A CalWatchdog

The survey, which was cited by Sacramento Bee columnist Dan Walters, established that the wrongdoing went far beyond the nationally publicized scandals in the small town of Bell, in which a small cadre of administrators and elected officials covertly siphoned millions of dollars away from public use for their own enrichment.

Among the many improprieties: the resignation of the mayor of South El Monte after he admitted taking bribes; officials at the Central Basin Municipal Water District being caught using a $2.75 million slush fund of ratepayer dollars for political machinations; the resignation of two City of Commerce council members for misleading official investigations into their conduct; as well as scandals that led elected officials to quit or go to jail in Cudahy, Lynwood, Maywood, Montebello, South Gate and Vernon.

But something strange has happened since South El Monte Mayor Luis Aguinaga resigned eight months ago after being caught taking bribes from a city contractor for seven years: After a decade-plus of one scandal after another, the Los Angeles County District Attorney’s Office reports a lull in corruption scandals countywide.

According to public records obtained by the Los Angeles Times, just 11 felony public corruption cases were filed last year, down from 39 in 2010.

Explanations vary for lull in prosecutions

In a statement to the Times, Los Angeles County District Attorney Jackie Lacey suggested that all the prosecutions and forced resignations in recent years might have discouraged corruption. Former state lawmakers Ron Calderon and Tom Calderon — brothers who built a political fiefdom over decades — pleaded guilty to public corruption charges last year after what an investigation showed was years of influence peddling that began at their power base in Montebello and the Central Basin water agency. Also cited as possibly affecting criminal filings: the departure of some senior deputy district attorneys with the most experience in public corruption cases.

Academics have also argued for decades that corruption comes in cycles: scandals lead to crackdowns and tough regulation, which leads to assumptions about problems being addressed and scrutiny slackening, thus leading to new scandals.

But officials at the scandal-scarred Central Basin water agency have a specific reason to stay on the straight and narrow: a new state law adds layers of accountability and transparency specifically designed for the water supplier, which delivers supplies to nearly 2 million Los Angeles County residents.

Assemblywoman Cristina Garcia, D-Bell Gardens, won the signature of Gov. Jerry Brown last September for AB 1794. The measure increases the number of people on the water agency’s board of directors, specifies the ways that the positions can be filled, adopts stricter language on contribution disclosures and says individuals already serving in a elected capacity are ineligible to be Central Basin board members.

Garcia’s measure easily passed the Legislature. Among those joining in the Assembly’s 80-0 vote for AB 1794: Assemblyman Ian Calderon, D-Whittier, son of Charles Calderon and nephew of Ron Calderon.

Ian Calderon, now 31, was first elected to the Assembly in 2012, before prosecutors closed in on his older relatives. He’s not suffering for the sins of his family. After a 2014 primary and general election scares in which he was nearly unseated by Republican Rita Topalian, he was re-elected easily over Topalian in 2016 and serves as Assembly majority floor leader.

State Senator Bob Hertzberg, D-Van Nuys, who has ruffled the feathers of taxpayer groups with his proposal for a $10 billion sales tax on services, has introduced legislation to aid taxpayers in their battle with the state tax agency. Senate Bill 540 would extend and make permanent the Franchise Tax Board’s Taxpayer Advocate Relief Program, which has helped taxpayers obtain speedy tax relief since 2009.

Under current law, the Taxpayers’ Rights Advocate relief program is set to sunset on January 1, 2016. Hertzberg’s office says that would dissolve much-needed protections and benefits afforded to taxpayers.

Taxpayer Advocate offers free help to taxpayers

Back in 1988, the California Legislature enacted the “Katz-Harris Taxpayers’ Bill of Rights Act,” which among other provisions, created the position of Taxpayers’ Rights Advocate. Since that time, state taxpayer advocates have provided free assistance to taxpayers and businesses struggling to comply with the state’s complicated tax code.

“We help taxpayers who have been unable to resolve their tax problems through normal channels,” the Taxpayers’ Rights Advocate at the Franchise Tax Board explains on its website. “Our goal is to protect your rights and ensure that your tax problems are handled promptly and fairly.”

Although the office has assisted taxpayers for more than two decades, for much of its history, the office has lacked the power to issue refunds or waive penalties — even when the tax agency was clearly in the wrong. That’s why in 2008, the Assembly Committee on Revenue and Taxation, under then-Assemblyman Charles Calderon, amended the state Taxpayers’ Bill of Rights Act to give the office the authority to waive penalties, fees, additional taxes or interest when there was an error by the Franchise Tax Board.

