As CBS Los Angeles reported, Brown tied his support for the legislation to his broader climate agenda, which has seen him praise Pope Francis’ recent encyclical on environmental matters and earn a trip to Vatican City to push for global change.

“‘We’ve got a serious problem here,’ he told KCAL9 Political Reporter Dave Bryan via satellite. ‘Burning oil and gas and coal and diesel is a big part of the problem. We’ve got to find new bio-fuels. We have to be more efficient. We’ve got a lot to do. And by the way, if we do nothing, the cost is unimaginable.'”

Brown has done his best to use his final term in office to amplify that message whenever possible. His trip to the Vatican, Sci-Tech Today noted, will be just “the latest of several international trips the governor has taken to urge others to do more to curb global warming. He’s also been rallying states and provinces to sign an agreement to match California’s target for reducing emissions by 2050.”

Stricter standards

While Brown has pushed the message, Democrat allies in Sacramento have crafted the content of regulations to match. De Leon’s bill, SB350, “imposes three significant clean-energy goals by 2030,” U-T San Diego’s Steven Greenhut observed: “Reducing the use of petroleum products in automobiles by 50 percent; increasing to 50 percent (from a current 33-percent goal) the amount of energy that uses renewable sources such as solar and wind power; and doubling energy-efficiency in current buildings.”

In fact, the legislation was crafted around achieving the outsized goals Brown set for ratcheting down California’s statewide emissions levels. As an interim step, the governor has proposed that the state “cut emissions to 40% below 1990 levels by 2030. It’s an ambitious target that members of his administration insist is achievable,” according to Sci-Tech Today.

De Leon himself has not shied away from using aggressive language to characterize the bill’s sweep and ostensible urgency, as Greenhut noted. “We need to break the stranglehold the profit-driven oil companies have on our economy and give consumers better options to power their homes and cars in cleaner, healthier and more sustainable ways,” de Leon said in remarks posted to his website.

Brown, for his part, has openly acknowledged the level of industry outrage the bill guarantees. “Well, of course, the people who are gonna sell 50 percent less petroleum are not only gonna have questions, they’re gonna have a fierce, unrelenting opposition,” he told KCAL-9.

But the coming regulatory shakeup has made for some strange industry bedfellows. “One of the issues both utilities and solar installers have raised,” according to GreenTech Solar, “is that distributed solar should not be treated any differently than utility-scale solar as the state crafts the rules around meeting the new 50 percent target.

A legislative scramble

Part of the urgency behind SB350 has been driven by environmental regulations voted into law years ago. AB32, the big climate bill passed in 2006, “established a goal of cutting the state’s greenhouse gas emission to 1990 levels by 2020. To meet that goal, emissions need to fall by six percent between 2013 (the latest year for which figures are available) and 2020,” CalMatters reported. “Brown and other political leaders expect that to happen,” according to SCPR, although, to date, “emissions have fallen only slightly since 2009, when the recession ended.”

The minor dip has been attributed to the difficulty involved in pushing California’s energy usage much lower than it is already. “Greenhouse gas emissions in California dropped by 7 percent from their peak in 2004 to 2013, compared to 9 percent nationwide over the same period,” according to CalMatters. “Reducing emissions is harder here because the state’s economy is already relatively energy-frugal.”

In 2010, for example, the California Public Employees’ Retirement System faced criticism for “thumbing its nose” at a state law written by Sen. Joel Anderson, R-El Cajon, intended to force CalPERS to divest in firms doing business with Iran.

Calpensions.com explained this defiance at the time:

Consultants have estimated that boycotts of corporate stocks to end racial apartheid in South Africa and reform the tobacco industry cost CalPERS and CalSTRS billions of dollars, with no hard evidence of any results.

Now when pressured to sell or “divest” investments, a new policy adopted by the California Public Employees Retirement System last year gives priority to the “fiduciary duty” to manage money for the benefit of retirees.

Pressure to sell or “divest” investments for other reasons is met by “constructive engagement” with targeted corporations, if dumping the holdings and barring future purchases are not in the best financial interest of members of the retirement system.

CalSTRS more pliant than CalPERS

Now CalPERS and CalSTRS are facing new pressure to take stands on issues. Senate President Pro Tem Kevin de Leon, D-Los Angeles, is pushing a bill that could force the giant pension funds to begin scrapping their coal investments.

