Is Qualcomm’s $400K salary to Fletcher even legal?

Richard Rider, Chairman, San Diego Tax Fighters Undesignated 14 Comments

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NOTE: This article is an expanded version of a comment I made here earlier.  Short answer to the question above — probably legal, BUT . . . .

Turns out that the Qualcomm job that Nathan Fletcher landed after his run for mayor in 2012 reportedly pays an absurdly high amount — $400,000 a year. That would provide a comfortable monthly cash flow ($33,333.33 gross/month) while Fletcher was waiting to (formally) run again for mayor of San Diego.

Fletcher’s job at Qualcomm? Reputedly he was paid to hobnob for the company, “sit on boards” and to give a couple “Rah-rah Qualcomm” speeches — and arguably to informally run for mayor.

His experience for this Qualcomm job? Essentially nonexistent. And apparently he seldom showed up at work, though this aspect is contested (see the story below).

One aspect that most are forgetting is the tax angle. If you contribute money to a candidate, it’s not tax deductible (unless you are a labor union member and itemize — it’s technically not legal to deduct union dues used for politics, but most do it). Also, a “donor” is usually severely limited as to the amount they can give to a candidate.

But if you “hire” an “employee” and pay quadruple the wage that he would gladly have “worked” for, then you still have a “legitimate,” deductible business expense — a.k.a. a tax deductible political contribution. Does anyone doubt that, if elected, Nathan Fletcher will carry out the agenda “suggested” by Jacobs? (Boy, that explanation required a LOT of quotation marks!)

Here’s my favorite excerpt from the story: Nathan Fletcher “is working out how to take a leave of absence with reduced pay and reduced responsibilities while he campaigns for mayor.”

“REDUCED responsibilities”? How is that even POSSIBLE??

But it gets better. If you run a public company, you can make such contributions with shareholder assets — in essence personally coughing up only a small fraction of the total dollars unwisely spent putting Fletcher on the payroll. Life is good if you are Irwin Jacobs!

 http://www.10news.com/news/investigations/nathan-fletcher-confronts-questions-and-concerns-on-his-qualcomm-job

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Comments 14

  1. Very informative article. But not any less scary how corrupt the political process is.

    “Life is good if you are Irwin Jacobs!” good, not sure- sure appears corrupt though. There is little doubt. What happned to the notion of “shame” and sheer moral justification for even crass quasi-legal activites? What happened to investigative reporters ferreting out things like this?

    Graft, corruption, and back-deals in SD County politics. Another “day in the life story. ” Sad!

  2. I attended the interview and Mitch said in his question that “some speculate he makes as high as $400k.”

    Nathan told 10 News he wasn’t confirming that number, because it’s not true. They chose to run with it anyway.

    He also told them the system that was screen-captured showing he hadn’t logged on in 31 days was not one he needed in his day-to-day job. Qualcomm told 10 News it was mostly used by engineers to communicate. The CEO hadn’t used it in three years. The spokeswoman never used it. Yet they ran with it anyway.

    I yearn for the days when reporters would abandon their story when they discovered they were being played by liars.

  3. Ms Laing,

    for clarity purposes…it it safe to assume then there are those that would be ok that Fletcher made 350K and didn’t log in for 18 days?

    By any reasonable, ethical, and practical measure…Mr. Fletcher does rate any of the package for his “services” on a free market hiring environment…if I, where undergrad was the 7 years of my life, would put my resume up against Fletcher any day if our names we left blank….as stated above…it is graft in the purest sense of the word.

  4. Just to be clear, it’s not that QCOM is paying him or about how much. It’s that the job is not in any way preparation to be the mayor of San Diego. He doesn’t manage people or budgets. He just collects a paycheck. The job just gives him opportunities to campaign.

    Nothing in his history gives any experience that would help him be a successful mayor. Anyone in San Diego would take an enormous paycheck to do very little. But few to none can relate to someone who is in that situation. (Especially one who says it qualifies him to be mayor)

  5. What the salary is, is a way for Qualcomm to bypass the campaign donation limits by paying Fletcher a salary, then Fletcher uses “his” money to fund his own campaign.

