Author: Dan Morain, Senior editor

  • Dan Morain: Groups bankroll our ballot options

    Voters going to the polls Tuesday down in Riverside County had a clear choice: Elect the California Dental Association, or the California Correctional Peace Officers Association.

    In a special election in Glendale on Tuesday, they had their pick of the Service Employees International Union or Farmers Insurance agents.

    Voters in Sacramento shouldn’t feel left out. In June, they’ll have a chance to elect the California Faculty Association, the union that represents teachers at public universities.

    Of course, the ballot doesn’t actually list dentists, unions or insurance agents. But it might as well.

    With term limits and campaign finance restrictions, more and more lawmakers represent the interests of groups that spend hundreds of thousands of dollars to elect them.

    Moneyed interests pay for attacks on candidates they suspect will vote against them, and back opponents whose votes would be more to their liking. Once in office, lawmakers know that by casting a vote that annoys an interest group, they risk having to pay at the next election.

    The Fair Political Practices Commission called independent expenditures the “giant gorilla in campaign finance” in a 2008 report. The math makes clear why they are so powerful.

    A candidate might find 100 donors who could give the maximum donation, currently $3,900. That would add up to $390,000, not nearly enough to in a state where contested legislative campaigns regularly cost far more than $1 million.

    Interest groups can spend unlimited sums on independent campaigns. In recent years, they have taken to using their money to elect legislators from their own ranks. Dentists, optometrists, insurance agents and union officials all have won seats with the help of groups that spawned them.

    In Sacramento, Assembly Democratic candidate Chris Garland is the choice of the union that represents college faculty. Garland is on leave from his employer, the California Faculty Association.

    The union of college teachers has loaded an independent campaign fund with $200,000, dedicated to Garland’s election in his primary race against Supervisor Roger Dickinson and City Council members Lauren Hammond and Kevin McCarty to succeed termed Assemblyman Dave Jones.

    Like college teachers, dentists might not come to mind when you think of Sacramento power players.

    But they can rip your teeth out, politically speaking, of course. The California Dental Association has spent $12.4 million on campaign donations and $5.8 million on lobbying in the past decade in California.

    In the Riverside special election to fill a vacant Senate seat, Assemblyman Bill Emmerson is the dental association’s darling in a field that includes former Republican Assemblyman Russ Bogh.

    Bogh and Emmerson would vote alike in almost all instances. But Emmerson is an orthodontist, who oversaw the dental association’s political action committee before winning an Assembly seat in 2004, with the help of $403,000 from the dental association.

    As a legislator, Emmerson carries bills that the dentists lobby for and regularly votes for legislation that dentists champion. In his quest to move to the Senate, Emmerson has benefited from $600,000 in dental association independent expenditures.

    In the campaign, Emmerson and the dentists faced opposition from a political action committee called Citizens for California Reform.

    Citizens for California Reform started the year by touting an initiative to make the Legislature part time. Once that stalled, the entity turned its attention to helping Bogh, raising $150,000 from three entrenched interest groups: the California Correctional Peace Officers Association, a union that represent state firefighters and a group representing optometrists.

    Why optometrists? Optometrists, who are not physicians, are involved in a nasty scope-of-practice fight. They want to be able to treat glaucoma. Ophthalmologists, who are physicians, are battling that attempt. Assemblyman Emmerson sided with the physicians. For taking that stand, Emmerson evidently must pay.

    Public employee unions generally side with Democrats. But they have friends among Republicans. No doubt, the prison guards and firefighters figured Bogh would be more open to their arguments – though you’d never guess that from television ads they aired on Bogh’s behalf.

    “Russ Bogh pledged to oppose any tax increase, said no to the car tax hike, and no to wasteful spending,” the public employees’ union-funded ad said.

    The race also attracted Indian casino money. The Morongo Band of Mission Indians, which operates a large casino outside Palm Springs, dumped $93,031 into the Senate race, siding with Bogh.

    In the Legislature, Morongo seeks approval to begin Internet gambling within California. Other casino tribes, including members of the California Tribal Business Alliance, are skeptical. The tribal business alliance answered Morongo by spending $21,605 touting Emmerson.

    Independent expenditures are not new. But as the FPPC noted, their magnitude is growing, as is their influence. It’s not an advance.

    Robert Fellmeth, a law professor at the University of San Diego who has followed Capitol politics and policy for decades, said the influence of independent campaigns leads to “tribalism” within the Legislature.

    Moneyed interests and the lawmakers they influence seek to satisfy their own narrow and immediate needs, without much thought of the greater good. Lawmakers mollify “stakeholders” without paying heed to the public at large.

    “We want public decisions to represent the broad society,” said Fellmeth. But if all lawmakers are “tribal chieftains,” he asks, then who is not at the table?

    Too often, the one missing from the table is you.

  • Dan Morain: PG&E flips the switch on a ballot power play


    It was an unhappy anniversary that passed without public fanfare. But nine years ago last week, Pacific Gas & Electric Co., ravaged by the energy crisis, plunged into bankruptcy.

    Today, PG&E turns a healthy profit. And knowing that the best defense against any new assault is a strong offense, PG&E is aggressively promoting an initiative on the June ballot that would all but ensure PG&E’s future.

    By election day, the Northern California utility will have spent $35 million, maybe more, to buy its very own law, one that seeks to guarantee that PG&E would never lose an inch of turf to public utilities or whatever the next new thing is that rocks the energy world.

    PG&E has legitimate concerns. But its initiative, Proposition 16, deserves its own separate wall in the pantheon of special interest-funded and one-sided ballot measures.

    PG&E is the measure’s sole funder, $28.52 million and counting. It has hired many of California’s top and most costly political consultants, including Sacramento’s own David Townsend, who is being paid $75,000 a month.

    PG&E has spent $19 million so far to air television and radio commercials across the state, warning that government plans to take over electric service, and lamenting: “We don’t even have the right to vote on it.”

    The California Chamber of Commerce has endorsed Proposition 16. PG&E holds a seat on its board. The company has received endorsements from other political operators, including several who market themselves to the public as being pro-business and opposed to taxes.

    PG&E has paid $457,000 to appear on the operators’ slate cards, which will land in voters’ mailboxes before the June 8 election. Some are receiving $100,000 payments, or more.

    California requires a two-thirds vote before imposing most taxes, an almost insurmountable hurdle. Through Proposition 16, PG&E is seeking to create its very own constitutional amendment that would extend the two-thirds requirement to electricity-related issues in three ways:

    • A local government seeking to enter the electric business could do so only after winning a two-thirds vote.

    • An existing public utility, such as the Sacramento Municipal Utility District, would need a two-thirds vote before expanding its service area.

    • Local governments would need a two-thirds vote before creating a “community choice aggregation” program, by which customers band together to buy power wholesale from independent operators at a discount.

    The No-on-16 campaign has virtually no money, at least not yet. But PG&E’s initiative has driven a wedge between business interests that ordinarily walk arm-in-arm.

    The California Association of Realtors, almost always aligned with the California Chamber of Commerce, is opposing it.

    The initiative’s wording could be interpreted as requiring that a public utility such as SMUD would need a two-thirds vote in order to add even one new home to its system.

    Equally significant, the California Manufacturers and Technology Association opposes Proposition 16.

    Electricity rates for California industry are significantly higher than those in most other states, notes Jack Stewart, the manufacturers’ president. By law, he added, utilities such as PG&E receive a guaranteed profit of 11 percent.

    “This initiative takes that guaranteed profit to a guaranteed monopoly,” Stewart said. “We don’t think that creating a monopoly that is even more difficult to penetrate is good for ratepayers.”

    PG&E’s initiative has its roots in the California energy crisis at the start of this century when Enron and other energy bandits gamed the grid and jacked up wholesale prices to record levels.

    The crisis tore PG&E apart. Unable to pay record-high wholesale prices and blocked from passing on the costs to its customers, the company filed for bankruptcy protection on April 6, 2001.

    Having emerged from bankruptcy court in 2004, its profits now are solid, with net income of $1.22 billion in 2009.

    Operating in perhaps the most environmentally aware region in the world, PG&E has burnished its green image.

    It recently pulled out of the U.S. Chamber of Commerce over the chamber’s opposition to efforts to curb greenhouse gases. The company broke with many California businesses and sided with environmentalists by embracing Assembly Bill 32, the landmark 2006 law that seeks to force California to reduce greenhouse gas emissions.

    PG&E’s standing might seem solid. But the future is arriving fast. In its latest annual report, PG&E enumerates many risks. One threat is “the loss of customers,” which could occur in several ways.

    PG&E warns about local government entering the electric business, citing the prospect of “municipalization of the utility’s electric distribution facilities.”

    It worries about “the level of ‘direct access’ by which consumers procure electricity from alternative energy providers.”

    A third risk is the “implementation of ‘community choice aggregation,’ which permits cities and counties to purchase and sell electricity for their local residents and businesses.”

    PG&E is not paranoid. There are, in fact, people seeking to take bites out of its business.

    In 2006, PG&E spent more than $13 million to defeat an attempt by Yolo County to join the Sacramento Municipal Utility District.

    There have been three separate votes to create public power in PG&E’s corporate home of San Francisco since 2000. Each has failed. But San Francisco and Marin County now are seeking to invoke the 2002 community aggregation law to break away from PG&E without a vote.

    At the same time, government and venture capitalists are spending billions on research into alternative energy sources.

    Earlier this year, Silicon Valley’s Bloom Energy gained national attention for its “Bloom boxes,” which it installed at high-profile users such as Google and eBay, helping them generate their own power with a box of fuel cells the size of a refrigerator.

    Whether it’s Bloom boxes or not, some new technology will be to the electricity business what cell phones were to the old telephone companies, a device that in a very few years forever alters the nature of a once-stable and profitable utility.

    “The industry model is changing very quickly,” said Arlen Orchard, general counsel to SMUD. “We think the relation between utilities and their customers will change fairly dramatically. We’re not sure what it is going to look like.”

    PG&E doesn’t know what tomorrow will look like either, except that without a doubt, it will be very different from today. But California is a state where constitutional amendments can be acquired by ballot measure. The shape of that future will depend in part on how voters decide PG&E’s Proposition 16.

  • Dan Morain: Anti-gay candidate tests GOP appeal

    John C. Eastman, seeking the Republican nomination for California attorney general, could become a new face in the fight to block same-sex marriage.

    His candidacy threatens to further shrink the GOP’s dwindling market share among California voters, even as he seeks to use the campaign apparatus that won the epic battle to ban same-sex marriage in 2008.

    Eastman has surrounded himself with prominent players from the Proposition 8 campaign. His campaign firm, Schubert Flint Public Affairs, ran the Yes-on-8 campaign. Several of his donors were major contributors to the effort.

    And a conservative Christian group called National Organization for Marriage, based in New Jersey, already playing in the GOP primary for the U.S. Senate here, proclaimed Eastman’s candidacy to be of prime interest. “We view this race as one of the most important races in the country,” said Brian Brown. The group was a major Yes-on-8 fundraiser.

    Eastman has never been a player in electoral politics, but he is significant in far-conservative legal circles. Until recently, he was dean of Chapman University School of Law in Orange County, and is a former law clerk to U.S. Supreme Court Justice Clarence Thomas.

    He founded the Center for Constitutional Jurisprudence, which stakes out conservative stands in appellate briefs and other writings, some of them related to homosexuality.

    The center’s advisers includes Reagan administration Attorney General Ed Meese, who is Eastman’s campaign chairman, and John C. Yoo, another former Thomas clerk who authored “torture memos” in President George W. Bush’s administration contending that “enhanced” interrogation techniques like water-boarding were legal.