CalSTRS is taking a less pugnacious stand than CalPERS did over Anderson’s law. According to Capitol Weekly, “The CalSTRS board directed its staff and consultants last week to evaluate the risk of investments in thermal coal companies, jumping ahead of pending legislation that would require CalSTRS and CalPERS to divest thermal coal holdings.”

But CalSTRS is in a bind over demands from the California Federation of Teachers that it end its investments in gun makers. More from Capitol Weekly:

Last week the California Federation of Teachers led a large and emotional protest of the CalSTRS failure to divest holdings in the manufacturer of an assault rifle used to kill 20 children and six educators at a Connecticut elementary school in December 2012.

“CalSTRS has hundreds of billions in investments,” Jeff Freitas, CFT secretary-treasurer, told the board. “Even if we take a loss in removing this portfolio from our retirement fund, it is the right thing to do.”

CalSTRS quickly sold $3 million in stock of two other gun manufacturers. But its holding in the assault rifle manufacturer, estimated at $8.8 million two years ago, is part of a $375 million investment in a long-term Cerberus private equity fund.

If it broke the Cerberus contract, CalSTRS could suffer a major financial loss and, some fear, perhaps the ability to contract in the future with top private equity funds, which are expected to provide above-market returns.

Investment czar: Divesting doesn’t cause change

While CalSTRS seems more willing than CalPERS to change its investments to take political stands, Chris Ailman, its top investment advisor, isn’t convinced this approach makes sense. He made his views known at the last CalSTRS board meeting:

“I’ve been involved in five divestments for our fund,” Ailman told the CalSTRS board last week. “All five of them we’ve lost money, and all five of them have not brought about social change.”

This observation about divestment being symbolic, not consequential, appears particularly on point with gun manufacturers, given constitutionally guaranteed rights of gun ownership.

Steinberg himself was not shaken up about the news. He expressed confidence that similar work would be done in some other way, according to the Sacramento Bee. “I have every confidence that Kevin is committed to oversight, but there are many ways to do it,” he said. “This is the way I chose to do it and I’m sure he will have his way.” Steinberg’s oversight office was funded directly through the office of the president pro tem.

Personal priorities

That was an expense de Leon clearly did not wish to maintain, despite his willingness to throw a lavish party this October for his swearing in as president pro tem. Many critics, the Los Angeles Times reported, found the bash an “inappropriate extravagance at a time when the state Senate is struggling to shake off the taint of corruption scandals and regain public trust.” Earlier this year, three Democratic state senators were indicted on federal corruption charges.

The celebration’s $50,000 tab was not covered by de Leon himself. Instead, the California Latino Legislative Caucus Foundation, which recently attracted five-figure donations from AT&T and Chevron, footed the bill.

De Leon’s approach to spending was recently on display in his shakeup of the state Senate staff. “Last month, de León laid off 39 employees, including staff who wrote bill analyses, did research and performed secretarial duties,” the Bee reported. A shoeshiner, paid a yearly wage of $13,000 “to provide information to Capitol visitors,” also was let go. Staff costs for Steinberg’s oversight office ran to about $380,000 yearly.

De Leon’s choice to trim budgetary costs by reducing staff, however, has not attracted much attention or scorn. The same cannot be said for his elimination of the Senate’s government oversight office.

Blowback

Steinberg’s oversight office produced a high volume of reports that made a substantial impact. As the Bee reported:

“Investigations found that a lack of scrutiny allowed sex offenders to treat drug addicts at state rehab clinics; that California’s mortgage lender foreclosed on homeowners who were current on their loans; that redevelopment agencies spent money without adequate accountability; and that tax breaks had cost the state $6.3 billion more than anticipated. Other reports made recommendations for curbing fraud in the home health care system and found that an illogical bureaucracy made it hard for regulators to detect fraud in state child care programs. The findings were frequently used as the basis for Senate oversight hearings and also led to new legislation.”

The office’s track record has led some political observers to raise eyebrows and pen editorials calling de Leon’s judgment into question. De Leon’s handling of the issue has left Democrats vulnerable to criticism for trying to return to business as usual following this year’s spate of humiliating scandals, as recent editorial in the Los Angeles Daily News suggested:

“In a further testament to ethical tone-deafness, Senate Democrats have chosen to revive their annual Pro Tem Cup, the golf event and major party fundraiser at Torrey Pines that has charged special-interest representatives up to $65,000 to trade strokes with lawmakers. The event was canceled this year because it wouldn’t have looked so good with Senate Democrats Leland Yee, Ron Calderon and Rod Wright facing ethics charges.”