The bill was extremely limited in scope and only applied in cases in which there was either:

1. Erroneous action or inaction by the FTB in processing documents or payments;
2. Unreasonable FTB delays; or
3. Erroneous written advice that does not otherwise qualify for relief.

According to a 2012 legislative analysis, “The advocate could only provide relief if no part of the error or delay could be attributable to the taxpayer, and when relief is not otherwise available.”

Sunset date on taxpayer assistance

If there weren’t enough caveats and limitations to that original legislation, Assembly Bill 3078 also included an automatic sunset date on January 1, 2012, which was later extended another four years with subsequent legislation in 2011.

Rather than extend the sunset date again, Hertzberg believes it’s time to make the tax relief program permanent. His office points to multiple cases in which taxpayer advocates have helped deliver speedy tax relief to taxpayers. In one case, 50 taxpayers received $1.1 million in tax relief due to bad advice contained in tax form instructions. Other taxpayers have received thousands of dollars worth in forgiven interest because of cases involving erroneous actions by the Franchise Tax Board.

“This program allows the Taxpayer Advocate to abate a taxpayer’s penalties, interest, and fees that occur because of erroneous actions by the Franchise Tax Board’s staff,” said Ray Sotero, Hertzberg’s communications director. “This bill would make improvements to the current program by removing a burdensome application process for taxpayers, removing the dollar limitation on the abatement amount, and by clarifying that the Chief Counsel approves each request.”

One improvement proposed by Hertzberg is the elimination of the $7,500 cap on the amount of relief that may be granted. In lieu of a limit, the bill requires the chief counsel and executive officer to sign-off on claims of more than $500. Those claims, which would include an explanation of the agency’s mistake, would be public records retained by the tax agency for a year.

Senate Bill 8: Hertzberg’s plan for sales tax on services

Hertzberg’s proposal to provide tax assistance may come as a surprise to many taxpayer groups. As CalWatchdog.com has previously reported, the former Speaker of the Assembly has introduced Senate Bill 8, which would extend the state’s sales tax to services. The new tax on services would generate $10 billion in revenue by applying the sales tax to accountants, lawyers, hair stylists and yoga instructors.

“Taxing services is a bad idea for California,” Jon Coupal, president of the Howard Jarvis Taxpayers Association, wrote in opposition to Hertzberg’s sales tax on services. “First, such a levy would have a depressing effect on California’s service economy. It is a simple fact of economics that when you tax something you get less of it.”

Hertzberg says the changing global economy requires a reevaluation of what’s considered subject to sales and use taxes. He believes California needs a permanent solution to raise revenue when Proposition 30, a temporary sales and income tax increase of $7 billion passed by voters in 2012, begins to expire next year.

Unlike the sales tax on services, Hertzberg’s legislation to permanently extend the taxpayer relief program is expected to sail through the Legislature.

For any taxpayers in need of assistance, the Taxpayers’ Rights Advocate has more information on its website, where you can also obtain a copy of “Your Rights as a Taxpayer.”

Gil Cedillo Jr.

Gil Cedillo Jr. will be “relieved of duties” July 31 from the Central Basin Water District.  The Los Cerritos News reported Cedillo Jr. was paid $112,970 a year, as well as $22,000 toward his bachelor’s degree. He is the son of Gil Cedillo Sr., who now sits on the Los Angeles City Council; and formerly served in the state Senate and Assembly.

Cedillo Jr. was once the chief of staff for then-Assemblyman Ron Calderon, D-Montebello, who now is a state senator. 

And more than a decade ago, Cedillo Jr. was a senior field representative for then-Assemblyman Tom Calderon, D-Montebello, who left office in 2002. Tom and Ron Calderon are brothers.

On June 5, the FBI raided Ron Calderon’s office. According to the Los Angeles Times, “[F]ederal authorities have seized records from a Southern California water district that provided contracts to Calderon’s brother, former Assemblyman Tom Calderon.”

Tom Calderon is a “consultant” for the Central Basin Water District and has been a familiar site at the Capitol lobbying lawmakers on bills benefiting his clients.

Tom Calderon is paid $10,000 a month as a consultant/unregistered lobbyist, and another $140,000 per year as a consultant to a subcontractor, according to the Los Angles Times. The Chicago Tribune reported this totaled more than $750,000 in consulting fees since 2004.

The FBI also searched Pacific Hospital of Long Beach and Industrial Pharmacy Management in Long Beach, companies using Tom Calderon as a consultant.

