Editor’s Note: This story was originally published on July 19.

Republicans in the state Legislature are thought to have a challenging election cycle this year. The outcome in November will determine whether the GOP has enough seats in the state Assembly and state Senate to maintain relevance in legislative matters.

Many factors are contributing to the angst, not the least of which is that Donald Trump as the GOP nominee is a wild card. No one knows yet how the reality T.V. star and real estate tycoon will affect down-ticket races — although Democrats are anticipating it will drag down GOP candidates. 

Regardless of the top of the ticket, this year looks to be tough for Republicans — who are largely hoping to just hold seats — as presidential election turnouts are generally more favorable to Democrats, when the electorate becomes more diverse. 

Republicans need to keep Democrats from achieving a two-thirds majority in the Assembly and Senate to have a meaningful impact on state lawmaking. Dipping below that line would mean losing their ability to weigh in on tax increases, gubernatorial veto overrides and legislatively-referred constitutional amendments — their last remaining points of legislative leverage.

To stay above a superminority, Republicans can afford to lose only one seat in the Assembly while Senate Republicans can’t afford to lose any.

Adding intrigue is the fact that it’s not just a war between the parties. The relatively new primary system where the top two candidates advance from the primary to the general election regardless of party has pitted some Democrats against each other, largely playing out proxy wars from outside interests. Of course in some races, a few candidates are termed-out of one chamber and aren’t ready to go home just yet.

Here are some of the top races to watch:

In the fight of their lives 

Catharine Baker, an East Bay Area Republican assemblywoman, led the primary 53.2 percent to 46.8 percent over Democrat Cheryl Cook-Kallio, a former Pleasanton City Council member. Baker is a the only Bay Area Republican in the legislature, so her seat is important both functionally and symbolically. 

Baker narrowly won the open seat in 2014 by about three points, and this time should be close too. Democrats in the district have a 10 percent registration advantage, with 24 percent of voters claiming no party preference. 

In one of several rematches, Republican Assemblyman David Hadley faces Democrat Al Muratsuchi, whom Hadley booted from office in 2014 by only 706 votes — or about 0.5 percentage points — in this Los Angeles south bay district.

In the June primary, Hadley received only 44.6 percent of the vote, with Muratsuchi and another Democrat splitting the majority. Democrats in the district enjoy a nine percentage point registration advantage, with 22 percent of voters claiming no party preference. Winning this seat was a major coup for the GOP in 2014, and retaining it would be as well.

Key holds

In the Antelope Valley, Republican Assemblyman Tom Lackey faces a strong challenge from the man he unseated in 2014, Democrat Steve Fox (who used to be a Republican). In 2014, Lackey destroyed Fox by 20 percentage points. But in the June primary, Lackey advanced with only 48.2 percent of the vote; three Democrats split the rest. Democrats have a six percentage point registration advantage with 19 percent of voters claiming no party preference. 

In the north Inland Empire, first-term Republican Assemblyman Marc Steinorth of Rancho Cucamonga finished second of two candidates in the primary behind Democrat Abigail Medina, a San Bernardino City Unified School District board member, trailing by three percentage points. Democrats have a one percentage point registration advantage with 22 percent of voters claiming no party preference.

And in the south Inland Empire, Republican Assemblyman Eric Linder — who is surprisingly supported by the SEIU, a formidable union — got only 45.6 percent of the vote in the primary with the rest split between two Democrats. In the general, Linder faces Democrat Sabrina Cervantes, the district director for Assemblyman Jose Medina. Democrats have a slight, two percentage point registration advantage with 21 percent of voters claiming no party preference.

Former Republican Senate Leader Bob Huff is termed out and Republican Assemblywoman Ling Ling Chang is hoping to fill Huff’s seat on the other side of the rotunda. Chang faces Democrat Josh Newman — a political neophyte who runs a non-profit aimed at helping veterans find employment — in this Orange County race.

Despite superior name recognition, Chang — the only Republican in the primary — drew 44 percent, while Newman and another Democrat nearly evenly split the majority. Republicans have a one percentage point registration advantage with 24 percent of voters declining to state a party preference.

Another rematch

Republican Assemblywoman Young Kim faces the woman she knocked off in 2014, Democrat Sharon Quirk-Silva, in this Orange County district.

Last cycle, Kim won by 10 percentage points. But in June, Quirk-Silva led the primary by 8.6 percentage points. And Democrats have a four percentage point registration advantage, with 23 percent of voters claiming no party preference.  

Competitive by chance

The race to replace the late Sen. Sharon Runner — the Republican incumbent from Lancaster — is wide open. Runner passed away in July, but had previously decided against running for re-election for health reasons (her second such decision). Runner won the seat in 2015 in a special election after Steve Knight won a Congressional seat. 

Republican Assemblyman Scott Wilk of Santa Clarita came in first in the primary with 46.7 percent of the vote over Johnathon Levar Ervin, an engineer and Air Force reservist, who drew 33.7 percent of the vote. Among four candidates, the results were almost evenly split with a slight edge to the Republicans, but voter registration in the district is closely split as well. Democrats have a two percentage point registration advantage with 21 percent of voters claiming no party preference. 

Republicans best shot to pickup

What would have otherwise been considered a noncompetitive Senate election to replace termed-out Democrat Carol Liu became competitive when longtime Los Angeles County Supervisor Mike Antonovich threw his hat in the ring.

Antonovich brings strong name recognition and a vast fundraising network from his more than 40 years in elected office, but he has a tough path forward having only won 39.5 percent of the vote in the primary. The rest of the vote was split among Democratic candidates, with former Assemblyman Anthony Portantino coming in second. Democrats have a 14 percentage point registration advantage with 24 percent of voters declining to state party preference. 

