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Founded by Frank D. Russo (Publisher and Editor, 2006-08).

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The Ultimate Outsourcing of California State Government: Governor's Office and Legislature Now Funded by Special Interests

Hiram Johnson Era Reforms Needed on Gifts, Travel, and Favors to State Electeds That Blur the Boundaries Between Private and Public Spheres

We Should Fund Our State Government with Public Funds, Including Salaries and "Investigatory Trips"

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By Frank D. Russo

Today's Los Angeles Times story, "Donations going to gov.'s staff: Schwarzenegger taps reelection campaign funds to boost the salaries of two trusted aides. Some say the practice should end", is sadly only the latest in an increasing "boundary" problem that "our" state government is suffering from. It is especially sad since Governor Schwarzenegger ran as a reformer, saying in the recall election that put him into office: "The money comes in, favors go out, the people lose."

The article starts out:

Gov. Arnold Schwarzenegger paid two of his most trusted aides a total of $33,000 in reelection campaign money in addition to their state salaries — meaning insurers, HMOs and other special interests that depend on government action were boosting the pay of his senior employees.

It goes on from there to say that Schwarzenegger has "routinely tapped the $114 million he had collected from private donors to ensure that several of his most valued aides are well compensated for their political work." [emphasis added] It then lays out the central issue: "whether government aides can work in California's best interests when a chunk of their pay is coming from campaign donors pressing for state contracts or favorable regulatory rulings."

This is not the first time that this practice was used, as the article points out that last year the Governor did the same thing--paying his chief of staff, Susan Kennedy, $92,500 in addition to the $131,000 salary she receives from the state. It reminds us that Schwarzenegger contracted for himself to be paid $8 million while Governor by a "fitness" magazine, and then put an end to that practice when its details became public. It also points out that during last summer's campaign season, the Governor issued an order forbidding his staff from accepting gifts from "special interests." It says that under these strict rules, "gubernatorial aides are not permitted to accept even a cup of coffee from business interests." Here's the kicker, according to the Times: "But Schwarzenegger is not preventing the same interests from boosting government salaries."

Read the Times' article and weep. But take a look around and you'll see that this is a bipartisan problem that needs fixing--the same way that a true reformer, Hiram Johnson-- took on the railroads which controlled our state a hundred years ago. His legacy is a California Constitutional prohibition against accepting any gifts of free transportation from railroad or other transportation companies. It needs to be extended to cover today's corruption, subtle and otherwise, of our elected officials.

A little of the history of article XII, section 7, of the California Constitution, which prohibits public officers from accepting passes or discounts from transportation companies, is found in an Ethics Opinion from the Attorney General, Bill Lockyer:

The genesis of the ban emanates from the early days of California and lies with the historical relationship between the legislature and the railroads. The ban focused on corruptive influences of gifts of free transportation by railroads and other transportation companies to legislators and other public officials. In 1970, a proposal to repeal this provision from the Constitution was defeated by the electorate.

Reduced to its component parts, the ban applies in the following manner:

1. The ban is violated when a transportation company makes a gift of transportation or discounts the price of transportation to a public officer.
2. The ban applies to public officers, both elected and non-elected but does not apply to employees.
3. The ban applies to interstate and foreign carriers, as well as domestic carriers, and to transportation received outside of California.
4. The ban applies regardless of whether the pass or discount was provided in connection with personal or public business.
5. Violation of the ban is punishable by forfeiture of office. Let's now consider these elements in greater detail.

The ban only applies to gifts made by transportation companies. An airline ticket or rail pass provided by the airline or railroad to officers would be covered by the ban. …

For purposes of the ban, the receipt of free transportation includes all other benefits accompanying the transportation. For example, when a railroad wished to provide transportation to a number of state and local public officers along with food, beverages, and entertainment from San Francisco to the Dixieland Jazz Festival in Sacramento, the officials in question were advised that the railroad should not merely charge the officer the standard fare for the transportation. Rather, all of the benefits received along with the transportation should be included in computing the value of the transportation. Officials who paid the full value of the goods and services could avoid receipt of a prohibited gift.

