Brown budget projects deficit

Good morning. Happy Hump Day! One word this morning: Budget. 

Gov. Jerry Brown preached prudence on Tuesday as he unveiled his 2017-18 state budget, proposing no new major spending programs while taking a wait-and-see approach to the incoming Trump administration, even as other prominent California Democrats brace for the unknown.

The budget showed a $2 billion deficit — modest by historical standards, but worthy of the lawmakers’ attention — caused by an increase in government programs over the last few years and lagging revenues.

Brown said he didn’t want to “repeat mistakes of the past,” recalling the days of the state’s budget crisis. The proposed budget showed approximately $8 billion in the Rainy Day Fund by the end of 2017-18, which is 63 percent of the constitutional target, which Brown said was bigger than it seemed as he called for greater savings now. 

Independent analysts, as well as Brown’s budget experts, have cautioned against the state’s over-dependence on the wealthiest residents to fund the government. Brown lauded the state’s “progressive” tax system, where people with the most pay the most. But he said it also requires prudence.

“It doesn’t make sense to pretend we have money when we really don’t,” Brown said. 

CalWatchdog has more.

In other news:

• Politics: “A new report tallying the costs of running against members of your own party revealed that Golden State Democrats spent big in 2016 on races without a Republican. This year, ‘Democrats raised or spent a total of $90.8 million on same-party races — a 67 percent increase from 2014 when Democrats spent $54.3 million,’ according to the study.” CalWatchdog has more. 

• Responsive Government: “San Diego is settling a lawsuit that accused the city of illegally limiting public comment at City Council meetings for at least 13 years.” The San Diego Union-Tribune has more. 

• Campaign Finance: “Now a handful of Los Angeles lawmakers are calling for a ban on such donations from real estate developers, saying they want to counter the perception that money drives those decisions.” The Los Angeles Times has more. 

• Tech: “Facebook CEO Mark Zuckerberg and his wife, Dr. Priscilla Chan, are strengthening their political connections, at least when it comes to philanthropy. On Tuesday, the couple announced that two well-known political figures among both Democrats and Republicans will lead policy and advocacy efforts at the Chan Zuckerberg Initiative, which they formed to fund philanthropic causes.” The San Jose Mercury News has more. 

Legislature:

• Gone till Friday at 9 a.m.

Gov. Brown:

• No public events announced. 

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After a string of failures in several central valley campaigns, the Democratic Congressional Campaign Committee has come in for scorn by increasingly independent party members seeking to take their fortunes into their own hands.

In one stinging example, Rep. David Valadao, R-Hanford, “trounced Democrats for two cycles in the 21st Congressional District despite the party’s 16 percentage point edge over Republicans among registered voters,” the Los Angeles Times noted. “Prominent locals told the Fresno Bee in December that part of the blame fell on the DCCC for micromanaging failed 2014 candidate Amanda Renteria’s campaign.”

Looking for an edge

But more established candidates have worked to push back against the insurgents. Some California Democrats facing primary competition have sought — and landed — so-called “pre-endorsements,” a robust signal of party support. “During a pre-endorsement conference meeting in San Bernardino, Assemblywoman Cheryl Brown, Assembly candidate Sabrina Cervantes and congressional candidate Tim Sheridan all got more than 70 percent of the votes needed to get their endorsements placed on the consent calendar for the state party convention scheduled for Feb. 26 through 28 in San Jose,” the Press-Enterprise reported.

“The Brown/Reyes contest is getting statewide attention because Brown, who is considered part of the Assembly’s moderate Democratic caucus, is being challenged by Reyes, a liberal Democrat.”

In another closely watched intraparty tussle, Lou Vince’s upstart bid to unseat Rep. Steve Knight, R-Lancaster, has divided national Democrats from Golden Staters. As the Los Angeles reported, “a member of the Democratic Party in Washington and two members of Congress, including Rep. Zoe Lofgren, chair of the California Democratic Congressional Delegation,” relayed to Vince their desire to see him yield the primary race to Bryan Caforio, an attorney who has proven to be more of a fundraising powerhouse.

Instead, of dropping out, however, Vince proceeded to win pre-endorsement by party activists with more than 80 percent of the vote, “making him the strong favorite to get the California Democratic Party’s backing at its convention next month. Caforio’s campaign will have to file a formal objection if it wants to bring the endorsement to the convention floor,” the Times added.

