Government: One Woman I-Team Sacks Tax Board

Mega-kudos to Laura Mahoney, Sacramento correspondent for the Daily Tax Report and the winner of the Calbuzz Little Pulitzer for Investigative Reporting, for a superb, 25,000-word probe of the powerful, under-the-radar state Board of Equalization.

The only journalist who regularly covers the board, she spent 18 months reporting and writing the five-part series, which reveals an incontrovertible pay-to-play connection between campaign contributions to its elected members and the outcome of tax appeals on which they rule.

“I realized when (the project) took me as long as it did to gestate my babies, I was in trouble,” said Mahoney, a mother of two.

Known as “the Board of Eeek!” to generations of California reporters who quake with fear at the mere thought of covering complex financial stories, the BOE not only administers billions of dollars of tax collections, but also adjudicates disputes about them between the state and corporations or individuals.

A summary of her findings begins:

Taxpayers with complex tax dispute cases before the California State Board of Equalization were more likely to win their cases if they or their representatives made campaign contributions to the elected board members, either directly or through political action committees, according to a detailed examination by Daily Tax Report, a BNA publication.

In a series of reports, BNA examined the outcomes of 70 complex, high-stakes cases argued before the board between 2002 and 2009, and compared those cases to publicly available campaign finance records.

BNA found more than $1 million in contributions to board members from taxpayers or their representatives who argue those cases before the board. All of the contributions were legal and contributors who spoke to BNA denied any causality between their contributions and success before the board.

We just bet they did. Check this:

However, a correlation appears to exist between contribution levels and success before the board, based on BNA's original research. BNA found that 20 of the 70 cases examined had less than $250 tied to them, and those taxpayers won their cases 30 percent of the time.

Success rates rose with higher contribution rates. Dividing the remaining cases in equal groups, BNA found another 17 cases had between $250 and $16,000 in contributions tied to them, and those taxpayers won 53 percent of the time. The next group of 16 cases had $16,000 to $50,000 tied to them, and those taxpayers won 75 percent of the time. The last group of 16 cases had $50,000 to $137,000 tied to them, and those taxpayers won 88 percent of the time.

For more, see Press Clips: One Woman I-Team Sacks Tax Board, by August 27, 2010 at , at Calbuzz.