Alameda County Grand Jury • 2017-2018

Coliseum Ticket Bonanza Executive Summary In April 2017, the City of Oakland's Public Ethics Commission released a*

Published: October 12, 2018 22 pages

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⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.

Findings 9 findings

F18-13

The ticket policies of Alameda County and the Oakland-Alameda County Coliseum Authority allow elected and appointed officials and their staff members to attend multiple high-value events for the purpose of "inspecting," "reviewing, or "evaluating" the facilities when no reports are ever generated after the events about the conditions observed.

F18-14

Free tickets often are used as a perk of office or employment rather than a public asset to be managed and utilized for a public purpose as required by law.

F18-15

Some 802 forms are carelessly prepared, and omit or erroneously report important information such as dates of events, number of tickets distributed, the name of the event, the identity of the actual recipient, or the public purpose for which the tickets were used, undermining the goal of transparency required by FPPC regulation 18944.1. The 802 forms often do not account for all of the tickets to Arena and

F18-16

Coliseum events in the Alameda County and the Oakland-Alameda County Coliseum Authority's luxury suites, indicating either that valuable resources have been wasted, or the tickets were used but not accounted for. No one is responsible for ensuring that all tickets to all events have been correctly and accurately reported.

F18-17

The ticket policies of Alameda County and the Oakland-Alameda County Coliseum Authority list reasons for attending events that are vague and lack credibility.

F18-18

The ticket policies of Alameda County and the Oakland-Alameda County Coliseum Authority do not contain limitations on the number of tickets that can be used by officials and employees, allowing tickets to be used by the same individuals over and over again.

F18-19

Alameda County and the Oakland-Alameda County Coliseum Authority have no defined procedures and practices for offering tickets to worthy community organizations and individuals, or county employees other than those working directly for the officials who distribute them. Distribution practices vary from office to office. 2017-2018 Alameda County Grand Jury Final Report

F18-20

Although Alameda County and the Oakland-Alameda Coliseum Authority claim an important public purpose for the tickets is to give them to worthy community-based organizations for use as fundraisers, the 802 forms show that high-value tickets with the biggest fundraising potential are seldom distributed to non-profits or schools, especially the most valuable playoff tickets.

F18-21

Alameda County has insufficiently analyzed whether its distribution of free tickets to elected officials and county employees meets the IRS criteria for exclusion from taxable income, putting the county at risk of sanctions for improper withholding.

Recommendations 3

R1

used repeatedly by the same elected or appointed officials and their staff members. Although approximately 30% of tickets are given to worthy non-profit organizations for use in fundraising, almost none of the most valuable playoffs and finals tickets go to community groups. Many tickets go unreported on Form 802s mandated by the state Fair Political Practices Commission, including tickets for some of the most expensive and desirable events, such as Warriors playoffs, Raiders games and big name concerts. Tickets that are reported are supposedly being used for approved public purposes, such as inspecting the facilities. Although not a requirement, no reports are ever generated by officials following their visits, suggesting that the so-called "public purposes" are merely a vehicle for attending exciting games and concerts without having to declare the ticket values as gifts or income. No uniform and publicized process for community-based organizations to apply for and receive tickets exists; instead, the allocation is handled on an ad hoc basis by the staff of the officials responsible for distributing them. No uniform and publicized process for all of the 6,000+ employees of the county to apply for and receive tickets exists; instead, the vast majority of employees who receive tickets are the staff members of the officials responsible for their distribution. 2017-2018 Alameda County Grand Jury Final Report Neither the county nor the Oakland-Alameda County Coliseum Authority has a policy to
R2

limit or restrict excessive use of tickets by particular individuals, permitting overuse by some, such as appointed authority commissioners, who used the most valuable tickets hundreds of times. The only reports filed and posted regarding ticket usage by officials and employees were designed for another purpose - making free tickets non-reportable as gifts and income - and are of limited value in providing meaningful data to enable tracking of ticket usage, and enforcement of ticket distribution policies that need strengthening. Ticket reports are inconsistent across the offices responsible for preparing them; the individuals who fill out the forms sometimes omit important data such as dates and numbers of tickets; and at least some of the reports include highly inaccurate information about who is really using the tickets. The Grand Jury recognizes that some of these problems will disappear naturally over the next few years as our professional sports teams leave the Coliseum complex. Nevertheless, we believe a major overhaul of the procedures and practices for distributing tickets is warranted so long as the facility remains in public ownership.
R3

community-based organizations for that purpose. Otherwise conform their policies, where applicable, to the recommendations of the Oakland Public Ethics Commission in its April 2017 report. 2017-2018 Alameda County Grand Jury Final Report Recommendation 18-16: Alameda County and the Oakland-Alameda County Coliseum Authority must provide employees who prepare Fair Political Practices Commission 802 forms training on the proper way to fill out the forms, and on the need for accuracy, and must institute systems to ensure that all distributed tickets are reported on filed 802 forms. Recommendation 18-17: Alameda County must determine whether the free tickets distributed to salaried officials and employees should be treated as taxable income, requiring appropriate tax withholdings.

Conclusions 1

CL1

The Grand Jury found a myriad of problems with the ways Alameda County and the Joint Powers Authority handle the free luxury suite tickets that they receive under the contracts with the teams occupying the Coliseum Complex. The problems fall into three categories: distribution practices, reporting practices, and uninvestigated potential tax liabilities. Regarding ticket distribution, the Grand Jury discovered that tickets are repeatedly used by the same officials and employees, and not fairly distributed to other county workers, because there are no policies limiting the number of times individuals can use them, and no system in place to solicit applications from all eligible employees. The most valuable tickets are seldom given to community groups that could use them as important fundraising tools. There is no system in place to accept and rank ticket requests from community groups, resulting in unequal distribution to groups favored by the particular officials responsible for distributing them. Regarding reporting, while the county and the JPA established ticket policies listing what sound like valid public purposes, in practice, the policies are relied upon as a cover for the same officials and employees to use the tickets over and over again to perform "inspections" that never result in written reports. Neither the county nor the JPA has an enforcement policy to ensure that the stated purposes are being fulfilled; indeed, neither has a system for making sure that all the tickets distributed are even reported. The Grand Jury also discovered that FPPC forms are 2017-2018 Alameda County Grand Jury Final Report sometimes incorrectly prepared. They report the wrong dates, the wrong events, the wrong recipients, and the wrong ticket numbers (and sometimes omitting these items altogether), and occasionally leave off the alleged public purpose for which the tickets were distributed - the whole reason behind the creation of the reporting system. Finally, the Grand Jury learned that neither the county nor the JPA has ever considered the potential income tax consequences of giving free tickets to elected officials and employees, relying on the fact that those who use them check off one of the approved public purposes on the 802 forms. But IRS rules about taxability of fringe benefits have no relationship to the requirements of a state political disclosure act. While an official can avoid having to disclose the tickets as gifts on a state form by checking off a box that says they were used to "exercise oversight" during an NBA playoff game, the IRS has far more stringent requirements about the business purposes for which tickets are used in order to make them non-taxable. Although the Warriors and the Raiders will be leaving Oakland over the next few years, they will each spend at least one more full season at the Coliseum Complex. And, even after they depart, the facilities will be used for other events. Thus, it remains essential that the ticket distribution policies and practices of the county and the JPA be improved so that these valuable community resources are not squandered. 2017-2018 Alameda County Grand Jury Final Report

No Responses Found 2

Government entities assigned to respond to this report. No response documents have been linked in our database.

Alameda County Board of Supervisors Elected County Office

County of Alameda Agency

* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.