Primary-season unease has in part been fueled by Democrats’ desire to wrest back their legislative supermajority. But at the same time, tilting away from candidates supported most heavily by the party’s activist base could end up exacerbating frustrations in Sacramento.” With a restored supermajority, Dan Walters noted at the Sacramento Bee, Democrats “could have raised taxes and placed constitutional amendments on the ballot, but their leaders were reluctant to do either. Meanwhile, business interests were busily electing pro-business moderate Democrats, which turned out to be a much more important factor in what happened, or didn’t happen, on legislation, particularly in 2015. The moderate bloc stymied the legislative agendas of liberal groups that business opposed.”

Off script

The dynamic has lent a somewhat surreal quality to the higher-profile struggles playing out in the party. In the San Fernando Valley, Walters noted, former Assemblyman Raul Bocanegra is hard at work trying to exact electoral revenge against Assemblywoman Patty Lopez, who defeated him in 2014, while outgoing Assembly Speaker Toni Atkins has mounted a challenge in San Diego to state Sen. Marty Block.

For Democrats, campaign finance has added to the topsy-turvy feel of the season. Although the party came out far ahead in final tallies of money raised in 2015, as the Los Angeles Times reported, moderate Democrats brought in more cash from the oil industry than did Republicans, according to the Daily Democrat:

“A band of self-described moderate Assembly Democrats led by former Assemblyman Henry Perea, who recently resigned to work for a pharmaceutical trade association, were instrumental in the oil companies’ victory. According to their campaign finance statements, the companies wrote checks to nearly 30 Assembly Democrats in the second half of 2015.”

“The California Supreme Court ruled 6 to 1 this week that the state Legislature has the authority to ask voters whether the Legislature should propose an amendment to the U.S. Constitution to overturn the U.S. Supreme Court’s Citizens United decision,” as the Los Angeles Times noted in an editorial.

A complex ruling

Opinion has swiftly split on the wisdom of allowing a statewide vote on a political position rather than a piece of law. The San Jose Mercury News observed that the court “for the most part upheld the state Legislature’s power to put nonbinding, advisory measures on the ballot — allowing state politicians to essentially test the waters on issues with voters without actually enacting new laws. The justices left some questions unanswered as to how far the Legislature can go in using such measures in the future.”

The lopsided majority “found that the Legislature has the clear power to seek voter input if considering ways to back a federal constitutional amendment,” the Mercury News continued. “However, the justices sent mixed signals on whether the ruling gives the Legislature blanket authority to use advisory measures to glean voter attitudes on other issues.”

Politically speaking, the decision made a strange fit within California’s prevailing partisan lines. Typically, Republicans incline toward supporting greater independence in the way states shape their policies, while Democrats often prefer that so-called laws of the land uniformly and unambiguously prevail across the country.

Liberals divided

But the court opened itself up to criticism even from anti-Citizens United analysts by requiring state lawmakers to reintroduce legislation that would replace the original ballot measure in question, last election season’s Proposition 49. “The suggested amendment would have allowed for the full regulation or limitation of campaign contributions and spending for the purpose of ensuring that all citizens, regardless of wealth, may express their views to one another and to make clear that the rights protected by the United States Constitution are the rights of natural persons only,” according to Ballotpedia.

Michele Sutter, co-founder of the organization that originally sponsored the bill that became Prop. 49, took to the Sacramento Bee to express her disapproval of the hurdles set up by the court. “In a striking reversal, the state court concluded that Prop. 49 was wrongfully removed from the ballot. Unfortunately, the court’s muddleheaded meddling has left California voters, who were wronged in 2014, disenfranchised again in 2016,” she opined. “Instead of ordering Prop. 49 directly to the November ballot, the court suggests that the Legislature can pass a new bill to do so.”

Last time around, Gov. Jerry Brown opposed the inclusion of Prop. 49 on the ballot, despite his longstanding opposition to the more corporate-friendly wing of his own party.  “We should not make it a habit to clutter our ballots with nonbinding measures, as citizens rightfully assume that their votes are meant to have legal effect,” he said, as the Los Angeles Times noted in its editorial. “The problem with Proposition 49 was that it was a purely advisory referendum that would essentially have turned the polling place into a Gallup Poll, as if California voters need to further crowd a ballot already stuffed full of complicated initiatives and referendums,” complained the board.

But other liberals rallied to the court in the name of the bigger legislative picture. “This is good news for the fight for reform in California and nationally, as it provides legal justification and support for the use of advisory initiatives and referendums to build popular support for this necessary amendment — and to put pressure on lawmakers to act,” The Nation suggested. “With Democratic presidential contenders Hillary Clinton, Bernie Sanders, and Martin O’Malley talking up the idea of an amendment, along with a majority of Democrats in Congress and a growing number of enlightened Republicans, there is momentum for reform.”