Dems v. Dems and the proxy wars

While this Silicon Valley election featuring two Democrats won’t affect whether or not there’s a supermajority, it may help fortify a group of business-friendly moderates. Incumbent Senator Jim Beall, of the liberal environmentalist ilk, is facing the more business-friendly Nora Campos, who is termed out of the Assembly.

This race is actually one of a few proxy wars between Big Environment vs. Big Oil, which have both spent considerable money in the race. Beall was a hair away from a majority of the vote in the primary.

So far Campos has stuck to the narrative that both Beall and Senate President Pro Tem Kevin de Leon, a Beall supporter, have bullied her. Campos said de Leon tried to dissuade her from running (party leaders generally dislike having to spend money and energy protecting incumbents from members of their own party). And Campos said Beall attacked her husband through a third party — as they say, it’s complicated.

A moderate Democrat is under fire in the Inland Empire, as incumbent Cheryl Brown faces attorney Eloise Reyes in this competitive Assembly district. Environmentalists and unions dislike Brown and have already spent big money opposing her through the primary, while Big Oil and charter schools have spent more than a half million dollars in support of Brown.

But surprisingly, word leaked that Senate President Pro Tempore Kevin de Leon — a powerful environmentalist — would be endorsing Brown. It’s unclear if this will have any effect on the race. 

In the primary, Brown received 44.1 percent of the vote to Reyes’ 35.6 percent. The Republican challenger received 20 percent of the vote, and how that’s divvied up could decide the race.

And while the tributes range in length and tone — one legislator joked (?) about his romantic feelings for Assemblywoman Nora Campos — none were as awkward as the one for termed-out Roger Hernández, who was recently placed under a restraining order from his now-ex-wife and was subsequently stripped of his committee assignments.

Assemblywoman Lorena Gonzalez, D-San Diego, was the first of around a half dozen Democrats to pay kind words to the West Covina Democrat, whom she had known since election night 2000.

Gonzalez spoke of Hernández’s focus on immigrant communities and low-wage workers.

“This body will miss your work,” Gonzalez said.

Remember when he stole a member’s mic?

Gonzalez opened her remarks with a joke about Hernández’s relationship with Assemblyman Matthew Harper, R-Huntington Beach. Last July, Hernández had security remove Harper’s microphone at a committee hearing on increasing the minimum wage after repeatedly talking over Harper and calling a vote to end debate. Videos suggested that even the clerk and deputies seemed confused by Hernández’s requests.

“Seargents have already turned off Mr. Harper’s microphone, so we’re going to do OK,” Gonzalez said.

Harper declined to speak on Wednesday when jokingly asked.

“Thank you for your wisdom, Mr. Harper,” said Assemblyman Kevin Mullin, D-South San Francisco, who was presiding.

Proud

Assemblywoman Shirley Weber had the most awkward exchange with Hernández, however, when she said she was “proud” to see how he’d handled himself over the past year.

In April, Hernández was placed under a temporary restraining order from his then-wife, Susan Rubio, after allegations of domestic violence surfaced during divorce proceedings.

Rubio alleged Hernández assaulted her 20 times over a three-year period, detailing eight alleged incidents in court that included being choked with a belt, being beat with a broom while on the ground and being threatened with a knife after having been accused of an affair.

Hernández has not been charged with a crime but was placed under a three-year restraining order earlier this summer. Hernández has denied the allegations, and even compared Rubio to former Olympic ice skater Tonya Harding, who hired a thug to whack the knee of another skater, Nancy Kerrigan.

It’s not the first time Hernández was in trouble. In 2012, an ex-girlfriend accused him of domestic violence, although charges were never filed. That same year, Hernández was arrested for drunk driving in a state vehicle, but was acquitted by a jury on one charge, while the jury was hung on another. And in 2015, allegations of political money laundering against Hernández were dropped by the Fair Political Practices Commission after two key witnesses were unable to testify — one had serious medical issues while the other passed away.

“You’ve taken a lot this year,” Weber said. “You’ve taken a lot over the years. And I’m always so proud to see you stand.”

Weber added that she thought of Hernández as courageous on tough issues, a man of “tremendous love and respect” and reiterated her appreciation for his toughness during his personal turmoil. Hernández recently dropped a bid for Congress amid the allegations.

“Many of us struggle with all the issues of life and we crumble as a result of it, but you did not,” Weber said. 

Women make up more than half of California’s population, but only about one-fourth of the Legislature. 

And in November, that’s unlikely to change too much, according to a CalWatchdog analysis.

While an October surprise, outside factor or just particularly good or bad campaigning could change the course of race that appears to be a sure thing, primary results, incumbency advantages, voting trends and partisan makeup of a district can be useful in making educated guesses.

Currently, out of 120 legislative seats, there are 30 held by women — an additional seat is vacant now, having been held by the late Republican Senator Sharon Runner, who died unexpectedly earlier this month.   

There could be as many as 49 women in the Legislature next year, but it is likely that they’ll hover around the same amount as this year.  

In the Senate, women could have as few as five seats and as many as 13 — realistically, the number will likely be around eight to 10 seats. In the Assembly, women will occupy at least six seats and as many as 36, but that number will likely be somewhere between 15 and 24 seats. 

What we know for sure

Republican Senators Jean Fuller, Janet Nguyen, Pat Bates and Democratic Senators Connie Leyva and Holly Mitchell are not up for re-election and will definitely be returning next year, as the Senate is on staggered four-year terms.

