This week was the deadline for Council members to file their annual financial disclosure forms. Council member Sawant’s filing this year adds additional information than it did in the past, and in so doing challenges us to “follow the money.” You won’t like where it goes.
Here are the new things she disclosed this year:
- Sawant’s spouse, Calvin Priest, has an undefined relationship or interest in 15 Now, an “activist organization to raise the minimum wage to $15/hr.”
- Sawant and Priest had over $13,000 of travel paid for them over the course of 2017: $1,850 by “Movement for the 99%” and $11,176 by Socialist Alternative. Priest also works for Socialist Alternative, and Sawant reported that he received between $10,000 and $25,000 in income from that job. Sawant has disclosed in the past that Priest works for Socialist Alternative, but the paid travel is new information.
Why is this important? Because Sawant claims that she only accepts an “ordinary worker’s salary” and gives the rest of her City Council salary to a “solidarity fund” to help build social justice movements.
Despite promises that she would give a full and current account of where the solidarity fund money is being spent at the end of every year, as of mid-February this year the information hadn’t been updated in two years. After several weeks of badgering Sawant’s office, they finally updated the web page with a list of who she decided to fund. Here’s the 2017 list:
You will notice that the vast majority of the money — over $25,000 — apparently went to two organizations: Socialist Alternative and 15 Now.
Putting the pieces together: last year Sawant gave $13,800 to Socialist Alternative, and Socialist Alternative in turn spent over $11,000 flying Sawant and Priest around the world. Is it legal? Sure, and I have no doubt they were legitimate trips — Sawant is no Scott Pruitt. But let’s not kid ourselves: sending Sawant to campaign in Minnesota, to speak at conferences, and to represent Socialist Alternative at national and international committee meetings is as much (if not more) about her building her own brand as it is about advancing the organization’s interests. If Sawant had simply paid for the travel out of her own pocket, I’d have no problem with any of it. But laundering it through her “solidarity fund” and Socialist Alternative is at the very least disingenuous, and arguably self-dealing.
It’s worth taking a moment to understand what Socialist Alternative is — and is not. It is not a non-profit today, though it used to be; for many years it was registered with the IRS as a 501(c)(4) “social welfare organization.” But in 2013 it stopped filing the required annual Form 990 financial disclosures (a nonprofit’s equivalent of a tax return), and in 2016 the IRS revoked its 501(c)(4) status. This is most likely because Socialist Alternative decided to become active in political campaigns, which under IRS rules social welfare organizations may not do. However, Socialist Alternative has not registered with the FEC as a political party or committee, nor has it registered as a political committee in Washington State or New York State (where it is headquartered). It also hasn’t re-filed with the IRS as a political organization. It is, for all purposes, a private company whose internal activities and finances have been completely opaque since 2012. There is no transparency or accountability for how it spends any donations it brings in, or for how it makes decisions — like paying for travel for Sawant and Priest. Its web site gives no information about its leadership or finances. The domain name “socialistalternative.org” is registered to the Seattle office, and the administrative contact is Ted Virdone — a longtime SA member and currently a legislative assistant working for Sawant. Socialist Alternative is a political organization closely tied to Sawant that is flouting the national and state political accountability systems without any transparency or external scrutiny.
15 Now is only slightly better. Officially the parent organization is a PAC registered in Washington State, with local chapters functioning as separate organizations spread around the country. The 15 Now web site says that it was “launched in January of 2014 by Seattle City Council Member, Kshama Sawant and Socialist Alternative to fight for a $15 minimum wage in Seattle.” It was successful in that fight, and lives on as a “continuing political committee” in the state so it can fight for a $15 minimum wage in other local jurisdictions. In 2014, 15 Now’s campaign disclosures show a $2,500 contribution from Sawant, though Sawant’s “solidarity fund” page claims she gave $15,000 that year). Since 2015, however, 15 Now has not reported any contributions or expenditures — despite Sawant making large contributions every year, including her $11,525 donation last year.
15 Now is not registered with the FEC nor with the IRS as a political organization, so once again there is no paper trail and no documentation of where the money is going — or the nature of Priest’s relationship with 15 Now, which you’ll recall Sawant listed in her financial disclosure form this week. True to form, the 15 Now web site lists no financial information and little about its leadership, though if you poke around you can discover that the 15 Now treasurer is campaign consultant Jeff Upthegrove and the campaign chair is Jessica Spear, Sawant’s former campaign volunteer coordinator and an unsuccessful candidate for the State House of Representatives. The domain “15now.org” is registered to — surprise! — Calvin Priest.
Let’s not forget that other $1,850 in travel taken by Sawant and Priest, paid for by Movement for the 99%. According to its web site, it is also “launched by socialist City Councilmember Kshama Sawant as a solidarity campaign dedicated to building and supporting movements that fight racism, sexism, environmental destruction, and for workers rights.” Not surprisingly, there is no other leadership or financial information, though it does have a store where you can buy a $20 “Tax the rich!” t-shirt. So we have no idea where the money originally came from, which funded Sawant and Priest to travel to the Women’s March last year.
Given that Sawant purports to lead a movement for ordinary people, the organizations she leads — and that in turn fund her activities — tell ordinary people very little about where their money is coming from, or where it’s being spent. And she herself claims to be only taking an “ordinary worker’s salary” while funneling tens of thousands of dollars through her “solidarity fund” into opaque organizations with which she has intimate connections and deep financial relationships.
The moral of this story isn’t that Sawant’s underlying causes are bad; indeed, just the opposite. She has a talent for pointing out big problems, and we need to unite to fight against economic injustice and other societal inequities (though there is still room for spirited policy arguments about the best means to address them). The real message is simply this: Sawant claims not to be a career politician, but in reality she is working from the same playbook. Power still corrupts, and none of our elected officials should be blindly trusted. We must demand transparency and hold them to account for their lies, deceptions, and financial shenanigans.
