With the California Legislature in the final three weeks of its session, big tech companies and business lobbies have so far had little success in getting changes to the California Consumer Privacy Act. The landmark online privacy law – enacted in summer 2018 – takes effect Jan. 1, 2020.

The law parallels a sweeping measure adopted by the European Union that took effect in May 2018. It gives consumers the right to know who is collecting what data on them from their online browsing and provides them the choice of opting out from collection.

Defenders of the state law say the reason it has been targeted so vigorously is because tech firms know that California often influences what other states or even Congress does. These companies prefer the present anything-goes data accumulation landscape allowed under federal law. The Golden State law did appear to inspire 24 states to consider online privacy laws this year, according to Pew’s Stateline research site, though few have been enacted so far.

Critics: Flaws will hurt bottom lines, customers

But critics say they are going after the law because it is poorly crafted and could both drive companies out of business and reduce the ways that online information gathering actually helps consumers by connecting them to goods and services they are likely to want. Among the criticisms offered by the California Chamber of Commerce and the state chapter of the National Federation of Independent Business:

• The limits put on what “personal information” can be gathered are so broadly written that they apply to broad swaths of information that can’t be linked to individuals but that can help businesses develop marketing strategies.

• The provision banning businesses from the sale of information gathered online is so broad it will make it difficult for businesses to use information that it has gathered directly and legitimately from use of their websites to determine what customized content to provide customers.

Legislation that would address these concerns has not advanced. 

Local agencies fear effect on public health, tax collection

The Bay Area News Group also reported on the failure of a bill that would have allowed government agencies to have access to consumer information for a variety of priorities, including helping government officials “to collect child support, find people exposed to infectious diseases, locate foster children’s family members, determine social service eligibility, and collect delinquent taxes and judgments.”

One measure – Assembly Bill 25 by Assemblyman Ed Chau, D-Monterey Park – has made progress. It would make clear that the law doesn’t cover employees acting within the scope of their basic job duties. As a co-sponsor of the original law, Chau had more credibility than some of the lawmakers’ who appeared to be proposing changes at the tech industry’s behest.

AB25 passed the Assembly on a 77-0 vote in May and an amended version was approved by the Senate Judiciary Committee on an 8-0 vote last month. But it has not been considered by the Senate Appropriations Committee since its referral.

Dramatic late-session moves could resurrect some of the more controversial bills seeking to narrow the Consumer Privacy Act. But an official with the Electronic Frontier Foundation told the Bay Area News Group that come Jan. 1, the foundation expected that “the same bill [adopted last year] goes into effect.”

Why focus is likely to shift from Sacramento to Albany

The tech companies and lobbying groups could soon shift their attention from California, the richest state in terms of GDP, to New York, the third richest.

In 2020, lawmakers there are expected to consider perhaps the most far-reaching online privacy law in the world. One likely provision would make it a “fiduciary duty” for companies to use the data they accumulate in ways that advance the customer’s best interests. Depending on how this is interpreted, this could mean the end of the present model of micro-targeting of consumers through information gained from their online searches and activity – at least in New York state.

A far-reaching online privacy bill that got next-to-no vetting or legislative debate was

Assembly Bill 375 – the California Consumer Privacy Act of 2018 – would change the playing field in the relationship between users of some online services and the companies that provide the services. It would allow users to ask companies to delete their personal information and to be informed what information about them that the companies were collecting and selling. It would also allow online consumers to sue over some unauthorized breaches of their information – but only for up to $750.

The San Francisco developer who reportedly spent more than $3 million to gather signatures for his ballot measure told the Sacramento Bee that AB375 – while not as far-reaching as his proposal – was more than good enough. Alastair Mactaggart said he was willing to compromise and gain “certainty” of online privacy reforms rather than take on tech giants in a heavy spending free-for-all in the fall election. He pulled his initiative after AB375 was signed by Gov. Jerry Brown on Thursday afternoon – just before the deadline for its possible withdrawal with the Secretary of State’s Office. Brown’s signing came after the bill won unanimous approval from both the Assembly and Senate.

The process under which a measure that qualified for the ballot could be pulled if proponents were satisfied with the Legislature’s alternative was established in a 2014 state law that was billed as an important refinement to the state’s system of direct democracy. The bill was championed by then-Senate President pro Tem Darrell Steinberg, D-Sacramento.

