With a long history of bad moves and missed opportunities, California has soured on Governor Schwarzenegger. In spite of his “nice guy” image, a field poll just released shows that only 27 percent of residents approve of Schwarzenegger’s job performance while 65 percent disapprove. This is That’s the lowest approval rating for any California governor in 50 years – except for Gray Davis who registered a 22 percent approval rating in 2003 just before voters recalled him. Voters are even more disgusted with the State Legislature with only a 13 percent approval rating – the lowest in 25 years. “It’s brutal,” Field Poll director Mark DiCamillo said to the San Francisco Chronicle. ” ‘How low can we go?’ is an open question. Voters don’t think we’ve bottomed out yet.”

University of California President Mark G. Yudof apparently hasn’t been able to do much to curtail the culture of corruption that has gripped the UC since a series of outrageous scandals during his predecessor’s tenure. It has now been reported that another highly paid executive just left the UC’s Oakland office with a $100,000 severance check, then turned around and got a job down the street at their Berkeley Office for the same $200,400 salary. The executive aid who commands this high salary is Linda Morris Williams.  She had previously been awarded a $44,000 relocation allowance and a low-interest $832,500 home loan by then-UC President Robert Dynes. State Senator Leland Yee condemned the University of California in a opt-ed he wrote on Califoria Progress Report:

Clearly, there is a broken record at the UC. How many more scandals, oversight hearings, and new laws do we need to have before the University will finally clean up their act? It is truly unconscionable that they continue to mislead the taxpayers and students… There is absolutely no justification for these bloated salaries. The UC administration continuously violates the public trust by catering to the University’s elite rather than serving the students, faculty, and workers they are appointed to represent. The public deserves better from the UC administration.

California’s budget situation has deteriorated since the summer and the State is now facing a massive $10 billion revenue shortfall, according to state’s legislative analyst Elizabeth Hill. Her report, made to the legislature said the current fiscal year budget situation had worsened by $6 billion since its passage in August, wiping out a hoped-for $4.1 billion reserve and leaving a $1.9 billion deficit. Turmoil in housing markets and the slowing economy that caused a drop in property taxes, was the reason for the shortfall, but the report also noted that forecasted revenues from Indian casino compacts were over optimistic and would be delayed.

When Governor Schwarzenegger signed the state’s current spending plan in August, he called it “a balanced budget”. Even before then, however, the slumping housing and credit markets had begun cutting into state tax revenue and threatening to make next year’s budget even worse. Economists had warned that thedecline in new home sales and construction, layoffs and bankruptcies in the mortgage-lending industry, and a volatile stock market were erasing revenue that lawmakers thought would materialize to cover California’s $145 billion budget.

“Knowing the challenges that we face, throughout the fall, my administration has been examining a variety of options to close next year’s budget gap,” Governor Schwarzenegger said in a statement. ” I have not made any final decisions yet, but it’s clear that the decisions that will be involved will be tough.”

Assembly Speaker Fabian Núñez is trying to defend his practice of using campaign funds to pay for international travel and expensive purchases. A Los Angeles Times investigation showed he spent nearly $50,000 on airline travel this year and more than $8,000 for high-end hotels in Europe, and thousands of dollars in extravagant purchases by tapping his $5.3 million “Friends of Fabian” campaign fund. He then really stepped in it when he said, “”There’s not too big a difference between how I live and how most middle-class people live” which contrasted greatly with his long cultivated image as a champion of the working poor. In trying to explain himself at a news conference, Núñez said, “The fact that I’ve been successful, that I’m the speaker of the Assembly, and I’ve represented California around the world is something I’m very proud of,” and that this travel would help “broaden his horizons”, he went on “I think the fundamental question here is, should I use campaign funds for trade missions and educational missions, or should I be using government money, or should I be using non-profit entities that sponsor trips like these?”