    Eastman wields a sharp pen of his own. In June 2000, he wrote that just as slavery and polygamy were “twin relics of barbarism” in the 19th century, “two new indicia of barbarism arose during the 20th century: abortion and homosexuality.”

    “Abortion is barbaric because it deprives some human beings of a right even more precious than liberty, the right to life itself. And homosexuality, like polygamy, has for centuries been thought to undermine the institution of marriage and the civil society that rests on it.”

    Eastman sides with Boy Scouts of America, defending the organization’s exclusion of gay troop leaders, and saying that Boy Scouts teach “the long-established view that extramarital sexual relations and homosexual conduct are immoral.”

    Some Republicans leaders fret that Eastman would be trounced in a general election if he were to win the primary. But it’d be folly to dismiss his primary campaign against Sen. Tom Harman of Orange and Los Angeles District Attorney Steve Cooley. Eastman has endorsements from the Howard Jarvis Taxpayers Association and California Republican Assembly, significant in GOP primaries.

    Conservative radio talk show hosts have embraced him, giving him unusual amounts of airtime, including three hours last week on a powerful Bakersfield-based station that beams throughout the San Joaquin Valley, prime turf for any Republican.

    He has endorsements from rightwing talkers Hugh Hewitt, who regularly features Eastman on his show, Dennis Prager, Laura Ingraham, Bill Bennett and Mark Levin.

    Whether spoken or not, one of the main issues in Eastman’s campaign is the lawsuit challenging the constitutionality of Proposition 8. Current Attorney General Jerry Brown has refused to defend the initiative, leaving Yes-on-8 backers to argue the case before U.S. District Judge Vaughn Walker of San Francisco.

    Eastman’s supporters expect if he were elected, he would bring the power of the attorney general’s office to bear in defense of Proposition 8. In an interview, Eastman called Brown’s stand “flagrant disregard” of the law, and said attorneys general must defend virtually all state initiatives.

    “It is the most important suit involving marriage in history,” Brown, of the National Organization for Marriage, said of the California case. A loss could upend same-sex marriage bans in 30 other states.

    Eastman has raised relatively little money today. But he also stands to capitalize on the apparatus that raised $39 million for Proposition 8.

    “We showed with Proposition 8 that we can get donors to support what we’re doing,” Brown said, adding that he is setting up a California campaign fund.

    Eastman is quick to say support from Proposition 8 backers is only part of his base. Certainly, his writings go beyond homosexuality. Birth on U.S. soil doesn’t necessarily qualify a person to be a citizen, he has written, a concept that would overturn law dating to the 19th century.

    Eastman sides with gun advocates in a U.S. Supreme Court case to be decided soon challenging the power of states to impose gun control. He filed a brief arguing against the ban on corporate donations to political campaigns. The U.S. Supreme Court struck down that ban in January.

    Eastman could capture a GOP nomination from a pool of voters that is shrinking. But his positions could be red meat for whichever Democrat makes it to the general election. His candidacy could have longer-range implications. He is hard-right in a blue state, where decline-to-state voters soon may overtake Republicans. Eastman’s candidacy could hasten that day.

  • Dan Morain: Senate contest tests GOP’s ‘big tent’

    Tom Campbell brings an impressive résumé to the race for U.S. Senate. He’s a past dean of UC Berkeley’s business school and a former Stanford Law School professor. He’s served in Congress and in the California state Senate, and directed the California Department of Finance.

    But being a free thinker, Campbell occasionally strays from Republican orthodoxy, including the party’s opposition to gay marriage. That stance has brought him under attack from the conservative National Organization for Marriage, a New Jersey group that reached into California earlier this month and aired a television ad aimed at derailing Campbell’s bid for office.

    Established in 2007 to combat same-sex marriage, NOM is headed by Brian Brown and Maggie Gallagher. The two were among the most influential backers of Proposition 8, the 2008 initiative that reversed the California Supreme Court decision permitting same-sex marriage, and of a 2009 ballot measure in Maine that overturned same-sex marriage in that state.

    “It’s important that the Republican Party maintain its platform and core beliefs,” Brown said, explaining his opposition to Campbell. “Marriage is one of the most critical of these … . We do not want a candidate elected, especially as a Republican, who wants to redefine marriage.”

    If you blinked, you might have missed the National Organization for Marriage’s ad attacking Campbell. The buy was tiny by California standards – $275,000. But it was the start of what could be a wave of ads in California’s U.S. Senate campaign by political entities that are under no obligation to disclose the source of their money. And it again raises questions about what it means to be a Republican, and whether the “big tent” has room for social moderates.

    Like many political ads, this one is fairly loose with its adherence to the facts. The ad describes Campbell and incumbent Democratic Sen. Barbara Boxer as “two peas in a pod,” claiming they support tax increases and same-sex marriage.

    More directly, the attack suggests that Campbell faces the prospect that he will be “Scozzafavaed.” It’s a little like being Borked, only by conservatives.

    The term came into the lexicon when Dierdre “Dede” Scozzafava, a New York Republican assemblywoman, ran for a congressional seat in a special election last year, and, like Campbell, acknowledged that she supports same-sex marriage.

    She ended up dropping her candidacy when she was, well, Scozzafavaed by conservatives including Sarah Palin and the National Organization for Marriage.

    Scozzafava threw her support to the Democrat, Bill Owens, who won the seat. What made the Democratic win so stunning was that the seat had been in Republican hands – albeit those of a moderate – since 1873.

    In California, Campbell is locked in a tight race against Carly Fiorina, the former chief executive officer of Hewlett-Packard. Polls show both would be competitive against Boxer, particularly in a year when angry voters are in a mood to throw out incumbents.

    A Field Poll earlier this month showed Campbell leading Fiorina by six points in the GOP primary. A poll by the Public Policy Institute of California showed Fiorina with a one-point lead. Fiorina and a third Republican candidate, Assemblyman Chuch DeVore, share opposition to gay marriage.

    Will the National Organization for Marriage’s involvement move the California electorate in the same way that it helped shape the New York congressional race? It remains to be seen. But Brown and Gallagher are willing to take credit for Fiorina’s upward trend in the polls.

    Gallagher, who is also an officer in the Virginia-based Institute for Marriage and Public Policy, cited that PPIC poll and proclaimed in a blog: “Bottom line: I think Tom Campbell is about to find out, as Dede Scozzafava did, that it is not a good idea to be for gay marriage if you are Republican.”

    It will be instructive to see how Republicans in California respond to this clarion call. This state has deep problems. Unemployment is 12.5 percent. Today, Toyota is ending production at the NUMMI plant in Fremont, sending another 20,000 wage-earners to the unemployment rolls.

    At the same time. attitudes are changing about same-sex marriage. The Public Policy Institute of California poll showed a slight majority of Californians now favor same-sex marriage. Although two-thirds of registered Republicans oppose such unions, it’s far less relevant among younger voters, no matter their party affiliation.

    Campbell clearly hopes that his understanding of the economy, the state and Capitol Hill will prevail in voter’s minds. He shrugs off the attack over his stand on same-sex marriage.

    “I do what I think is best,” Campbell told me. “Voters will support me if they want to reform this remarkably bad political process.”

    Perhaps so, but history suggests that Republicans care more about enforcing orthodoxy than appealing to the state’s changing electorate. Only 30.8 percent of California’s voters are Republican, down from more than 37 percent in 1994. Democratic registration is rising, as is the number of voters who decline to state a party preference.

    The GOP lacks a majority in any of California’s 58 counties. Perhaps attacks on moderates have something to do with the party’s slide.

  • Dan Morain: In Brown vs. Whitman, the contrast is clear



    California gubernatorial candidate Jerry Brown gets into his 1974 Plymouth Satellite parked in front of his old apartment near the Capitol on N Street in Sacramento, where a fundraiser was held for him Wednesday.

    Linda Ronstadt’s greatest hits played on a stereo in the upstairs Thayer apartment. A powder-blue Plymouth Satellite was parked on the street below.

    Capitol denizens past and present filed in to the N Street building, having paid $2,500 to $10,000 to eat sushi and other Asian food, drink wine and get reacquainted with the featured attraction.

    Where, exactly, was that attraction?

    Jerry Brown, rarely one to show up on time, appeared 31 minutes past the appointed 5 p.m. start of the fundraiser thrown for him at the apartment he rented for $275 a month, back when he tooled around in the 1974 Plymouth and dated one of the hottest acts of the time.

    “This is about the future, not the past,” the once and perhaps future governor said, accommodating photographers by standing by the Plymouth, a relic on loan for the evening from the California Auto Museum.

    For better or worse, Brown is the lone Democrat in the race for governor. Other Democrats pulled out, knowing they could not beat a politician who has held office for four decades and is the son of a governor who held office decades earlier.

    Billionaire Republican Meg Whitman, a name unknown to most voters a few months ago, has been using her wealth to carry out the threat made by one of her aides to run her Republican rival through a “wood chipper.” With a $27 million ad blitz, Whitman has opened a 50-point lead over Republican Insurance Commissioner Steve Poizner, polls show. Poizner vows to close the gap.

    Voter attitudes could change by the June primary. But as it stands, the race will come down to Brown and Whitman.

    Some pundits lament the choice. Some seem bored by the prospect of a Brown-Whitman contest. Say what you may, there is one attraction about this prospective contest – it offers voters a clear choice.

    Insider vs. outsider. Lifelong politician against an ex-chief executive who until recently didn’t much care about voting. One has vetoed bills and had lawmakers override a veto. The other this past week naively talked about how she would task “legislative teams” to implement her vision, as if the Legislature is something other than a co-equal branch of government.

    The differences all were on display in the past few days. As campaign finance reports showed, Whitman is doing her part to end the recession, spending $47 million so far, with plans to spend three times that sum or more between now and November.

    Brown has spent $144,000, and has enough money in the bank for maybe three weeks’ worth of television commercials.

    Brown travels aboard Southwest Airlines, paying reduced fares accorded to a man of his advanced years, 71. Whitman flies aboard charter jets.

    Brown’s campaign manager, Steve Glazer, volunteered for five months and now receives $15,000 a month. Whitman pays her campaign manager, Jillian Hasner, $30,000 a month.

    She pays a consultant $100,000 a month, a second $90,000 a month, and a third $36,000 a month. There are many others who receive more than Glazer.

    Money aside, the two have very different styles, as was apparent in separate appearances this week before police chiefs and sheriffs at the downtown Sheraton Grand.

    Whitman showed up on time and delivered a speech that shareholders and Toastmasters would appreciate. She employed topic sentences, made concise points and offered conclusions, all in 11 minutes, 30 seconds. No applause.

    Brown wandered in late, without an entourage or script, bounced from topic to topic, occasionally lost his thread, and got fiery when talking about Wall Street greed and politicians who make scapegoats out of poor people.

    He made some odd detours, like pointing out that 36 years has passed since his first stint as governor. That’s like “the equivalent if someone ran for governor at the beginning of World War I and decided to run again for governor at the beginning of the Korean War.”

    Despite that rambling spiel, the crowd applauded when he concluded, 20 minutes later.

    Whitman had urged the cops to pick up a copy of her glossy policy paper. The campaign counts it at 48 pages. Take away the pictures of Whitman, charts and fluff and the brochure is, charitably, 20 pages.

    Brown is a walking policy brief. He reminded the chiefs that as governor, he signed legislation that dramatically altered the old indeterminate prison-sentencing system in which felons could spend little time in prison, or a lifetime, depending on parole boards’ subjective assessments of whether they were dangerous.

    Attorney General Brown lamented the unintended consequences of the determinate-sentencing system he helped create, in which inmates are released at the end of set prison terms, no matter the threat they pose. There must be changes, he said.