Harris “has a fight on her hands trying to get the brothers’ Americans for Prosperity Foundation to give her access to the same confidential data it already provides to the Internal Revenue Service,” Bloomberg Politics reported. That organization has labored in court to maintain control over information about its contributors, arguing that they and it face routine threats of violence.

“Grotesque threats have been leveled against known associates of the foundation, ranging from threats to kill or maim to threats to firebomb buildings,” the Foundation alleged, as Courthouse News reported. “More mundane threats abound too, including boycotts, firings and public shaming, all of which are now demonstrated components of the playbook of the foundation’s more extreme opponents.”

Pressed on the prospect of public disclosure by judges at a recent hearing in federal appeals court, “Deputy Attorney General Alexandra Gordon told the judges that new regulations to prohibit such disclosure are in the making, though she didn’t know when they would be enacted,” the site added. Gordon waved away claims that Foundation contributors could be put in peril by the disclosure of their information. “We have basically some anecdotal evidence of threats, mostly arising from the founders of this foundation, the Koch brothers’ very public presence and very public events held by the foundation,” she said, according to Courthouse News Service. “That has nothing to do with whether this type of disclosure requirement is actually going to lead to harm.”

The legal battle between the Kochs and the state Attorney General began in December 2014, when Americans for Prosperity sued Harris for violating its First Amendment rights to free speech. Although California law requires all charitable organizations to register with the state and furnish copies of their public IRS filings, as the Los Angeles Times then noted, the so-called “Schedule B” filing, which lists the names and addresses of donors giving over $5,000 each tax year, is “kept confidential and not available to the public.”

While Americans for Prosperity “said they have been registered with the state since 2001 and had never before been asked for its list of donors,” the Times reported, a Harris spokesman said the Foundation “has been out of compliance with the law for a number of years” and “did not receive a communication previously from our office for one simple reason: the section responsible for enforcement has been chronically underfunded for years.”

By this year, however, the Kochs had gained the upper hand in court. This February, U.S. District Judge Manuel Real blocked Harris from pursuing the list “until the legality of the request has been resolved,” as Bloomberg Business observed, citing “a separate case in which the U.S. Court of Appeals in San Francisco halted the attorney general from enforcing the demand on the Center for Competitive Politics while that case was before that court.”

“Real rejected Harris’s argument that her office won’t publicly disclose the donor information, saying that California doesn’t have regulation preventing such disclosure and that, as such, it was left to the attorney general’s discretion whether to make it public. The judge agreed with the foundation that the attorney general’s office won’t be harmed by an injunction because it hadn’t had the donor information for the past decade.”

Whatever the outcome of the case, Harris stood to gain politically from putting the heat on Americans for Prosperity and the Kochs, who are reviled by Democrats as big-money GOP puppet masters. Of late, Harris has had to weather criticism of her own campaign spending, “using her campaign account to fund stays in upscale hotels and first-class airfares during her nearly five-year tenure as state attorney general,” as the Hill recently reported. “A review by The Hill of California campaign finance records reveals that Harris’s expenditures follow a pattern: The Democratic candidate regularly charges thousands of dollars in luxury travel and hotels to her campaign.”

A state lawmaker wants to double the reporting threshold for political campaigns in California — allowing major donors to contribute more money and campaigns to spend more money before filing a disclosure report.

Under the Political Reform Act of 1974, as modified by later laws, candidate and independent expenditure committees must file disclosure reports after accepting $1,000 or more in a calendar year. Similarly, the state requires major donors to file campaign reports after contributing $10,000 or more in a calendar year.

Assemblyman Richard Gordon, D-Menlo Park, believes it’s time to increase those disclosure limits. Assembly Bill 594 would require candidate and independent expenditure committees to file a disclosure report after spending $2,000 or more in a calendar year. The reporting threshold for major donors would increase from $10,000 to $20,000 or more.

Political amateurs punished by campaign finance laws

Since his election to the state Assembly in 2010, Gordon has carved out a special niche in campaign finance legislation with bills to increase regulation and disclosure requirements. In 2012, Gordon authored Assembly Bill 481, which added new reporting requirements for independent expenditure and major donor committees. Last year, Gov. Jerry Brown signed Gordon’s bill, Assembly Bill 800, to give the Fair Political Practices Commission “the authority to conduct immediate audits when political campaigns are suspected of illegal activity and requires subcontractors and sub-vendors to disclose their donations.”

State-level political campaigns continue to be big budget blockbusters. According to the Sacramento Bee’s analysis of campaign finance reports, “candidates and independent groups collectively spent at least $150 million on Assembly and Senate contests statewide over the two-year election cycle.”