In another coincidence of timing, cops in de Leon’s district have been handed a new oversight body. In the wake of serious ethics charges of their own, the Los Angeles County Sheriff’s Department was put under civilian oversight by the Board of Supervisors, as the Times reported.

And in a second coincidence, the de Leon controversy has unfolded at the same time as a similar one in the federal government, although this time it’s Republicans mainly involved.

Rep. Jason Chaffetz, R-Utah, revealed he’ll take a less pugnacious approach to the House Oversight Committee than the chairman he is replacing, Rep. Darrell Issa, R-Calif.

In 2012, Issa’s actions led to the House of Representatives holding Attorney Gen. Eric Holder in contempt of Congress over the Fast and Furious weapons scandal.

Last month, Gov. Jerry Brown tried to reverse UC President Janet Napolitano’s 25 percent tuition hike over five years. But she outmaneuvered him at a Board of Regents meeting.

Now the California Senate is moving to the head of the class. Senate Bill 15 is by state Sen. Marty Block, D-San Diego. As his website explains:

“The proposal upgrades the State’s current financial aid system so it can support all California students more effectively and provide incentives for completing college within four years. The plan also proposes a higher tuition premium for non-resident UC students and a transition of the Middle Class Scholarship program.”

It was co-introduced by new Senate President Pro Tem Kevin de Leon, D-Los Angeles. The tuition increase for out-of-state students would top $4,000.

Although the UC and CSU systems have expressed interest in the bill, its fate will be out of their hands. The Assembly has not yet offered any enthusiasm.

The bill was a response, according to the San Jose Mercury news, of how Napolitano “put the onus on the Legislature and the governor to repair the damage: If they came up with more money, she suggested, the tuition increases would not need to be as large.”

Ending independence

A more radical bill is Senate Constitutional Amendment 1, by state Sen. Ricardo Lara, D-Bell Gardens. The bipartisan bill was co-authored by Sens. Anthony Cannella, R-Ceres, and Joel Anderson, R-El Cajon.

SCA1 would amendment the California Constitution to take away the UC’s independence.

“The bill doesn’t list specific powers lawmakers would have over UC, where the governor-appointed regents are currently the highest authority,” the Chronicle reported. “But, under the bill, the elected officials would have the final say over any policy approved by the regents, from tuition levels to executive compensation.”

While the UC system has controlled its finances autonomously since the original California Constitution was signed in 1848, the Cal State system faces oversight from Sacramento — an arrangement seen as a model by Lara and Cannella.

As a constitutional amendment, SCA1 would need a two-thirds vote of of both houses of the Legislature to be put before voters in 2016.

Frustration

California voters have not yet weighed in on SCA1, but current polling has showcased their own frustration.

The Public Policy Institute of California found strong opposition to tuition increases and tax increases alike, with 77 percent opposing hikes that hit students, and 58 percent siding against hits to their pocketbooks.

Yet the poll also found just over half of respondents felt funding for public higher education was too low.

The desire for more spending but lower taxes and tuition will be hashed over in the Legislature, by the governor and by voters over the next several years.

In American political parlance, a “czar” is a government official put in charge of a project. For example, the head of the federal Drug Enforcement, currently Michele M. Leonhart, commonly is dubbed the “drug czar.”

Now state Sen. Kevin de Leon, D-Los Angeles, is proposing to establish what in our state could be called a Green Bank Czar. This still is in the early stages, but is important to watch, especially because he is slated to become the next state Senate president pro tem.

He is advancing Senate Bill 1121, the California Green Bank Act. It will be heard by the state Senate Rules Committee, chaired by current Senate President pro Tem Darrell Steinberg, sometime before March 22.

SB 1121 reads:

“This bill would state the intent of the Legislature to enact legislation that would establish the California Green Bank to coordinate, align, and enhance the state’s efforts to provide energy finance programs for advanced energy technologies and projects throughout the state.”

Note the word “intent.” If this bill passes, a second bill would be needed to provide the exact details of what the Green Bank would do. But the structure of the new state bureaucracy would be roughly what is called for in SB 1121:

“[W]ould establish a board of directors for the California Green Bank to be composed of appointees by the Governor, the Legislature, the Treasurer, the Department of Finance, the California Public Utilities Commission, the California Energy Commission, and the California Air Resources Board, who possess expertise in financing and green investments.”

