Does John Chiang have a Boss?

JULY 12, 2010

By KATY GRIMES

Who is California state Controller John Chiang’s boss? The answer is surprisingly elusive. Right now, it appears that Chiang doesn’t even answer to the governor or the executive branch, much less the state’s judiciary.

Governor Arnold Schwarzenegger recently ordered Chiang to pay the state’s civil servant workers minimum wage until the legislature can pass a budget. But Chiang told the governor no.

Repeatedly.

Meredith Turney of the group Americans for Prosperity says that “since Chiang is willing to defy both the governor and the judiciary, something is holding his feet to the fire.” Turney suggests that Chiang is being directed to defy the governor by the state’s labor unions, all of which are very large contributors to his campaigns.

The SEIU labor union has maxed out their contributions to Chiang’s campaigns every year he has been in office, according to Turney. Chiang received more than $190,000 in campaign contributions from state employee labor unions in his 2010 re-election bid, which accounted for nearly 22 percent of all his contributions. According to campaign reports filed through May 22, 2010, Chiang received large donations from the California Teachers Association, SEIU, Electrical Workers Union, Firefighters Union, California Labor Federation Operating Engineers, and California State Council of Service Employees (click  here for his contribution list).

Aaron McLear, Schwarzenegger’s press secretary, said the governor has filed a lawsuit and a Temporary Restraining Order to compel Chiang to follow the law. Sacramento Superior Court Judge Patrick Marlette is expected to rule on the case on July 16. Chiang had Sacramento Superior Court Judge Timothy Frawley disqualified from the minimum wage case and replaced with Marlette. But Marlette is the same judge who ruled in the governor’s favor over state worker furloughs.

Jacob Roper, the spokesman for the controller’s office, says that the governor’s lawsuit is not a problem. “If there is an order, the Controller will abide by the order,” Roper said. According to Roper, there is no actual order from a California court directing Chiang to pay state employees minimum wage –- just a Supreme Court ruling and an Appellate Court decision supporting that ruling.

McLear explained that the appellate court affirmed the California Supreme Court’s ruling in favor of the governor, in a lawsuit filed in 2008 after the governor’s first attempt to impose the minimum wage during the budget impasse.  The latest ruling from the Appellate Court concludes that Chiang cannot ignore the governor’s minimum wage order.

But Chiang’s office says that since there is no court order, the controller is still following the law by not paying out minimum wage to state workers.  It appears that the governor and administration are arguing that state wage law prevails here, as every employer in the state must follow, while Chiang is deferring to federal law.

Roper says Chiang wants a court order and not just a court ruling, leading many to believe that Chiang will keep suing to stall, pehaps even after a court order is issued.

The controller does appear to be cherry-picking who gets paid and who doesn’t, according to McLear. State employees who have been appointed by the governor or legislature are not getting paid right now. While we were talking, McLear looked at his paycheck and said it was all zeros.

McLear added that state employees receiving minimum wage would be immediately reimbursed for the remainder of their salary once the budget was approved.

And while the threat of minimum wage weighs heavily on state employees, none of their benefits, perks or subsidies would be cut. Health insurance, leave benefits, vacation and sick pay, pension contributions, parking subsidies, food subsidies and transportation subsidies would all remain intact.

But the state is not paying any bills right now, according to Roper, including all outstanding bills owed to the state’s vendors. McLear asked “how Chiang is paying civil servants their full wages if he can’t pay vendors, with no budget or appropriation to pay anything.”

Roper explained that the controller is especially concerned about the minimum wage order from the governor, since civil servants fall under the federal Fair Labor Standards Act. To not pay state civil servant employees in full would create penalties amounting to double wages. Roper explained that Chiang is trying to avoid the exorbitant penalties.

With Roper reporting that Chiang will abide by a court order to pay minimum wage, McLear asked how that would be possible since Chiang has said California’s computerized payroll system cannot handle the change because it can’t cut some checks at full pay and others at minimum wage.

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  1. pad
    pad 14 July, 2010, 23:58

    Wow, could your article be more biased? What McLear (correct spelling ) conveniently forgets is that the Gov is choosing to exempt certain groups of employees who have tentative agreements with him, even if those tentative agreements have not been ratified and no appropriation made for their full salaries. (Agreements that were bargained under threats and extortion.) Or the convenience of omitting that the actual ruling states the Gov “may” not “shall” pay federal minimum wage? This a purely a political ploy on the part of the Gov and state workers are being used as pawns.
    Did McLear also tell you that he received a $17, 000 raise before the furloughs were implemented (as did most of the Gov’s staff)? Most state workers have received two raises in the last 11 years for a combined total of 8.4%. State workers do not receive COLAs and they have lost 14.62% (that puts us in the negative) for the last 18 months. Now we are being threatened with more.
    Did you even read the ruling? There is a portion that speaks to feasibility. The Gov and McLear are very aware that the state’s payroll system can’t do what they are asking of the Controller. You want to drag John Chiang over the coals and state his is defying the Gov and the judicial system. What about the court rulings and statutes that Arnold has ignored and twisted? Just as Arnold has and continues to use the judicial system to file frivolous lawsuits and appeals, are you implying John doesn’t have the right to due process?
    While I understand that many have lost jobs in the private sector, they are plenty who have not. If there is no money, why is the state still hiring? Why didn’t Arnold implement a hiring free? Some of the reasoning behind the hate toward state workers is on par with, “I lost my job or had my salary cut so you should too.” It’s like the mentality of crabs in a bucket; “if I can’t pull myself up, I’m going to make sure you don’t get out either”. With that type of reasoning we all lose in the end.

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  2. K Hughes
    K Hughes 15 July, 2010, 09:53

    I’m a nurse, the Governor destroyed our BRN board, siting articles from the LA Times that bad nurses were still practicing nursing. But the articles failed to point out that the Attorney General’s office and other depts that assist the BRN in disciplining nurses were also to blame for the delays. Now we have a new board, it seems to be working despite the fact that 90% of its members were appointed by Arnold. But the BRN still can’t get court dates from the AG’s office so these nurses can have due process and their licenses revoked if needed. Not to mention that the BRN is a self funded board, it’s financed through our renewal fees and the BRN pays for all the work being done by other dept and boards needed to get it’s work done. We asked for those working on BRN issues to be exempt from furloughs, since it didn’t impact the state budget, but no…thus slowing down the process again. Arnold doesn’t want the BRN to pay for work being done, because that leaves more money in the BRN reserve for him to ‘borrow’ from. Voted for Chiang, plan on voting and campaigning for him again, someone has to stand up to the terminator!! Keep up the great work John!

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