We've just seen a record of obscene campaign contributions in California this election cycle--topping $600 million dollars. We have railed against the influence of this money on the political process and the corruption of state government. But these other "gifts" to public officials also need to be scrutinized.

Action is needed, not because our elected officeholders are corrupt--any more than anyone else--but because they are human and influence is why campaign donations and private funding for trips and the like are given by private interests in this state. The same was true in when bold Progressive Reforms were needed in 1911 and human nature is the same today. Only now it's not the railroads.

The Foundation for Taxpayer and Consumer Rights (FCTR) also has tapped into this in a press release: "Documents Reveal Details of Corporate-Funded Luxury Junket for Top State Officials, Spouses And Lobbyists;Chevron Hosts Day of Meetings for Gov's Chief of Staff, Assembly Speaker and Others On "Rascals In Paradise" Tour of South America."

One little snippet:

"This is Jack Abramoff's golfing trips to Scotland, only with more bathing suits," said FTCR Executive Director Douglas Heller. "These luxury vacations paid for by special interests and dressed up as study trips just confirm that government officials are guided by a culture of corruption. The companies on the trip got days of uninterrupted lobbying and socializing with these public officials who will certainly remember their all-expense-paid vacation to the Copacabana when the lobbyists demand special favors in Sacramento."

The trip was sponsored by the California Foundation on the Environment and the Economy (CFEE), whose funders include the trip's corporate. FTCR has criticized public officials for participating in previous CFEE-sponsored, energy industry junkets including trips to Italy and Australia in 2004. In addition to having 12 days of unfettered access to powerful California state officials, Chevron, a major corporate-funder of the trip, delivered a series of private presentations to the officials all afternoon on November 13. John "Jack" Coffey, Chevron's lead lobbyist, was representing his company on the trip.

Read what the Foundation has to say and shed some more tears. Then let's take a look at what we need to fund our state government, tax the corporations of this state what is necessary, pay for salaries and investigations through appropriated funds, and end this privately funded outsourcing of our democracy. That includes taking a look at the parts of Proposition 140 that have chronically under funded our state legislature and led lobbyists and organizations to do much of the work that should be done by staffers under the Capitol dome. If our legislators, other elected officials, or staff need to travel to meetings and confereces, we should be paying for it. Otherwise, we'll be paying for it in other more indirect and disguised ways.

Posted on December 28, 2006

Comments

Whatever happened to the notion of public service? The honor of public service is suppose to be a part of their remuneration. The Governor, or the Legislature, shouldn't have to lure people to work for the citizens of California by bloating their already generous salaries. Making more than $100,000 a year is hardly a vow of poverty even in this state.

Posted by: Hayseed at December 28, 2006 12:11 PM

Mr. Russo,

I agree with much of what you say here. The public should fund, after and including some scrutiny, any travel required for state officials to perform their duties. Sounds pretty basic...

I do wish you would have had a more balanced article in that the current Governor is not the first one to collect special interest cash such as Gray Davis and the prison guards union for example. Nor is the Legislature hit with a big enough bat in your article in compairison to Gov. S; They got SO MUCH special interest cash in their latest campaigns, SO MUCH from interests outside of their districts and even their state! You name it: Pharmaceuticals, Indian Gaming Casinos, oil companies, railroads (again), multiple unions, law firms, etc.

Hayseed is right; only a little "public" and a big "service" in being serviced is what our elected officials are all about today.

Political "Clean money" ala Prop 89, redistricting and retention of term limits is needed. Perhaps a part-time legislature as well would help to concentrate on job performance vice solidifying additional power as the current political machine perpetuates.

Posted by: Sid at December 28, 2006 06:12 PM

A hundred thousand dollars a year is nothing in California. To live away from the scum you need at least $150,000 a year. It is time for California to stop favoring the poor, illegals etc. Let them figure out how to make their lives better or let them eat cake.

Posted by: Zarlat Absilok at December 29, 2006 02:28 PM

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