Charities such as the Salvation Army and Rescue Mission may discuss issues affecting communities and even offer opinions, but they often remain neutral to protect their tax-exempt status and to avoid offending donors. The Internal Revenue Service prohibits such 501(c)(3) organizations from supporting political candidates or engaging in partisan politics and severely restricts lobbying that would influence legislation.
Although he personally advocates the ballpark, Mitrovich kept the City Club neutral on the topic until the recent ad. "We do not take positions on political issues. We weren't involved in Prop C."
Such caution may have been unnecessary, given the uncertain status of the City Club, which accepts donations and charges money to finance public events. Since the 1970s, guest speakers have ranged from right-wing columnist George Will to "gonzo" journalist Tom Wolfe. This year, the club has featured Tijuana development tycoon Carlos Bustamante and mayoral candidate Ron Roberts, among others.
An IRS spokesman in Los Angeles said the federal government recognizes the City Club as a tax-exempt 501(c)(3) organization. But in 1991 the California Attorney General's Office asked the Franchise Tax Board to suspend the club's tax-exempt status for having failed to file annual reports. By then, the tax board had already suspended the City Club as a corporation because it had not received any financial information either. Public records show Mitrovich tried to make things right in 1993 by submitting reports for 1985 through 1988. "I regret this oversight," Mitrovich wrote to the attorney general's office. "We will be current from this point forward." But no subsequent reports were filed, according to state files.
When asked for the City Club's federal 990 financial statements two weeks ago, Mitrovich and his lawyer at first failed to respond. When presented last week with the IRS's written rules requiring 501(c)(3) organizations to make copies available to the public, Mitrovich's lawyer offered an explanation. "We haven't been able to find any recent 990s. That leads us to believe they weren't filed," said John Howard of San Diego. "We may not have to file them, but we're going to prepare them anyway."
At some point, the City Club ceased existing as a corporation and became an unincorporated association, Howard said. Now it plans to become a corporation again, seek tax-exempt status, broaden its focus, and "operate on a more sophisticated basis," he said.
If the City Club's annual gross receipts were $25,000 or less, it would not be required to file 990 forms. The few state documents available show the club received $79,000 to $102,000 a year in the late 1980s. Donors included the Hotel Del Coronado and McDonald's Corp. heiress Joan Kroc. During the early 1980s, J. David "Jerry" Dominelli bankrolled the City Club and his brokerage employed Mitrovich as community relations director, according to Captain Money and the Golden Girl, written by Donald C. Bauder, the Union-Tribune's financial columnist. The book describes how Mitrovich helped Roger Hedgecock get Dominelli's financial backing for his mayoral campaign. After federal regulators exposed Dominelli as a con artist and his La Jolla investment firm as a Ponzi scheme, Hedgecock nearly ended up in prison too. When Mitrovich resigned before that point -- emerging from the scandal unscathed -- he disavowed any knowledge of the $200 million scam and declared that the rewards of local political campaigns were too few, according to Bauder's account.
Not inclined to keep a low profile or stay silent, Mitrovich likes to drop names, identify himself as a liberal Kennedy Democrat, write editorials for the Union-Tribune, and criticize the media. He turned the baseball stadium into a crusade in late 1997 by starting the Committee of 2000, which he describes as an independent citizens' committee that works closely with the Padres. An affiliated political action committee operates on contributions, which totaled less than $4000 from October through June, according to state records.
Like the committee, Citizens for San Diego's Future was created to express widespread support of the ballpark, but few if any of the member organizations helped write the ad. The day it ran, the Union-Tribune published a news item about the group and a commentary written by Laurie Black, president of the Downtown San Diego Partnership. She wrote: "The best development opportunity in San Diego's history has been placed in jeopardy because, once again, some have chosen to stop progress, rather than working together with the rest of us to advance our city's common good."
Mitrovich didn't have details about the rest of the promotion. "There's some debate about the timing and the content." Black said, "We're talking about having a lunch to raise money for the ads."
Endorsers of the second ad were individuals, not identified by organization or occupation. However, there was some predictable duplication from the first ad, such as Ky Snyder, president of the San Diego International Sports Council, who referred calls to the Padres, and -- in the middle of the alphabetical list -- Mitrovich himself. Some real estate executives with a stake downtown signed, including Craig Irving and Steve Williams, who are members of the Committee of 2000. Heading the list was San Diego lawyer Mike Aguirre, a co-chair of the Yes on C campaign.
Sometimes it's hard to see the forest for the trees.