Why would a Democratic politician with a record of authoring campaign finance laws seemingly aid money in politics? Like his previous campaign finance proposals, Gordon’s current legislation has support from the state’s campaign watchdog, which argued that low campaign spending limits reduce political participation.

In a memo obtained by the Los Angeles Times, Erin Peth, executive director of the FPPC, said that the current campaign finance rules “can be a barrier for those individuals who wish to participate, but who will not be raising or spending large amounts of money in connection with an election.” Peth also argued, “Committee qualification thresholds have not been updated since at least 1987 and the proposed increases in the bill are intended to adjust the thresholds with the rate of inflation.”

According to the Inflation Calculator of the U.S. Bureau of Labor Statistics, when adjusted for the rising in the cost of living, $1,000 in 1987 is the equivalent of $2,066 today.

The rationale for higher limits is supported by pro-freedom campaign finance experts, who strongly defend political contributions as a protected form of political speech. Complex campaign finance laws force average citizens to seek legal counsel before engaging in political organizing.

“While serving on the FEC from 2000 to 2005, I kept a file of letters from political amateurs caught in the maw of campaign-finance laws,” Bradley Smith, a law professor and former chairman of the Federal Election Commission, wrote in 2007. “Many of these people had no lawyers; none had the least intent to corrupt any officeholder; and all thought that they were fulfilling their civic duty by their involvement in campaigns.”

Top Two Primary could lead to more low-budget upsets

A higher campaign reporting threshold also increases the chances that those amateurs turn pro. Aided by California’s Top Two primary, which was passed by state voters in 2010, unknown candidates have been able to exceed political expectations, even achieve remarkable upsets, with low-budget campaigns. With higher reporting levels, these candidates will be able to operate in the dark for longer without tipping off incumbents.

Last November, unknown community activist Patty Lopez failed to report any expenditures in the primary campaign, despite spending a few thousands dollars. That failure to report resulted in a $400 fine by the FPPC. In the general election, she went on to upset fellow Democrat, Asm. Raul Bocanegra.

“I made a few mistakes, and I paid the price for that,” Lopez said after the election. “Most of the people on my team, we’re not in the political arena.”

Lopez’s campaign finances weren’t managed by a campaign professional, just a family friend who was willing to serve as treasurer. That’s exactly the type of grassroots campaign political watchdogs hope to encourage with relaxed campaign finance regulations.

Her victory is proof that low-budget long-shots have the potential to win. Although it’s unlikely that Bocanegra would have been intimidated by a few thousands dollars of campaign spending, some political observers believe the lack of campaign finance disclosure contributed to the perception that she wasn’t a serious threat.

Opportunity for political professionals to exploit

By aiding political amateurs with higher reporting levels, state regulators also could empower creative political professionals to exploit the outcome of primary races. In multi-candidate primary elections, political professionals could spend just under $2,000 in online ads or automated calls backing a decoy candidate.

Such a scenario has already played out in this year’s special election for the 7th State Senate District. A Democrat-led political action committee, the Asian American Small Business PAC, spent $46,380 on behalf of Michaela Hertle, a Republican candidate who had dropped out of the race.

By backing the lone Republican candidate, the political action committee hoped to thwart moderate Democrat Steve Glazer, who had built his campaign strategy on appealing to Republicans and independent voters. Glazer ultimately advanced to the May run-off against fellow Democrat, Assemblywoman Susan Bonilla. But Hertle had an impact, garnering 15 percent of the vote.

In a new report issued by Forward Observer, Golden State Democrats were found to drop over $100 million since the 2010 passage of Proposition 14, the initiative that set up the Top Two primary system. The measure created a so-called “jungle” primary system, where the top two candidates square off in the general election, regardless of whether they’re both members of the same party.

In the report, Democrat-on-Democrat spending dwarfed what Republicans shelled out when running against other Republicans. “For every dollar spent or raised by Republicans in these intra-party contests,” Forward Observer concluded, “$3.26 was raised or spent by Democrats.”

The finding struck a significant contrast with provisional conclusions by political analysts that low-information voters didn’t discriminate much among candidates from the same party.

Kevin Drum used that judgment to argue in Mother Jones that “jungle” primaries didn’t much impact California politics:

“In 2012, for example, researchers polled voters using both a traditional ballot and a top-two ballot. There was no difference in the results. One reason is that most voters knew virtually nothing about any of the candidates. Were they moderate? Liberal? Wild-eyed lefties? Meh. Voters weren’t paying enough attention to know.”

In a report drawing similar conclusions from a host of recent studies, the Los Angeles Times determined Californians weren’t any more likely to vote for relatively less ideologically extreme candidates, one of the rationales advanced by “jungle” primary advocates.

