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New law closes campaign finance loophole exploited by convicted ex-Anaheim mayor

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New law closes campaign finance loophole exploited by convicted ex-Anaheim mayor

California politicians convicted of a crime will no longer be able to use campaign funds to cover legal expenses.

On Sept. 26, Gov. Gavin Newsom signed AB 2803 into law, which closes a campaign finance loophole that former Anaheim Mayor Harry Sidhu used last year to pay his criminal defense attorney amid an FBI political corruption probe.

According to campaign finance documents, Sidhu made a $300,000 payment to attorney Paul Meyer in 2022 from funds raised for his reelection.

Before that, he resigned as mayor a week after an FBI affidavit accused him of bribery, fraud, obstruction of justice and witness tampering.

Assemblyman Avelino Valencia (D-Anaheim), who had publicly called on Sidhu to step down when he served on Anaheim City Council alongside him, introduced the bill in February.

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“What Sidhu did was unacceptable and unethical considering the crimes that he was being charged with,” Valencia said. “I don’t think supporters of candidates intended for their money to go towards defending politicians against criminal charges.”

Sidhu eventually pleaded guilty to four felonies, including charges connected to the attempted sale of Angel Stadium, at the Ronald Reagan Federal Courthouse in Santa Ana last September.

“Yes, I’m guilty,” Sidhu said when he entered his plea. “I did lie to the FBI.”

But the former Anaheim mayor is not the sole politician in the state to have exploited the campaign finance loophole.

Former state Sen. Leland Yee paid his legal team $128,000 from campaign committee funds for his secretary of state bid before pleading guilty to racketeering in 2015.

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Assemblyman Avelino Valencia has pushed several good government measures since being elected in 2022.

(Genaro Molina / Los Angeles Times)

Sean McMorris, ethics program manager for Common Cause, noted the new law as one that is narrowly tailored but important in strengthening the Political Reform Act that was first enacted 50 years ago.

“There are bad actors,” he said. “If you do want to deter them and make ethics laws more important, one way to do that is not allow them to use campaign funds to pay off legal fees or penalties. This is good in that it’s expanding that for felonies as well as bribery.”

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Under the new law, if politicians are convicted of a felony among other select crimes, they will be required to pay back donors for any funds diverted to legal expenses.

The law doesn’t cover legal defense funds, which politicians are legally allowed to open and raise money for without contribution limits.

Former state Sen. Ron Calderon and former state Sen. Roderick Wright raised funds through such committees.

“That’s still a loophole,” McMorris said.

The bill, which was co-sponsored by state Sen. Tom Umberg (D-Santa Ana) and Assemblyman Phil Chen (R-Yorba Linda), marks another anti-corruption effort for Valencia, who chairs an Assembly accountability and oversight subcommittee.

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He previously ordered a state audit of contracts between Visit Anaheim and the Anaheim Chamber of Commerce after an independent corruption report alleged the two organizations engaged in a grafting scheme involving $1.5 million in COVID-19 relief funds.

Newsom also last month signed into law AB 2946, a Valencia-backed bill that requires a majority vote by the Orange County Board of Supervisors before discretionary funds can be awarded.

The legislation comes in the wake of a political corruption scandal involving $13 million in public funds directed by Supervisor Andrew Do to Viet Society America, which a county lawsuit now alleges was embezzled by the nonprofit that also employed Do’s daughter.

In closing the loophole exploited by Sidhu, Valencia hopes to protect the intent behind campaign contributions.

“It’s another step in ensuring good government, transparency and ethics in public service,” he said of the new law. “It doesn’t solve some of the gaps still kept in the system, but it’s a step closer for sure.”

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Finance

German finance minister wants to scrap spousal tax splitting

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German finance minister wants to scrap spousal tax splitting

Last weekend, several thousand people took to the streets in Munich to demonstrate against abortion and assisted suicide. One speaker made an extremely dramatic plea against what he called the “culture of death” that has allegedly taken hold in Germany. One sign of this, the speaker argued, was that the government is planning to abolish a regulation known as “spousal tax splitting.”

Is tax law really relevant to deep philosophical debates on the sanctity of life? It is even a matter of life and death at all? Surely we needn’t go that far? In any case, the intense political uproar surrounding the new debate on whether to abolish spousal tax splitting is notable, even by today’s standards of populist outrage.