    Whitman sees no need for a “sentencing commission” to review prison terms currently in place, and made a point of saying she supports the death penalty. Brown didn’t raise the topic but is a lifelong capital punishment opponent.

    Former Oakland Mayor Brown told the law enforcement officials about overseeing a police department in a city where there are “real cops” and “real criminals,” and how there have been nine murders in a five-block radius around his Oakland loft.

    Whitman did not talk about her digs, which are in Atherton, the leafy peninsula town where many Silicon Valley multimillionaires have their fenced mansions.

    Whitman cites her business experience, telling police her time as chief executive officer at eBay taught her much about law enforcement and cybercrime. Brown dismisses the experience of “What do they call them? CEOs.”

    The two take different tones about California and its future. Long Island native Whitman offers a long list of states she seems to think are managing better than California – Utah, Texas, Nevada, Arizona and Colorado, where she has a second home.

    Brown acknowledges California has problems but offers a view that is rather optimistic, albeit awkwardly phrased: “From the finding of gold, to agriculture, to movie industry, to oil, the Silicon Valley, to computer games, medical breakthroughs, this is an incredible state, to green jobs.”

    Brown is famously quirky. Whitman has issues, too. Although her money has propelled her into the lead in the polls, voters could come to resent the lavish spending.

    Yet in an age when voters regularly complain that all politicians are the same, the pending race between Whitman and Brown exposes the folly of that wisdom. If Whitman prevails over Poizner in the primary, voters will be presented with sharp contrasts and very divergent visions on how California can right itself.



    Meg Whitman, Republican candidate for governor and former CEO of eBay, speaks to the California Taxpayers Association at its annual meeting Tuesday at the Sacramento Convention Center.

  • Dan Morain: Meg Whitman flies far above the fray

    A billionaire’s wallet is something to behold when it opens wide.

    Republican billionaire Meg Whitman has attained front-runner status in the race to replace Gov. Arnold Schwarzenegger by spending nine times more than her nearest rival on broadcast ads in the first two and half months of this year.

    The glossy production value of her campaign ads aside, her latest campaign finance report offers a peek at the woman who was a political unknown a short time ago, and perhaps provides some insight into how she might govern.

    Whitman surrounds herself with aides from eBay, where she was chief executive officer, and from the campaign of former Republican presidential candidate Mitt Romney, the onetime Massachusetts governor who is her mentor in business and politics.

    She also frets about security.

    Whitman has paid $204,000 to John W. Endert, a former eBay security executive who has a permit to carry firearms and describes himself as experienced in corporate investigations, executive protection and threat mitigation. She categorized the $10,500 per month expenditure as a campaign worker salary.

    Whitman paid $3,500 to what she called a “campaign consultant.” The recipient, Walsingham Associate Inc., says on its Web site that it specializes in detection of eavesdropping equipment.

    Last year, Whitman’s campaign paid $20,383 to a company called Western Limited and called the expenditure “polling and survey research.” Western Limited describes itself as a private investigations firm that seeks to “solve your case – whether it is obtaining damaging video, locating the background records that you need, or obtaining a statement that helps you make a claims or business decision.”

    Whitman has given $39 million of her own money to her campaign, raised $11 million from other donors and spent $46 million – with seven months left until the November general election.

    She has hired no fewer than 54 campaign staffers and retained more than 70 consultants as she has built what seems to be an insurmountable lead in the Republican primary against state Insurance Commissioner Steve Poizner.

    Whitman has spent more than twice as much on a single charter jet company, $371,125, than the $144,000 that Democrat Jerry Brown reported spending on his entire campaign so far.

    The Whitman campaign is traveling first class.

    The charter jet company she seems to prefer is ACM Aviation, which boasts on its Web site that it “has been offering white-glove, on-demand, premium jet charter services for more then 28 years.”

    She holds fundraisers at high-end venues, spending $20,564 for an event at Bernardus Lodge, “among the oaks and vineyards of scenic Carmel Valley,” where guests are invited to “savor the gracious intimacy of a resort with epicurean flair.”

    Whitman lashes out at state spending but appears willing to pay top dollar to her help. She pays former eBay aide Henry Gomez $36,000 a month annually to serve on her campaign.

    She has spent almost $3.6 million on consulting by Tokoni Inc., a social networking firm co-founded by former eBay executives Mary Lou Song and husband Alex Kazim.

    The firm says on its Web site that it seeks to create a “global internet community to help people share their first-hand stories and experiences with others through shared stories of interest.”

    She paid $96,000 last year to Solamere Capital, a Massachusetts-based firm whose Web site says it “was founded to serve as a multifamily office focusing on superior private equity opportunities.”

    Solamere’s principals include Romney’s son Tagg Romney and Spencer J. Zwick, who was prominent in Mitt Romney’s presidential campaign. Zwick is her finance chair; she has paid his firm, SJZ Inc., $842,000.

    Since entering the campaign, Whitman has poured a head-spinning $28 million into radio and television, plus what she has spent on consultants who devise the spots. She paid $495,000 to Mike Murphy’s firm, Bonaparte Films LLC.

    Her spending is unprecedented even for California, where wealthy candidates such as Michael Huffington, Al Checchi and Steve Westly spent lavishly in failed bids to win statewide office.

    “It is going to backfire,” Poizner said in an interview. “It becomes distasteful at some point. People starting asking questions, ‘What are you trying to compensate for?’ “

    Lately, Whitman has started to step out from behind her handlers’ shield but remains cloistered, at least compared to the far more accessible Poizner and Brown, and Republican candidates for U.S. Senate who regularly respond to questions from voters and reporters.

    Whitman and her consultants may be betting that California is such a media-driven state that she doesn’t need to mingle with the electorate.

    But she runs the risk that she will be seen as arrogant and disconnected from the everyday lives of California voters.

    Whitman may or may not be down-to-earth. It’s hard to know based on the few interviews and news conferences she has held. But judging from her campaign, she is living a very different life than most of us.

  • Dan Morain: Lungren rival a very different sort of skeptic on health bill



    Democrat Dr. Amerish “Ami” Bera is challenging GOP Rep. Dan Lungren, pictured, in California’s 3rd Congressional District, where the health care debate is a pivotal issue. Lungren is a leading foe of the Democrats’ health plan in Congress who openly questions the magnitude of the health care problem. Bera calls the legislation a “move forward” but questions whether it will pay for itself, address soaring health costs and cover enough people.

    The national health care debate is coming to Galt, Fair Oaks and Ione.

    Across the country, Republicans are bellicose, vowing to unseat congressional Democrats who dare to vote for President Barack Obama’s health care legislation. Democrats seem fearful.

    But in the district that runs from Elk Grove to Carmichael and east to the Sierra Nevada, a Democrat is uniquely positioned to alter the terms of engagement and challenge incumbent Republican Dan Lungren over his opposition to the health care overhaul.

    There may be no congressional race in the nation where health care could play a more prominent role.

    Lungren, a 63-year-old lawyer and career politician, grew up with a unique view into perhaps the most elite corner of the medical world.

    His father was Richard Nixon’s longtime personal physician.

    Now, Lungren is a leading Republican voice denouncing the Democrats’ health care plan pending in Congress, and is openly questioning the magnitude of the health care problem.

    “They want to go to a national health care system. I believe that would be completely destructive,” Lungren told me as the vote neared.

    “That is not politics. That is sincere difference in beliefs.”

    Lungren’s challenger is Dr. Amerish “Ami” Bera, a 45-year-old physician who is married to a physician and is making his first run for public office.

    Bera served as Sacramento County’s chief medical officer and spent four years as associate dean overseeing admissions to the UC Davis Medical School, where he taught and is an internist on the medical staff.

    Bera doesn’t embrace the health care legislation pending in Congress.

    He was waiting for the final version to be released when we spoke the other day.

    It is an expedient position, and underscores how hostile voters are about legislation emanating from Washington, particularly in California’s 3rd Congressional District, where voters have been electing Republicans for decades.

    However, Bera’s doubts are fundamentally different than Lungren’s.

    “It is certainly a move forward,” Bera said. He questions whether the bill would pay for itself, and worries that the legislation won’t “address the runaway costs of health care,” or ensure that enough uninsured people are covered.

    A product of a public medical school, Bera has spent his career in public health, treating all patients, regardless of whether they have insurance.

    He long has advocated extending care to as many people as possible, having pushed to provide care for Sacramento County’s uninsured when he was medical officer. Even now, he regularly volunteers at medical student-run free clinics around the county aimed at treating the least well off among us.

    Bera, who is on leave from UC Davis while he runs for office, decries “runaway” health insurance costs that far outpace inflation in health care costs. He talks of treating patients who never would have become ill if only they could have afforded basic preventive care, and laments sending uninsured patients on their way, knowing they cannot afford follow-up care.

    “The system doesn’t allow you to change your oil, but when your engine block cracks, we put in a new engine,” Bera said.

    For his part, Lungren disputes the magnitude of the problem of the uninsured, saying there are 9 million to 12 million Americans without insurance nationwide.

    “That is a fantasy number,” Bera scoffs.

    Lungren parrots studies produced by conservative and libertarian institutes, and reports by publications such as National Review. They arrive at their estimate by discounting people who could afford insurance but opt not to buy it, and others who are illegal immigrants.

    Critics of those studies call them flawed and politically motivated.

    The U.S. Census Bureau, the primary source for counting the nation’s uninsured, placed the number at more than 46 million as of 2008, and not counting the millions of people laid off in 2009.

    The UCLA Center for Health Policy Research reported last week that in California alone, 8.2 million people lack health insurance, a number that jumped by 2 million last year because of the recession.

    California’s numbers include 1.5 million children, UCLA says.

    Lungren offers solutions including health savings accounts. That would work fine for people who could afford to pay and would benefit from the tax break. The concept would be useless for the 2 million Californians out of work. Even people who could afford health savings accounts ought to be skeptical, given what became of 401(k) retirement plans in the crash.

    Lungren is an articulate advocate of the conservative view of health care. But he was part of the majority when Republicans controlled all branches of government, and failed to confront the insurance industry.

    It’s understandable. The insurance industry and health care professionals have been loyal Republican contributors, donating $475 million to congressional candidates over the past two decades, while Democrats received $330 million, according to the nonpartisan Center for Responsive Politics.

    Incumbents like Lungren have an advantage in California, where gerrymandered districts all but ensure the party that holds a congressional seat will retain it.

    But restless voters are angry with incumbents, and this is not a race to be dismissed lightly. Lungren squeaked by two years ago against an underfunded Democrat.

    Bera doesn’t lack for money. He caught national party leaders’ attention when he out-raised Lungren in 2009, ending the year with $740,000 in the bank, to Lungren’s $527,000. The Democratic Congressional Campaign Committee has decreed that the Bera-Lungren race is one of its targets.

    Bera, who grew up in Downey and Las Palmas, is the son of a public school teacher and an engineer who emigrated here in 1957 from India.

    As a candidate, he is tapping Indian Americans who strive to establish themselves in U.S. politics. No fewer than 29 people whose last name is Bera donated to him last year, not counting Janine Bera, his wife.

    They are all relatives, he said.

    Lungren has been through it before. His vita stretches back to 1978 when he won his first congressional race, back in his hometown of Long Beach. After a decade in Congress, he won two four-year terms as California attorney general before losing to Gray Davis for governor in 1998. He came back in 2004, winning the congressional seat formerly held by Doug Ose.

    Lungren has some moves. He cleverly took it upon himself to deliver a version of the health care bill, all 2,000 pages, to public libraries in his district. He poses in front of a past version, its pages stacked high, on a YouTube video.

