Los Angeles Times - 09.08.2019

C2 FRIDAY, AUGUST 9, 2019 WST LATIMES.COM/BUSINESS

BUSINESS BEAT

What’s most
fascinating
about the
controversy
raging about
Rep.
Joaquin
Castro’s
tweeting out
the names of
donors to President
Trump’s campaign is that
Castro’s Republican detrac-
tors seem to be admitting to
a dirty little secret.
By complaining that he’s
exposing those donors to
public shaming, they’re
effectively acknowledging
that donating to Trump is
shameful. Whoops.
To bring you up to date,
Castro, the twin brother of
Julian Castro, a candidate
for the Democratic nomina-
tion for president, on Tues-
day tweeted a list of the 44
donors in his hometown of
San Antonio who have
made the maximum dona-
tions to the Trump cam-
paign this year.
Although Castro didn’t
publicize the donors’ ad-
dresses or phone numbers,
he did identify some con-
nected to local businesses
evidently of some promi-
nence. His point was that
“their contributions are
fueling a campaign of hate
that labels Hispanic immi-
grants as ‘invaders.’ ”
The Republican and
right-wing outrage factory
leaped into the fray. The
National Republican Con-
gressional Committee, a
fundraising group, termed
the disclosure “disgusting”
and accused Castro of “in-
citing violence against
private citizens for partici-
pating in our Democracy.”
House Minority Leader
Kevin McCarthy (R-Bakers-
field), the mastermind of his
delegation’s crushing defeat
in the 2018 House elections,
tweeted out a typically
meatheaded complaint,
labeling as “shameful and
dangerous” Castro’s “tar-
geting and harassing Ameri-
cans because of their politi-
cal beliefs.”
Even some journalists
who should know better
opined that Castro had set a
“dangerous” precedent.
Is that so?
Let’s be clear about a few
things. The list Castro
tweeted is 100% public infor-
mation. It’s all available
online, where it’s justifiably

labeled an “open secret.”

The problem, if anything, is

that voters don’t consult

data enough.

A moment’s thought

should bring home to any-

one that we want and need

this information to be publi-

cly available, because

shrouding political contrib-

utions in secrecy is exactly

what allows big money to

undermine our democracy.

Indeed, the whole point

of the “scandal” ginned up

by the useless former Rep.

Darrell Issa (R-Vista) over

the Internal Revenue Serv-

ice’s scrutiny of political

groups masquerading as

social organizations a few

years ago was to discourage

enforcement of the disclo-

sure rules, the better to give

cover to fat cat contributors.

Also, any reporters

wringing their hands over

the disclosure of campaign

donors should turn in their

press cards. For political

and business reporters, the

donor database is pure gold,

mined assiduously all the

time, often by the same

organizations that employ

the handwringers.

Finally, as my colleague

Michael McGough points

out, the disinfectant effect

of donor disclosure has been

endorsed by none other

than the Supreme Court. In

his 2010 Citizens United

opinion, Justice Anthony

Kennedy tried to reassure

the public that the “trans-

parency” afforded by disclo-

sure “enables the electorate

to make informed decisions

and give proper weight to

different speakers and

messages.”

Writing for the court

majority, Kennedy acknowl-

edged that “disclosure

requirements may burden

the ability to speak but

“don’t prevent anyone from

speaking”— and the burden

is more than compensated

by the gains in public knowl-

edge.

Castro, plainly, didn’t

call for or incite a violent

reaction — unlike the incite-

ment Trump engages in at

his rallies and on Twitter. By

identifying the businesses

associated with some of the

donors, he may have been

calling for boycotts — but

business boycotts have a

long and honorable tradi-

tion in America.

The harsh reality uncov-

ered by Castro’s tweet is

that politicians rely on the

complexities of campaign

databases to keep informa-

tion about their backers

hiding in plain sight. Castro

didn’t merely cut and paste

from the donor data; he and

his staff crunched the num-

bers to extract the names of

San Antonio residents

making the largest dona-

tions to Trump. In other

words, he provided his

followers with a useful

shortcut.

It’s true that many

donors — in fact, ordinary

citizens — may be unaware

of and discomfited by how

public their political activ-

ities happen to be. The same

phenomenon happens with

one’s phone number. In the

old days, few people thought

twice about listing their

home phones; they were

published in the local phone

book, but accessing the

white pages from afar was

enough of a chore to dis-

courage, say, stalkers.

Nowadays, however,

anyone can find a listed

home phone from the pri-

vacy of a computer screen

located anywhere in the

world. What’s changed isn’t

the privacy of the number,

but the concept of a private

number.

The worst that can be

said about Castro’s tweet is

that it was mischievous. He

knew his audience: mem-

bers of his local community

repulsed by Trump’s racism

and its role in fomenting

violence such as the massa-

cre in El Paso, a mere 550

miles to the west of his

hometown. His goal was to

paint contributing to

Trump as socially unaccept-

able; the feverish reaction of

Republicans and conserva-

tives suggests that he got

his strategy absolutely

right.

What’s most unnerving

about the outcry over Cas-

tro’s disclosure is that the

politicians grousing the

most about it may have an

ulterior motive — they want

to shut down public disclo-

sure of campaign contrib-

utions.

This can only help back-

ers of unpopular candidates

and causes — wealthy

donors supporting candi-

dates who will do their

bidding despite public

opinion being heavily

weighted to the other side.

Consider the National

Rifle Assn. One of the most

potentially effective weap-

ons against politicians

voting against gun control

measures is to expose their

take from the NRA.

