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IN THIS ISSUE – “When a political party enjoys that much uncontested power, there’s no penalty for stepping over ethical or legal lines”
Dan Schnur, former head of the state Fair Political Practices Commission, on California political corruption convictions
- California Leads US in Local Government Corruption Convictions
- Follow the Bouncing Bill: Tracking Final Fate of Critical Legislation
- Assembly Dems Push Back on Newsom’s Last-Minute Legislative Plays
- Legislators Offer Rare Criticism of Governor for Healthcare Bill Cost Estimates
- “Hostile Takeovers”?: Newsom Sends CHP & Prosecutors to Fight Crime in Oakland, Other Cities
- Newsom Has 2 Years to Match Jerry Brown’s Achievements
- Tech Industry Layoffs Continue
Capitol News & Notes (CN&N) curates California policy, legislative and regulatory insights from dozens of media and official sources for the past week. Please feel free to forward this unique client service.
FOR THE WEEK ENDING AUG. 30, 2024
California Leads US in Local Government Corruption Convictions
NY Times
Jose Huizar’s downfall at Los Angeles City Hall was as stunning as his rise to success, a political tragedy that, like many in the land of dreams, has become a familiar one.
Born to a large family in rural Mexico and raised in poverty near the towering high rises of downtown Los Angeles, he overcame enormous odds to graduate from the University of California, Berkeley, Princeton University and U.C.L.A. law school.
He returned to his old neighborhood in East Los Angeles to run for the school board and eventually the City Council, where he gained control of the influential committee that approves multimillion-dollar commercial development projects across the city.
His spectacular fall — after F.B.I. agents caught him accepting $1.8 million worth of casino chips, luxury hotel stays, prostitutes and a liquor box full of cash from Chinese developers — was cast by federal prosecutors as an epic Hollywood tale.
They persuaded a judge in January to sentence him to 13 years in prison on charges of tax evasion and racketeering.
Over the last 10 years, 576 public officials in California have been convicted on federal corruption charges, according to U.S. Justice Department reports, exceeding the number of cases in states better known for public corruption, including New York, New Jersey and Illinois.
California has a larger population than those states, but the recent wave of cases is attributable to much more than that, federal prosecutors say.
A heavy concentration of power at Los Angeles City Hall, the receding presence of local news media, a population that often tunes out local politics and a growing Democratic supermajority in state government have all helped insulate officeholders from damage, political analysts said.
This week, when Mr. Huizar is scheduled to report to prison, he will become the third recent Los Angeles City Council member to go down on charges of corruption, part of a much larger circle of staff aides, fund-raisers, political consultants and real estate developers who have been charged in what federal authorities called an “extraordinary” recent wave of bribery and influence-peddling across California.
Two other members of the City Council, Mitchell Englander and Mark Ridley-Thomas, were convicted earlier on various corruption charges, as was the former head of the city’s Department of Water and Power. A fourth City Council member, Curren Price, is facing charges of embezzlement, perjury and conflict of interest.
In March, a jury convicted Raymond Chan, a former Los Angeles deputy mayor whom prosecutors called the “architect” of the Huizar conspiracy, also on racketeering charges. In all, more than 50 key political figures and executives in Los Angeles and San Francisco have been convicted since 2019. Many more were investigated or resigned after allegations surfaced.
California also had cases of corruption in the days, now in the distant past, when Republicans held statewide office.
Political analysts say the Democrats’ present lock on political power leaves little opportunity for Republicans to effectively raise the issue of corruption as a campaign issue.
“When a political party enjoys that much uncontested power, there’s no penalty for stepping over ethical or legal lines,” said Dan Schnur, a former head of the state Fair Political Practices Commission and a former Republican who is now an independent.
In Los Angeles, Mr. Huizar’s influence was even greater than that of most other council members: Not only did his district include downtown Los Angeles, where billions of dollars of foreign investment was transforming the skyline, but he also controlled the Planning and Land Use Management Committee that approves major developments all over the city.
“When you have that kind of power, pay-to play schemes run amok,” said U.S. Attorney Martin Estrada, whose office has led many of the recent prosecutions in Los Angeles. “I wouldn’t call it ordinary what these folks did. It is extraordinary.”
Mr. Huizar, 55, pleaded guilty to racketeering, a charge often used in prosecuting organized crime or street-gang cases. The $1.8 million in bribes he received was twice the amount that recently convicted Sen. Robert Menendez of New Jersey was charged with accepting.
A two-year-old reform effort to curb some of the extraordinary power conferred to individual council members in Los Angeles has foundered.
“When you talk about reducing individual council member discretion over land use, there is real pushback,” Nithya Raman, a council member who sits on the city’s charter reform committee, said.
What happened in Los Angeles had been playing out on a smaller scale for years in the small industrial cities of Los Angeles County that have been described as a “corridor of corruption”: South Gate, Bell, Lynwood and Vernon, among others, where civic leaders were prosecuted for taking bribes or tapping into city funds.