Mr. Speaker, a small suggestion. when you are in a hole, stop digging. First of all, campaign funds- or public funds, should not be used to “broaden your horizons” – that is what your own money is for. Second, as we have said here at least a dozen times, people will forgive an occasional international junket if you you also come up with some meaningful and international policies or programs- but the Legislature and the Schwarzenegger administration have done neither. You might, like the Governor, be able to fool some people into thinking that using these shadowy “non profits” with “undisclosed donors” to fund your junkets is good public policy, but those of us who follow this issue closely know better- and eventually everyone else will too.

The Los Angeles Times has written an expose about the luxury junkets being taken by Speaker of the California Assembly, Fabian Nuñez. Entitled “Nuñez travels the world like a high roller” the article describes how the Speaker has “traveled the world in luxury, paying with campaign funds for visits to some of the finest hotels and restaurants and for purchases at high-end retailers such as Louis Vuitton in Paris.”

In a sad and familiar refrain, the Times also reports that “it is not clear how these activities have related to legislative business, as state law requires, because the Los Angeles Democrat refuses to provide details on tens of thousands of dollars in such expenditures.”

Haven’t we been here before? California’s politicians seem to be far better at taking these junkets then they are at making quality policies- especially as it relates to international business and trade. We have harshly criticized Governor Schwarzenegger for the “undisclosed donors” he uses fund his international trips, and it is disconcerting to learn that this kind of corruption has apparently also spread to the Legislature. Read the whole sorry story at this link: http://www.latimes.com/news/local/la-me-nunez5oct05,1,1069266.story?page=1&cset=true&ctrack=1&coll=la-headlines-california

The Los Angeles Times has published a highly critical review of California’s sole international trade offices- a privately fund office for the small country of Armenia. The California-Armenia Trade Office in Yerevan is a legacy of a confused period for the State in international business development as lawmakers struggle to determine the proper role of the Government in this area. At the time when the Legislature was closing the other trade offices, California’s influential Armenian-American community convinced then to accept private funding in exchange for official status and recognition.

Critics consider it ludicrous to put the state’s sole overseas trade office in such a small and isolated country. If California were a nation, it would have the world’s eighth-largest economy, they note. Armenia ranks 128th. The contract with the state required a minimum of $150,000 (amount of business) for 2006, a June 30 report from the Schwarzenegger administration to the Legislature said. The report cited only one significant achievement, a deal between a North Hollywood spirits importer and Safeway to market a high-end Armenian vodka. “It appears the trade office did not successfully complete any of the priorities set forth in the contract,” read a letter signed by Dale E. Bonner, secretary of the California Business, Transportation and Housing Agency, which oversees the trade office.

What’s more, critics warn that bureaucrats in Sacramento don’t have the money to effectively supervise the operations of a faraway entity. Bonner noted in his letter that the Scott legislation did not provide “budget authority for direct supervision or ongoing oversight.” As a result, the state could be legally liable for any misconduct by unsupervised representatives working in a part of the world not known for especially honest or stable governments. “This is an invitation to a scandal,” said Jock O’Connell, a veteran trade consultant in Sacramento. “They’ve created a system that allows a private company to obtain for a ridiculously small amount of money the right to represent California commercial interests in a distant country, while effectively prohibiting any state agency from looking into the activities of the people who are representing us overseas.”

The Orange County register has given it’s take on junkets being funded by the California Foundation on the Environment and the Economy, a non-profit organization founded by several large Corporations in the Energy and Telecommunications industry. Their take is that this abuse of non-profit status is similar to the Abramoff case and could be considered “bribery” – though it would be difficult to prove. Our take has already been written here. We wouldn’t begrudge Schwarzenegger Administration officials and California Legislators an occasional junket if there were doing a decent job of international business development in the interests of California companies and citizens- but they are not doing a decent job- they are doing a crappy job. Also, where are the “trip reports” for these junkets? I can’t find them, and they certainly don’t seem to be on the CFEE website. How can the recipients of these junkets claim they were in the public interest, if the information they (should have) generated is not available to the public? Excepts from the OC register article:

At the end of March, lawmakers and members of the Public Utility Commission joined corporate executives on a trip to Japan. The expenses, valued at $8,000 to $9,500 per person, were picked up by the California Foundation on the Environment and the Economy – a nonprofit in San Francisco funded and connected to firms represented on the trip.