    “Weighs about 20 pounds,” Lungren says on the video.

    When he ran for re-election as attorney general in 1994, Lungren debated his foe up and down the state, even though he led by a wide margin in the polls. What a show it would be if he were to revive that tactic this year with Bera and bring the national health care debate to Elk Grove and Fair Oaks and Jackson.



    Dr. Amerish “Ami” Bera

  • Dan Morain: Lacking big bucks, Ted Costa keeps getting dissed



    Ted Costa, here announcing a 2003 ballot measure, has initiated a number of initiatives only to see them taken over by larger political organizations.

    Ted Costa is getting Bigfooted. Again.

    Costa is sitting at the desk of his musty office in a strip mall sandwiched among other strip malls on Arden Way.

    Papers are spread about his desk and floor. Old pizza crust sits in a trash can. His black wingtips are muddy from his morning chores at his Citrus Heights home, which includes feeding his wife’s pet donkeys.

    Original campaign signs for Proposition 13 hang on the walls, as does a black and white photo of a trimmer and younger Costa with his mentor, Paul Gann.

    Costa was not pleased on the day I visited him.

    “Politics. That’s the way it is,” Costa said, disgusted that moneyed interests, including Texas oil companies, were elbowing him out of the coming initiative war over California’s law requiring reductions to greenhouse gases.

    Costa, 68, runs People’s Advocate Inc., a legacy of the 1978 anti-tax revolt that brought us Proposition 13. Costa has spent decades in the world of direct mail and ballot-box politics, usually on the edges, always on the conservative side.

    The business of politics is dominated by huge money and high stakes. There isn’t much room for a guy like Costa. Big money guys who use initiatives to buy laws and shape state policy simply don’t want to fund a measure if he is in control. Costa is not poll-tested or focus-grouped. He says what he thinks, and that is dicey, given the multimillion-dollar stakes involved in initiatives.

    But Costa does have an eye for issues that resonate, particularly among conservatives, the tea party sorts, though he is dismissive of the California version of the movement. Has it placed an initiative on any ballot? he asks, knowing it hasn’t.

    Costa initiated the 2003 recall drive against Gov. Gray Davis and later pushed to alter how legislative boundaries are drawn. More sophisticated political operations, using Arnold Schwarzenegger as the front man, seized control of both issues.

    This year, Costa grabbed hold of what he was convinced was another winner: an initiative to roll back AB 32, the landmark 2006 law championed by Schwarzenegger that seeks to force California corporations to reduce greenhouse gas emissions.

    Schwarzenegger signed the bill into law back before the economy crashed. Now voters are scared, what with unemployment far above 12 percent and the recession dragging on. Voters might decide to put the law on hold, given dire warnings by business leaders that AB 32’s implementation would cost more jobs.

    Costa wrote a direct one-page initiative to accomplish that end, and got Republican Rep. Tom McClintock of Elk Grove, and Assemblyman Dan Logue, a Linda Republican, to sign on as official proponents.

    But as Costa was preparing to gather signatures and send mailers soliciting money from his list of past donors, Texas oil companies stepped in, putting their money behind a nearly identical proposed initiative written by Sacramento attorney Thomas Hiltachk. Hiltachk is one of the state’s most prolific initiative authors; his firm represents the California Republican Party.

    It’s all part of the professionalization of the initiative industry. If there ever was room for citizen activists, that time passed long ago.

    High-end consulting firms Goddard Claussen and Woodward & McDowell were enlisted to run the campaign to derail AB 32, along with lobbyist Michael Carpenter, whose clients include Valero Energy, one of the Texas funders. The three firms have eight offices among them from Sacramento and Washington, D.C., to Los Angeles and the Bay Area. Not a one is in a strip mall.

    Goddard Claussen and Woodward & McDowell have handled California ballot measure campaigns on behalf of oil, gambling, agriculture, alcohol, builders, real estate interests, health care, auto insurance carriers and many more.

    Goddard Claussen is famous for creating the Harry & Louise ads that helped tube President Clinton’s health care plan in 1994. The firm regularly represents the California Chamber of Commerce in initiative battles and worked on many of Schwarzenegger’s ballot measures before joining the effort to unravel the governor’s proudest achievement.

    The AB 32 initiative fight easily could reach into the tens of millions. Both firms are used to such numbers. Woodward & McDowell received no less than $13.4 million for its work on California ballot measures between 2000 and 2009.

    Goddard Claussen received $51 million during that time for its work on ballot measures, including millions it spent on behalf of clients to purchase broadcast time, California secretary of state records show.

    That’s simply not Costa’s world. Nor was it Paul Gann’s.

    Gann was the other half of the two-man juggernaut that included Howard Jarvis and created the anti-tax revolution of 1978 by promoting Proposition 13 to slash property taxes. Costa tells of a conversation related to him by Gann in which Jarvis one evening announced that he was taking his campaign national, but that Gann simply wasn’t up to such a challenge.

    Jarvis got his picture on the cover of Time magazine. Gann had his successes but never gained Jarvis’ fame. Today, the organization that bears Jarvis’ name, the Howard Jarvis Taxpayers Association, is allied with the Republican Party and Chamber of Commerce, and raises and spends millions of dollars a year on ballot measures, lobbying and litigation.

    The Jarvis organization raised $12 million in 2008. Costa’s group, People’s Advocate, raised $99,961 that year, publicly available tax returns show. Costa’s wages were $22,167 in 2008. That same year, Jon Coupal, the lawyer who heads the Jarvis organization, received $280,000.

    In the coming fight over AB 32, Coupal is serving as an official sponsor, aligning himself with Big Oil.

    Logue and McClintock have joined the new team, the one that has money.

    “I’m a member of a large group that is trying to get this passed,” Logue told me. Where does that leave Costa? He could join if he wanted, but “the team felt that there was a different organization that they felt comfortable with.”

    Costa’s view: “It is fair to say I am out of the loop.”

    Unlike most players in California’s politics today, Costa knew Gann and Jarvis, the men most often credited with creating the modern initiative industry. Some people admired them, others loathed them. But as Costa tells it, “They spoke from their hearts.”

    Not the new crop. They see “a meal ticket.”

    “They’re looking at a big trough – and they’re lapping it up. That is what I believe.”

    Costa has a few moves left. His mailing list is not nearly as large as the Jarvis group’s but it includes tens of thousands of voters. He is contemplating signing the official ballot argument against the initiative, he told The Bee’s Jim Sanders the other day.

    “Integrity has been breached,” Costa said. “Without basic and fundamental integrity, there is no good public policy.”

    There would be a certain symmetry if Costa campaigns against the initiative to stop AB 32.

    Costa helped ignite the recall that brought Schwarzenegger to office, though his role was overshadowed by other, slicker, consultants. Once in office, the movie star governor never gave the time of day to the guy who operates from a strip mall.

    Schwarzenegger will campaign fiercely to preserve AB 32, which is integral to his legacy. He will find himself battling some of the same businesses and consultants who helped put him in office and fund his various ballot measures. Now that the governor’s days in office are coming to an end, and his power is waning, Schwarzenegger once again could come to rely on a man who operates on the edges of the political world.

  • Dan Morain: Ballot-language ploy tars Legislature

    You’d think the legislators might try something new, given voters’ dark view of them. But you’d be wrong.

    Californians approved a ballot measure in 2008 to bring a little fairness and less gerrymandering to the way in which legislative district boundaries are drawn.

    This year, politicians, including former Speaker Karen Bass, are raising money for a ballot measure that would kill the redistricting measure before the first lines are drawn.

    That’s bad enough.

    But the latest gambit is stunning. Democratic leaders in the Legislature and their attorneys entered into talks on a deal that might have spelled the demise of an open primary measure on the June ballot. It was an especially underhanded play.

    The details are almost beside the point. It looks to be an example of how lawmakers seem unable to say “no” to their campaign patrons. In this era of term limits, it also suggests that deals struck by one set of leaders don’t apply to the next.

    The episode does not bode well for newly minted Speaker John A. Pérez, who was aware of the suit. His aides authorized the Legislative Counsel’s Office to enter into discussions with a union that hoped, via a lawsuit, to alter the wording with buzzwords designed to persuade the electorate to vote it down.

    First, some background. As part of last year’s budget deal, Gov. Arnold Schwarzenegger and the Legislature agreed to place the open primary measure on the June ballot.

    Sen. Abel Maldonado, a Central Coast Republican, extracted the concession in exchange for voting for the budget, thinking it would help moderates like him win election.

    That concept doesn’t sit well with chiefs in either the Democratic or Republican parties, who believe correctly that an open primary system would undermine their power.

    Partisan interest groups including many unions also despise open primaries, believing voters would elect more moderates and fewer ideologues. They’re probably correct, too. Voters, by contrast, overwhelmingly favor the idea.

    Now, a year after the deal was struck, a power play is taking place, or at least an attempt at one.

    One of the Democrats’ most loyal benefactors is the California School Employees Association. The union, represented by Olson, Hagel & Fishburn, a law firm that long has done work for the California Democratic Party, filed suit last week challenging the title and summary worked out in last year’s deal for the open primary measure, Proposition 14.

    As it sued, the union entered into talks with the Legislature’s Democratic leaders to get them to accede to the union’s wishes to alter how the open primary measure would be portrayed to the public.

    Without talking to Maldonado or Schwarzenegger, Democrats authorized their attorneys in the Legislative Counsel’s Office to reach an accord with the union.

    The purpose was to alter how the measure is summarized for voters, substituting words that Schwarzenegger and the Legislature had agreed upon only a year ago with new words that likely would lead to its defeat.

    It might have worked, except that attorneys representing Maldonado learned of the play Friday by accident when an open primary backer happened across a blog that mentioned the lawsuit.

    After a frantic few days, lawyers for Maldonado and Schwarzenegger appeared before Sacramento Superior Court Judge Allen H. Sumner on Tuesday, and won the right to intervene in the effort to water down the ballot title and summary – over the objection of attorneys for the union.

    Another hearing is set for Thursday, when Sumner expects to decide the matter.

    Pérez told me that he was party to no deal, other than to “see if we could work something out.”

    Maldonado was having none of it, calling the episode “frankly embarrassing” to the Legislature.

    Old-timers were particularly distraught to see what is becoming of the institution. Former Speaker Willie Brown told me he was “flabbergasted” by events in the institution he dominated for decades.

    “Somebody doesn’t under what the protocol is, what the rules are,” Brown said.

    “I’ve been in this business for over 40 years, and I have witnessed a lot of outrageous behavior,” said Steve Merksamer, of the Republican political firm Nielsen, Merksamer, which represents Maldonado. “I must say I have never seen a more cynical or shameful attempted abuse of power.”

    Former Sen. Steve Peace, a Democrat, is an open primary proponent. But as he sees it, the issue has little to do with an open primary. It has much more to do with how far the Legislature has fallen.

    “Clearly, they did get caught,” Peace said.

    Peace is no neophyte. He understands deals, power and intrigue. He was one of a handful of legislators who tried to unseat Speaker Brown in the late 1980s. He was a lawmaker when others became enmeshed in the corruption scandals.

    This episode doesn’t involve crooks having their hands out. Rather, he said, it’s more subtle and perhaps more insidious. It entails exercise of power not because legislators hope to do some good, but simply because they could exercise power.

    The most recent public polls by Field and Public Policy Institute of California showed that a mere 16 percent of likely voters think the Legislature is doing a good job. I wonder who those people are.

    Lawmakers hope that one day, voters will loosen or overturn term limits. So long as stuff like this happens, it’s far more likely that voters will become so disgusted that they deliver a knockout punch to the small-timers and make the Legislature into a part-time institution.