“You have large immigrant populations, largely marginalized communities that do not have the resources to watch their politicians closely,” said Mr. Estrada, the U.S. attorney, whose parents emigrated from Guatemala. “I think you have a pretty unique cauldron of factors in Los Angeles and the greater Los Angeles area that allow for these things to happen.”
The arrival of large-scale investments from China starting in 2011 heightened the risks.
Over the next half-dozen years, about $26 billion of direct investment from Chinese firms and their billionaire owners arrived in the state.
Downtown Los Angeles underwent a dramatic revival. New high-rise condos and hotels went up, abandoned warehouses were converted into loft apartments and galleries and expensive restaurants opened.
The scandal was almost inevitable, said Miguel Santana, the former top administrative officer of Los Angeles.
“The depth of power that a council member has around development in their own districts almost facilitates the level of corruption that took place,” Mr. Santana, now president of the California Community Foundation. “That level of power still exists today.”
San Francisco has had its own round of corruption cases, many of the recent ones surrounding the former Department of Public Works chief, Mohammed Nuru, who pleaded guilty in 2021 to accepting gifts, including a tractor for his ranch outside the city, a Rolex watch and millions of dollars, from various people with business before the city.
Florence Kong, the owner of a recycling company, pleaded guilty to offering some of the bribes in exchange for city contracts. Zhang Li, a Chinese developer also accused of offering bribes, signed a deferred prosecution agreement.
MORE:
(EDITOR’S NOTE: As the Legislature is scheduled to adjourn Saturday night, CN&N next week will publish final bill actions.)
Follow the Bouncing Bill: Tracking Final Fate of Critical Legislation
CalMatters
For California laws, the buck does really stop at Gov. Gavin Newsom’s desk.
While the Legislature approves hundreds of bills each session — and will add to that list before adjourning Saturday — Newsom decides whether they become law.
Last year, Newsom vetoed 156 bills and signed 890, or about 15%, a similar ratio as in 2022, when he blocked some very significant ones. In 2021, he vetoed less than 8%. While the Legislature can override vetoes, it takes a two-thirds vote in both the Assembly and Senate and that rarely happens. Governors can also allow bills to become law without their signature, but that doesn’t occur very often, either.
Here are some noteworthy bills being tracked by CalMatters:
Assembly Dems Push Back on Newsom’s Last-Minute Legislative Plays
Politico CA Playbook
After years of being asked to support Gov.Gavin Newsom’s last-minute legislative plays, Democrats in the Assembly are pushing back.
The Legislature could be headed for a special session next month to address energy issues after assembly members resisted the governor’s initial efforts to hurriedly pass a bill this week to give the state more authority over oil refiners’ supplies as a way to try to prevent gas price spikes.
Newsom’s plan got a cool reception from the Assembly Democrats when presented on Tuesday, in part because of concerns that it could raise gas prices, but also because it presses on a years-long sore spot between the two branches of government that are supposed to be equal — one where legislators feel like they are often being jammed on the governor’s eleventh-hour requests without much regard for their own concerns and vetting processes.
In response to the resistance, the governor leveraged the idea of a special session. Now, members say they’re prepared to take him up on the offer.
“I’m not here just to let somebody have a win on a press conference,” said one Democratic legislator familiar with negotiations, who was granted anonymity to candidly discuss sensitive subjects.
“We want to dive in and actually solve this issue.”
The tension reflects lawmakers’ long-simmering frustrations with how Newsom approaches the Legislature.
In 2022, he pressured Democrats to pass a heap of oil industry-opposed climate bills, later taking credit for the package and lamenting that he had to “jam [his] own Democratic Legislature” to get it done.
In 2023, lawmakers also passed a set of infrastructure billsthat he floated at the very end of budget negotiations. And earlier this year, he was lobbying Democrats to back a scheme to negotiate the tough-on-crime Proposition 36 off the ballot with a counter proposal, only to pull that measure at the last minute.
“Over time, at least since I’ve been here, legislators have become increasingly frustrated over these last-minute deals,” said Assemblymember Alex Lee, a progressive Democrat.
Many lawmakers are still feeling raw over how the administration handled Prop 36, with some arguing it ultimately left both the Legislature and the governor with egg on their faces.
“I do think that eroded trust for members,” said the Democratic legislator familiar with negotiations.
In response to lawmakers’ complaints about feeling repeatedly rushed, the governor’s office said it has been working with them on the refinery policy for months, and that the first recommendations from the Division of Petroleum Market Oversight were shared with the Legislature at the start of the year.
Still, many Democrats in the Assembly feel they need more time to consider any unintended consequences. The final language of the proposal went into print just before 5 p.m. Wednesday, giving the Legislature about three days to pass it before the end-of-session deadline.