Lawmakers say trips like these are valuable educational experiences; government watchdogs say they’re attempts to buy influence and circumvent the law, which bars corporations from buying trips for government officials or funneling money through organizations that can.

But without evidence, like a memo or an e-mail, directly linking corporate money to officials’ travel, the law says it’s OK. ‘It’s extraordinarily frustrating,’ said Carmen Balber of the Foundation for Taxpayer and Consumer and Rights. The foundation recently uncovered documents showing the value of the Japan trip. ‘You don’t need a smoking gun in California to know a $10,000 gift to the Speaker of the Assembly is illegal,’ Balber said. ‘But the law does require that smoking gun if that $10,000 gift is funneled through a nonprofit organization. And that’s absurd.’

The Jack Abramoff case illustrates the kind of concrete evidence needed to substantiate such a connection. By now, it’s known the disgraced former lobbyist used the National Center for Public Policy Research and other nonprofits as intermediaries for himself and his clients to pay for trips to Scotland and other things. (At the time, businesses were allowed to pay for House of Representatives trips; Abramoff was trying to dodge a rule that required trip sponsors to be directly connected to the reason for the travel.)

But proving those links required a mountain of documentation and testimony: e-mails showing Abramoff arranging pass-through payments; donations dated the same day trips were taken; sworn statements by insiders. I asked Bryan Sierra, a Department of Justice spokesman, why political corruption cases require reams of evidence. He said the burden of proof can be incredibly high.

For bribery, he said prosecutors have to prove the intent of two parties: the briber, who must be shown to have offered something of value and delivered it, and the bribed, who must be shown to have taken an official action directly because of that thing offered or delivered.

Legislation has been introduced in the California State Legislature calling on President Bush to immediately begin the “safe and orderly withdrawal” of all United States forces from Iraq. California Senate President pro Tem Don Perata announced plans to place an advisory measure on California’s statewide ballot as part of next year’s February 5 presidential primary. The text of the resolution is as follows:

“The people of California, in support of the men and women serving in the Armed Forces of the United States, urge President Bush to end the U.S. occupation of Iraq and immediately begin the safe and orderly withdrawal of all United States forces; and further urge President Bush and the United States Congress to provide the necessary diplomatic and non-military assistance to promote peace and stability in Iraq and the Middle East.”

The Sacramento Bee has written another expose about the “California Foundation on the Environment and the Economy”. This so called “nonprofit”, actually made up of some of the largest Corporations in the State, made the arrangements for this “all expenses paid” trip to Japan for officials in the Schwarzenegger administration and several California State Legislators:

The California Foundation on the Environment and the Economy, a San Francisco-based nonprofit not required by law to disclose its donors, is paying for the trip. The group’s board of directors is populated by the top executives at the biggest energy and telecom companies in the state — among them AT&T, Verizon, PG&E, Chevron, Sempra Energy, Southern California Edison and BHP Billiton — as the lawmakers and regulators tour Japan to discuss telecommunications and energy technology.

Along on the Asia trip — whose participants departed Thursday — are Timothy Simon and Rachelle Chong, two of the governor’s appointees to the Public Utilities Commission, the powerful state board that regulates California’s multibillion-dollar telecommunications and energy industries. Also participating are Sen. Christine Kehoe of San Diego and Assemblyman Lloyd Levine of Van Nuys, both Democrats, who chair the legislative committees that oversee energy and telecommunications policy in California. Sen. Alex Padilla, a freshman Democrat from Los Angeles and a potential swing vote on the Rules Committee — which will decide the fate of embattled PUC nominee Simon — is on the trip, as well.