The most important differences between Mactaggart’s proposal and AB375 is that it gives tech companies more certainty of their own that there would be legal limits on their exposure to damage claims from those using their services.

The bill quickly made it to Brown’s desk despite warning from key players.

Tech lobbyist: At least ‘even worse’ measure is dead

The Internet Association, a lobbying group for tech firms with significant online presence, issued a statement decrying “many problematic provisions” in the bill and “the unprecedented lack of debate or full legislative process.” But the association said it would not “obstruct or block AB375 … because it prevents the even worse ballot initiative from becoming law in California.”

The state Senate Judiciary Committee, which approved AB375 on Tuesday, did so even though chairwoman Hannah-Beth Jackson, D-Santa Barbara, expressed “grave, grave concerns about this legislation” to the San Francisco Chronicle. But she also praised its consumer-friendly elements, which take effect in 2020.

While California, as the nation’s largest and wealthiest state, often finds its policies emulated by other states, it’s not clear if AB375 will be copied in other capitals. Companies like Google, Amazon, Comcast and AT&T have steadily increased lobbying and campaign contributions in many states and may try to get what they consider model online privacy legislation passed elsewhere – so it could in theory compete with California’s version.

However, Facebook voiced its support for the state bill. “While not perfect, we support AB375 and look forward to working with policymakers on an approach that protects consumers and promotes responsible innovation,” a Facebook official told the Sacramento Bee.

Companies in the region are increasingly offering their employees paid time off to participate in protests, marches and other demonstrations as part of civic engagement policies.

“Democracy is a participatory institution; it’s not just something that takes place every four years when you have a candidate in a race,” Adam Kleinberg, CEO of San Francisco ad firm Traction, told the San Francisco Chronicle.

The company gives its workers two paid “Days of Action” per year.

Furthermore, tech giants like Facebook recently allowed their employees to take a day of paid leave to participate in the May Day immigration rights demonstration in San Francisco — a rally that was largely a protest of Trump’s agenda.

“At Facebook, we’re committed to fostering an inclusive workplace where employees feel comfortable expressing their opinions and speaking up,” a spokesman explained in an emailed statement. “We support our people in recognizing International Workers’ Day and other efforts to raise awareness for safe and equitable employment conditions.”

Major tech figures like Facebook COO Sheryl Sandberg, Google CEO Sundar Pichai and co-founder Sergey Brin have all spoken out against the president, illustrating this administration’s frosty relationship with the industry.

And even those who showed a willingness to work with the White House have faced a wave of scrutiny. For example, Uber CEO Travis Kalanick resigned from the president’s business advisory council earlier this year after facing intense backlash, seeing #DeleteUber trend at the top of Twitter over his decision to offer guidance on a job growth agenda.

The policies appear to reflect a growing discontent in the heavily liberal region that Trump presents more than just policy differences — but an existential threat to their well being and daily life.

“It’s a recognition of the fact that civic engagement is something that we should be doing not just as individuals but as a company,” Buoyant CEO William Morgan told CS Monitor about his software company’s policy. “I wanted to make it more clear that we could not be passive citizens in this world.”

While the policies aren’t new — as companies like Comcast have been offering such leave for years — they appear to be taking on new life in the Trump era.

“People were wishing that I was dropped off in an (Islamic State) territory, calling me an idiotic libtard, candy-ass, saying they hope we’ll go out of business. Really nasty stuff,” Kleinberg told the Chronicle about the backlash to the policy.

Overall, Trump’s policy proposals have been met with a particularly strong response in Silicon Valley due to his stance on issues like the controversial H-1B visa program that tech companies say they rely on to recruit top talent — but one critics say comes at the expense of American workers.

And the president’s rhetoric may be having some effect, as the number of H-1B applications dropped to under 200,000 in 2017 — a 15 percent decrease from a year earlier.

But will his resignation quiet the political and social unrest in the city, or will others follow, like Mayor Ed Lee, who is surrounded by allies’ controversy, or Fire Chief Joanne Hayes-White, who has been plagued by questions about her leadership and judgement? 

CalWatchdog has more. 