  6. EVERY major corporation has people on the payroll whose functions are vaguely described with terms like ‘public affairs,’ ‘community affairs’, ‘civic engagement,’ ‘social responsibility’. These tend to be people whom the company is paying for their rolodex and/or because their name carries some credibility within a relevant constituency. The reason is that Quallcomm would have to get the support of local community leaders, environmentalists, and low-income advocates in order to pull a permit for renovating their parking garage…to say nothing of something that actually generates revenue. QComm’s industry is such that this is not as hugely necessary as with other industries (i.e. what energy & pharma invests for these purposes), but it is still necessary.

    Assuming that Fletcher/QComm can come up with a way to keep it all above board with the campaign finance laws, there is nothing to see here but standard operating procedure for any major company. It is a symptom of over-regulation of an over-rated business environment.

  7. QCOM already has a very strong public affairs / community relations /pr department. People who have much deeper connections than Fletcher, not only in the local and regional community but around the world. And many of them have been working extremely hard on the company’s behalf for many years, doing much more work on a daily basis than Fletcher. Yet, if this $400,000 number is accurate, he is being compensated much more than them. It’s a private company and it’s a free market. They are entitled to pay him what they believe he is worth. In my opinion, as a QCOM investor who has a number of friends who have worked at the company since the early days, I don’t believe Fletcher brings enough value to justify that sort of compensation; and it cannot be good for the morale of his colleagues (see my earlier comments re: culture change).

  8. “Assuming that Fletcher/QComm can come up with a way to keep it all above board with the campaign finance laws, there is nothing to see here but standard operating procedure for any major company. It is a symptom of over-regulation of an over-rated business environment.”

    You just defined crony capitalism, D.Morton. Frankly, $400K is a small price for QCOM to pay if regulations eliminate any company which may compete with them. This is S.O.P. for sure—SOP in a kleptocracy

  9. Is the suggestion here that anyone running for office needs to quit his/her job in order to avoid his/her employer making a (potentially illegal) campaign contribution disguised as a paycheck?

    If so, doesn’t that give the incumbent an even bigger advantage?

  10. It’s not QCOM.
    It’s Nathan doing nothing for an enormous $400,000 paycheck in a position that adds nothing to the resume of someone who wants to be mayor.
    Do you really think anyone Kevin Faulconer spoke to today in Barrio Logan while he was fighting for more jobs can relate to Nathan and his paycheck?
    Me either.

  11. Brady: you can label it whatever you want. It is one of the costs of doing business in the U.S., and especially CA circa 2013. We likely agree on the preference that this not be the case, but that’s a whole other conversation. Especially when…

    to Schwartz’s point, those voters in Barrio Logan probably can’t relate any better to Kevin Faulconer’s career as an exec for Porter Novelli, before becoming a career politician, where he would have done the exact same sort of work as Fletcher with QComm. The only difference being that Faulconer would have worked for multiple clients on contract, instead of being hired by one.

  12. The difference is Faulconer has a record with the city of San Diego to run on and be judged by. Who knows what Fletcher stands for? Fletcher doesn’t even know.

    So going back to Fletcher’s experience he’s done three things: worked to elect Republicans, shot at people, and collected a paycheck to run for mayor.

    Yesterday Fletcher was posting about banning plastic bags while Faulconer was talking about clearing the way for companies (meaning jobs) for maritime businesses (read blue collar jobs with a good paycheck).

    I am willing to bet people across San Diego can relate to their paycheck and the general job market in San Diego a lot more than the fate of their grocery bag.

  13. If there is one thing I know, its that when we get to the point of betting on what people think in order to create outcomes, the fundamental flaws to our movement are systematic and much larger than squabbling about some defector that the party now freaks out over like a teenage breakup on facebook.

    What we should be talking about it coalitions and how many boots the party can put on the ground and how many votes it can bring to the ballot on election day, cycle after cycle. Unfortunately, the party measures its success in terms of a few chosen races every year, and its bank balance. Instead we should be looking at the big picture of how many races are won across the county, wiping out the dems at the lower levels so that they don’t have candidates to run for higher positions, and moving leaders up through our own ranks. That’s what the Dems/labor have done to us over the past few cycles, although my part of the county still holds out.

    Fletcher is a douche who’s gone off the reservation, but his douchiness is a symptom of a party that consistently alienates what should be its own constituency, when it should be embracing them, and then blames poor election results on outside factors. The real enemy is us.

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