An advantage for couples with widely divergent incomes

The row was sparked by Germany’s vice chancellor and finance minister, Lars Klingbeil, of the center-left Social Democratic Party (SPD), who said he wanted to abolish and replace the joint taxation of spouses’ income, a system that has been in place since 1958.

How exactly does spousal tax splitting work? In Germany, married couples (and since 2013, couples in civil partnerships), can choose to have their income assessed jointly by the tax authorities.

It means that the taxable income for both spouses together is halved – as if both partners had each earned an equal half of the income. Their tax liability is then determined by simply doubling the income tax due on one half.

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As people who earn more pay higher taxes in Germany, this system benefits couples where one partner (and often this is still the man) earns significantly more than the other (in practice often the woman).

Lars Klingbeil
Lars Klingbeil thinks spousal splitting is outdated and costs the state too muchImage: Bernd von Jutrczenka/dpa/picture alliance

Costs of up to €25 billion per year

If for example one partner earns €60,000 ($70,512) a year and the other partner earns nothing, the couple will be taxed as if they earned €30,000 each. In this example, the couple would save nearly €5,800 in taxes per year compared to the amount they would owe if both partners filed their taxes separately. According to the Finance Ministry, spousal tax splitting costs the government a total of up to €25 billion annually.

Some critics have long viewed splitting as a tool to keep women out of the labor market, because the more a woman earns, the larger her tax burden becomes. Klingbeil seems to agree, arguing on ARD television in late March that the system was “out of step with the times.” The spousal splitting system reflects “a view of women and families that is completely at odds with my own,” he said.

Chancellor Merz said to be in favor of splitting

On Monday of this week, Klingbeil got some surprising support on this from Johannes Winkel, head of the youth wing of the conservative Christian Democratic Union (CDU).

“Given the demographic reality, the government should create incentives to ensure that both partners in a relationship are employed,” Winkel told the Funke Media Group. “In the future, tax relief should primarily be granted to married couples when they are facing hardships related to raising children.”

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But the chancellor is a vocal skeptic of the proposal. “I am not convinced by the claim that joint filing for married couples discourages women from working,” Friedrich Merz said at a conference organized by the Frankfurter Allgemeine Zeitung newspaper. “Marriage is a relationship based on shared income and mutual support. And in a marriage, income must be treated as a joint income for tax purposes, not separately.”

Berlin under pressure to fix pensions, health care and taxes

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Klingbeil’s alternative plan

At around 74%, the labor force participation rate for women in Germany is one of the highest in Europe, but half of them work part-time.

Klingbeil’s idea is to replace the existing system with a more flexible approach: Both partners would be able to distribute tax-free income among themselves in such a way that it minimizes their tax liability. This would allow the couple to continue enjoying a tax advantage, albeit not to the same extent as before. And whether one partner earns more than the other would become less important.

However, it remains to be seen whether Klingbeil will be able to push through his proposal. Aside from Germany, similar regulations offering tax benefits to couples exist in Poland, Luxembourg, Portugal and France.

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This article was originally written in German.

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Departing inspector general targets Council Office of Financial Analysis

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Departing inspector general targets Council Office of Financial Analysis

The $537,000-a-year office created in 2014 to advise the City Council on financial issues and avoid a repeat of the parking meter fiasco has failed to deliver on that mission, the city’s chief watchdog said Tuesday.

Days before concluding her four-year term, Inspector General Deborah Witzburg said a shortage of both adequate staff and financial information closely held by the mayor’s office prevents the Council’s Office of Financial Analysis from helping the Council be the the “co-equal branch of government” it aspires to be.

In a budget rebellion not seen since “Council Wars” in the 1980s, a majority of alderpersons led by conservative and moderate Democrats rejected Mayor Brandon Johnson’s corporate head tax and approved an alternative budget, including several revenue-generating items the mayor’s office adamantly opposed.

But Witzburg said the renegades would have been in an even better position to challenge Johnson if only their financial analysis office had been “equipped and positioned to do what it’s supposed to do” — provide the Council with “objective, independent financial analysis.”

“We are entering new territory where the City Council is asserting new, independent authority over the budget process. It can’t do that in a meaningful way without its own access to financial analysis,” Witzburg told the Chicago Sun-Times.

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Chicago Inspector General Deborah Witzburg’s latest report focuses on the Chicago City Council’s Office of Financial Analysis.