  • Dan Morain: Jarvis group evolves into a money machine



    Paul Gann, left, and Howard Jarvis celebrate their 1978 victory in passing Proposition 13. The organization named after Jarvis is still fighting taxes under the leadership of lawyer Jon Coupal.

    Politics can be a good business. Just look at the Howard Jarvis Taxpayers Association.

    Jarvis has been dead for a quarter century. But the organization that bears his names occupies a profitable niche, one that includes opposing taxes, promoting initiatives and endorsing politicians.

    Jarvis was a tea partier long before the anti-government and anti-tax movement took on its current name. Now, his mad-as-hell message is part of the Republican establishment, almost always aligned with Chamber of Commerce and real estate interests, and often with tobacco, oil, gambling and other big businesses.

    The rough edges are gone, but the Jarvis name is as powerful now as it was in 1978 when he championed the property tax-slashing Proposition 13, and Time magazine splashed his craggy visage on its cover.

    Today, Jon Coupal is responsible for spreading the Jarvis message. A 54-year-old attorney who is as smooth as Jarvis was bombastic, Coupal has been a denizen of the political scene for more than two decades. After working for the conservative Pacific Legal Foundation he joined the Jarvis organization in 1991, ascending to its presidency in 1999, a post that paid $255,000 last year.

    Coupal is making the rounds of conservative talk shows touting the endorsement of billionaire Republican Meg Whitman’s candidacy for governor over Steve Poizner, and slapping at Democrat Jerry Brown.

    If it ever was, the organization long ago ceased being a curmudgeonly old man’s domain. Now, it is a sophisticated series of nonprofit corporations and political action committees, built around opposition to tax increases or expansion of government, though it does veer into other lucrative areas when the price seems right.

    Through e-mail and snail mail, Coupal and his staff, working from a tidy downtown office, regularly tap roughly 200,000 followers, mobilizing them to sign petitions, vote and, of course, donate. The followers are aged, averaging 60-plus years old, but are reliable voters and provide sufficient political muscle to ensure the operation is a force inside the Capitol.

    Jarvis’ lobbyist regularly testifies on budget and taxation issues, always on the side of big business and against taxes. Hardly an outsider, the organization spent $2.27 million on lobbying in 2009. That ranks it eighth highest, above heavyweights such as PG&E and Chevron, entities with which it sides, or the California Labor Federation, with which it invariably disagrees.

    All that Republican orthodoxy may place the organization in the minority in this blue state. But its anti-tax stand is potent and helps explain California’s perennial budget impasses. Like the Club for Growth, which elicits anti-tax pledges from congressional candidates, the Jarvis organization obtains pledges from legislative candidates who vow to oppose any measure deemed to undermine Proposition 13.

    The pledge is not to be trifled with, as Assemblyman Anthony Adams, a San Bernardino County Republican, learned when he broke from the pack and voted for a tax increase last year.

    Coupal minced no words when he announced his support of the effort to oust Adams: “Recalling a legislator who stabbed us in the back is a good way to remind other legislators that there are certain acts which are unforgivable and punishable by the political death penalty known as recall.”

    Adams survived. But the tax vote derailed his career in Republican politics. He will quit the Legislature when this session ends. The message was clear; there cannot be the “slightest deviation from blinding purity,” Adams told me.

    The meaning of purity depends on who does the defining. Coupal promotes initiatives to limit campaign spending by labor and is a critic of public employee unions and their pensions, even as the organization has accepted $42,000 from the California Teachers Association and $10,000 from the California Correctional Peace Officers Association. Both donations were earmarked for Jarvis-backed initiative fights.

    Millions pass through the Jarvis organization each year. The Howard Jarvis Taxpayers Association, the main umbrella organization, disclosed that it raised $12 million in 2008.

    That was the year Coupal joined with mobile home park owners to push an initiative to restrict government’s ability to use eminent domain to take over property.

    To my mind, the initiative placed the organization in an odd position. Old man Jarvis’ main goal was to roll back ever-rising property taxes to help longtime homeowners hang onto their houses.

    One goal of the eminent domain initiative was to overturn local rent control ordinances governing mobile home parks. That would have allowed mobile home park owners to raise rents, which would have forced residents from their homes. Voters rejected the measure.

    The organization has taken other stands that were more remunerative than popular. In 2004, Coupal appeared on television commercials attesting to the wisdom of an initiative sponsored by the Agua Caliente Band of Cahuilla Indians, which owns two casinos in downtown Palm Springs and in the outskirts.

    The initiative, Proposition 70, sought to give tribes unlimited authority to expand their casinos on their reservations so long as they paid the state part of their earnings.

    “With Proposition 70,” Coupal said on the commercials, “casinos help share the burden for schools, health care and public safety.”

    Voters rejected the measure, but it was not a total loss. Agua Caliente donated $1.825 million to one of Jarvis’ political committees.

    Politics is not recession-proof. But the 2010 outlook is promising for the Howard Jarvis organization.

    It is pushing to place on the November ballot an initiative sponsored by the Chamber of Commerce that would make it harder for lawmakers to impose fees, and likely one backed by oil companies and others to overturn Assembly Bill 32, the landmark 2006 state law requiring that businesses cut greenhouse gases.

    The power of Jarvis’ name won’t wane any time soon. The Public Policy Institute of California last polled on Proposition 13 in September, finding that its appeal crosses party lines and voters support it by a 2-to-1 ratio.

    No politician understands that better than Jerry Brown, the Democratic candidate for governor. Brown initially opposed Proposition 13 but so wrapped himself up in its implementation that Jarvis endorsed his re-election in 1978.

    As he announced his 2010 candidacy for the office he held back in 1978, Brown channeled his old “frenemy,” promising not to raise taxes unless voters give specific approval. That pledge was not enough for a Jarvis endorsement.

    Whitman secured that coveted stamp of approval. Coupal said there is no agreement that Whitman will donate to his group. But she is a billionaire, and Coupal is in the business of promoting initiatives and causes. The question lingers: Will the Jarvis name hew to its populist past or be used to tout the causes of the highest bidder?



    Jon Coupal

  • Dan Morain: To play initiative game, you must pay

    No matter who wins this year’s governor’s race, much of the real power in California still will reside with a clique of self-interested insiders who promote initiatives.

    If history is a teacher, the ideas they concoct will benefit them and their industries, and will have impact long after the next governor leaves office.

    The number of initiatives aimed at this November’s ballot is relatively small, maybe nine. The exact number won’t be known for a few months, as paid signature gatherers still are plying their trade at shopping centers across the state.

    But if any of the initiatives were to win voter approval, they would have far-reaching impact. They deal with marijuana laws, rules governing state budgets, whether California will continue to seek to regulate greenhouse gases, and much more.

    It’s all a big-money game. That became apparent once more as proponents of initiatives to “reform” California state government stumbled.

    Even though they had influential supporters, few moneyed interest groups saw any benefit to shelling out the millions needed to place the measures on the ballot.

    The ante is $3 million, give or take. That’s what it costs to hire petition circulators to gather the hundreds of thousands of signatures needed to place measures on the ballot. Actual campaign costs, including buying television ad time, reach into the tens of millions, and sometimes into the hundreds of millions.

    Most proposals never make it onto the ballot. Even seemingly savvy political players stumble. The Bay Area Council, representing some of the state’s largest businesses, scrapped initiatives to create a constitutional convention after raising $521,000, far short of the sum needed to play.

    “We’re talking about changing an institution,” said Bay Area Council President Jim Wunderman. “Institutions don’t like change. Elements want things to stay the way they are.”

    Repair California, the campaign committee promoting the constitutional convention initiatives, received two donations of $150,000, along with several smaller contributions.

    One came from one of the true believers, Lenny Mendonca, a member of the Bay Area Council and senior partner at the management consulting firm McKinsey & Co.

    The other $150,000 came from a trade group representing Indian tribes that own casinos. The wording gave a hint why tribes might have been supportive.

    The initiative would have barred conventioneers from tinkering with the constitutional rights to freedom of religion and the press, immigration, capital punishment, abortion, marriage and “gambling or casinos of any type.”

    California has a rich history of wealthy interests paying good money for ballot measures that benefit them.

    Tribes that own casinos spent $24 million to win passage of a 2000 initiative that made clear their casinos were legal.

    In 2004, financier Robert Klein sponsored and spent $3 million on the initiative to fund stem cell research. He remains the stem cell commission’s chairman.

    In 2010, that tradition of self-interest will be upheld. Marijuana entrepreneur Richard Lee, who runs what he calls “America’s first cannabis college” with branches in Oakland and other cities, spent $1.27 million to qualify his initiative to legalize marijuana in California.

    Lee likely won’t be part of the initiative scene much beyond the marijuana measure. Others appear year after year, most notably the California Chamber of Commerce and related business interests, and organized labor.

    In 2010, Chamber of Commerce President Allan Zaremberg is backing a ballot initiative to require the Legislature to approve fees by two-thirds vote, rather than the current simple majority. Business also is contemplating a campaign to repeal landmark legislation requiring the state to reduce greenhouse gases.

    The California Teachers Association, the state’s biggest teachers union, is paying petition circulators to gather signatures for an initiative that would repeal a tax cut approved by lawmakers last year.

    With the help of Democratic Party Chairman John Burton, other unions are funding a petition drive for an initiative that would authorize the Legislature to approve budgets by simple majorities rather than by the current two-thirds majority. Business opponents believe the measure would make it easier for lawmakers to raise fees.

    Jerry Brown, the newly announced Democratic candidate for governor, knows the initiative world well. He catapulted to statewide office by promoting a 1974 initiative that created the Political Reform Act. As governor in 1978, Brown tried to beat and then embraced the late Howard Jarvis’ property-tax-slashing Proposition 13.

    Meg Whitman, the Republican front-runner for governor over Steve Poizner, has called for changes in what she labeled the “referendum” process but also touts the endorsement of a charter member of the initiative promoters’ club, the Howard Jarvis Taxpayers Association.

    California Chief Justice Ronald George is an increasingly vocal critic of direct democracy. He told a Stanford Law School audience that initiatives “have rendered our state government dysfunctional, at least in times of severe economic decline.” Californians have a love-hate relationship with the process. They reject two-thirds of all initiatives that make it onto the ballot but support keeping the initiative process in place.

    Given that support and the power of initiative promoters, there is little chance of change any time soon. As a result, whoever becomes the next governor will find him- or herself ever more hamstrung by initiative-created law.

  • Dan Morain: NUMMI closure shows failure of California talk about job creation

    What can government officials do to help create jobs in California? To comment on this issue, please see our forum.

    FREMONT – Excuse Stanley Mayfield if he is less than impressed when politicians one-up each other to show how much they care about jobs.

    Gov. Arnold Schwarzenegger has called himself “California’s job czar” and denounces Democratic legislators for standing in the way of his proposals he says would create jobs.

    Senate President Pro Tem Darrell Steinberg offers 27 bills that he says would create 140,000 jobs, largely by tapping into the Obama administration’s $862 billion stimulus package.

    “I would like to believe it, but the bottom line is that they want your vote,” Mayfield said.

    For the past 12 years, Mayfield, 38, has worked at California’s only car factory, New United Motor Manufacturing Inc., a joint venture between Toyota and General Motors, and the one Toyota plant where the workers are part of a union.

    As part of its bankruptcy last year, General Motors, now owned by Uncle Sam, turned its back on NUMMI. Toyota followed by declaring last August that it would cease its operations March 31, moving the manufacturing of Corollas and Tacoma pickups elsewhere.

    On that day, Mayfield’s job will end, as will the jobs of 4,500 other NUMMI workers. Thousands more who work for businesses that supply the plant also will join the other 2.3 million Californians out of work.