“What makes this trip so particularly egregious is that the corporations are focusing on the exact levers of power in hosting this junket for the state’s top utility cops,” said Doug Heller of the Foundation for Taxpayer and Consumer Rights, a consumer-advocacy group. “If you had to identify the people with the most responsibility over utility issues in the state, they’ve brought the two in the Legislature and 40 percent of the Public Utilities Commission.”

One of the corporate executives traveling this week in Japan is Kenneth McNeely, the president of AT&T California. Last year, McNeely helped secure major legislation allowing phone companies access to the state’s cable TV and Internet market. AT&T spent $23.6 million in lobbying for the bill, which was jointly written by Levine and Assembly Speaker Fabian Núñez, and signed into law by Schwarzenegger… On Friday, the Public Utilities Commission announced that it had approved a video franchise agreement to allow AT&T access to California’s lucrative broadband market. McNeely, who was traveling with PUC members Chong and Simon in Japan when the deal was announced, issued a laudatory statement, which Heller jested was made “over sake shots with the regulators, no doubt.”

The article did not mention that AT&T also gave generously to the Schwarzenegger reelection campaign, and some of this money may have been used for the huge bonuses the Governor recently paid to his senior staff. A smaller campaign contribution of $25,000 was transfered from Schwarzenegger to his Chief of Staff Susan Kennedy just a few weeks after she voted to approve the purchase of AT&T by SBC Communication, leading many to believe that this was a payment made by the giant telecommunication firm in exchange for this vote.

“Assembly Speaker Fabian Nuñez, D-Los Angeles, and five other California lawmakers are scheduled to be in France this week to take a look at the TGV (the French high-speed rail system) as the state considers building a 700-mile, high-speed rail system of its own… Also on the trip are Assembly members John Laird, D-Santa Cruz, Fiona Ma, D-San Francisco, Joe Coto, D-San Jose, Michael Duvall, R-Yorba Linda, and Bob Huff, R-City of Industry…

While Nuñez and his group are in France this week, five state senators are in Taiwan to consider opening an office to promote trade with California. Sen. Leland Yee, D-San Francisco, said the trip will include stops in Taipei, the capital, and Kaohsiung, Taiwan’s second-largest city. He said visiting the cities will give lawmakers ‘an understanding of their ability to foster trade and enhance trade with California.’ In addition to Yee, the delegation includes Sens. Roy Ashburn, R-Bakersfield, Ron Calderon, D-Monterey Park, Gil Cedillo, D-Los Angeles, and Denise Ducheny, D-Chula Vista.

Another five legislators are in Japan on a trip sponsored by the California Foundation for the Environment and the Economy. The San Francisco-based group finances annual overseas trips for legislators that focus on a particular issue facing the state. The foundation’s board of directors includes representatives of oil and telecommunication companies, utilities, labor unions and environmentalists. Alex Traverso, a spokesman for Assemblyman Lloyd Levine, D-Sherman Oaks, said Levine went on the trip to look at ‘new innovations in cell phones and broadband.’ Also on the trip are Assemblyman Ted Lieu, D-Torrance, and Sens. Jim Battin, R-Palm Desert, Bob Margett, R-Arcadia, and Jack Scott, D-Altadena…

Assemblyman Ira Ruskin, D-Redwood City, is the lone legislator on another European trip this week, one organized by the California Climate Action Registry. The nonprofit organization was created by the state to promote greenhouse gas reductions. Also on the trip are several Schwarzenegger administration officials, said James Lee, a spokesman for the California Environmental Protection Agency. Lee said the registry was covering costs. The eight-day trip includes meetings with Belgian, German and British officials to discuss their efforts to combat global warming.”

“Assemblyman Dave Jones last week revealed that a state-run web site had been selling access to the Social Security numbers of thousands of California consumers, a practice that began in 2004 and only ended this week when Jones raised objections. According to Jones this is ‘potentially the longest running government Internet breach in California’s history… ‘For the past 3 years, the state has been in the data broker business,” Jones said. ‘It has sold Social Security numbers for a mere $6 each to any member of the public with an Internet connection and a credit card. This is a gold mine for identity thieves.’… Jones discovered earlier this month that an Internet web site maintained by the Secretary of State’s office was selling public records containing the names, addresses, Social Security numbers, and sometimes the signatures of tens of thousands of Californians who have taken out secured loans. Though legal, selling this information to the general public could have enabled criminals to fraudulently secure credit cards in other individuals’ names, according to Jones.”

