SIDEBAR |
By Royal Calkins
SEE RELATED STORY: Monterey County’s social services building is a money pit
When Barnett Davis II sought tax-exempt status for his Life Foundation, he told the IRS that his charitable contributions would “enhance the lives of people living in poverty” along with at-risk youth, abused women, and children with learning disabilities.
It was partly true.
After the foundation bought the Quadrangle Building in Salinas, it used some of the rent proceeds to make contributions of those types. But for reasons unexplained, Davis sent shares of the proceeds to a controversial yoga retreat in Oregon, the Salinas Air Show, the city’s Veterans Day Parade and other organizations that didn’t fit into his promised group of beneficiaries.
Davis and others involved also said the contributions would mostly go to charitable organizations in or around Monterey County – in consultation with Salinas Mayor Dennis Donohue. Some did. The Food Bank for Monterey County apparently got $90,000. The Monterey County Office of Education has used Life Foundation money to help children with autism. Others got money, too. But Mayor Donohue says he wasn’t involved.
Davis clearly has an interest in autism. In the foundation’s annual tax filings, he told the IRS that unspecified amounts went to unidentified autism researchers in Asia and Europe. He gave $5,000 to an autism researcher at George Washington University and $5,000 to a UCLA autism researcher, the late Edward Ritvo, who was on the foundation’s board of directors at the time.
The foundation’s purchase of the Quadrangle building was financed by tax-exempt bonds authorized by the city. In a 2008 memo to the Salinas City Council, then-city Finance Director Tom Kever wrote that lease payments from Monterey County government would “support charitable endeavors.” The bond documents approved by the IRS said the contributions would be made in consultation with Donohue and that Davis would provide the city with annual reports about the gifts. But Donohue says he doesn’t recall ever meeting Davis and doesn’t think they ever conferred about anything. And, if city officials ever received the annual reports, they lost them.
Donohue also said he didn’t know that one of his most active political supporters, Monterey property manager Jeff Davi, had partnered with Davis in managing the Quadrangle property.
In a phone interview two weeks ago, Donohue said he would talk to other city officials to learn more about what had happened and get back to Voices. He hasn’t responded to phone messages since.
Here’s what the Life Foundation’s website says about the charitable giving:
“The foundation will consult the governmental and/or charitable agency in establishing charitable support priorities and in creating a local advisory board consisting of community leaders to help determine what charitable organizations are making a real difference for those in need.”
The website also declared that the foundation’s charitable contributions would “lessen the burden” of Monterey County government by helping the Department of Social Services address the needs of county residents.
It appears that the city of Salinas put its name on a $22 million financing arrangement without adhering to the promises and restrictions spelled out in the underlying documents. For its help it received about $50,000 of the bond proceeds.
Voices has called Davis seeking comment about the contributions and his litigation with Monterey County. He wouldn’t answer questions.
Donohue said Kever, the former finance director, was the city’s point person on the venture. Kever could not be reached to comment. Emails and messages left on phones that might be his were not returned.
The foundation bought the Quadrangle Building in 2008, two years after Donohue was elected mayor the first time. It was an unusual arrangement. The building was mostly occupied by Monterey County government’s Department of Social Services, but the city of Salinas issued bonds to finance the sale even though the foundation had little or no experience operating commercial buildings and city officials apparently knew little about Davis. The arrangement gave him a discount on his monthly mortgage payments, which, theoretically, gave the county a break on the rent.
While various city and county officials say they can’t recall many details from the time, they agree that the creative plan reflected Donohue’s ambitious style of governance. He was mayor at the time and is mayor again. He served three terms starting in 2006 and was elected again in 2024, shortly after the county filed its continuing breach of contract suit against Davis.
After moving into City Hall from a career in agricultural marketing, Donohue led aggressive and somewhat unusual efforts to team the public and private sectors. He was also working with an unusually entrepreneurial Finance Department that put city pension money into risky private development ventures, some with poor results.
Also in 2008, he arranged for the city to pay $1 million for a piece of landlocked property from the owners of the proposed Bankers Casino cardroom downtown. The purchase completed the gambling operation’s financing package but Donohue didn’t mention that when he pitched the idea to the City Council. Three council members at the time later said they voted yes only because they had been misled by Donohue.
Dave Mora, who was city manager at the time, said recently that he didn’t remember the Quadrangle venture. Two Monterey County supervisors at the time, Fernando Armenta and Dave Potter, and the county administrative officer then, Lew Baumann, said they also couldn’t recall details of the Quadrangle transactions. Baumann suggested Voices contact Charles McKee, who was the county’s chief lawyer at the time, but he did not return calls.
Later, during his first stretch in office, Donohue led the city into a failed electric car venture and a downtown redevelopment plan that put the city under federal scrutiny shortly before he left office. With heavy support from the business and ag community, he returned to office in 2024 atop a slate that dismantled an activist City Council that had imposed a rent stabilization plan on the city’s landlords, many of them Donohue backers.