In other news:

• Voter registration in California is surging at a rate not seen since 1980, reports The San Jose Mercury News. While there are likely many factors at play, the Capitol Weekly reports that much of the credit goes to Facebook. 
• As the primary approaches and voters consider Prop. 50, which would give the Legislature the ability to suspend misbehaving lawmakers without pay, Capital Public Radio looks at how the idea came about.  
• “Democratic Rep. Ami Bera, whose father is awaiting sentencing on two felony counts of election fraud, for years has engaged in a complex series of campaign donations involving his parents and the families of other congressional candidates, federal records show,” writes The Sacramento Bee.
• Los Angeles finally opened its subway line to the ocean over the weekend, but its success will be determined by its functionality, which needs some improvement. The LA Weekly has more. 

Assembly:

• In at 1 p.m. A few Budget subcommittee hearings.

Senate:

• In at noon. Appropriations Committee hearing. 

Gov. Brown:

• No public events scheduled.

Tips: matt@calwatchdog.com

Follow us: @calwatchdog.com @mflemingterp

New followers: @zitununykyda @futuresquares

Many Americans are familiar with the Taser, a nonlethal device used by law enforcement to shock and immobilize. Fewer are aware that the Taser is the creation of a company with the same name — or that the Taser corporation runs a division devoted to wearable and cloud-powered monitoring devices. Known as Evidence.com, the division works closely with police departments across the country to facilitate data management, including data obtained in the course of “evidence gathering.”

From the sound of its sales pitch, Evidence.com doesn’t put civil liberties front and center. After all, it promises law enforcement agencies the ability to “capture anything anywhere.”

More technology, more liberty?

But that’s where ex-Facebook and Google Maps impresario Bret Taylor comes in. Taylor’s latest move finds him joining the board of Taser as an independent director — and instead of giving the impression that he’s selling out to Big Surveillance, he’s delivering the opposite message. In a statement reported by TechCrunch, Taylor specifically makes the case for better civil liberties through enhanced law enforcement technology.

“Taser is applying technology to important social issues that I care deeply about,” he said. “This is an important opportunity to use technology to protect civil liberties. I believe Taser is poised to revolutionize the public safety space with enhanced transparency from body-worn camera technology while leveraging the cloud to manage the massive data being generated by wearable cameras and sensors. I’m thrilled to be joining the Taser board.”

Momentum for body cameras has grown recently, especially in Los Angeles, where Police Commissioner Steve Soboroff has made the feature a centerpiece of his approach to fighting crime and reducing officer abuse. In April, the L.A. Police Commission found itself lecturing the LAPD in the wake of discoveries that officers had tampered with in-car recording devices. In addition to transparency and cloud usage, Taylor is poised to confront stubborn, if not universal, resistance to round-the-clock self-monitoring by police forces.

Opening the floodgates for drones

If Google and Facebook are relatively well-known California companies setting the tone for surveillance in today’s society, there’s almost no name recognition surrounding an equally important firm — AeroVironment of Monrovia in the San Gabriel Valley. Although its tagline is “Human Power,” AeroVironment is in the business of manufacturing drones.

And AeroVironment’s Puma drone is among the first approved by the Federal Aviation Administration for commercial flight over land, a game-changing development that signals the government’s changing attitude toward the technology. Although approved last summer, the drone’s status was only recently revealed by the FAA. The Puma will patrol the region surrounding Alaska’s Prudhoe Bay, reports the Associated Press, taking 3D pictures of inaccessible areas as part of an environmental and business effort conducted by the BP oil company.

Regulators and drone industry lobbyists both acknowledge it may be years before a full-fledged drone policy takes shape in Washington. Nevertheless, public and private sector players are emphasizing that the future, for all intents and purposes, is now. Transportation Secretary Anthony Foxx told the AP that the Prudhoe Bay project is an “important step toward broader commercial use of unmanned aircraft. The technology is quickly changing, and the opportunities are growing.”

Because the Puma drone was created and first used as a military craft, the government’s comfort level with AeroVironment’s limited commercial venture is relatively high. Innovators itching to put drones to broader use, however, are ready to push the FAA for more concessions — and to jump the gun if need be. One youthful entrepreneur, GauravJit Singh, recently launched one of his DroneCast advertising drones without explicit FAA approval.