“The Hawaii state legislature is considering a resolution asking the California state legislature to find a way to improve port infrastructure without taxing Hawaii shippers. California’s legislature is considering a new tax on shipping containers that would cost an estimated $34 million a year to Hawaii shippers. ‘This bill, if passed, will have a major negative impact on Hawaii’s economy, the maritime industry and raise the cost of living for Hawaii’s people,’ said Jim Tollefson, president of the Chamber of Commerce of Hawaii. More than 80 percent of goods consumed in Hawaii are produced elsewhere and shipped to the islands, and 90 percent of those are shipped through the California ports of Oakland and Long Beach on the ships of Matson Navigation Co., Horizon Lines and Pasha Hawaii Transport.”

“California lawmakers are considering legislation that would force state pension funds to sell billions of dollars of shares in companies doing business with Iran.
The California Public Employees’ Retirement System, the largest U.S. pension fund, and the state teachers’ fund would have to unload shares in companies including BNP Paribas of France, Siemens AG of Germany and Eni SpA of Italy. ‘Who’s funding terrorism? It sure as hell shouldn’t be our public employees,’ said Joel Anderson, a Republican assemblyman from El Cajon who introduced the measure. `When you’re looking at the war on terrorists, this is one of the best weapons we have — just defunding them.’ Anderson estimated his legislation would affect $24 billion worth of investments.”

Assemblyman Van Tran has gone to Japan to meet with high-ranking government officials and discuss trade relations, according to the Newport Beach Daily Pilot:

Tran was specially invited by the Japanese foreign ministry and left Tuesday for a five-day trip ‘Basically this is a long-standing invitation that’s gone on for about a year now,’ Tran said by phone Tuesday before leaving. He planned to meet with Japan’s ministers of justice, science and technology, and also with corporate officials from Panasonic, Honda and Kikkoman. Tran said his goal for the trip is “to basically promote trade and have discussions to build better relations between the people of Japan and California.

There has been more coverage in the San Francisco Chronicle on Corporations links to “non-profits” that are being used to pay for junkets for Schwarzenegger administration officials and members of the State Legislature:

Some of the same corporate interests that dominate the Capitol through high-priced lobbyists and campaign donations also bankroll nonprofit organizations that in turn spend tens of thousands of dollars a year entertaining state lawmakers and administration officials far from home — gifts that otherwise would exceed state limits.

Since 2002, the largesse has included a weekend at a fashionable beachfront golf resort south of Rio de Janeiro for 14 state officials, including Assembly Speaker Fabian Núñez, D-Los Angeles, and the governor’s chief of staff, Susan Kennedy.

There was also a luncheon cruise on New Zealand’s Hauraki Gulf for two state senators and three Assembly members; dinner at Harry’s Bar in Rome for Núñez and another lawmaker; and golf at the renowned Kapalua Resort on Maui — a treat enjoyed by state Sen. Jeff Denham, R-Salinas, and Bill Leonard, a member of the state Board of Equalization.

The trips, which typically involved study groups and conferences, are sponsored by organizations such as the Pacific Policy Research Foundation, the American Legislative Exchange Council and the California Foundation on the Environment and Economy.

According to a Chronicle investigation, each of these organizations receives substantial funding from major corporations such as ChevronTexaco, Sempra Energy, Pacific Gas and Electric Co. and Altria Corp. (the lobbying arm of Altria Group, which owns Philip Morris tobacco).

We’re disappointed, but no longer shocked to learn about these shenanigans. In truth, if our elected leaders were doing a decent job we wouldn’t begrudge them an occasional junket. In the area of international trade and economic development, however, they are not doing a good job- they are doing a terrible job.