In the Assembly, every seat is up for re-election every two years, although five seats will definitely stay occupied by women — either because the incumbent is running unopposed (or facing a write-in challenge) or because the incumbents are facing another woman in the general election. Those five seats are held by: Democrats Cheryl Brown, Cristina Garcia and Autumn Burke and Republicans Catharine Baker and Young Kim. 

Because of either term limits or the seat being vacated by an incumbent running for another position, eight seats held by women will be replaced by men as no women advanced from the primary in these races. Those are the seats currently held by Republican Assemblywomen Beth Gaines, Kristin Olsen, Shannon Grove and Ling Ling Chang and one Democrat, Toni Atkins, as well as two Democratic senators, Carol Liu and Fran Pavley.

Runner’s Senate seat will also be filled by a man.

There is only one definite pickup: An Assembly seat held by termed-out Democrat Luis Alejo.  

Seats where we likely know the outcome

Again, nothing is guaranteed until the final votes are tallied, but these nine seats are safe bets.

While the Assembly seat of Speaker Emeritus Toni Atkins will be filled with a man as mentioned above, the San Diego Democrat is expected to offset that loss by filling a seat being vacated by a man in the Senate. 

Because of the advantages of incumbency, district voting trends and favorable lopsided primary results, these eight female legislators will likely keep their seats: In the Senate, it’s Democrats Hannah-Beth Jackson (the current chair of the Women’s Caucus) and Cathleen Galgiani, and in the Assembly, it’s Democrats Jacqui Irwin, Susan Talamantes Eggman, Shirley Weber and Lorena Gonzalez with Republicans Melissa Melendez and Marie Waldron.

One female incumbent in trouble 

The only incumbent woman who is on very shaky ground is Democrat Patty Lopez. Lopez finished second in the primary, down 17.2 percentage points to the man she surprisingly knocked out of office in 2014, fellow Democrat Raul Bocanegra.

Best pickup chances

In the race to replace Sen. Mark Leno, who is termed out, Jane Kim led the primary against fellow Democrat Scott Wiener 45.3 percent to 45.1 percent. It’s obviously a close race, but it is a good chance for a woman to pick up a seat.

In a less competitive race, Democrat Cecilia Aguiar-Curry finished first in the primary against Republican Charlie Schaupp in a heavily Democratic district to replace Assemblyman Bill Dodd, D-Napa, who is running for Senate.

Democrat S. Monique Limón finished the primary with a formidable lead against Edward Fuller, who claims no party preference, 65.9 percent t0 34.1 percent. If elected, Limón would replace Democratic Assemblyman Das Williams. 

In the race to replace termed-out, Democratic Assemblyman Roger Hernandez — who is currently under a three-year restraining order for alleged domestic violence — Blanca Rubio appears likely to win. Rubio, a Democrat, will face Republican Cory Ellenson in a heavily-Democratic district.

Two wildcards 

Two seats where women have decent chances to pickup seats, although the odds are slightly tipped against them, are the Senate races to replace termed-out Republican Bob Huff and incumbent Democrat Jim Beall.

Republican Assemblywoman Ling Ling Chang saw an opening in the Huff race and decided to vacate her Assembly seat after only one term. However, she finished the primary with only 44 percent, with two Democrats splitting the 56 percent majority. 

Beall is being challenged by Assemblywoman Nora Campos, a fellow Democrat. Beall narrowly missed a majority in the primary, topping Campos by 22.5 percentage points. Campos is considered the business-friendly candidate, so she’ll have to use that to draw upon Republican support to top Beall.

Toss ups

There are approximately 11 races that look as though they could go either way, with four being vacated by termed-out women. Another four are against male incumbents: Republicans Marc Steinorth, Eric Linder and Travis Allen and Democrat Miguel Santiago.  

Looking for October surprises

And there are 11 other races where women are challenging male incumbents, although these races do not appear as though they’ll be too competitive. 

Alejo honors his mother Woman of the Year. Courtesy of Alejo’s office.

At a time when voters are increasingly convinced the system is rigged, some state legislators are making that perception worse by giving district-wide awards to their family members, critics say.

While it’s not uncommon for legislators to participate in award ceremonies recognizing constituents for their accomplishments, it’s becoming more common for those honorees to be friends and family members of the legislators.

In March, members of the Legislature honored women from their districts to be Woman of the Year: Assemblyman Luis Alejo picked his mother. In May, Assemblywoman Nora Campos selected as Small Business of the Year a brand new political strategy firm both her brother and her longtime political consultant work for, which had also held fundraisers for her. And just a few weeks ago, Assemblywoman Lorena Gonzalez picked her boyfriend, Nathan Fletcher, a former state legislator, to be Veteran of the Year.

“These ‘awards’ are a generally cost-free technique for buying some goodwill in the community,” said John J. Pitney, Jr., a Roy P. Crocker professor of politics at Claremont McKenna College. “Generally, they are harmless, but when lawmakers give them to their relatives, friends and squeezes, they just contribute to the sense that the political system is rigged.”  

“We already have a surplus of cynicism, and this nonsense makes it worse,” Pitney said.

Hurts the association

This was the first year Campos, a San Jose Democrat, chose to participate in the Small Business of the Year award, selecting Voler Strategic Advisors, which had been in business less than one year and does not have a working website.

The same month the award was given, Voler held a fundraiser for Campos’ Senate campaign — Campos is challenging Sen. Jim Beall, a fellow San Jose Democrat.