Wow. Thanks for the deep dive into this. Sawant has also used public funds to support her causes. Many of the professional posters her supporters seem to have so many of give credit to SA with a kogi but are paid for with public funds. A recent protest against Amazon had RSVP sent to her legislative aid.
I’ve looked into that before. If the posters just said “Socialist Alternative” she would have an issue, but they always clearly say “City Councilmember Kshama Sawant” and then usually list all of the partner organizations in an event, not just SA. And Sawant has a lot of flexibility in how to spend the discretionary part of her office budget. We may not like it, but it’s legal.
Hi Kevin. Thanks for covering the Council’s disclosures!
I’m not sure I understand why you label Sawant’s behavior “self-dealing.” Clearly, she’s donating part of her salary to organizations she founded and controls, and that money is then being used to pay her travel expenses for political purposes. So she’s leveraging her salary to create a public-relations advantage for the activist organizations that she supports, and to portray herself as more selflessly public-minded than she actually is.
But wouldn’t “self-dealing” require that Sawant receive some material benefit she would otherwise not receive, at public expense? That is, wouldn’t she have to be diverting someone else’s money, rather than her own salary?
I’m no fan of SA, but I’m not sure Sawant’s actions here rise to the level of “self-dealing,” which implies something improper or corrupt.
–David B.
Thanks for your comments David. There are benefits inherent in travel: the direct ones stemming from the travel and per-diem itself, but also in this case being able to network, build connections and grow her stature and “brand” on a national and international basis. That’s why she was required to disclose them on her F-1 financial disclosure. So to that extent her donations to Socialist Alternative which she extolls as coming from her “solidarity fund” are in fact intended to advance her own interests.
it is all kind of hodgepodge. She could be trying to structure donations, travel expenses, etc. in a way to preserve tax deductions on her federal personal tax return. Does not necessarily violate tax law.
I thought about that. That would be true if Socialist Alternative and 15 Now were 501c3 org’s. They’re not. And even when SA was registered with the IRS, it was a 501c4 — donations are not tax deductible.
I agree with you and I have not looked at the tax regs. SA did not renew its non-profit business license with the State, it expired 12/31/17. Maybe, she figured out there was no tax benefit for all her travel expenditures. Also its easy to drop $1,000 or more for preparing the annual form 990. So, convert SA to a for profit company. A sole proprietorship or single member LLC. Contribute personal funds to SA. SA reimburses her for travel which is an expense to SA, the travel expenses potentially create a tax loss to the company which flows through to her personal federal tax return and is netted against her W2 income from the city. All those non-deductible travel expenses just became deductible.
the conventional wisdom on the street seems to be that SA withdrew from being a 501c4 because it prohibited participation in political campaigns.
Yes, they had no choice but to end the 501c4 designation. I’m confused on who owns which organizations. If it was me in that situation, I would look for a way to get a legal tax benefit . Information from your post, she might save $3k-$6k in federal income tax. The problem is not this situation with Sawant. The confusion associated with the new tax changes will make it a free for all for tax cheats. The Treaury and IRS are going to have problems. Seattle could not even keep the corruption out of the Democracy Vouchers.
This is a pretty lame hatchet job. Maybe they need to clean up their paperwork, but no deception has happened. This is just going after a politician for doing politics and building a political party.
Thanks for your comments. I’m not sure how you know no deception has happened, since there are so few public-facing records. Who decided what travel expenses Socialist Alternative and “Movement for the 99%” paid for? Who decided, for that matter, what Calvin Priest’s salary is at Socialist Alternative, and how does it compare to what other employees and officials in the organization make? Are there other people in these organizations who get their travel paid for by the organization, or are Sawant and Priest the exception? Sawant says she made a large contribution to 15 Now, a registered PAC, last year, but there is no record of them receiving it, let alone any record of how they spent it. There needs to be a paper trail for these financial decisions and transactions, and Sawant’s political network is flouting the system that requires it.
I agree that there needs to be more disclosures, but you haven’t actually established any self dealing and your questions are largely answered by the documentation provided. Is it self dealing or unseemly when other politicians doing party building get reimbursed for flying coach to a party function? Is this being paid for by lobbyists for wealthy interests? No and no. It’s a hatchet job of a politician building a small and growing political party.
I have established a set of financial transactions that raise a genuine question of self-dealing through an opaque organization that has no public-facing records. Other political parties register with the IRS and with states as political parties and/or committees, and then make regular financial disclosures of who their officers are, the money they’ve collected, and the money they’ve paid out. If Socialist Alternative did that, we could look at the paper trail and determine whether it’s truly self-dealing. I’m glad that Socialist Alternative exists because they add another important voice to our public political discourse, but I don’t trust them any more than I trust any of the other political parties — or politicians. I assume they are all corrupt and I want to be able to follow the money for all of them.
You’ll note that earlier this week I took the trouble to get the annual financial forms from the City Clerk for all eleven of our elected city officials, and reviewed and posted all of them here on this site. In fact, that’s what led me to write this piece on Sawant’s political network. As far as I can tell, I’m the only journalist in the city who has reported on the financial disclosures this year. I care about keeping them all honest and transparent. In this case, Sawant’s disclosure had some particularly noteworthy items and it led me down a rabbit hole.
I thank you dearly for your deep investigative journalism. This city really needed a voice like yours, I’m grateful it is being heard now.
I’m not a math wiz, but her donations don’t seem to add up to the difference in her $200,000 (plus salary) and the “average workers” salary she claims to live off of?
Her salary isn’t that high. I can’t remember the exact figure off the top of my head, but it’s somewhere in the range of $120k. Possibly a bit lower.