times the prevailing market rates (taxpayers were charged $8.46-10 per door knock!)

• Inappropriate Collaboration on Fundraising: Emails obtained during the investigation reveal that government staff actively directed grants to Left-wing groups – acting almost like business development partners for the groups. Even worse, one agency even covered the cost of purchasing fundraising software for a political group.

• Manipulation of Redistricting Efforts: On top of providing taxpayer funding to Left-wing groups at the same time that they lobbied the state and local redistricting commissions, the investigation found evidence that SANDAG government staff produced maps-on-demand and related redistricting marketing materials for a Left-wing group lobbying redistricting commissions and worked to boost Census participation in Democrat-leaning communities.

• Campaign Finance Violations: One organization that received taxpayer funding openly admitted to supporting the collection of signatures on a local tax hike ballot measure – and then failed to properly report this contribution.

“Given significant amount of taxpayer funds being diverted and the numerous alarming examples of politicized emails we obtained between government officials and these groups, there is little doubt that this misuse of taxpayer funds is part of a larger and deliberate plan,” DeMaio says.

While the investigation focuses on San Diego county funding streams, the Transparency Foundation believes the pattern of diverting taxpayer funds to political groups is likely happening in other California counties as well. For example, in May 2021 nearly $100 million in federal Covid-19 funding was distributed to over 480 “community-based organizations” across California, but there has been no way to track that funding or any deliverables associated with it because funding was funneled through third parties such as foundations and private vendors.

The Transparency Foundation is calling on state and local leaders to take immediate action to prevent any additional misuse of taxpayer funds in San Diego county. Among the recommendations made:

• Immediate Suspension on Taxpayer Funding to Political Groups: To remove any suspicion or doubt going forward, San Diego elected officials and government agencies should adopt a policy to prohibit taxpayer funding for any non-profit organization that engages in lobbying, issue advocacy, or political activity.

• San Diego County Grand Jury Investigation: The San Diego County Grand Jury should initiate an investigation into the use of taxpayer funds by groups that engage in lobbying, issue advocacy and political activity to determine if the funding was appropriately accounted for and used.

• Congressional and Inspector General Inquiries: A Congressional committee of appropriate jurisdiction should conduct an aggressive oversight hearing on the misappropriation of Covid-19 funds using San Diego County as a case study — and make a formal request to appropriate Inspectors General of federal agencies for investigatory support in this matter.

“There is absolutely no defense for the diversion of taxpayer funds to any political groups – whether on the Left or the Right – at the same time that they are lobbying government officials, engaging in issue advocacy or voter contact, or outright funding campaigns on political issues,” DeMaio concludes.

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