“This is absolutely not the spirit of the award,” said Samantha Toccoli, legislative coordinator for the California Small Business Association, one of the groups in charge of the program.

California Small Business Day was created by an Assembly resolution in 2000. Toccoli said she was unaware of any familial relationship between Campos and Voler and added that the organization is run by volunteers who have no way of efficiently vetting every honoree.

“I would hope that this reflects on the legislator and not the integrity or intention of our organization and the 25 other organizations that host the event,” Toccoli said. 

A Campos spokesperson countered that the award was technically given to Voler’s owner, not Campos’ brother, Xavier, who is a senior vice president, or her longtime political consultant and former communications director, Rolando Bonilla, who is Voler’s chief strategy officer.

Look no further

For Alejo, a Watsonville Democrat, it’s his last year in the Legislature, having been termed out and elected to the Monterey County Board of Supervisors — he said he “could not think of anyone better” for the award than his mother, Maria Luisa Alejo Covarrubias. 

“I wanted to honor my mother during my last year in the state Assembly,” Alejo said in a statement at the time. “Our mothers are our first teachers and made us who we are today. My mother has done so much for my family and for our local communities, and I could not think of anyone better for this year’s Woman of the Year for Assembly District 30.”

Alejo did not respond to requests for comment.

Cronyism?

Because Gonzalez’s boyfriend is a former legislator, her awarding Fletcher was more conspicuous than the two prior examples. On Instagram, Fletcher said: “Honored to be chosen as Veteran of the Year by my Assemblywoman:)” 

San Diego Republicans blasted Gonzalez, a San Diego Democrat, for choosing her boyfriend, which she defended on Facebook by highlighting Fletcher’s work with veterans, by denouncing the attacks as partisan and by blaming the media. She pointed out that others, including Republicans, had done the same.

“It is well known that Nathan and I are in a committed relationship, but there is a long line of assemblymembers who have picked husbands, wives, fathers, mothers and other relatives for recognition,” Gonzalez wrote. “Never once has it been questioned.”

Not who it is but how it looks

But the question isn’t so much whether Fletcher or any of the others are deserving of the awards, it’s a question of what message these actions send to the public, which is already weary from the perception of widespread double standards and cronyism. 

“These examples reflect poorly on the Legislature,” said David Wolfe, legislative director for the right-leaning Howard Jarvis Taxpayers Association. “We need to ask if the awards program as a whole is in the best interest of California taxpayers.”

“If the Legislature truly desires to honor [taxpayers] it should rededicate the hours that they currently spend on pomp and circumstance shows like these and instead focus on fixing real problems, like our state’s $500 billion unfunded pension liability,” Wolfe said.

Lax leadership?

So far, the three incidents are isolated to Assembly Democrats and it’s unclear if Speaker Anthony Rendon, D-Lakewood — who waited more than two months to take action against a committee chairman accused of domestic violence and under a temporary and then three-year restraining order — will ask fellow legislators to abstain from taking actions that give the appearance of cronyism.

Rendon did not respond to requests for comment.

The San Jose Democrat chose Voler Strategic Advisers, a fledgling political strategy firm that has held a fundraiser for her and employs both her brother, Xavier, and a longtime political consultant, Rolando Bonilla.

Campos did not respond to requests for comment.

No money comes with the award, just recognition. It’s something a business can then use to post on its Facebook page: “It is an honor to be recognized as Small Business of the Year for our region.”

Every state legislator nominated a company from their district. The award ceremony was last month in Sacramento, hosted by the California Small Business Association. 

Voler

Details on Voler are hard to come by since its webpage is “Coming soon,” but Linkedin shows Bonilla is the chief strategy officer and Xavier Campos is senior vice president, government strategy and land use. 

Bonilla served as Campos’ communications director for three years while she was still a San Jose city councilwoman.

Voler was actually started less than a year ago, according to San Jose Inside, which first reported the story. It has less than 300 likes on Facebook and only 37 Twitter followers.

In May, Voler held a fundraising event for Campos’ 2020 Senate campaign committee (she has one for 2016 as well), according to campaign finance disclosures.

Xavier Campos donated $4,200 to Campos’ 2020 committee, listing Voler as his employer. 

Background

Campos is termed out of the Assembly and is challenging fellow Democrat Jim Beall in the Senate. On Tuesday, she advanced through the primary with the second-highest vote total behind Beall, who she has accused of “bullying” her. 

Xavier Campos was also a San Jose councilman. But he was voted out of office in 2014 following a rocky term, which The San Jose Mercury News characterized as “marred by a campaign win aided by illegal campaign mailers, his refusal to testify to even basic facts in a friend’s criminal trial, and his past as an executive in a nonprofit that raided employees’ pension funds.”

“Campos was not criminally charged in any of the scandals, but his reputation had been battered by the end of his four-year term,” added The Mercury News. 

The two leaders of the California Legislative Women’s Caucus demanded in April Hernández, a West Covina Democrat, step down from his committee assignments (including the Labor and Employment Committee chairmanship) and take a leave of absence from the legislature while under a temporary restraining order from his wife. 

Last week, calls against Hernández intensified following testimony from his wife during divorce proceedings, which detailed eight alleged incidents: One of Hernández choking her with a belt, another of Hernández dropping her to the ground and beating her with a broom and another of Hernández threatening her with a knife after accusing her of having an affair, according to the news reports.

But Asm. Nora Campos, D-San Jose, said the outrage from the women’s caucus has been unevenly applied.

“I want to know why the women’s caucus is so quick to take position on Asm. Hernández, but when it comes to Sen. Jim Beall and the bullying of women in San Jose they’ve been quiet,” Campos said. “I called on the Women’s Caucus leadership to take an equally aggressive position with Sen. Jim Beall.”