    The fate of NUMMI’s workers raises questions whether politicians, particularly at the state level, can do much to alter basic business decisions related to hiring and retaining jobs or lure new business. Politicians’ pronouncements not withstanding, the state has been unable to block this latest hit to California’s dwindling manufacturing base.

    From its earliest days, state and federal authorities provided NUMMI with breaks of one sort or another. In 1984, the U.S. Commerce Department waived import tariffs on parts, and the Federal Trade Commission exempted GM and Toyota from antitrust laws.

    In the years since, the company received discounts on energy costs, and the Port of Oakland dredged San Francisco Bay in part to accommodate ships required by NUMMI.

    The state allotted $18.3 million to NUMMI to train workers, including $5.6 million for training between 2006 and 2009, plus an additional $1.7 million in job training grants to NUMMI’s suppliers. In the federal Cash for Clunkers program, Americans bought more Toyotas than any other type of vehicle.

    Once Toyota announced the closure, lawmakers offered more enticements. Proposals are pending to eliminate sales tax on equipment purchases, give $29 million in low-interest loans, create a new tax credit to retain autoworker jobs, establish a preference that the state would buy NUMMI vehicles, build a BART station nearby, and so on.

    With March 31 nearing, most politicians, Schwarzenegger among them, have moved on. One exception is Treasurer Bill Lockyer, who is presiding over what he calls a blue ribbon commission to offer a last-ditch plan to save the plant. Organized labor is a driving force. UC Berkeley professor Harley Shaiken, a labor expert, provides expertise.

    Their point: Toyota would not be the world’s largest car manufacturer without California. We account for 17 percent of its sales nationally, and we buy one in four Prius hybrids. Shaiken and Lockyer contend that Toyota, facing a public relations disaster because of its faulty cars and recalls, could reclaim some of its luster by reversing itself and keeping the plant open.

    None of it has worked.

    “It’s not financially viable” to maintain operations, James Lentz, president of Toyota USA, said in Washington last week, responding to questioning by Rep. Jerry McNerney, an East Bay Democrat.

    Schwarzenegger has been absent from the fray. It’s odd given his rhetoric: “The first priority for the coming year, obviously, is to get the economy and to get jobs back. Jobs, jobs, jobs,” Schwarzenegger declared in his State of the State speech last month.

    Ignoring the 20,000 jobs that will be lost – directly and indirectly – when NUMMI closes, Schwarzenegger instead dwells on his proposals that may or may not create a single job, let alone 20,000.

    Back on Aug. 27, he issued a statement lamenting Toyota’s announcement that the plant was closing as a “sad day in the history of Fremont.” He blamed the closure on GM’s bankruptcy and the “worldwide collapse in demand for automobiles.”

    Four months later, on Dec. 28, Toyota Motor Sales gave the governor a $20,000 campaign contribution. The governor’s timing is inexplicable. The donation came as evidence grew of flaws in Toyota vehicles, as consumers demanded recalls and as many California politicians still were pressing Toyota to keep NUMMI open.

    Toyota spokeswoman Cindy Knight explained the genesis of the donation: “He approached the company.”

    A Schwarzenegger spokesman issued the same statement given whenever a question is raised by a donation: “People donate to him because they believe in his vision for the state.” Toyota has not made another donation to a California politician since. It’s unlikely many politicians would take Toyota money at this point.

    Twenty-five years after it opened, the NUMMI plant still glistens. It once was part of a feel-good story about California, U.S.-Japan business relations and organized labor. Even now, Mayfield has a hard time criticizing Toyota. When he got the job a dozen years ago, he could stop working two jobs and provide for his daughter, now 13 years old.

    Mayfield stood outside the United Autoworkers union hall across from the factory last week. An Obama for President sticker was on the door, next to a sign that describes the hall’s new use.

    “NUMMI Re-employment Center,” the new sign reads, inviting soon-to-be unemployed autoworkers to enter the hall for counseling and leads for new jobs.

    “I thought I would have been able to retire here,” Mayfield said.

    Union executives believe Toyota is closing the plant because labor is cheaper in other parts of the country and world. Perhaps. The top wage at the Fremont plant is almost $30 an hour. Certainly the company can find less expensive workers in Mississippi and in other countries, though probably not as skilled.

    Schwarzenegger could have engaged, instead of taking a campaign donation. Given that taxpayers own GM, Obama could have insisted that GM keep a presence. The cost of maintaining the NUMMI jobs would be far less than the hundreds of billions being spent in the hope of “creating” new jobs. Then again, maybe Toyota made a cold, hard business decision that no politician could have altered.

  • Dan Morain: Tea Party movement attracts political purists and profit-seekers alike



    Sal Russo, left, a political strategist who has raised more than $2 million for the Tea Party Express, looks over a TV commercial with Bobby Cullen.

    To comment on this issue, please see our forum.

    No matter the cause, politics is a mix of believers, opportunists and entrepreneurs. The tea party is no different.

    Claire Magid, a believer, is a retiree who organized a recent tea party gathering that attracted 200 people to the Lincoln Public Library. To cover costs, she placed an empty HyTop coffee can with a slit in its plastic lid on a folding table in the auditorium.

    “Donations would be appreciated,” read the note taped to the side of the can. By the end of the night, she had raised $60, well short of the $230.53 cost of renting the room and paying for insurance.

    Magid supports “anyone who is a constitutionalist. That’s what we’re all about – the Constitution.” Of course, the best minds of our day differ in constitutional interpretations.

    She points to Rep. Ron Paul as a true constitutionalist and supported his 2008 presidential bid. The Texas Republican-libertarian is an isolationist in foreign affairs who seeks to abolish the Federal Reserve and return to the gold standard.

    Exactly what the partiers stand for depends on your view. Here are the basics: They oppose big government and taxes, and fret about the economy. The movement also attracts birthers and people who advocate sealing America’s borders.

    California tea partiers want to place an initiative on the November ballot to restrict the ability of unions to spend on political campaigns – an idea that voters have rejected twice, most recently in 2005.

    Magid hopes for a part-time Legislature, is “sick of taxes” is proud that there is a “strong Christian” element among her tea party friends and hopes to maintain tea party independence.

    “There will be people out there trying to claim the tea party movement as their own,” Magid said. “We’re not a party, and we don’t endorse. We find candidates we like, and we work for them.”

    Chuck DeVore, an Orange County assemblyman, sees the opportunity and hopes to be one of those candidates. A darling of Fox News commentator Glenn Beck, DeVore is seeking the GOP nomination for U.S. Senate and took his campaign to the Lincoln gathering.

    At one point, he asked people in the audience to raise their hands if they were under 30. Two did. He spoke reverentially about the Constitution, warned about the rise of China, and whaled away at the Wall Street bailout, trade deficits and overspending by President George W. Bush and Gov. Arnold Schwarzenegger.

    “You care very deeply about America. Some of you are scared. Some of you are mad as hell,” DeVore told the crowd. “A sleeping giant has been awakened.”

    In downtown Sacramento 30 miles from Lincoln, long-time Republican political consultant Sal Russo pings the “giant” with regular e-mails soliciting money and urging activism.

    Russo, who has worked for Govs. Ronald Reagan and George Deukmejian, does not pretend to control tea partiers. He hopes to get tea party people to the polls to nominate Republicans who can win general elections. But he sees entrepreneurial possibilities. There’s also money to be made.

    When he was advocating Barack Obama’s defeat in 2008, Russo raised $1.3 million. Not a bad haul. But recession or not, business got better when he rebranded his political action committee as Our Country Deserves Better-Tea Party Express. In 2009, Russo raised $2.06 million.

    Russo’s office walls are lined with photos of his Republican heroes, Nixon, Reagan and Deukmejian. He doesn’t represent candidates these days. Instead, he has carved a niche by chartering buses and embarking on cross-country tours, organizing rallies along the way.

    A few years ago, he organized tours in support of our troops and the Iraq war. Now he runs Tea Party Express tours.

    To gin up excitement for a Tea Party Express rally last year, he brought Samuel Joseph Wurzelbacher to speak at the rallies and paid him $2,000. Better known as “Joe the Plumber,” Wurzelbacher gained fame and a book deal by sharply questioning Obama about taxes during the 2008 campaign.

    Correspondents for Fox News, CNN and the New York Times reported on his tours last year. He is preparing for another tour in March, starting in Searchlight, Nev., hometown of Senate Majority Leader Harry Reid, whom he hopes to help unseat. Former Alaska Gov. Sarah Palin is scheduled to speak at the Searchlight rally.

    “Last year, people were cursing at their television sets,” Russo said. “Now, our job is to get people off their couches and pointed toward taking our country back.”

    Whether any of it will work is not clear. The latest Field Poll found that 28.5 percent of Californians identify “a lot” or “some” with the movement, and 28.2 percent identify with it “not at all.”

    Among “strong conservatives,” 63 percent identify with the movement. However, Republicans make up an ever slimmer slice of California’s electorate, 30.8 percent compared with 44.6 percent who are Democrats and 20 percent who decline to state a party preference, latest registration figures show. Not a single one of California’s 58 counties had even 50 percent Republican registration.

    Its reputation as a Democratic bastion notwithstanding, California does have a conservative streak. It has always been there. Depending on the electorate’s mood, conservatives can latch onto an issue that draws in moderates and win.

    They propelled Howard Jarvis and Paul Gann to their legendary status, approving the property tax slashing Proposition 13 in 1978. They dumped three justices from the California Supreme Court in 1986, approved the anti-illegal immigrant Proposition 187 in 1994, and recalled Gray Davis in 2003 and replaced him with a movie star.

    “More than a movement, there is a mood,” said Mark Baldassare, president of the Public Policy Institute of California. “The mood is about frustration and dissatisfaction with government in California, a sense that government is not working. It cuts across party lines.”

    Fragmented though the movement is, consultants nationally hope to harness the energy. Dick Armey, the former Republican congressman who co-authored the “Contract for America” in 1994, is promoting himself as one who can orchestrate the movement.

    Tom Tancredo also seeks a place of prominence. A former Colorado congressman, Tancredo is stridently anti-illegal immigration. Speaking at last weekend’s National Tea Party Convention in Nashville, he suggested that the United States institute a “civics literacy test” for voters. That brought a rebuke from Meghan McCain, the daughter of Republican Sen. John McCain, who called it racist and a reason why young people turn away from the GOP.

    Joe Farah, the radical-right former editor of the Sacramento Union, spoke in Nashville, too. Farah is a leading voice in the “birther” movement that questions whether Barack Obama was born in the United States. Farah supported Tancredo for president in 2008. Tancredo dropped out before the first primary vote was cast.

    “If Republicans think this movement is their road to success, they are sadly mistaken. This is anti-incumbency,” Farah told me.

    Farah believes McCain could be in trouble in Arizona, along with moderate Republican Gov. Charlie Christ of Florida, who is seeking a U.S. Senate seat. That could be good news for the Democrats.

    In California, Russo, DeVore and Magid are three faces of the tea party movement. How many will be around beyond the 2010 election remains to be seen. Believers tend to stay active for an election cycle or two.

    Conservatives sometimes win Republican primaries in California. But Sen. Barbara Boxer surely would be pleased with a win for DeVore in June. Conservative candidates haven’t won statewide offices in years.

    DeVore and Magid may not remain. Russo’s roots date back to Reagan’s tenure. Of the three, my guess is that Russo will be here in 2012 and beyond.

    It is not clear what the tea party movement will become, or if it will become anything other than some aging and angry voters. It stands a chance if tea partiers focus on bailouts, lower taxes and smaller government. It will splinter if talk turns to social issues like abortion rights or isolationist foreign policy. It will fracture if talk shifts to Obama’s birthplace and litmus tests for voters.