The California Green Bank would be led by:

“[T]he position of an executive director to manage and conduct the business of the California Green Bank, subject to the direction of its board.”

Although not called that directly, the executive director would be the Green Bank Czar.

Green Bank functions

The Green Bank bureaucracy’s functions would be quite extensive over the state economy and would include:

“(1) Reducing rates and decreasing costs for California ratepayers while expanding the accessibility and affordability of clean energy for all Californians.

“(2) Increasing private investment in clean energy projects that currently are not able to obtain financing in traditional capital markets at a reasonable cost by providing a variety of financial tools to stimulate private investment.

“(3) Achieving California’s environmental and economic objectives by reducing greenhouse gas emissions and increasing investments in disadvantaged communities.

“(4) Facilitating efficient, low-cost private financing markets for clean energy projects.

“(5) Supporting California’s unique position as a worldwide leader in clean energy innovation by helping to bring innovative technologies to market.”

Number (3), for example, would tie the Green Bank bureaucracy in with AB32, the Global Warming Solutions Act of 2006, which mandates reducing greenhouse-gas emissions in California to 1990 levels by 2020.

Any legislation implementing the Green Bank would have to spell out how it would interface with the California Air Resources Board, which under AB32 is implementing current greenhouse-gas reduction efforts.

Existing Green Bank

However, California already has a Green Bank established in the State Treasurer’s Office.  Treasurer Bill Locker’s website explains:

“The State Treasurer’s Office does its part by serving as California’s Green Bank. The office invests a portion of funds from the Pooled Money Investment Account (PMIA) in bonds that finance green projects throughout the world and operates two authorities that finance and administer programs and projects that promote green jobs and green California industries, keep our air and water clean, and encourage conservation of natural resources and the use of alternative energy.

Some of the projects include:

• The California Alternative Energy and Advanced Transportation Financing Authority provides tax-exempt bond financing, sales tax exclusions and other financing mechanisms.  Part of CAEATFA’s package of green financing was authorized under Assembly Bill X1-14. That’s a no-down-payment loan program repaid by property tax reassessments for renewable energy projects. CAEATFA has granted 48 businesses tax exclusions, among them Tesla Motors, Cal-Tech, Bloom Energy and First Solar.
• The California Pollution Control Financing Authority is a “conduit” that issues tax exempt bonds for waste recycling projects.  In 2013, it issued 3,640 loans for $233,561,098.
• The California Industrial Development Financing Authority Commission provides tax-exempt bond financing under a joint powers arrangement with local communities to help businesses finance capital expenditures such as land, construction, renovation and equipment.
• The California Statewide Communities Development Authority provides tax-exempt bond financing to non-profit businesses, for-profit and non-profit low-income housing developers including a Sustainable Energy Bond Program and Property Assessed Clean Energy Program.
• When Gov. Jerry Brown eliminated 625 local redevelopment agencies in 2011, redevelopment in many cases transformed into green energy programs at the state level.

California’s new Green Machine politics

In 2009, President Barack Obama and created 38 executive branch “czars.” The most high profile czar was Van Jones, a “Special Advisor on Green Jobs.”  Jones had previously made a name for himself by founding nonprofit agencies in California, such as “Green For All.” And he wrote a book, “The Green Collar Economy: How One Solution Can Fix Our Two Biggest Problems.”

In New York, machine politics was historically founded on boroughs and immigrant neighborhoods. In the middle of the last century, Robert Moses was the czar and “power broker.”  In Chicago, machine politics was based around wards and Mayor Richard Daley.

In California, a new Green Machine politics is emerging, centered around “joint powers authorities,” regional “Strategic Action Committees” between state and local government and green “Watershed Groups” that would usurp local home rule.

If the new Green Bank Czar position is created, it would maintain immense influence over all these projects.

A century ago progressive politics came into power in California to banish the influence of the political machine of the Southern Pacific Railroad over the Legislature. 

Ironically, today progressive politics seems to be establishing — perhaps even without conscious knowledge — a new machine politics within the Legislature based around green economies and industries. If SB1121 passes, and further legislation enacts what it calls for, there would be a Green Bank Czar who could oversee it all.