One of the Life Foundation’s first contributions was $5,000 to the Community Alliance for Safety & Peace, which was founded by Donohue and Judge Jonathan Price. It is a legitimate organization that continues to combat gang violence but Donohue’s dual role could raise conflict-of-interest questions. Not serious questions, though, because there is no evidence the mayor personally benefitted from the donations.
The bond documents say “any advisory board appointed by the president of the Life Foundation will include one or more local community leaders residing in Monterey County.” There are no apparent indications that Davis ever appointed such a board.
The United Way got some of the foundation’s early money, which makes sense, and so did Big Sur’s esoteric Esalen Institute, which makes less sense. On his tax forms, Davis provided no explanation. One year his foundation donated $1,000 to Boston University, which is where he earned his law degree. He gave $5,000 to KIPP Los Angeles, a chain of charter schools.
Also in 2008, Davis’s foundation donated $5,000 to CHP 11-99, a group that helps the families of disabled California Highway Patrol officers.
That same year, the foundation contributed $11,000 to the Nityananda Institute, a Kundalini yoga and spiritual retreat and temple in Portland that had faced numerous accusations of financial shenanigans and sexual coercion. An institute website includes comments from him that suggest he was a member. (See below). While the retreat was soliciting contributions to help it defend lawsuits again, Davis’ foundation contributed $10,000 to the closely related Movement Center in 2016.
Davis’s thank you message to the Nityananda Institute:
The idea for the Life Foundation flowed into me, in the greatest possible detail, while I was practicing the Chöd—something at which I was (and am still) a novice practitioner…. The flowering of the Life Foundation is an expression of my practice and the gifts that come from releasing negativity and tension . . . and creating a space . . . an opening for something magical to enter . . . connecting with my creative energy . . . accessing the infinite source of abundance that surrounds us at all times . . . and expanding the possibility to serve others exponentially . . . I also believe that success in the material realm can be part of our practice and does not preclude our spiritual evolution…. And in everyone’s quest, I deeply, madly, and sincerely wish you inspiration . . . belief . . . action . . . and an abundance of crazy wisdom.
Regulations on how nonprofits collect and spend their money are complex and there is no apparent indication of lawbreaking in the foundation’s tax records. Similarly, despite the intent of the financing documents, there do not appear to be any laws that would require it to donate only to family serving charities in or around Monterey County.
Lawyers who specialize in representing nonprofit organizations say most receive the barest of scrutiny from the IRS and that the Trump Administration’s deep cuts to the agency are likely to guarantee that oversight will continue to weaken.
One of the Life Foundation donations went to a Monterey organization with nonprofit status though it appears to have never done anything to earn it. Its stated purpose is vaguely religious.
Unlike most tax forms, the filings from nonprofit organizations such as the foundation are public records.
In 2010, Davis reported giving $7,000 to an unidentified autism-related organization.
In 2014, the foundation contributed $5,000 to Public Recreation Unlimited, the nonprofit group that has raised money for several sports facilities in Salinas, including Rabobank Stadium. It’s headed by accountant Warren Wayland who, coincidentally or not, has handled the books for Donohue’s political campaigns and several of the nonprofits that received Life Foundation money. His firm also has handled campaign accounting for numerous other Salinas politicians.
Some years Davis contributed more than in other years.
Davis’ list of recipients also includes highly regarded Court Appointed Special Advocates, which mostly assists foster children. Two former CASA officials said they couldn’t find a record of contributions but they said that didn’t necessarily mean there weren’t any. Davis reported contributing $17,500 to Peacock Acres, a Prunedale group home that housed foster children until it lost its state license because of young wards being mistreated.
His list also includes the American Diabetes Association, multiple-sclerosis organizations and the Hospice Giving Foundation, worthy recipients all though they don’t fit the foundation’s stated purposes. Monterey Gives, the holiday fund-raiser sponsored by the Monterey County Weekly, received sizable gifts from Davis.
Davis also has regularly contributed to the local Rancho Cielo organization, headed by former county supervisor John Phillips, which provides job training and other services for at-risk youth. Another regular and worthy recipient of foundation money, according to the tax forms, has been the Kinship Center, which also has declined to confirm or deny receipt.
Davis also contributed to autism and asthma camps in Colorado even though there are such camps closer to Salinas.
Solid organizations like the Boys and Girls Club and the Franciscan Workers of Junipero Serra each got $2,500 in 2017, according to the tax filings. So did the popular Gil Basketball Academy in East Salinas.
One path taken by Life Foundation money could be worthy of scrutiny. A recipient of regular $5,000 and $10,000 payments has been the Salinas Police Activities League (PAL), which provides recreation and education programs for area youth. According to its tax forms, PAL also regularly sends money to the Salinas police officers union for charitable purposes. The union helps run a holiday toy drive but also makes campaign contributions to Salinas City Council candidates, some of whom have served on the PAL board. Voices found no evidence of Life Foundation money going to candidates directly or indirectly.
For several years after Davis’s foundation bought the Quadrangle, he said on his tax return that he was donating more than $1 million for improvements to the building and that the money should be considered a charitable contribution. But county officials say in the court papers that they have been waiting, for close to two decades, for a long list of promised repairs and a roof that doesn’t leak.
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