None of the basics for an effective economic development program are in place in California. After more than three years, they haven’t formed any cohesive business development strategy or policies, there is no administrative infrastructure and few effective public services. The few remaining small business programs are listless and bureaucratic. The junkets are the fun part- but they haven’t earned it by doing any of the hard work to justify their little romps.

Another huge question that always seems to go unanswered is what happens to the information that was collected on these trips? Do they even bother to collect it in an organized and professional manner? The Schwarzenegger administration is virtually closed to public input in these areas- presumably unless you are one of the Corporations funding their junkets and other pay offs, so shouldn’t we at least be allowed to see what they came up with?

“Assemblyman Mark Leno (D-San Francisco) announced today he will introduce ‘Net Neutrality’ legislation that will preserve the free and open Internet by allowing all users to access the content of their choice. ‘The Internet has provided a forum for free speech and open communication, giving a voice for everyone from the largest business with the most expensive website to the individual with a one-person operation,” said Assemblyman Mark Leno (D-San Francisco). ‘We can’t allow those who want to serve as our Internet gatekeepers to discriminate against content and decide for us what we can and cannot view’. The legislation will… prevent companies that control the internet’s infrastructure from discriminating against content based on its source or ownership. “

The California Senate passed a resolution Monday urging Congress and President Bush not to escalate U.S. involvement in the Iraq war. The 22-14 vote was along party lines with all Republicans voting against the measure, and all but one Democrat voting in favor. During a contentious hour-long debate Democrats said they continued to support American troops fighting in Iraq, but they disapproved of Bush’s request for more troops and money. Republicans argued that the measure could harm troop morale or embolden terrorists. Dennis Hollingsworth (R-Murrieta) even seemed to say that those who voted for Democrats in the last election were terrorist sympathizers, “This resolution emboldens our enemies,” he said “This resolution simply tells Al Qaeda and other state sponsors of terrorism, ‘We’ve got the Americans on the run. First, we had the election in November and now … all we have to do is hold out a while longer. They are crumbling in Washington and they are crumbling in state legislatures all over the country.’ Sen. Sheila Kuehl, a Santa Monica Democrat, responded: “Balderdash. If anything is supporting and emboldening our enemies, it is this war…. This war was a mistake, and the rest of the world knows it.”

“A group of California lawmakers hope that a bill to create a $45 million clean-fuel technology fund will be just the thing for California to keep — and attract — companies like San Carlos’ Tesla Motors. The electric car maker, founded by Silicon Valley entrepreneurs Martin Eberhard and Marc Tarpenning, wants to expand and is considering building an electric car plant in Pittsburg. It’s also weighing offers out of state. Assemblyman Mark DeSaulnier, D-Martinez, a co-author of the bill, said he held meetings with company and city officials Monday at his Capitol office and hopes such a fund would encourage Tesla to stay.”

“If electric-car maker Tesla Motors opts to open its first U.S. assembly plant in Pittsburg, the move could create hundreds of local jobs and bolster the regional and state economies at a time when manufacturing in California has remained stagnant for more than two years. ‘They’re talking about 300 jobs to begin with,’ Assemblyman Mark DeSaulnier, D-Concord, said Wednesday, relaying a conversation he had with executives of the San Carlos-based company. If Tesla later expands its vehicle production, he added, ‘without hyperbole, you’re looking at the next Detroit.’”

It may be closing the barn door after the horse has bolted, but the California Legislature has begun considering restrictions on unorthodox mortgage-lending practices. About half of all new home loans in California are something other than the traditional 30-year fixed loan and this has allowed hundreds of thousands of Californians to buy homes they otherwise could not afford. The loans use features such as no money down and variable interest rates in exchange for higher bills that kick in years later. Regulators said many of those riskier loans were taken out in 2004 and 2005 and will start resetting to higher rates this year. Some areas of the State have already experience an increase in mortgage defaults as a result of these unconventional loans.