  • Dan Morain: Is Internet poker in the cards for state?

    It’s an old line but true: If you sit down to play poker and don’t know who the sucker is, it’s you.

    On Tuesday, lobbyists, consultants and clients filled almost every one of the 182 seats in Room 4203 of the Capitol. It wasn’t readily apparent who was getting taken to the cleaners, at least not to me.

    The Senate Governmental Organization Committee convened the hearing to bring into the open the high-stakes concept of turning Internet poker, currently illegal under federal law, into a moneymaker for the state of California.

    The room oozed with the promise of money. Money for lobbyists. Money for consultants. Money for politicians’ campaign coffers.

    And money for the state, maybe.

    With a $20 billion deficit, lawmakers are intrigued by the notion. But if the past is any indicator, the state needs to be careful about playing with people who win bets for a living.

    “It’s not the wave of the future; it’s the wave of the present,” Lloyd Levine told me, noting that millions of Americans already wager on illegal Internet poker sites.

    Levine carried Internet poker legislation that failed in 2008 when he represented the San Fernando Valley in the Assembly. Now he is a consultant for a company seeking to create Internet poker in California and in other states.

    Others in the audience included leaders of major casino Indian tribes, owners of card rooms, horse racing executives and their lawyers, lobbyists and consultants. Many envisioned a whole new branch of legal gambling. Others, including some Indian casino owners, view Internet poker as an assault on their monopoly on casino gambling in California.

    Internet poker has been percolating for years. In 2006, Congress made virtual poker illegal. For emphasis, federal authorities arrested executives of online gambling operations, prompting some to steer clear of the United States.

    Internet entrepreneur Ruth Parasol grew up in Mill Valley and became a billionaire as co-founder of PartyPoker.com. She apparently has been living in Gibraltar. She and her husband, Russ DeLeon, paid $555,000 to Washington lobby firms to work on Internet gambling issues, presumably so that she could return to the United States, federal reports show. The lobby effort evidently didn’t succeed. But the business grows. PartyPoker reported that its revenue jumped 32 percent in 2009.

    “Whilst the regulatory picture in some countries remains uncertain, the momentum toward creating commercially viable and regulated markets is strong,” the company said in a statement last week.

    Rep. Barney Frank, D-Mass., is advocating federal legislation legalizing, regulating and taxing Internet poker. At the same time, companies are pushing legislation in New Jersey and Florida to authorize Internet poker within their state’s borders.

    The same is happening in California, where the Morongo Band of Mission Indians, which owns of one of the largest Southern California casinos, is urging legislators to legalize Internet poker, in collaboration with card rooms and perhaps other tribes.

    There’s no bill in print. But Morongo Chairman Robert Martin envisions an intrastate site where Californians would place bets against other Californians.

    Morongo’s involvement is significant. The tribe has spent $81 million on California campaigns since 2000, and more on lobbying than any other gambling interest in the state, $4.3 million.

    No other tribe has joined Morongo. Some tribes, including some in the Sacramento area, are opposing the idea. But Richard Milanovich, chairman of another large Southern California casino tribe, Agua Caliente Band of Cahuilla Indians, submitted a letter Tuesday saying he is neutral but “intrigued with the notion of intrastate Internet poker.”

    Martin said tribes and card rooms would establish a company that would operate Internet poker and pay tribute to the state in the form of a fee or tax. The state’s take is to be determined. Experts estimate a million Californians gamble on illegal Internet sites now, and wager hundreds of millions of dollars yearly.

    Whatever the state’s estimated take might be, odds are it will be overstated, at least based on recent history.

    Gov. Arnold Schwarzenegger took office in part by criticizing Gov. Gray Davis’ handling of Indian gambling. Once he got into office, Schwarzenegger sat across the table with the tribes and demanded that they pay more to the state.

    He struck several deals including four in 2007 that authorized major expansions at Southern California tribe-owned casinos. Voters ratified those deals two years ago. Schwarzenegger was their biggest booster.

    “At a time when California faces a budget crisis, these agreements will provide hundreds of millions of dollars in new revenues each year – billions in the years ahead to help pay for public safety, education and other services,” the governor proclaimed in the 2008 voter pamphlet.

    The recession hurt casino expansion plans. The governor got some more money from tribes, but not what he envisioned and certainly not enough to significantly alleviate the budget crisis. When Schwarzenegger sat at the bargaining table, did he know who the sucker was? And will the next governor?

  • Dan Morain: Senate still isn’t hip to this Internet thing

    You’ve probably never heard of Arnold Queen. Yet in a year when a dozen U.S. Senate seats are up for grabs, voter knowledge about the money behind the candidates depends on this one civil servant.

    Queen, 54, has been working for the Federal Election Commission in Washington, D.C., since he came of age, back in 1976. His job entails overseeing a vital if antiquated task. Despite calls by President Barack Obama to overhaul the federal campaign finance system, Queen’s job looks to be secure.

    Here’s why: In its arrogance, the U.S. Senate refuses to acknowledge the existence of the Internet in a way that might give voters a glimpse into the power behind their throne.

    No matter if they are running for city council or president, politicians for the past decade have regularly filed campaign finance disclosure reports online. Anyone who is interested can figure out which interest groups are spending money on the campaigns.

    But being a U.S. senator or Senate candidate has its prerogatives. One is to ignore technology and make it as hard as possible to determine the money behind Senate candidates.

    The issue arises whenever there are deadlines to file reports, as there was this past Sunday. It becomes more relevant when there is a hotly contested senate race, as there will be in California this year.

    To comply with Senate rules, candidates merely must print paper copies of their disclosures – they can be thousands of pages – postmark the copies by the filing deadlines, and mail them to the Senate.

    Then the process gets ridiculous.

    Once reports arrive at the Senate, staffers use scanners to transform the pages back to digital images. Then the staffers e-mail the images to the FEC.

    That’s where Arnold Queen comes in, and where the system becomes more absurd. He must print the copies that Senate staffers have scanned.

    I first met and wrote about Queen three years ago. Back then, he was using a 10-year-old copy machine that turned out 500 pages an hour. He has a new machine now. It can spew 2,000 copies an hour.

    Queen reported by phone that he had copied 10,000 pages Tuesday. As more reports arrive, he will get up to 16,000 pages.

    “They’re printing right now as we speak,” Queen said. With his new machine, he can print pages “pretty much as fast as the post office can process” them.

    It gets worse.

    Once Queen makes the copies, the FEC delivers the reports to a company in Virginia. There, keypunchers input details about the donors – names, amounts and dates of the donations – back into computers.

    Once the keypunchers finish, the FEC places the disclosures on its Web site in a searchable format.

    The process can take weeks. In the recent Massachusetts race to replace the late Sen. Edward Kennedy, the last report detailing who gave in the last weeks before the election was not posted in a searchable format until after the election.

    There is an alternative. Senators can voluntarily file their reports on the FEC’s Web site, and make them available to anyone.

    Sen. Barbara Boxer, the California Democrat who is defending her seat this year, is among the few senators who regularly files her reports voluntarily on this site, though she neglected to file one of her quarterly reports from 2009 until I asked about it earlier this week.

    On the Republican side, Carly Fiorina, the former Hewlett-Packard chairwoman, e-mailed her 311-page report to journalists on Friday. Assemblyman Chuck DeVore, one of her Republican foes, did the same with his 446-page report. A third candidate, Tom Campbell, had not raised money into his Senate campaign committee in 2009.

    Neither Fiorina nor DeVore’s reports were in a form that would permit the public to easily sort or search them. After initially telling me they were unaware of the voluntary filing system, DeVore and Fiorina discovered that indeed they could file electronically. Fiorina posted her report on the FEC Web site on Tuesday.

    “Should Carly be elected,” a Fiorina campaign spokeswoman said, “she will push to change the Senate rules to not only require online filing for all senators, but also to require more timely disclosure of campaign finances. She believes the current system lacks transparency and is unnecessarily cumbersome.”

    Promises, promises.

    Politicians far more practiced than Fiorina have tried. Three years ago, Sen. Dianne Feinstein, D-Calif., vowed to work to bring about the requirement. Three years later, nothing has changed.

    It’s not clear which senators stand in the way of this seemingly minor change. But Senate leader Harry Reid, D-Nev., and Republican leader Mitch McConnell, R-Ky., are among those who refuse to voluntarily file their reports online.

    The FEC regularly asks Congress to require senators to file reports electronically. The FEC estimated last year “at least $250,000 per year in costs directly attributable to current Senate filing procedures would be saved by requiring electronic filing.”

    The commission has even invoked potential of disruption due to terrorism, noting that with electronic filing there would be no risk of anthrax attacks.

    In the world’s most exclusive club, such words have no effect.

  • Dan Morain: Whitman and Poizner a study in contrasts



    Vying for the GOP gubernatorial nomination are Insurance Commissioner Steve Poizner and former eBay CEO Meg Whitman.

    It’s not easy being Steve Poizner, at least not when you’re compared to former eBay chief executive Meg Whitman.

    Poizner made a bunch of money in his earlier Silicon Valley life. Whitman made a ton of money, too, though her bundle may exceed a billion dollars and perhaps is bigger than his.

    Searching for second acts, Poizner and Whitman have set their sights on becoming governor and are battling for this year’s Republican nomination in what promises to become the priciest gubernatorial primary in U.S. history.

    There, the comparisons end; the differences come into focus daily, especially this past week.

    Poizner, the sitting insurance commissioner, is an engineer by training. He gained his wealth by building startup companies and developing a chip most of us use and only vaguely comprehend.

    Whitman, who regularly failed to vote until recent elections, comes armed with a Harvard MBA and headed a company that everyone knows. Having been among the highest paid woman in American business for a time, she has attained celebrity status.

    Their approaches to the campaign could not be more different. Poizner spent one of his mornings last week answering journalists’ questions in an hourlong grilling on a stage in front of California newspaper executives at the downtown Sheraton Grand Hotel.

    His style befits the Silicon Valley engineer he is – no tie, a shirt open at the collar, kind of nerdy and very earnest. Whitman has called herself “frumpy,” though judging from her many television appearances, she is getting help accessorizing these days.

    Poizner spoke of his support for charter schools, his year volunteer teaching in a tough San Jose school, his views about health insurance, his opposition to open primaries, his belief in open government, how California spends too much on welfare, and, oh, in case you hadn’t heard, how Whitman won’t debate him.

    Poizner stepped off the stage and hung around with political reporters until they ran out of questions. Then he walked to the banquet room next door where he spent an hour speaking to the Sacramento Chamber of Commerce.

    On that very morning, Whitman was on the other side of the country touting her newly released book, “The Power of Many,” on the “Today” show, easily swatting Matt Lauer’s softball questions.

    Lauer: “You say that if you follow an ethical and true course, you can unleash the power of many. What do you mean by that?”

    Whitman: “Well, remember what the power of many is. What we can do together none of us can do alone. And eBay was a perfect example of that. We created the trading platform, but it was eBay buyers and sellers who built the company.”

    The Sacramento Sheraton is a fine place. But the Harvard Club it’s not. From the “Today” set, Whitman made her way to the rather more posh red brick 19th-century building in Manhattan where a dress code of business casual is expected and where, evidently, she discussed “The Power of Many” at a luncheon.

    On her fabulous East Coast trip, Whitman also spoke at the Russian Tea Room, which calls itself “a second home for boldface names and the intellectual elite.” Then there was the visit to Fox News for an interview with Neil Cavuto, and MSNBC’s “Morning Joe.”