By John Seiler

California remains a fantastic place if you have a 180 IQ and an entrepreneurial spirit. You move to Silicon Valley, live and work in a closet and devour Coke and pizza until you make your first $1 billion. Then move into a mansion and drive a Bentley. California’s notoriously high taxes? That’s for accountants to figure out how you don’t have to pay them.

For those of us with IQs < 180, it’s time to move to Iowa. That’s where Facebook is building its new server firm, which will generate thousands of construction jobs; and when it’s finished thousands of jobs for maintenance, programming, engineering, etc. for those not able to join the Silicon Valley empyrean.

Wrote Vice President of Infrastructure Engineering Jay Parikh in a blog on the Facebook site on Apr. 22:

“Today we’re thrilled to announce that Altoona, Iowa, will be the home for Facebook’s newest data center.

“For most people, Facebook is something pretty simple. It’s a service you visit every day to connect with the people and things you care about. But behind the scenes, Facebook is a global service of immense scale and complexity — over 1 billion people use Facebook every month, and every day there are more than 2.7 billion Likes and over 2.4 billion content items shared with friends.

“In the coming years, as our service continues to grow and people share and connect in more ways, we need to make sure that our technical infrastructure also continues to scale. Our goal is not just to deliver you a fast, reliable experience on Facebook every day — we also want to help make connectivity a universal opportunity. Our data centers are essential for making that happen.

“Altoona will be our fourth owned and operated data center, and our third in the United States. (The others are in Prineville, Oregon; Forest City, North Carolina; and Luleå, Sweden.)”

Note that none of the four data centers is in California. This will not get tallied as a “business that leaves California.” Rather, it’s one that never came here — and never would come here.

That data center was planned months ago. But Iowa Gov. Terry Brandstad was trolling for more California jobs in his trip here two months ago. He said, “The state’s in a financial mess. Taxes are going up. There’s a lot of uncertainty.” After talking to California businesses, he said, “They’re saying the California business climate is bad, and getting worse.”

It takes a lot to drag somebody away from the beach and the sun to the corn fields and frozen tundra. But the Hawkeye state welcomes businesses and jobs instead of repelling them.

By John Seiler

A year ago, Gov. Jerry Brown and other state officials were salivating like Pavlov’s dog over the $2 billion in new taxes they projected the state treasury would get from Facebook’s Initial Public Offering. Then the IPO tanked and the company lost half its value. So California would get only $1 billion.

Now it turns out Facebook isn’t going to pay any taxes!

“Facebook is reporting a $429 million net tax refund from the federal and state treasuries. And it’s not because they weren’t profitable. Indeed, Mark Zuckerburg’s little company earned nearly $1.1 billion in profits.

“Facebook’s income tax refunds stem from the company’s use of a single tax break, that is the tax deductibility of executive stock options. That tax break reduced Facebook’s federal and state income taxes by $1,033 million in 2012, including refunds of earlier years’ taxes of $451 million.”

This is happening even though Facebook co-founder and multi-billionaire Chris Hughes recently bought  the New Republic magazine, the flagship of liberals. And Hughes, according to former editor Martin Peretz, has turned it into politically correct propaganda rag of Obama worship.

Not that Hughes wants to pay Obama-high taxes. He wants tax breaks just like any billionaire. And billionaires get them because their tax accountants are smarter than IRS functionaries.

So it’s the same old story. Obama and Brown insist taxes must go up on the rich so they “pay their fair share.” The rich, including rich liberals, figure out tax loopholes. An the middle-class ends up getting hit to pay the bill for all the government waste.

By Joseph Perkins

Randi Zuckerberg made news recently when a family photo she posted on her Facebook account was reposted on Twitter without her knowledge or consent.

The big sis of Facebook CEO Mark Zuckerberg was not amused. “Digital etiquette: always ask permission before posting a friend’s photo publicly,” she admonished the culprit who trampled upon her privacy.

This is the brave new world of social media. While it offers tremendous utility to the hundreds of millions of us who have Facebook, Twitter, LinkedIn, Pinterest and other such accounts, it also poses a clear and present threat to our privacy rights.

That’s why those of us here in the Golden State who routinely use social media owe a debt of gratitude to state Sen. Leland Yee, D-San Francisco, and Assemblywoman Nora Campos, D-San Jose. Both are authors of legislation, which took effect New Year’s Day, that provide new privacy protections for selected social media users.

