Consumer Watchdog – Sacramento's scandal-in-waiting

The Los Angeles Times

The following op-ed commentary by JAMIE COURT, author of "Corporateering", and president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights, was published in the Los Angles Times on Tuesday, January 24, 2006:
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In the wake of the Abramoff, Cunningham and DeLay scandals, all eyes have turned to lobbying reform in D.C. And deservedly so. But Washington is just the beginning. In fact, the kind of lobbying that goes on in the nation's capital also exists -- often more brazenly, more openly and with bigger dollar amounts -- in every state capital in the country, including Sacramento.

Jack Abramoff's former lobbying firm, for example, did not open shop in Sacramento earlier this month for the fine food. California is the Wild, Wild West for influence-peddling greased by campaign cash, self-dealing and insider connections.

More money is spent lobbying in California than in any other state in the nation. The $212 million spent by California lobbyists in 2004 dwarfed the runner-up lobbying state, Texas, by $50 million and third-place New York by almost $70 million. In only one of the remaining 47 states -- Minnesota -- did lobbyists even reach the $50-million mark.

Most of the 1,000 lobbyists working the state capital traffic in more than information. Of the $250 million that, by conservative estimates, is contributed to California state campaigns during a gubernatorial election cycle, the bulk comes from corporations, professional associations, unions and other interest groups that employ lobbyists in the state.

The most highly paid hired guns in Sacramento have two silver bullets: access to vast amounts of campaign cash and connections to people -- such as the governor or Assembly speaker -- who are even more powerful than the legislator being lobbied.

Gov. Arnold Schwarzenegger, for example, who came to office purportedly to clean up a corrupt capital, keeps a coterie of high-paid consultants on his campaign payroll -- consultants who also are paid by corporations that have sought and won favorable decisions from the administration. And often those favors were backed up by big campaign cash.

Schwarzenegger's chief consultant until last week was Mike Murphy. While Schwarzenegger paid Murphy more than $700,000 for his campaign and ballot-measure consulting, Murphy's firm simultaneously represented 35 clients, many that did business with the state, including the American Insurance Assn. and Wal-Mart.

Murphy claims that he does not lobby the governor on behalf of his clients. Yet on the same day this fall that Schwarzenegger vetoed SB 399, a bill that would have ended a major taxpayer subsidy for insurers (by forcing them to repay government medical programs when they should be responsible for the cost of an accident), the American Insurance Assn. delivered a $105,000 check to a Schwarzenegger-controlled ballot-measure campaign committee. Also on that day, Oct. 7, the governor vetoed an insurance benefits disclosure bill opposed by Wal-Mart -- and simultaneously collected $250,000 from Wal-Mart heiress Christy Walton. The committee that received the checks also paid Murphy consulting fees.

Or consider Schwarzenegger's chief fundraiser, Marty Wilson. Wilson's firm was paid $453,967 by Schwarzenegger's campaign committees, but it also represented clients that had business before the state and that contributed to those campaign committees. Wilson client CGI-AMS, an information technology and business services company that obtained a state contract, gave a $25,000 contribution to Schwarzenegger two months before receiving the contract.

This is not just a Republican disease. Former Gov. Gray Davis' top advisors, Gary South and Darius Anderson, represented corporate clients with business before the state that lavished campaign cash on Davis.

These gubernatorial advisors from both parties claim they never discuss their private clients' business with the governor. Of course, they may use their knowledge of the governor's priorities to "help" their clients. Or they may try to influence other decision-makers who are beholden to the governor, using their personal relationship with him as leverage.

In Capitol parlance, that's often called "strategic services" (rather than lobbying). Outdated disclosure rules in California allow some of Sacramento's most influential power brokers to not register as lobbyists if they talk about legislative "concepts" and not specific legislation.

These disclosure rules need to be overhauled. Nor should any paid consultant of a governor be allowed to have clients that have business before the state.

The Abramoff scandal has proved nothing if not that the line between public and private service needs to be clear and bright. And it reminds us that the nexus of politics and money in the capital is cancerous to the body politic and to the creation of good public policy.