A spokesperson for the women’s caucus said the group would not be responding to Campos’ allegations regarding either Beall or the manner with which the group responds “at this time.”

What’s going on?

Campos is termed-out of the Assembly and challenging Beall, a fellow San Jose Democrat, in the Senate. She previously alleged that Beall “bullied” both her and the woman vying to replace her, and alleged Senate President Pro Tempore Kevin de León did as well.

De León was accused of trying to discourage Campos from challenging Beall and for sending another senator to do the same. The alleged other senator allegedly said he or she was “concerned” for Campos’ safety, according to The San Jose Mercury News. 

A de León spokesman called the allegations “irrational” and “outrageous,” according to The Mercury News. 

As for the allegations against Beall, it’s complicated.

What (allegedly) happened with Beall?

In April, Campos’ husband, Neil Struthers, was kicked in the genitals by entourage members of union leader Enrique Arguello, a Beall ally, at a union fundraiser. Arguello claimed Struthers called him a gay slur, threatened him physically and made racist remarks, all of which Struthers denied.

Campos told The Mercury News that this related to Beall because of his political connection to Arguello, adding that Beall had endorsed Arguello for a position on a Democratic central committee. Campos also alleged that following the fight, two union members came by her house to “intimidate” her.

More allegations?

The Mercury News also reported that Darcie Green, the Democrat running to replace Campos in the Assembly, is alleging Beall used his influence with Kaiser Permanente officials to get Green forced an unpaid leave of absence from her job.

Beall endorsed Green’s opponent.

Back to Hernández

The original statement by the two leaders of the women’s caucus about Hernández was conspicuously from them and not from the caucus as a whole. CalWatchdog followed up with Campos to see if she had a position on Hernández and asked her to clarify her response, as it seemed she was putting political intimidation on the same level as domestic violence.

“The Women’s Caucus position is clear and I stand behind (sic),” Campos said. “I demand consistency from caucus leadership and expect that they give the same type of response to Senator Beall. If they do not, it is clear to me they are simply playing politics.”

History

It’s not the first time Hernández — who is challenging Rep. Grace Napolitano, D-Norwalk, for her seat in Congress — has been accused of wrongdoing. In 2012, an ex-girlfriend accused him of domestic violence, although charges were never filed due to insufficient evidence. 

That same year, Hernández was arrested for drunk driving in a state vehicle, but was acquitted by a jury on one charge, while the jury was hung on another. 

In 2015, allegations of political money laundering against Hernández were dropped by the Fair Political Practices Commission after two key witnesses were unable to testify — one had serious medical issues while the other had passed away. 

Villaraigosa announced his decision Tuesday in a post on Facebook that foreshadowed a run for governor in 2018.

“I am humbled by the encouragement I’ve received from so many to serve in the United States Senate,” the former Democratic Speaker of the California Assembly wrote. “But as I think about how best to serve the people of this great state, I know that my heart and my family are here in California, not Washington, D.C.”

If Villaraigosa’s statement that his heart remains “here in California” wasn’t a clear enough indication of a future run for governor, he added he’ll continue his “efforts to make California a better place to live, work and raise a family.”

“We have come a long way, but our work is not done, and neither am I,” he concluded.

Kamala Harris

Villaraigosa’s decision to pass on an application for membership in “the world’s most exclusive club” follows similar announcements by Treasurer John Chiang, billionaire climate-change activist Tom Steyer and Lt. Gov. Gavin Newsom.

It didn’t take long for Harris, the only major announced Democratic candidate, to issue a statement praising the former Los Angeles mayor.

“The city of Los Angeles, and our state and nation, have benefitted [sic] greatly from his leadership,” Harris said in a prepared statement tweeted by her campaign. “I know he has much more to offer. I wish him and his family all the best.”

Although Harris welcomed Villaraigosa’s exit from the race, the biggest beneficiary could be Loretta Sanchez. A moderate Orange County Democrat, Sanchez would have appealed to similar voters — Latinos and Southern Californians — as Villaraigosa.

Sanchez may prove formidable challenger to Harris

She hasn’t received the same media hype as Villaraigosa, but in some respects Sanchez may prove to be a more formidable challenger to Harris. The 10-term Democrat has said she’ll make a decision later this year. Sanchez has a head start on fundraising with nearly $400,000 in federal cash on hand, according to the most recent campaign finance reports.

Her statewide name identification, albeit lower than Villaraigosa’s, comes without the personal baggage. Early in his tenure as mayor, Villaraigosa disclosed an affair with a Telemundo newswoman. That was followed by photos showing the mayor partying with Hollywood bad boy Charlie Sheen at a hotel opening in Mexico.

But as pointed out by CalWatchdog.com, the biggest weight on a Villaraigosa campaign could be his support for Esteban Nunez, the son of former Assembly Speaker Fabian Nunez. Esteban pled guilty to manslaughter for the fatal stabbing of a 22-year-old college student. Villaraigosa, on official mayoral letterhead, wrote a letter of support for “a young man of good and upright character.”

The case was riddled with political favoritism, as detailed in a lengthy profile by the Los Angeles Times, and ended with Nunez friend Gov. Arnold Schwarzenegger’s commutation of Esteban’s sentence.

Latino Caucus: Senate contest bigger than any one candidate

Villaraigosa’s decision to pass on the race also does nothing to cool the burning frustrations of Latino political leaders, who are being pressured by some Democratic leaders to clear the field for Harris.