(OpenSecrets.org has com-

piled and posted the data

online.) If you’re curious

why Democrats in the

House are moving ahead

and the Republican-con-

trolled Senate is refusing to

budge, consider that the

NRA donated $19,350 to

House Democrats in 2018,

and $564,400 to House Re-

publicans; among senators,

$116,000 went to Republi-

cans and $0 to Democrats.

Isn’t that useful to know?

This isn’t the first time

that political contributors

have been exposed to public

shaming. Back in 2008, the

manager of a family-owned

Beverly Boulevard restau-

rant popular in the gay

community turned up on a

list of donors to Proposition

8, the California ballot ini-

tiative that banned same-

sex marriage (until it was

overturned in court). A

boycott and public demon-

strations ensued, and busi-

ness fell off sharply. The

manager eventually re-

signed.

That episode under-

scored that public shaming

works only if the target has

done something shameful in

the eyes of his or her com-

munity. A donation to Pro-

position 8, which was pro-

moted by the Mormon

Church, might not have

generated a boycott in Salt

Lake City, but was distinctly

out of place in the restau-

rant’s L.A. neighborhood.

By the same token, crit-

ics of Castro who have asked

what the harvest would be if

the names of donors to, for

example, Rep. Rashida

Tlaib (D-Mich.) were made

public are missing the point.

The disclosure might be bad

for a donor located in Ala-

bama, but the betting here

is that it wouldn’t shake

donors residing in her De-

troit district.

Joaquin Castro did a

service for his constituents

and for the principle of

transparency in govern-

ment. The only reason any

people might have for claim-

ing otherwise is that they

have something to hide. Get

the message?

Keep up to date with

Michael Hiltzik. Follow

@hiltzikm on Twitter, see

his Facebook page, or email

michael.hiltzik

@latimes.com

Listing Trump donors is public service

The outrage over a

congressman’s tweet is

misplaced since the

data are meant to be

publicly accessible.

MICHAEL HILTZIK

U.S. REP.Joaquin Castro, left, shown with his brother, presidential candidate Julian Castro, was criticized for

tweeting a list of San Antonio residents who are donors to President Trump’s reelection campaign.

Brendan SmialowskiAFP/Getty Images

HOUSE Minority Leader Kevin McCarthy labeled

the list of political donors “shameful and dangerous.”

Andrew HarnikAssociated Press

A Los Angeles man

pleaded guilty in Florida to

orchestrating a nationwide

$1.3-billion real estate fraud

scheme and agreed to forfeit

valuable jewelry, wine and

paintings by Picasso and Re-

noir.

Court records show that

61-year-old Robert Shapiro

of Sherman Oaks pleaded

guilty Wednesday in Miami

federal court to mail fraud,

wire fraud and tax evasion.

He faces up to 25 years in

prison at his October sen-

tencing before U.S. District

Judge Cecilia M. Altonaga.

At least 9,000 people suf-

fered losses in the scheme,

Miami federal prosecutors

say. Many of them were

elderly individuals who in-

vested their retirement sav-

ings.

Prosecutors say Sha-

piro’s Woodbridge Group

had offices employing 130

people in California, Florida,

Tennessee, Colorado and

Connecticut. The pitch to in-

vestors was that Wood-

bridge held real estate loans

that would pay them rates of

interest between 5% and

10%.

In fact, the real estate

was also owned by Shapiro

through 270 shell companies

and did not generate the

necessary money for in-

vestors. Sometimes, the

properties didn’t even exist.

It became a Ponzi

scheme that paid older in-

vestors with money from

newer ones, court records

show. Five states entered

cease-and-desist orders be-

cause Woodbridge was sell-

ing unregistered securities.

Authorities say the scam

operated from at least July

2012 to December 2017. In

2017, the company filed for

bankruptcy and defaulted

on its obligations to in-

vestors.

As part of the plea agree-

ment, Shapiro and his wife,

Jeri, agreed to forfeit assets

including works of art by Pi-

casso (“Face With Circles,”

“Picador” and “Fish Sub-

ject”), Renoir (“Portrait de

Rosita Mauri”), Chagall (“Le

Clown Flutiste Au Coq”) and

others. They also will hand

over to the government nu-

merous pieces of jewelry, in-

cluding a pair of 14-karat,

white gold earrings with two

black diamonds, two gray

diamonds, two rose-cut dia-

monds, 266 round diamonds

and a platinum ring with an

emerald and diamonds.

Also on the forfeit list: 603

bottles of wine, a 1969 Mer-

cury convertible and money

in multiple bank accounts.

Court records show Sha-

piro spent millions in in-

vestor money on personal

expenditures, such as

$3.1 million for chartering

private planes and travel,

$6.7 million on his home,

$2.6 million on home im-

provements, $1.8 million on

personal income taxes and

more than $672,000 on luxu-

ry automobiles.

Shapiro also used bank

accounts and credit cards

opened in the name of his

wife for family members.

The tax evasion charge

involves more than $6 mil-

lion never reported to the In-

ternal Revenue Service from

2000 to 2005.

Also charged in the case

are Dane Roseman and Ivan

Acevedo, who are set for a

February 2020 trial. They

have pleaded not guilty. The

U.S. Securities and Ex-

change Commission has

also filed a civil enforcement

case against Shapiro and

the other defendants.

L.A. man pleads guilty to scam

Many of real estate

scheme’s victims were

elderly people who

invested retirement

savings, officials say.

associated press

THIS HOLMBY HILLShome was owned by a real

estate development group head by Robert Shapiro.

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