Political fiefdom

“Cedillo Jr. was rarely seen at work for the past several months by employees and elected directors of the district, but still collected his six-figure salary,” the Los Cerritos News reported. “Copies of checks written to Azusa Pacific University to cover the costs of Cedillo Jr’s.” salary were “approved by former CBMWD General Manager Art Aguilar, who is a longtime personal friend of Cedillo’s family.”

Cedillo Jr. has been working since April of 2011 as a “business development manager” for the Central Basin Municipal Water District.

Cedillo name

“It pays to have the name Gilbert Cedillo in Los Angeles political inner circles these days,” said Randy Economy and Brian Hews in the Los Cerritos News story.

When Cedillo Jr. went to work for Central Basin, a college degree was a condition of his employment. So the water district paid him $22,000 toward tuition at Azuza Pacific University. If Cedillo Jr. were to “flunk out,” he had to repay the district, according to the Los Cerritos News. Instead, termination means he doesn’t have to repay the tuition. And he will receive a severance package.

By Katy Grimes

Editor’s Note: This is Part One of a series on the Calderon family.

June 13, 2013

By John Hrabe

It wasn’t quite the Academy Awards. But the 60 or so people assembled last Saturday afternoon at the Whittier Center Theatre were excited just the same.

The festival, a digital media competition organized by Assemblyman Ian Calderon, D-City of Industry, in conjunction with the California Arts Council, featured the works of 58 area high school students, who produced short clips on human rights and genocide. The nearby picture shows Calderon with two students getting awards.

“Around here, many of the kids won’t go to college because of money,” said Calderon, who provided small scholarships to some of the participants. “I want them to know there are opportunities out there.”

The kids were vulnerable — putting their creations up for judgment by the community. It’s something Ian knows about. Earlier this year, when he and two of his legislative colleagues released their own digital media creation, a surfer’s perspective on coastal protection, Ian’s father expressed his misgivings.

“The surf caucus?” recalled Ian’s dad, Charles Calderon, a former assemblyman and state senator. “I mean, in my day, surfing was associated with ‘Fast Times at Ridgemont High.’”

The film was released in 1982, the same year that Charles won his first election to the Assembly. The film’s 1980s California slacker milieu is an anathema to Charles’s tough-guy image, especially because he came within a handful of votes of dethroning then Assembly Speaker Willie Brown, the self-proclaimed “Ayatollah of the Assembly.”

The old political rules, Ian says, no longer apply. Yet, he understands why it took some time for his father to come around. “The old guard keep things close to the vest because that’s when they come after you,” Ian said.

The Calderon “Dynasty” Storyline

This week, everyone seems to be coming after the Calderons. No sooner had FBI agents executed a search warrant at the Capitol offices of Democratic state Sen. Ron Calderon, Charles’s brother, than the press was churning out headlines about the “political dynasty” mired in scandal. “Sen. Ron Calderon, target of FBI raid, is part of a political dynasty,” read the headline of one LA Times piece. The Times wasn’t alone. Almost every major outlet has repeated some version of the “Southern California political dynasty” storyline.

The Calderons have certainly made politics the family business. Charles, the eldest brother, started it off in the Assembly in 1982, followed by middle brother, Tom, in 1998, then Ron in 2002. Last year, Ian, the surfer son, won a hard-fought campaign for his own seat in the Legislature. The dynasty storyline is easy and convenient. It’s also an oversimplification of the major differences among the Calderons.

The people who know the Calderons best, old friends, current and former staffers, community leaders, and Sacramento lobbyists, say that each of the Calderons has brought a unique style and approach to the family business. Far from speaking with a uniform voice, the Calderons often have had heated political disagreements within the family and been on opposite sides of controversial legislative fights.

The FBI says it won’t comment on the ongoing investigation, which has only intensified the Capitol rumor mill. The best evidence suggests that the FBI is investigating Ron’s relationship with the Central Basin Municipal Water District, where Tom has worked as a high-priced consultant. At least one state Senator, Kevin de Leon, D-Los Angeles, has confirmed that he has been subpoenaed.

That Ron and Tom are the subjects of the FBI investigation, without any evidence to suggest that either Charles or Ian is involved, doesn’t surprise many Calderon confidants. When speaking candidly on background or not for attribution, these individuals described two brothers in conflict with Charles’s reputation as an honest broker and effective legislator.