Earlier this year, former Speaker of the Assembly Willie Brown, who at one time dated Harris, said Villaraigosa should forgo a campaign out of respect for his friendship with the attorney general.

“His loyalty and his relationship with her should be so valuable, and he should, in my opinion, see it as an opportunity to demonstrate that,” Brown told the Sacramento Bee.

That comment inspired grumblings from members of the California Latino Caucus, who say the race is bigger than any one Latino candidate. Earlier this month, the group released a poll showing a Latino candidate could contend with Harris. The survey of 600 likely Latino voters, according to CalBuzz, showed Villaraigosa leading Harris, with Sanchez not far behind in third place.

“The U.S. Senate race has importance beyond the contestants themselves,” Assemblywoman Nora Campos, D-San Jose, said in a press release. “This is not about one candidate or another. An exciting race can generate enthusiasm among voters that have not been energized in years.”

Other Democratic candidates that are considering the race include Rep. Adam Schiff of Burbank, Rep. Xavier Becerra of Los Angeles and former Secretary of the Army Louis Caldera.

On the Republican side, Assemblyman Rocky Chavez of Carlsbad and former California Republican Party chairman Tom Del Beccaro are seriously exploring bids.

The trip, which kicks off on Monday, is the second legislative junket to Cuba organized by Anderson this year. During the Legislature’s spring break, eight lawmakers participated in a similar trip that included a tour of a castle, afternoon salsa lessons and rooftop cocktails, among other activities, according to Assemblyman Katcho Achadjian, R-San Luis Obispo, the only legislator to speak publicly about the trip.

The legislative junket to Cuba has been criticized by ethics experts for conflict of interest issues as well as the questionable practice of setting up a nonprofit organization that is “a wholly owned subsidiary” of a lobbying firm.

Assemblywoman Campos confirmed as participant

It is unclear how many legislators or their staff are participating in this week’s trip. At least one legislator has been identified as a participant. The San Jose Mercury-News reports that Assemblywoman Nora Campos, D-San Jose, and her husband, Neil Struthers, are going.

“It’s an opportunity to develop economic and trade ties,” Campos spokesman Steve Harmon told the Mercury-News by email.

However, an ethics expert said this type of trip gives lobbyists an unfair level of influence.

“It absolutely raises ethical questions when lobbyists travel with elected officials,” Jessica Levinson, a Loyola Law School professor who specializes in ethics, told CalWatchdog.com in April. “We want elected officials to hear from all of us, not just those who are taking trips.”

The trip’s price tag, according to the invitation, is $4,175 per person with a $500 supplement for single occupancy. But legislators won’t be paying for it out of their own pockets. A spokesman for Campos told the Mercury-News that the San Jose Democrat would use campaign funds to pay for the trip.

Under the California Political Reform Act, legislators and their staffs cannot accept gifts worth more than $10 per month from a registered lobbyist. However, campaign accounts provide legislators with an easy vehicle for circumventing these strict limits on lobbyist gifts. Lobbyists can direct their clients to donate to a member’s campaign account. Then the member can use the campaign account to pay for personal expenses, including foreign travel.

Nonprofit has links to lobbying firm

In order to comply with the State Department’s ban on travel to Cuba, the trip was arranged by Californians Building Bridges, a shadowy nonprofit organization controlled by Anderson. The organization’s website was registered by an employee of Platinum Advisors in August 2010, who provided contact information for Platinum Advisors.

The nonprofit’s board of directors includes Anderson as well as Holly Fraumeni and Melinda McClain, both of whom are registered lobbyists with Platinum Advisors. Only two other individuals serve on the board of directors, Kevin Murray, a former state senator and lobbyist, and James Bruner, the director of Orrick’s Governmental Affairs Practice Group in Sacramento.

That information, Levinson previously suggested, raised the question of whether “the nonprofit is a wholly owned subsidiary of the lobbying firm.”

More evidence of lobbying firm directing trip

The latest trip provides even more evidence that Anderson has used the nonprofit organization as a subsidiary of his lobbying business. In June 2013, Anderson invited lawmakers on the trip on behalf of “Platinum Advisors” and signed the invitation on Platinum Advisors letterhead.

“On behalf of Platinum Advisors and in partnership with Californians Building Bridges, we are excited to invite you to join us on an upcoming trip to Havana, Cuba during December 2-7, 2013,” Anderson wrote on Platinum Advisors letterhead. “In 2010, I founded an exciting nonprofit organization, Californians Building Bridges (CBB), which gained independent approval from the U.S. Office of Foreign Assets Control in 2011 to travel to Cuba and coordinate educational exchanges.”

Nevertheless, despite overwhelming evidence that the nonprofit is a subsidiary of the lobbying firm, Californians Building Bridges denies that lobbying will occur on the trip.

Jason Kinney, a spokesman for the nonprofit, told the Los Angeles Times that no policy issues are discussed. “These are nongovernmental educational exchanges with the people of Cuba — which means that no policy issues are discussed and certainly none relating to anything going on in Sacramento,” Kinney said in interview with the newspaper earlier this year.

83% of nonprofit funds spent on travel

Federal tax documents, filed by the organization on May 28, 2013, for the 2012 tax year, claim that the group’s primary purpose is to support other charitable endeavors. In 2012, $541,363, or 83 percent of the organization’s overall expenses, was spent on travel.

“The organization’s primary purpose is to assist other charitable organizations in expediting projects, setting priorities, and achieving goals,” the group stated as its charitable mission on tax forms for the past two years. “Californians Building Bridges will develop humanitarian programs that help volunteers and corporate partners alike make a useful connection to a world in need.”