Voters “were just as apt to support candidates representing the same partisan poles as they were before the election rules changed — that is, if they even bothered voting,” according to the Times.

“To summarize, our articles find very limited support for the moderating effects associated with the top-two primary,” said Washington University’s Betsy Sinclair, as quoted in the Times, which noted her research summarized six research papers.

A surge of outside money

Further complicating the political narrative for state Democrats, Forward Observer found their outsized intra-party campaign spending came in substantial part from Independent Expenditure committees, or IEs.

Another factor is the U.S. Supreme Court’s 2010 decision, Citizens United vs. Federal Election Commission, which took a permissive approach to outside political spending. Since then, liberals and progressives have worried IEs would throw the balance of electoral power to wealthy private interests and, ostensibly, the Republican Party.

As Silicon Valley critic Andrew Gumbel put it, money-in-politics activists worry most about “the under-the-radar stuff that happens away from the media spotlight, often in smaller jurisdictions or in other states. The advent of super-PACs and unlimited independent expenditures makes it possible for billionaires to play a much longer game and to reap far greater successes as long as they are patient.”

In California, the data have provided a different story, with IEs fueling intra-party competition among Democrats most of all. “IEs raised or spent $30.9 million in Democrat-vs-Democrat campaigns and $10.1 million in Republican-vs-Republican campaigns,” Forward Observer calculated.

Notably, the findings underscored earlier research on the impact of IEs in California’s “jungle” primaries. As CalWatchdog.com previously reported:

“Out of 52 same-party races across elections for California’s state Senate, Assembly and House of Representatives, Democrats faced Democrats in 36 contests, while Republicans went head to head in 16 match-ups. Democrats poured $69 million into those three dozen races, while Republican totals reached just over $20 million, according to information drawn from the offices of the state Fair Political Practices Commission and the Secretary of State’s Office, as well as the Federal Election Commission.”

A consistent pattern

Lest analysts think that IEs have distorted other prevailing trends in campaign spending, Forward Observer’s calculations also revealed that money raised or spent by campaign committees themselves also fit the pattern followed by IEs.

Campaign committees, Forward Observer noted, were responsible for “$72.4 million in Democrat-vs-Democrat campaigns and $21.6 million in Republican-vs-Republican campaigns. This was true across both election cycles and across all three chambers – the California Assembly, Senate, and the U.S. House of Representatives.”

Since its passage in 2010, the Top Two system still has run through only two election cycles. But so far, it has fulfilled proponents’ prediction that formerly one-party races, in which the November election was a mere formality, would be replaced by tough competition between two candidates from the same party.

According to the nonpartisan MapLight research organization, Prop. 47 has raised a total of $5,177,162. Of that sum, reports MapLight, $4,716,891 has come from just 10 donors — some of whom were predictable donors — but some were not predictable.

Among the predictable donors was George Soros, the left-wing hedge fund manager with a long history of bankrolling drug- and prison-reform efforts. Through his Open Society Policy Center, Soros supplied Prop. 47 with nearly $1.5 million. Moreover, as the Los Angeles Times recounted, Soros funneled resources into Vote Safe, an organization created in 2013 to help get Prop. 47 off the ground. Soros, the Times reported, arranged to keep a “representative” in place on the organization’s three-person advisory board.

Some of the proposition’s big backers, however, came as more of a surprise. The No. 2 donor, with $1,255,000 in funds, was Public Storage; the sixth, even more remarkably, was Reed Hastings, the CEO of Netflix. Although Public Storage supplied about $1 million more than Hastings, the CEO’s intervention into the controversial measure signaled that Silicon Valley’s tech titans have become increasingly comfortable with political spending.

A surge of tech dollars

In fact, this isn’t the first of Hastings’ expenditures. The San Jose Mercury-News reported:

“Hasting’s stance could represent an evolution when it comes to issue advocacy from Santa Cruz’ best-known business leader. A benefactor of Santa Cruz’ Pacific Collegiate School, Hastings has long backed charter schools, giving nearly half a million dollars last year to groups backing them, after nearly $1.2 million the prior year, according to state campaign finance records. But in 2012, he also donated $1 million to Prop. 30, the Brown-backed tax measure, and $250,000 to another criminal justice initiative, a failed effort to end California’s death penalty.”

And Ars Technica reported on other tech titans’ giving: Napster co-founder Sean Parker, for instance, has dumped a million dollars into Gov. Jerry Brown’s favored Propositions 1 and 2, which authorize a massive water bond and structure Sacramento’s debt repayment, respectively. With liberal leanings, Parker has recently put money toward legalizing marijuana and re-electing both Brown and Attorney General Kamala Harris.