Yee’s measure, SB 1349, prohibits California colleges and universities from requiring students, or prospective students, to disclose, divulge or otherwise provide access to their personal social media.

That not only includes electronic content appearing on a student’s Facebook, Twitter or other such account. But also blogs, podcasts, emails and instant and text messages that are accessible on the Internet.

Campos’ measure, AB 1844, makes it unlawful for employers to require employees or job applicants to disclose the user name and password to their personal social media accounts. And, like Yee’s legislation, it’s inclusive of all forms of electronic content.

There are some who suggest that the measures by Yee and Campos address problems that do not as yet exist.

Indeed, the assemblywoman acknowledged that very well may be the case with her legislation, which she described as a “preemptive measure.” And the same may equally apply to the senator’s measure.

Privacy under attack

But what is beyond dispute is that the privacy of our personal information, on- and offline, is under attack like never before.

Not only by colleges and employers seeking to snoop into the private lives of students and workers, but by every conceivable information-gathering beast individuals encounter in their day to day lives.

Indeed, why did Williams-Sonoma and other California retailers until recently require customers to provide zip codes when making purchases with a credit card?

Why does California-based 24 Hour Fitness require biometric scans of members before they work out?

And why does Pacific Gas & Electric Co. electronically swipe the driver’s licenses of all visitors to its main office?

If retailers, health clubs, utilities and others that gather personal information guaranteed that the info would never, ever be used for purposes never imagined by those who provide their zip codes, biometrics and driver licenses, if they could assure those whose personal information is stored in their data bases that it will never fall into the wrong hands, there would be no need for new laws protecting privacy.

But we have seen all too many cases in which personal information gathered for one specific purpose is used for an entirely different purpose. As in the shocking 1989 murder of actress Rebecca Schaeffer by a stalker who obtained her home address from California DMV.

And we also have seen far too many instances in which supposedly “secure” data bases have been penetrated by hackers. Like the data base maintained by Barnes & Noble, which was infiltrated this past  September by cybercriminals who made off with credit card numbers of the bookstore’s in San Diego and several other cities.

Once the personal information of students, employees, consumers or social media users like Randi Zuckerberg is out in the open, there’s really no repairing the damage done.

That’s why Sen. Yee, Assemblywoman Campos and their fellow lawmakers serve the public interest by passing laws that address the growing threats to privacy rights.

By Chriss Street

The state of California was already facing a $19 billion budget deficit, had shorted K-12 public schools $8 billion and are releasing imprisoned rapists into the “community probation” when the California Legislature’s Democratic majority voted last week to approve selling $4.6 billion in new state bonds to build 130 miles of railroad track through some of the most uninhabited farm country in Central California.

The arrogance of the leveraging the already insolvent state caused a volcanic public outrage. But the Legislature and Governor Jerry Brown were desperate to get their paws on $3.3 billion in federal grants from the Obama Administration.

Then, in a shocking development, Moody’s Investor Services, which was expected to provide the credit rating to justify selling the debt, may have just torpedoed California’s credit rating by tripling their estimate of the state’s unfunded public pension liability from $38.5 billion to a $109.1 billion liability and raising the annual cost of state pension funding by $7.3 billion.

California has long been ground zero for financially dysfunctional government.  Under the California State Constitution, the Legislature is required to approve a “balanced budget” each year.  At the start of the fiscal 2011-12 budget on July 1, 2011, California had an $8.2 billion budget deficit carry-over from the prior year.  No problem for Sacramento political magicians to balance a budget. They simply estimated the state would collect $9.7 billion in capital gains taxes from the Facebook initial public offering.

Twelve months later, the state has collected less than $1 billion from Facebook and the deficit has grown by another $1.4 billion to $9.6 billion.  This year, the Legislature passed another dicey “balanced budget” on the expectations voters would approve in November $8.5 billion in new sales and income taxes.

Ponzi spending

The key to California politicians being able to continue their Ponzi spending far above the state’s revenues has been the willingness of ratings agencies, like Moody’s, to dutifully collect huge consulting fees for providing the state with an “investment grade” credit rating.  Armed with the Moody’s “Good Housekeeping Seal of Approval,” municipal bond investors have been willing to loan California huge amounts of cash.