Despite its tax-exempt status, Californians Building Bridges has little to show in the way of charitable activities. Californians Building Bridges, according to its most recent tax return, provided no financial support to domestic or international charities.

In fact, Californians Building Bridges, which spent $652,200 last year, has never spent a penny in support of grants or contributions to other charities, according to the two tax returns that are publicly available. Yet the organization’s mission, according to its tax return, listed as a priority making “one-time financial grants and donations of supplies and materials to charitable organizations that lack their own resources or do not qualify for assistance through existing agencies and organizations in their region.”

Darius Anderson: Sacramento’s ‘best connected lobbyist’

According to state disclosure reports, Anderson’s firm is the lobbyist of record for 68 government organizations and special interest groups, including Anthem Blue Cross, AT&T, California Thoroughbred Breeders Association, Clear Channel Communications, Station Casinos, Sutter Health, United Food and Commercial Workers, UPS, and the counties of Alameda, Napa, Orange, San Bernardino and Ventura.

In 2009, Anderson was voted by state legislators as the “best connected lobbyist,” according to a survey of all 120 legislators conducted by Capitol Weekly.

In 2010, Anderson and Platinum Advisors “paid $500,000 to settle claims by New York Atty. Gen. Andrew Cuomo stemming from a yearlong investigation into so-called pay-to-play practices in city and state pension fund investment partnerships,” according to the Los Angeles Times.

As of Sept. 12, seven of the eight legislative members on the spring-break trip to Cuba have been identified. Attendees include: Achadjian, Assembly Majority Leader Toni Atkins, D-San Diego; Assemblywoman Shirley Weber, D-San Diego; Assemblywoman Holly Mitchell, D-Los Angeles; Assemblywoman Nancy Skinner, D-Berkeley; state Sen. Ron Calderon, D-Montebello; and state Sen. Cathleen Galgiani, D-Livingston.

Additional background information, past coverage

California Building Bridges 2012 tax return

Platinum Advisors 2013 Invitation Page 1

Platinum Advisor 2013 Invitation Page 2

CalWatchdog: Legislators take secret trip to Cuba with Sacramento lobbyist

CalWatchdog: FPPC shuns investigation of CA legislators’ Cuba trip

CalWatchdog: Two more legislators ID’d who went on lobbyist-organized Cuba junket

LA Times: Six California lawmakers took trip to Cuba with Capitol lobbyist

CalWatchdog: 7th legislator on Cuba junket identified

San Jose Mercury-News: Nora Campos’ junket to Cuba

This is Part Two of a two-part series. Part One is here.

March 29, 2013

By Wayne Lusvardi

Los Angeles-based redevelopment expert Larry Kosmont is marketing his Redevelopment 2.0 idea as a way to compete with other states that currently are out-competing California for industries.  As Kosmont puts it:

“The reason no one is buying up these old buildings is because they are too expensive for any company to retrofit them for handicap access and just to make it work.  So they export those jobs to Texas or Glendale, Arizona where they can buy a cheap building.”  

But this doesn’t explain the hot e-commerce market where e-tailers must have warehouses close to Los Angeles’ consumer markets.  And if part of the problem is obsolescent buildings, why does Kosmont’s bill replace “blight” with “unemployment” as the criterion for redevelopment?

Under the previous system the state eliminated in 2011, “blight” commonly was used to justify redevelopment. But that idea generally has been discredited.

The main effect of Kosmont’s Redevelopment 2.0 would be to try to divert e-tailing warehouse and distribution facilities from new, state-of-the-art facilities in the Inland Empire to old, obsolescent industrial districts in Los Angeles County. Kosmont’s Redevelopment 2.0 effectively would steer development from politically Red to Blue areas.

But even with Redevelopment 2.0, Los Angeles can’t compete with the much cheaper land prices in the Inland Empire.  Indeed, Los Angeles property prices could be going higher. A forecasted tight industrial building market for 2013 will result in the market finding the best sites for e-tailing warehouses in close-in areas to Los Angeles consumer markets.  Location is so critical in e-commerce that one source said:

“Location-sensitive industrial users will either need to pay more for high-end space, or lease in buildings with less-than-optimal operational efficiency potential.” 

This may mean re-using older industrial facilities in some cases.

e-Commerce competition is also inside L.A. market

Los Angeles County industrial real estate markets are not competing for e-commerce with Texas or Arizona, but mainly with each city within their own market area.  All that would happen from Kosmont’s proposed bill, AB 690, would be an unnecessary wild scramble for each city to capture e-tailers with tax increment financing.   It would be better to just even the playing field by not using redevelopment at all.

Kosmont’s Redevelopment 2.0 would issue bonds to fund vague jobs programs.  Using bonds to fund social programs is risky and is what almost bankrupted New York City back in the 1970s.

What government does best is help facilitate new infrastructure.  The infrastructure is already mostly in place in the older “factory belt” areas of Los Angeles County.  The current federal low interest rate policy makes tax-exempt bonds and tax-increment financing to retrofit old industrial buildings mostly superfluous.

Building  “parks, libraries, and bike lanes,” as Kosmont’s bill also proposes, would only create more jobs that have no economic multiplier effect.  And financing such jobs would end up costing about 50 percent more because of bond interest.

Blue Jobs Model Failing

AB 690 is just a way for depressed communities to tax themselves to create more jobs that would be taken out of the private sector and shifted into the public union sector.  A good example of this already happening is El Monte, where the Blue Jobs Model — high taxes and many government jobs — is failing. In El Monte, seven out of the top 12 employers are governmental.  Of the five remaining large private employers, two have gone out of business.