Jim Vondruska/Jim Vondruska/For the Sun-Times

But the Council’s financial analysis office, she added, “has never been equipped or positioned to do what it needs to do. It needs better and more independent access to data, and it needs enough staff to do its job. It has a small number of employees and comparatively limited access to data.”

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The inspector general’s farewell audit examined the period from 2015 through 2023. During that time, the financial analysis office budget authorized “either three or four” full-time employees. It now has a staff of five .

Witzburg is recommending a staffing analysis to identify how many people the financial office really needs — and also recommending that the office “get data directly” from other city departments, “ rather than having it go through the mayor’s office.”

The audit further recommends that the office develop “better procedures to meet their reporting requirements” in a timely manner. As it stands now, reports are delivered “sometimes late, sometimes not at all,” the inspector general said.

“We find that those reports have been both not timely and not complete in terms of what they are required to report on and that those reports therefore have provided limited assistance to the City Council in its responsibility to make decisions about the city’s budget,” she said.

The Council Office of Financial Analysis responded to the audit by saying it hopes to add at least three full-time staffers in the short term and has made “some progress” over the last three years in improving their access to data, but not enough.

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The office was created in 2014 to provide Council members with expert advice on fiscal issues.

For nearly two years the reform was stuck in the mud over whether former 46th Ward Ald. Helen Shiller had the independence and policy expertise to lead the office.

Shiller ultimately withdrew her name, but the office was a bust nevertheless. In an attempt to breathe new life into it, sponsors pushed through a series of changes.

Instead of allowing the Budget chair alone to request a financial analysis on a proposal impacting the city budget, any alderperson was allowed to make that request.

The office was further required to produce activity reports quarterly, not just annually.

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Now former-Budget Chair Pat Dowell (3rd) then chose Kenneth Williams Sr., a former analyst for the office, as director and gave him the “autonomy” the ordinance demanded.

Two years ago, a bizarre standoff developed in the office.

Budget Committee Chair Jason Ervin (28th) was empowered to dump Williams after Williams refused to leave to make way for a director of Ervin’s own choosing.

The standoff began when Williams said he was summoned to Ervin’s office and told the newly appointed Budget chair was “going in a different direction, and I’m putting you on administrative leave” with pay.

“He took all my credentials and access away. I would love to come to work. I wasn’t allowed to come to work,” Williams said then.

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Williams collected a paycheck for doing nothing while serving out the final days remainder of a four-year term.

Ervin’s resolution stated the director “may be removed at any time with or without cause by a two-thirds” vote or 34 alderpersons. He chose Janice Oda-Gray, who remains chief administrator.

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Reilly Barnes Returns to Little League® as Purchasing/Finance Assistant

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Reilly Barnes Returns to Little League® as Purchasing/Finance Assistant

Little League® International has announced that Reilly Barnes accepted a new role as Purchasing/Finance Assistant, effective April 6, 2026. Barnes transitions from a temporary Purchasing Assistant to this full-time position to assist in the year-round demands of purchasing for the organization, as well as the region and Little League Baseball and Softball World Series tournaments. 

“We are thrilled to welcome back Reilly to our team as a full-time Purchasing/Finance Assistant. Reilly’s prior experience, time management, and attention to detail make him an invaluable asset to the purchasing team,” said Nancy Grove, Little League Materials Management Director. “We look forward to the positive contributions he will have on our organization.” 

In this role, Barnes will be responsible for processing purchase requisitions, coordinating souvenir products, and tracking order fulfillment. He will also assist with evaluating suppliers, reviewing product quality, and negotiating contracts for effective operations.  

After most recently working as a Logistician Analyst at Precision Air in Charleston, South Carolina, Barnes, a Williamsport native, returns after honing his skills in the fast-paced environment. Prior to his time at Precision Air, Barnes served as a Procurement Specialist at The Medical University of South Carolina, where his expertise and knowledge were instrumental in supporting both education and healthcare needs.  

“I am thrilled to return to Little League in this full-time role,” said Barnes. “Coming back to my hometown and having the opportunity to work for an organization that has played such a special part of my upbringing means a lot. I can’t wait begin this new opportunity.” 

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Barnes graduated from the University of Pittsburgh in 2022 with a B.A. in Supply Chain Management, Finance, and Business Analytics.  

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