But the bogus choo choo bonds may have been so toxic even for Moody’s high tolerance for government shenanigans; they were the proverbial “straw that broke the camel’s back.” If Moody’s issued an investment-grade credit rating and the railroad bonds eventually default, the firm would undoubtedly be sued for billions of dollars by lots of angry retired people who tend to be the main buyers of municipal bonds.

This newfound conservatism by Moody’s comes at a very inopportune time for the state and its 58 counties and 478 cities.  Each year, California governments have borrowed huge amounts of money by selling low-cost municipal bonds in late July to finance the period until they collect the majority of their tax revenues in December and April.  The state of California was expecting to borrow $28 billion and municipal governments were anticipating borrowing anther $50 billion.

But any downgrades of the state or municipality debt from investment grade to “junk bond” would send the cost of borrowing up to Greek-like levels of 20 percent.  This appears to be exactly what just happened to San Bernardino, forcing the city to file for an emergency Chapter 9 municipal bankruptcy.  According to Los Angeles Times:

“The city’s fiscal crisis has been years in the making, compounded by the nation’s crushing recession and exacerbated by escalating pension costs, lucrative labor agreements, Sacramento’s raid on redevelopment funds and a city reserve that is tapped out”.

This same language could apply to most of the cities and counties in California over the last few years.  The real reason for the collapse of San Bernardino and the growing panic is Moody’s was about to downgrade the city’s credit rating to junk.  With state and most local governments running out of cash, there will be more bankruptcies in California.  It looks to me that it was the train that broke California’s back.

Chriss Street will be in Studio with Paul Preston on “The Inside Education”; Streaming Live from Monday July 9 to Friday July 13.  Click Below to listen between 7-10 pm each night:  www.mysytv.net/kmyclive.html.

By John Seiler

Why do young nerds angling to be the next Steve Jobs still flock to Silicon Valley? That’s where Mark Zuckerberg transplanted Facebook, which he started in his Harvard dorm room. Facebook’s IPO this week pegs its value at around $100 billion.

But the Facebook owners are being gouged by the bankrupt state of California for $2 billion. If they had moved instead to Austin, Tex., or Seattle, Wash., they would have paid no state income or capital gains taxes. If they had moved to the Cayman Islands, Singapore or another tax haven and renounced their citizenship — as co-founder Eduardo Saverin has done — they could have avoided even most of the 35 percent U.S. income tax and 15 percent capital gains tax.

California also has numerous preposterous laws people and companies must follow, from banning the use of cell phones in cars to banning smoking almost everywhere. Well, I suppose the young gearheads don’t smoke — cigarattes, anyway.

My theory is that Silicon Valley is like Star City was in the old Soviet Union. If you were a budding young cosmonaut aspirant in the Soviet bloc, that was the place to be. According to Wikipedia,

“Cosmonauts of the Russian Federal Space Agency, and the Soviet space program before it, have lived and trained in Star City since the 1960s. In the Soviet era the location was a highly secret and guarded military installation, access to which was severely restricted.”

There was no question of defecting to the West. Sure, you maybe could escape across the border and be given asylum in the United States. The FBI would debrief you about your knowledge of the Soviet space program. You’d be given a new identity as Ivan Smithsky in Dubuque. You’d be a free person. But no way they’d let you become an American astronaut.

So you were stuck in Star City. The amenities there made it worthwhile. Unlike the subsistence living scraped out by most Soviets in the workers’ paradise, you would be given the best food and drink, a decent apartment or house, culture and entertainment, even access to banned literature the Soviet bosses winked at. They knew you weren’t going anywhere. You also had to put up with pervasive secrecy and being spied on.

The weather? Much better in Silicon Valley, of course. No Russian winters. But if you were a Russian wanting to be a cosmonaut, you grew up with the winters. And if you stuck with the program, retirement would be in the Crimea, with California-style weather and great local wines.

People will do almost anything to get what they want. They’ll put up with socialism, whether the Soviet or California kind.

That’s why Silicon Valley will continue attracting high-IQ future Jobses and Zuckerbergs. For as long as anyone reading this is alive.

For most of the rest of us, it’s Moscow circa 1970, Jerry Brown as Leonid Brezhnev, but with great weather.