To be sure, many members say they’re aligned with the governor on the ultimate goal — to protect consumers — and say a special session would give them more time to get it right.
Assemblymember Isaac Bryan, chair of the Natural Resources Committee, said: “I think we’ve got to do all we can to respond to this crisis, and whether we complete that work by the end of the week, or we’ve got to come back and do a special session, I think we’re all committed to getting this done.”
The Senate, for its part, isn’t keen on sticking around Sacramento past Saturday, with multiple lawmakers telling Politico there’s no reason they can’t get it done by the end-of-month deadline.
Republicans, meanwhile, are glad to see their counterparts push back against the governor.
GOP Assemblymember Devon Mathis said he thinks Newsom should have better relationships within his own party at this point in his tenure.
“This throwing a temper tantrum, saying, ‘if you don’t give me what I want, I’m gonna force you into a special session’ …. I mean, I’m kind of glad my colleagues on the other side of the aisle are calling bullshit,” Mathis said.
Legislators Offered Rare Criticism of Governor for Healthcare Bill Cost Estimates
CalMatters
Lawmakers and advocates say Gov. Gavin Newsom’s administration is making inflated estimates about the cost of legislation, with some suggesting his subordinates have been trying to kill the bills without making the governor politically accountable for the outcome.
“While people are dying on the streets from a lack of access to behavioral health care treatment, state agencies continue to fabricate exorbitant cost estimates,” Sen. Dave Cortese, a Democrat from Campbell, told CalMatters after one of his mental health proposals died recently in the Assembly Appropriations Committee.
Sen. Scott Wiener, a Democrat from San Francisco who authored another mental health bill that died recently, said in a public hearing last month that the administration’s cost estimate of his bill was “extreme and outrageous.”
The pointed accusations from Democratic lawmakers and health care advocates who tend to be friendly with the Democratic governor are extraordinary because such criticism is rarely made in public. The examples also stand out because they challenge the administration’s response on one of the governor’s top priorities, mental health.
The administration refused an interview request with CalMatters and would not provide more detail to explain the cost estimates. By email, however, a spokesperson insisted the costs were accurate and rejected the idea that they were intentionally inflated.
“It’s outrageous and inaccurate for anyone to suggest these numbers are fabricated or artificially inflated,” Rodger Butler, a spokesperson for Newsom’s Health and Human Services Agency, said in an email. “Legislative fiscal analyses from state government departments are informed by real-world, on-the-ground experience implementing legislative mandates.”
Whatever the motivations, four health care bills with controversial cost estimates died quietly earlier this month in the Senate and Assembly Appropriations committees even after each had advanced without a single “no” vote from a Democratic legislator.
The Appropriations Committees are focused on the cost of legislation, especially in a year when the state is struggling with a budget deficit. The four bills were moved to the committees’ “suspense files” along with 263 other controversial or costly bills. Each committee then killed the bills in their respective suspense file with a single vote.
Mike Gatto, a former Democratic lawmaker from Los Angeles who chaired the Assembly Appropriations Committee, said inflated cost estimates from a governor’s administration are nothing new.
When an executive-branch agency provides “a significantly exaggerated cost” on a piece of legislation “it’s generally a big flashing light that the administration dislikes the bill and that the governor would likely veto it,” he said.
It can be advantageous for the governor when legislators quietly kill those bills, he said.
“Having the appropriations committee there to kill it and to take the arrows (of criticism), that is a tremendous benefit politically for any governor,” Gatto said.
https://calmatters.org/digital-democracy/2024/08/newsom-healthcare-costs-inflated-estimates/
“Hostile Takeovers”?: Newsom Sends CHP & Prosecutors to Fight Crime in Oakland, Other Cities
CalMatters
Gov. Gavin Newsom’s letter to Oakland city leaders last month urging them to change the city’s policy on police vehicle chases seemed out of the ordinary: a governor weighing in forcefully on a somewhat-obscure element of local policing.
But it’s part of a larger, slowly unfolding effort to exert state influence on law enforcement in Oakland and other California cities as crime concerns rise during an election year. In the past six months, Newsom has deployed California Highway Patrol officers to Oakland, then quadrupled their shifts; sent National Guard prosecutors to help the Alameda County District Attorney’s Office with drug cases, then chastised D.A. Pamela Price for not accepting the assistance quickly enough.
The state intervention — which includes extra deployments of CHP officers, National Guard lawyers , or both in Oakland, San Francisco, Bakersfield and Riverside — plays well with some worried residents and business owners. And it may help fend off right-wing critiques of California as a liberal dystopia.
But it has drawn criticism from police accountability groups and privacy experts concerned about the effect on residents, especially communities of color.
“We’re a charter city. We have self rule,” said Brian Hofer, who chairs Oakland’s Privacy Advisory Commission, which recommends policy to the city on technology and privacy rights, including police surveillance. “We certainly need financial help, but we do not need this hostile takeover from Sacramento.”