Tipping the national scales

A big picture has begun to emerge from the political spending habits of Silicon Valley influentials like Hastings and Parker. Where measures on the California ballot have the likelihood of making a big impact on national policy, it has seemed more likely that confident tech players will intervene on the side of change. High-profile outcomes like the abolition of the death penalty or the legalization of marijuana would fuel powerful media narratives about the nationwide momentum — and perceived inevitability — of such laws.

Prop. 47 has fit into the same basic pattern. According to a Sunday poll released by UCLA and the Times, almost half of respondents supported the measure’s lighter sentencing rules, while only a bit more than a quarter of respondents opposed them. Although the organized opposition to Prop. 47 has been well outspent by Soros, Hastings and company, Californians’ widespread interest in criminal justice reform has reinforced the idea that money in politics has not always proven as important as once believed.

In the wake of the Supreme Court’s divisive decision in the Citizens United case, critics warned that so-called “dark” money, flowing in from undisclosed corporate and individual donors, would damage the democratic process. Instead, not much changed. Organizations and individuals taking advantage of the Citizens United ruling could chalk up few, if any, major victories to the spending opportunities protected by the court.

In some ways, that has shaped up to make Prop. 47’s opponents ironically uncomfortable. California’s big law-enforcement associations, representing sheriffs, police chiefs, highway patrolmen and narcotics officers, have spent thousands against the measure — in some cases, tens of thousands. Yet the largest “outside” donor, at $10,000, is Artichoke Joe’s Casino, a card-gaming club in the Bay Area city of San Bruno.

While Citizens United was broadly interpreted as favoring right-of-center candidates and policies, in California as elsewhere, those presumably outsized benefits have not materialized.

Since spending against Prop. 47 has been so low, even relatively modest investments by the likes of Hastings could go a comparatively long way in shifting public opinion at the margins. More importantly, however, Prop. 47’s supporters have managed to associate themselves with a risky but popular approach to a major new policy that could become a template for national changes.

According to state campaign finance records posted Monday evening, the Democratic State Central Committee of CA accepted a total of $1.59 million in campaign contributions on Sept. 19 — with the overwhelming majority of those funds coming from the state’s powerful labor unions, representing teachers, firefighters, engineers and nurses.

The biggest check won’t come as a surprise to any California political observer: $750,000 from the California Teachers Association. The teachers union, considered by many to be “the most powerful interest group in the Capitol,” has stepped up its political giving in the wake of Vergara v. California, a landmark court ruling that could ultimately throw out California’s teacher tenure system.

But it’s another set of six-figure union campaign contributions that is raising questions about blatant influence peddling.

Engineers get state contract, then donate to Democrats

Just days after operating engineers ratified a new contract with the state, two unions of operating engineers contributed $275,000 to the California Democratic Party.

Under the headline, “California operating engineers approve contract with Gov. Jerry Brown,” the Sacramento Bee reported last week:

“After months of rancorous talks over pay and a threat to strike, California’s state building operators have ratified a contract with Gov. Jerry Brown.

“Steve Crouch, who negotiates for about 850 state building operators and water-system engineers, said members approved the three-year deal but declined to characterize by what margin. Union members were the last state employees without a current contract. State attorneys and scientists signed off on deals in recent weeks after working under the terms of their expired contracts for more than a year.”

The deal, which was ratified by union members on Sept. 16, included a 4.5 percent pay raise and “a $250 bonus once the deal was ratified.”

Three days later, with the ink barely dry on the agreement, the California Democratic Party accepted $150,000 from the International Union of Operating Engineers Local Union No. 12 and $125,000 from the Operating Engineers Local 3.

First Amendment Expert: ‘Not hard to connect the dots’

An expert on the First Amendment and campaign finance regulations said California Democrats are making it easy to connect the dots.

“This case in California shows that unions here are not even subtle about influence peddling,” said Dr. Craig Smith, a professor of communication studies at Cal State Long Beach and director of the Center for First Amendment Studies. “It is not hard to connect the dots when there are only two of them.”

Smith, a former presidential speechwriter, noted the irony of Democrats’ money moves, given the party’s repeated criticisms of Citizens United, a 2010 Supreme Court decision that protected the political activities of corporations and labor unions.

“Democrats are often heard to complain the Supreme Court’s Citizens United ruling freed corporations to pour money into Republican campaigns, and thus influence how Republicans vote on issues dear to corporations. But the same ruling allowed unions to dump lots of money into Democratic campaign coffers.”

Democrat: ‘Reinforces perception of pay to play government’

Even some Democrats question the timing of the campaign contribution.