Centinela Valley school desegregation case

Last Thursday afternoon, I sat down with Charles Calderon just a few blocks from the Los Angeles City Attorney’s office, where his professional career began as a deputy city attorney. Under then-City Attorney Burt Pines, now an LA County Superior Court judge, Calderon got his start prosecuting misdemeanor cases that ranged from assaults to drunk driving. “My dream was to be a lawyer,” Calderon explained.

After two years, he moved into private practice, while also serving on the school board. Almost immediately, Calderon took up a low-paying, controversial school desegregation case representing a group of white, black and Latino parents that had already been turned away by the NAACP and MALDEF.

“Here I was, I’d just started with a private law firm, and I’m taking a risky case,” Calderon recalled of the lawsuit. “The case was a 50-50 proposition, maybe.”

Calderon’s clients claimed that the Centinela Valley Union High School District had closed a Lawndale high school in order to prevent integration of other high schools in the area. It was an uphill battle; the parents had to show intentional segregation. So Chuck, in search of any evidence to show de jure segregation, headed down to the school district headquarters to review years of board minutes.

Hours into his search, a secretary offered Calderon something to drink and casually mentioned that all the meetings were recorded. “I immediately knew if there was going to be anything, it’d be on those tapes,” he said. “Finally, I heard it.”

Calderon found audio of school board members making racial slurs about the students at Lennox High School, the segregated school that the board kept open. The school district quickly settled. Writing of the case in 1985, the Los Angeles Times observed, “The Lawndale group raised the focus of the community debate to a loftier level.”

“It takes discipline to go through that kind of exercise,” Charles proudly shared as he sipped a cup of coffee and ate a slice of pie a la mode. “It also takes a lead ass.”

A disciplined taskmaster who’d drive staff crazy

A year later, Charles was up and on his feet, walking door-to-door in his first legislative campaign. That first election, he estimates, he walked 98 precincts. He’d walk one side of the street, his mother the other side.

The discipline — to finish law school, to tediously review school board minutes, to walk door-to-door — explains Calderon’s approach in Sacramento. His former legislative staff members consider him “a taskmaster.”

“Chuck used to drive staff crazy,” says Tom White, who worked for Calderon all six years of his second stint in the Assembly. “On policy, he was a taskmaster. He wanted to walk through the bill, talk through the bill and think his way through it.”

Charles: “Head and shoulders above his brothers”

Phil Pace, a Montebello community leader whose friendship with Charles goes back decades, describes him as someone who has “always been straightforward.”

“I consider him a good friend, a good person, and a good legislator,” Pace said. “He tried to do the right thing for the right reasons.”

Personal friends say that Charles’s smarts and discipline are what separate him from his brothers. Another close personal friend, who has known the family since the days before a Calderon served in the Legislature, described Charles as “head and shoulders above his brothers.”

“In terms of everything, smarts, style, class, honesty, work ethic,” the friend said of Charles, the first in his family to earn a college degree and the only one to graduate from law school. “That doesn’t take anything away from his brothers. They just don’t have Chuck’s smarts, not even close.”

Part Two will explore Ron and Tom’s Reputation in Sacramento

(Editor’s Note: The first part in a two-part series on how California’s regulations affect the global economy.)

July 26, 2012

By John Hrabe

Regulations are killing California’s global competitiveness. Or, so you’ve heard from policymakers left, right and center.

“Our environmental regulatory system is obsolete, duplicative and burdensome in many areas, which is hurting our business community’s ability to thrive and compete in a global marketplace,” lamented Assembly Majority Leader Charles Calderon, D-Industry, in an opinion piece at Capitol Weekly.

Republican U.S. Senate candidate Elizabeth Emken repeated the complaint a few weeks later.

“Thanks to over-taxation, over-regulation and over-litigation, American companies are at a distinct competitive disadvantage,” Emken wrote in her policy paper on regulations. “This disproportionate cost on small business causes inefficiencies in the structure of American enterprises, and the relocation of production facilities to less regulated countries, adversely affecting our ability to compete in the global marketplace.”

“California has a daunting task to regain its competitiveness,” complained Loren Kaye, president of the California Foundation for Commerce and Education, in a blog post entitled, “Job Killing Bills Hobble California in Global Competition.” The piece continued, “It can’t be a leader in the global economy if it interferes in the global marketplace.”

While there’s some truth to the cliché, it’s not the whole story. Increasingly, it’s the regulations themselves that are being exported globally.

That makes the story of California’s over-regulation even more troubling. Unelected bureaucrats on obscure boards in Sacramento are establishing regulations for the world—in many cases based on weak or contradictory scientific data that is selectively edited by special interest groups.