El Monte needs to bring more private sector jobs into its economy.  AB 690 would add a lot of redevelopment agency jobs and costly makeshift private-sector jobs.  It wouldn’t guarantee bringing an e-commerce industrial user into El Monte more than what might occur without AB 690.  

AB 690 Unneeded

A flaw in Kosmont’s bill — and in the old model of redevelopment as well — is that local voters will always vote to capture business away from more competitive perceived communities.  Redevelopment creates the psychology of a competitive jobs “horserace” that ends up robbing school districts of needed property tax revenues.

As the California Legislative Analyst’s Office has concluded, redevelopment doesn’t create new jobs, it just shifts them around.  Most jobs created by redevelopment would have been created by the private sector in the same communities in the same time frame anyway without it.

This is Part One of a two-part series. Part Two is here.

March 28, 2013

By Wayne Lusvardi

Redevelopment 1.0 died statewide in 2011 when Gov. Jerry Brown phased it out, mainly because it was robbing local school districts of needed property tax revenues.

Now Los Angeles-based redevelopment expert Larry Kosmont has written a bill, AB 690, to bring “Redevelopment 2.0,” supposedly to rejuvenate “old factory belts” in former industrial areas.  The bill will be sponsored by Assemblymember Nora Campos, D-San Jose. The Southern California Association of Governments and the Los Angeles County Business Federation have signed on to support it.

But would it bring back jobs in “old factory belt” areas, especially areas with closed aerospace plants that Kosmont is targeting in such cities as as El Monte, South Gate, Montebello and Huntington Park?

The problem in those areas is not the lack of “tax increment financing,” which under Redevelopment 1.0 uses “hypothetical future gains in taxes to subsidize current improvements.” Instead, the lack of jobs and economic growth is due to the new market realities of e-commerce.

Tax increment financing is a tool used by redevelopment agencies to “upzone” older commercial and industrial properties for a higher use, but freezes the property tax assessments at the old levels.  The increase or “increment” in newly created taxes then is used to repay bonds to assemble land and build infrastructure such as roads, utility lines and rail service to develop shopping malls and industrial parks.

L.A. County’s old factory belt

In Los Angeles County’s “old factory belt,” the land for industrial use has mostly already been assembled, the infrastructure is in place, and rail service is already available from the Alameda Rail Corridor that links the ports with wholesale distribution hubs.

In Los Angeles County, the Alameda Corridor East already is in the process of being upgraded with 22 new grade separations at a cost of nearly a half billion dollars —  $498.5 million — to reduce vehicular congestion along local truck routes.  The Alameda Corridor created traffic congestion that is frustrating truck shipping times to and from local warehouses and end customers.

Kosmont’s AB 690 does not propose to use the old criteria for redevelopment — the elimination of “blight” — for his proposed “Job and Infrastructure Districts” that would have to be approved by 55 percent of the voters.  Instead of blight, Kosmont’s bill proposes to substitute unemployment as the criterion for redevelopment instead.  But what apparently has gone unrecognized by Kosmont is that what is mostly inhibiting job growth in Los Angeles County’s “old factory belt” is industrial building obsolescence or “blight” caused by the retail market shift to e-commerce.

e-Tailing changing industrial real estate

e-Tailing — the buying of retail goods online — has changed the industrial real estate market.   One third of all large industrial building space in the United States in 2012 was for “e-tailers” and e-commerce.  This has been called the shift from “bricks and mortar” retail outlets to “bricks and clicks” online retailing.

The shift has resulted in increased demand for big-box industrial warehouses, defined as those more than over 400,000 square feet. That’s the equivalent to nine football fields in floor space, with 36-foot high ceilings, mezzanines and sprinkler systems. The space accommodates state-of-the-art storage racking and logistics automation and robotics systems.  Kosmont’s bill is being advertised as a way “to bring a city and a developer together to remake an abandoned warehouse into a supermarket or a modern industrial facility.” But the website, “Area Redevelopment,” aptly summarizes the prospects for re-using old industrial buildings for e-tailing is infeasible:

“New-generation industrial is five times more labor intensive than traditional retail distribution facilities, requiring more parking, mezzanine build-outs, increased building automation, and other features that are difficult or impossible to retrofit in older buildings.” 

Showcase property for proposed AB 690

Proponents of the new bill are directing newspaper reporters to the former Crown City Plating facility at 4350 Temple City Boulevard in El Monte (see photo here) as a prime candidate for Kosmont’s version of redevelopment-lite.  According to the State Employment Development Department, the unemployment rate in El Monte is 12.6 percent, with 6,500 people jobless, compared to 9.8 unemployment for all of California.

This 1956-built, 179,948 square foot building on a 7.3-acre site is too small and its ceiling height too low for e-tailing.  And rehabilitation always costs more than new construction. Newspaper reports also fail to mention that this vacant facility is located on a former Superfund site.  Crown City Plating went bankrupt in 2008.

Kosmont’s proposal would likely end up subsidizing new industrial building construction at a time when interest rates are so low that no public subsidy would be needed.  The Federal Reserve’s “Zero Interest Rate Policy” (ZIRP) has rendered tax-exempt bond financing superfluous.

What the “old factory belt” in Eastern San Gabriel Valley and Los Angeles Industrial core has going for it is Class I rail access.  This already provides what is called intermodal methods of transporting goods from ships to rail to trucks to UPS or Fed-Ex delivery to customers’ doors.

Part Two of this two-part series is about e-tailing competition.