“The timing certainly reinforces the perception that we are living under a ‘pay to play’ government,” said Derek Cressman, a longtime government watchdog and Democratic candidate for secretary of state in the June 2014 primary. “We all pay a price when public decisions are influenced by campaign cash.”

But don’t expect the state’s official political watchdog to do much about it. The Fair Political Practices Commission, which aggressively prosecuted an anti-tax campaign in 2012 for campaign finance violations, isn’t investigating the potential pay-to-play behavior by California Democrats.

“Donating to a political party is legal as long as the fundraising and donations are all reported properly,” Jay Wierenga, FPPC communications director, told CalWatchdog.com. “If we receive any information or indication of a potential violation of the Political Reform Act, we will take a look at the complaint.”

MapLight: Contributors expect favorable treatment

Other non-partisan watchdogs say the contributions create the expectation of favorable treatment.

“Unions and other major campaign contributors invest in politics because they expect favorable treatment and beneficial outcomes, and they usually receive it,” said Daniel G. Newman, president and co-founder of the independent campaign watchdog, MapLight. “Two unions — SEIU and the California Teachers Association — were responsible for blocking a key transparency measure last month that would have shown voters who were the real funders of state ballot measures.”

Newman is referring to Senate Bill 52, the DISCLOSE Act. Authored by Democratic State Sens. Jerry Hill of San Mateo and Mark Leno of San Francisco, the bill would require the disclosure of a campaign’s top three contributors on all campaign materials. Well intended as it may be, some reformers believe the legislation could be easily circumvented with more transfers between campaign committees.

High cost of California campaigns

Newman added that the high cost of campaigns makes fundraising a higher priority.

“It costs a lot of money to run for office in California, and the best place to get this money is from interest groups that want something from government,” he said.

According to MapLight, members of the California State Assembly raised an average of $708,371 for their 2012 campaigns, or $970 per day. State Senators raised slightly more than $1 million during the same period, according to MapLight.

Last Friday, Democrats helped their members whittle away at those big fundraising targets with a total of $1.6 million in contributions. After the teachers and engineers unions, the third biggest contribution was $100,000 from the American Federation of State, County and Municipal Employees.

The state party also accepted campaign contributions from legislative candidates, including Sebastian Ridley-Thomas, Rob Bonta, Anthony Rendon, Miguel Santiago, Lorena Gonzalez, Kevin Mullin, Jim Frazier, Jimmy Gomez, Susan Eggman, Eduardo Garcia, Das Williams, Connie Leyva, Bill Quirk, Bill Dodd and Speaker of the Assembly Toni Atkins.

For a complete list of contributors and the amount of each contributions, check out ElectionTrack.com.

This election year, however, that longstanding habit may be in for a change. State Sen. Jerry Hill, D-San Mateo, wants to ensure that nonprofits springing for legislators’ travel disclose their donors — not only to California’s Fair Political Practices Commission, but to the public at large. As the Los Angeles Times reports, Senate Bill 831 aims to prevent undue influence from flourishing under cover of the current broadly-tailored rules.

Although Hill’s reforms would require a two-thirds majority of both houses of the Legislature to pass, a populist turn among lawmakers from both parties could keep interest in the bill alive.

This isn’t the first time free travel has arisen as a legislative concern. In a 2011 report, the Bee revealed how travel costs for all but one of the state’s 12 Assembly committees went mostly to personal aides. In its yearly expenditure report, the Assembly had claimed that most travel funds went toward hearings that served the public interest.

That raised the ire of liberal-leaning groups such as Consumer Watchdog. But small-government advocates also have reason to support stricter reporting and transparency measures.

Travel

In a Los Angeles Times investigation of gifts disclosed this year, Republicans and Democrats ran up a lengthy list, with travel playing a notable role. On one trip to Europe that included members of both parties, $710 in meals and transportation was reported by State Sen. Mark Wyland, R-Escondido. On others, the Times specifically cited a number of Democrats.

Burgeoning scandals among state Democrats give Republicans an added interest in considering Hill’s legislation more seriously. The Associated Press notes that state Sen. Ron Calderon, D-Montebello, reported “a $256 golf game paid for by the nonprofit group Californians for Diversity.” Calderon, fighting federal bribery charges, allegedly told undercover FBI agents to bribe the organization. According to the Associated Press, Californians for Diversity paid $13,000 to the consulting firm run by Calderon’s brother Thomas, the former Assemblyman.