    She traveled down to Washington, D.C., where she spoke to the Washington Area Board of Trade on Thursday, and ended the day at a $1,000 per ticket fundraiser at the McLean, Va., home of Republican power couple Bobbie and Bill Kilberg. The Kilbergs’ GOP pedigree stretches from Richard Nixon’s administration to that of George W. Bush. On her way West, Whitman laid over for another luncheon at the Junior League of Chicago, dress code enforced.

    Poizner rounded his week by meeting in Sacramento with pro-gun advocates (he claims to be a big Second Amendment guy, though he does not currently own a firearm), doing some insurance commissioner work, speaking to a gathering of Silicon Valley techies and visiting the San Jose Mercury News editorial board.

    The primary election is more than five months off. But there is, as always, the question of money.

    So far, Poizner has given himself $19 million and raised $2 million from others for his gubernatorial campaign. That might be plenty against any candidate not named Meg-a-millions Whitman.

    She has given herself $39 million, and counting. She also has raised at least $7 million, and is drawing on a national base, having spent 2007 and 2008 on the presidential campaign trail raising money for her mentor, Mitt Romney, and later John McCain.

    Can Poizner match her spending? “It’s not an eBay auction,” he told me, “but we’re going to make sure our candidacy is well-financed.”

    As visible as she was last week on the East Coast, Whitman remains a stealth candidate in California, though she will be hawking her book on this coast in the coming days. Using her money and celebrity, she by-passes the political press corps. Instead, she’s advertising heavily on radio, where she is introducing herself to the public and explaining some of her views. The former CEO who lives in Atherton wants to cut welfare, cut taxes and cut 40,000 state jobs.

    The race is far from over. But at this early stage, her strategy is working. The latest Field Poll showed 45 percent of likely Republican voters supported Whitman, compared to Poizner’s 17 percent. More than one of the East Coast television interviewers slipped up by calling her “front-runner.” She’s not. But she is closing the gap on the early favorite, Attorney General Jerry Brown, apparently the lone Democratic candidate.

    Poizner seems a little frustrated by Whitman’s candidacy. “She is running her campaign from her living room,” he says, and pointed out again that she declined four different debates in 2009. He urges groups he visits to host a debate. Rest assured, Poizner will show up.

    • For more information on Meg Whitman’s East Coast fundraising and book tour, go to The Swarm, www.sacbee.com/swarm



    Former eBay CEO Meg Whitman.

  • Dan Morain: Expect a wave of secret campaign donors



    Sandra H. Greiner

    As high-powered consultants plot strategy in the race for U.S. Sen. Barbara Boxer’s seat, they should factor in Sandy Greiner, a 64-year-old grandmother six times over from Keota, Iowa.

    Greiner, her husband and their three sons farm corn and soybeans in a town with fewer than 1,000 people in southeastern Iowa. Don’t let appearances deceive you.

    Greiner and people like her suddenly became more important to American politics last week because of a landmark U.S. Supreme Court ruling and the stunning vote in Massachusetts.

    Sandra H. Greiner is no neophyte. After 16 years in the Iowa Legislature ending in 2008, she became president of American Future Fund, a nonprofit corporation that espouses limited taxes and opposes President Barack Obama’s economic policies and health care proposals.

    Entities like Greiner’s operate in the shadows. Their donors are anonymous. The power behind them is rarely apparent. It’s impossible to track the exact amounts they spend on campaigns in any timely fashion.

    Last week’s Supreme Court decision opened the way for corporations and unions to spend directly on federal campaigns, which means that groups like Greiner’s will be infused with yet more money. Unless federal law is changed, they and their donors will remain hidden from the voting public.

    To get an idea of how they operate, look at the race to fill the seat left vacant when Sen. Edward Kennedy died in Massachusetts. That contest portends what could happen in California and in several other states this year.

    As Greiner told me by phone this week, she paid attention early to Republican Scott Brown’s seemingly quixotic effort to capture the seat controlled for more than half a century by the strongest Democratic dynasty in American history.

    No single individual turned the tide against Democratic candidate Martha Coakley. But Greiner’s American Future Fund was the first outside organization to enter the fray, launching a television ad 12 days before the election attacking Coakley over taxes.

    By the time it was over, American Future Fund had spent about $500,000, and others had piled on with millions more. Republican Brown won in a stunning upset.

    “Nobody saw it coming,” Greiner said.

    Greiner doesn’t hide her pride. American Future Fund raises less than 1 percent of its money from Massachusetts. Nor does it raise much from that other Democratic stronghold, California. But she was able to insert herself into one of the biggest upsets ever in U.S. politics.

    “This is the fun part of politics,” Greiner said. “It is fun to sit and dream up stuff that is going to have to make somebody stop what they’re doing, and figure out how to respond.”

    Greiner had plenty of help.

    McCarthy Marcus Hennings, Ltd., produced the ads. The firm works for clients that have stakes in federal affairs, including Goldman Sachs, American Insurance Association and the U.S. Chamber of Commerce, plus the National Republican Senatorial Committee and Senate Republican Leader Mitch McConnell.

    McCarthy Marcus specializes in independent campaigns. One of its principals produced the infamous Willie Horton ads that helped derail Michael Dukakis’ 1988 presidential bid.

    Business will pick up for such firms. The high court’s decision in Citizens United v. the Federal Election Commission specifically permits corporations to spend on independent federal campaigns.

    Pundits from the left fret that the ruling will alter democracy as we know it. From the right, proponents say the ruling reaffirms the First Amendment by granting corporations the rights as individuals.

    Both views contain truth. Here’s another truth: The public will never know how much corporations or unions give to political groups such as Greiner’s. So long as donors want anonymity, the federal system provides ways to spend money without ever being publicly identified.

    American Future Fund is a nonprofit corporation similar to the Sierra Club or the National Rifle Association. Such groups file tax returns publicly. But there is no requirement that they identify donors.

    Anonymity is one reason people give to such groups. They don’t want the “annoyance” of being publicly identified, Greiner said.

    Greiner raises some money by sending regular e-mail solicitations. She also relies on larger donors, attracted by the group’s message and by the knowledge that they will never be identified.

    Some donors fear they might incur the wrath of people who oppose their views. Others know that if they were to donate to candidates, their names would become public, and other candidates would solicit. Once a donor’s name becomes public, “everybody else and their dog (is) wanting a piece of the pie,” Greiner said.

    Will Greiner jump into the California Senate race?

    She says she doesn’t know. The roughly $500,000 American Future Fund spent in Massachusetts would not go far here, where a week’s worth of television time costs $2.5 million or more.

    But as Greiner showed voters in Massachusetts, people who help swing the outcome of elections can live halfway across the country.

    With the right message and backing, they reach into any state in the union and have an impact on an election. Now that the bosses who control corporations and unions can spend freely on federal elections, they will – and most of us will never see it coming.

    For more information about American Future Fund, please go to The Swarm blog, www.sacbee.com/swarm.

  • Dan Morain: Casino-owning tribes are betting on Brown


    Attorney General Jerry Brown casts himself as a no-nonsense prosecutor. But when it comes to asserting state oversight of casinos owned by Indian tribes, he’s been less than aggressive.

    Tribes that own the state’s most lucrative casinos are betting early that Brown will be the next governor. Based on his actions as attorney general, those casino owners will have a friend in the most important corner office in California.

    In 2008, for example, Brown sided with the tribes and against the state Gambling Control Commission, which wanted to impose new requirements on the tribe’s casino operations, similar to how Nevada casinos are regulated.

    Since then, he has collected $692,000 from tribes into various campaign and charitable accounts. Brown says there is no connection. But his view is that the state has a limited role overseeing tribe-owned casinos – and that ought to give voters some pause, regardless of their views on gambling.

    “It is the tribes that have the primary jurisdiction,” he told me, adding that the California Department of Justice does have a role that includes conducting background checks of key employees.

    Billions of dollars flow through tribal casinos each year. Exactly how much is not known. Tribes don’t need to disclose their take. Federal and state governments have ceded almost all oversight to the casinos’ owners.

    Still, governors can use their power to negotiate agreements that benefit casino patrons and communities around these casinos. If the past is any predictor, Brown’s agenda as governor won’t include taking tough stands against casino-owning tribes.

    Consider the events of September 2008.

    The state Gambling Control Commission sought to assert its authority by developing what it called minimum internal control standards to govern tribe-owned casino operations.

    Its name notwithstanding, the gambling commission has had little luck controlling the tribes’ gambling operations.

    For a brief time, however, the state had a grander vision of its role.

    The commission sought to impose an array of requirements governing audits, surveillance, money counting and other details.

    Representatives of 60 tribes, seeing no reason to permit state involvement, turned thumbs-down when the gambling commission made its proposal back in 2008.

    Their position came as no surprise. But Brown’s stand did raise eyebrows. He sided with the tribes, and against the state gambling commission.

    “The tribes were ready to claim they violated the compact and were threatening litigation,” Brown said. “This is not a blunderbuss, take-it-or-leave it. You’ve got to work together. This is a collaborative role.”

    The recession has slowed the expansion of gambling. But once the economy improves, the industry will grow. Whoever wins in November will negotiate any new deals permitting tribes to expand their operations, hold sway over Internet gambling and help decide whether to allow new casinos on land that is not now part of reservations.

    The Brown family and gambling have a rich history. One of Brown’s grandfathers owned card rooms in San Francisco’s Tenderloin and employed Jerry’s father, Pat Brown, who preceded Brown as governor.

    The nature of gambling has changed dramatically since those days. A voter-approved ballot measure in 2000 ended any debate about the legality of Indian-owned casinos. Since then, Govs. Gray Davis and Arnold Schwarzenegger have presided over the largest expansion of gambling in U.S. history.

    There’s no turning back now. Casinos are part of the fabric of California. Tribes have spent hundreds of millions of dollars on California politics since 1998, making them integral to state campaigns.

    They could be particularly important to the coming election.

    Republican Meg Whitman, the political neophyte who once ran eBay, has dumped $39 million of her own wealth into her run for governor. Her primary opponent, Insurance Commissioner Steve Poizner, another wealthy former Silicon Valley entrepreneur, has chipped in $19 million.

    Brown must run as he always has, soliciting money from his supporters. To this end, he gathered 30 tribal leaders and their consultants together early in December at the Somerset, a chic eatery in Oakland’s boutique-y Rockridge section.

    They dined on entrees of salmon, roasted chicken and flatiron steak, and an apple crisp that was to die for. Brown raised $205,000 in November and December from the tribes.

    Since Brown’s election as attorney general in 2006, tribes that own casinos have donated $715,000 to Brown’s coffers for attorney general and governor, and to charities that operate charter schools he established in Oakland.

    The timing of that money is particularly interesting. Brown collected almost all of it – $692,000, or 96 percent – after September 2008 when he sided with tribes and against the state Gambling Control Commission.

    “There will be considerably more fundraising. Any legitimate donor is solicited,” Brown said, noting that he is looking at a campaign that could cost $150 million. “I have raised some, and I will raise more.”

    State law bars a single donor from giving more than $51,800 directly to a gubernatorial candidate for the primary and general elections.

    But well-heeled patrons can spend unlimited sums on separate campaign efforts independent of the candidate. Independent spending from groups such as wealthy tribes likely will serve as the equalizer for Brown to the millions that his Republican foe will spend.

    Tribes, meanwhile, have reworked the regulations governing their internal operations. They’re set to vote on them on Feb. 4 at a meeting hosted by the Cabazon Band of Mission Indians in Indio.

    Brown views that as a victory, saying: “Everything that needs to be achieved has been achieved.” Odds are tribes will adopt the internal controls. After all, they largely wrote the new regs.