“The regulatory field has a lemming-like attitude, often reflecting biases,” Dr. F. Peter Guengerich, the interim chairman of the biochemistry department at Vanderbilt University School of Medicine, told CalWatchDog.com.

Prop. 65: Hazardous Substance Warning Label

To understand the increasingly global nature of California’s regulations, consider the case of a chemical compound that you’ve likely never heard of and probably can’t pronounce, 4-methylimidazole or 4-MEI. It’s a common byproduct of the cooking process and gives sodas their caramel color.

In March 2009, regulators at the Office of Environmental Health Hazard Assessment, a department of California’s Environmental Protection Agency, began the process of adding the chemical to a list of potentially harmful substances. Products that contain chemicals on the list must carry warning labels about their potentially harmful effects. Voters created the process with passage of Proposition 65, the Safe Drinking Water and Toxic Enforcement Act of 1986.

“Prop. 65 is primarily a right to know law that provides information about exposure to listed chemicals that the public can use to make informed choices,” explained Sam Delson, deputy director of the Office of Environmental Health Hazard Assessment.“The addition of 4-MEI to the Prop. 65 list does not ban it from use in California or anywhere else.”

Of course, who wants to buy something that warns of death on its packaging?

4-MEI Does “Not Represent a Risk”

A substance can be added to the Prop. 65 warning list through one of four ways, including if it has been flagged by any “authoritative body” chosen by an unelected state committee. Some legislators say that this process deserves greater scrutiny.

“As Vice-Chair of the committee of Toxics and Environmental Safety, I have had a front row seat to the show which is legislating the use of chemicals in products that are sold and made in California,” said Assemblyman Jeff Miller, R-Corona. “Over time, what sticks with me, is that we have to be very careful about the decisions we make in California regarding banning or placing chemicals on a list of ‘chemicals of concern.’”

California’s regulators weren’t so careful with 4-MEI. The state began the review process after only one study of mice and rats showed an increased risk of cancer.

“According to California’s regulators, a level of more than 16 micrograms per day would pose a significant risk,” Time cautioned last year. “Meaning it could result in at least one excess case of cancer per 100,000 exposed people.”

The study’s findings weren’t as scary as they sound.

“Basically my advice would be just to relax … I did some simple math. … If you look at the study in terms of what the mice got, in terms of causing any effect, a human being would have to drink more than 1,000 sodas a day,” Dr. Guengerich told ABC News back in 2011, when the chemical first garnered headlines.

Dr. Guengerich’s view is backed up by health and safety agencies from all over the world. The European Food Safety Authority conducted a comprehensive review of the scientific evidence and concluded that 4-MEI is not a health concern. The same goes for Health Canada, the country’s federal health agency. It ruled that 4-MEI does “not represent a risk” to consumers.

Even the original study, which prompted the 4-MEI scare, showed a reduction of tumors in the group of female rats that received the highest dosage of 4-MEI. A 2011 study published in Food Chem Toxicol, an international food chemical toxicology journal, reinforced that finding. “4-MEI itself may possess an ability to prevent tumor formation,” Dr. F. Jay Murray wrote.

Safe Harbor Standard Raised by 81 percent Without Any New Research

Nevertheless, some consumers might prefer a “better safe than sorry standard” when it comes to potentially hazardous products. For this very reason, Prop. 65 required the state to adopt a “safe harbor standard,” or an acceptable exposure level for each chemical. The safe harbor standard for 4-MEI was originally set at 16 micrograms per day. Then, state regulators changed their minds.

The experts were only off by 81 percent. In October 2011, 32 months after the regulatory process began, California increased the safe harbor standard from 16 to 29 micrograms. State regulators confirm that the increase wasn’t based on any new research.

“The change was based not on new research but on adoption of an updated method for calculating human cancer potency based on animal studies,” Delson, the OEHHA’s spokesman, said. “So the effect of setting the NSRL for 4-MEI at 29 micrograms per day instead of 16 was to create a larger “safe harbor” and exempt a larger number of products from Prop. 65 warning requirements.”

That means the decision to label 4-MEI as a potentially hazardous chemical wasn’t based on objective scientific data. Or rather, the science itself isn’t as precise as the public is made to believe.

So, what does 4-MEI have to do with the rest of the world? For that, we return to Dr. Guengerich’s evaluation of the regulatory field’s “lemming-like attitude, often reflecting biases.” There’s a movement afoot to ban 4-MEI in Kenya. The reason: the chemical “has been restricted in the US state of California.”

Coming soon: Part Two: How California’s regulation are sold to other countries.