Watchdog groups and activists face a particularly high level of difficulty in monitoring travel gifts before the opportunity for corruption sets in. As the California government code indicates, an “expenditure associated with holding office is within the lawful execution of the trust imposed by Section 89510 if it is reasonably related to a legislative or governmental purpose.” In practice, that generous standard has translated into theoretically unlimited amounts of travel, and substantial reimbursements for events that require it.

Foreign trips

Focusing on nonprofit expenditures wouldn’t cover the full extent of lawmakers’ most frequent sources of free travel. In addition to privately funded foundations, foreign governments often subsidize overseas trips. According to the Times, Gov. Jerry Brown flew to China on the Bay Area Council’s dime, while Armenia’s National Assembly covered the cost of a visit from Assembly Speaker John A. Pérez, D-Los Angeles.

Now, as attention continues to build around the practice of accepting paid-for travel, legislators may find it easier to support heightened disclosure requirements than to oppose them. It’s unlikely that the most common kinds of trips and subsidies would face a wave of public disapproval.

Rather than aggravating the state’s increasingly disaffected electorate, Republicans and Democrats might see the benefit of moving forward with Hill’s bill in an effort to clear the travel issue from reformers’ agendas before the election season gets further underway.

The incumbent Democrat governor, according to state disclosure reports released recently, raised $9.9 million last year — with the overwhelming majority of those funds coming from big corporations, labor unions, oil companies and high-worth individuals that routinely lobby state government.

“When you’ve been through the experience like Jerry Brown went through with Meg Whitman, your gut tells you that you better go out and raise as much money as you can because there might be some millionaire or billionaire lurking in the shadows that will try to spend you out of office,” Garry South, one of the state’s leading Democrat campaign consultants, told Bloomberg.

Brown’s Republican opponents will have only a fraction of the governor’s campaign funds. Former Treasury Department official Neel Kashkari, who launched his campaign in January, has yet to file any campaign disclosure reports. Former Lt. Gov. Abel Maldonado, who dropped out of the race in January, raised slightly more than half a million dollars last year.

Assemblyman Tim Donnelly, R-Twin Peaks, reported just $54,299 in cash on hand at the end of the year, after raising $374,212 for his gubernatorial campaign in 2013. However, Donnelly’s fundraising picked up steam after the campaign filing deadline. In mid-January, Donnelly’s campaign received $20,000 from the California Houndsmen for Conservation, which is not factored in the latest cash-on-hand figures.

Neither Cindy Sheehan, the Peace and Freedom’s candidate, nor the Green Party’s Luis Rodriguez filed disclosure reports.

Brown’s fundraising dependent on max-out contributors

Brown’s fundraising in 2013 was largely dependent on max-out contributions from large special interest groups. Under state law, individuals and corporations may contribute up to $27,200 per election. In 2013, Brown’s average campaign contribution was $17,713, with 287 contributions of $10,000 or more. That high average was buoyed by 198 campaign checks of $25,000 or more – with 167 checks written for the legal maximum, $27,200.

Several of those max-out contributions are drawing questions about mixing state business with campaign finances. One max-out contributor, Occidental Petroleum, according to a report by Bloomberg, has an interest in California’s pending review of the state laws governing hydraulic fracturing, more commonly known as fracking.

“Brown took two checks in January for $27,200 each from GEO Group Inc. (GEO), the second-largest U.S. prison operator,” observes Bloomberg. “The donations come after GEO, based in Boca Raton, Florida, last year won a five-year contract worth as much as $150 million to house 1,400 of California’s inmates at two of the company’s jails in the state.”

The governor’s office denies that campaign contributions affect state business. “Contributions have no bearing whatsoever on the state’s legal filings,” said Evan Westrup, Brown’s spokesman.

Campaigning strategy

Brown’s opponents have gotten creative with their limited funds. In contrast to Brown’s high-budget campaign, Donnelly has focused on a grassroots effort, which includes a two-week statewide bus tour. The campaign has more than 40 stops scheduled in its 1,000-mile journey across the Golden State.

“We’re hitting the road to save California!” Donnelly explained on his website. “Over the next two weeks, I’ll be aboard our campaign bus, The Liberty Express, visiting with you and holding events throughout the state.”

In 2010, Brown’s campaign held $12 million

At the same point four years ago, Brown’s campaign reported nearly $12 million in the bank, according to the Associated Press. This year’s campaign chest, thanks to the power and influence of incumbency, is $5 million better, or a 41 percent improvement.

Brown also proved that a penny saved is a penny earned. The report shows Brown spent just shy of $208,000 last year, a relatively low sum for a statewide campaign. The largest expenditure was for two $25,000 bonuses paid to Angie Tate, one of the best Democratic fundraisers in the state, and Edward Ruthrauff, a Brown aide.