As California’s political pendulum swings back toward tough-on-crime policies, the governor has tasked CHP officers with cracking down on auto, retail and cargo theft in Bakersfield, and fentanyl dealing in San Francisco. Oakland, however, has drawn the bulk of the state attention.
Newsom has called the CHP “the Swiss Army knife of law enforcement in the state,” and said the agency’s job in Oakland is “not to substitute, but to support” the work of city officials. He’s said the surge is temporary and will last into November.
“We’re encouraged by local reporting that crime is going down,” Newsom spokesperson Tara Gallegos said Friday. “It’s a step in the right direction for the Oakland community, but there is more work to do.”
Since CHP began surge operations in Oakland in February, the agency — tasked with helping patrol the city’s crime and traffic accident hotspots — said it has made 747 arrests, recovered more than 1,500 stolen vehicles and seized 74 guns as of Friday. Some police watchdogs expressed skepticism about those numbers; CalMatters requested documentation of the arrests and seizures but did not receive it by press time.
A spokesperson for Alameda County District Attorney Price said her office has received 11 cases connected to the CHP surge for prosecution. “Their numbers obviously don’t match our numbers,” Price told reporters earlier this month.
James Burch, a spokesperson for the Anti Police-Terror Project, said community activists see a mismatch between the specific problems plaguing Oakland and CHP’s historic emphasis on traffic stops and recovering stolen vehicles.
“We need to figure out how to support small businesses, especially those getting broken into, and we need to stop the flow of gun violence on our streets,” he said. “We don’t see CHP having the skills, the experience, the technical know-how to address these issues.”
In his letter to Oakland officials, Newsom touted a recent CHP blitz in which officers used police cars and a helicopter to chase people suspected of participating in sideshows, making five felony arrests. He acknowledged that such pursuits “can be dangerous to police, suspects and innocent bystanders.”
“But there is also extreme danger to the public in allowing criminals to act with impunity,” the governor wrote, calling Oakland’s chase policy “an outlier” and asking the city council to reconsider it.
Any CHP officers investigating crimes in Oakland should receive additional training in implicit bias, the city’s communities and aspects of the settlement agreement governing use of force and police misconduct, Burris said.
He said he was not aware of any complaints to his office about CHP stopping Oaklanders without probable cause during the surge but that his staff was monitoring the situation.
Police departments’ efforts to build trust with local communities can suffer when another law enforcement agency parachutes in for a brief period, said Jorja Leap, a professor at UCLA’s Luskin School of Public Affairs who studies gang violence and community policing.
She called the state’s deployment “a temporary fix for a deeply rooted problem” and a shift away from the efforts by cities including Oakland over the past two decades to engage with the root causes of crime.
“We have a bunch of police chiefs who all stood up and said, ‘We can’t arrest our way out of the problem,’ ” she said. “And now we’ve got a governor going, ‘Yes, we can.’ ”
Newsom has pointed out that the state has also spent millions of dollars on community violence prevention programs, including $6 million over three years for Oakland’s Operation Ceasefire. But his announcements of state public safety support to cities over the past year have focused largely on sending cops and prosecutors.
At the governor’s request, California National Guard lawyers and case analysts have been working fentanyl cases in San Francisco over the past year. Crime is down in the city, while accidental drug overdose deaths in the first six months of this year ticked down just slightly compared with the same period last year, from 405 to 373. The state help has gotten a warm reception from Mayor London Breed, and a chilly one from the San Francisco Public Defender’s office.
When Newsom said in February that he would also send California National Guard lawyers to help prosecute Alameda County drug cases, the county’s chief public defender, Brendon Woods, noted that his office was not receiving any additional state resources. “This is only going to lead to more caging of Black and Brown people,” Woods posted on X at the time.
Newsom assigned the lawyers anyway, and when he deemed that District Attorney Price was not taking advantage of the support quickly enough, he inked an agreement earlier this month to have the prosecutors work out of the California Department of Justice instead.
“We just don’t have time,” he told reporters in July. “People don’t want to wait another day. They don’t want to wait another weekend.”
MORE:
https://calmatters.org/justice/2024/08/newsom-oakland-crime-chp/
Newsom Has 2 Years to Match Jerry Brown’s Achievements
CalMatters commentary from Dan Walters
Gov. Gavin Newsom has devoted much of his second term to building a national political profile and more or less succeeded.
Why he did is less evident. He says he was helping his Democratic Party become more aggressive. National media assumed he was laying the groundwork for a presidential campaign. Or it might have been just an ego trip.
Newsom still has 28 months as governor, and the question is whether he will now pay more attention to his day job or, for whatever reason, continue his quest for relevance on the national stage.
Truth is, were Newsom’s governorship to end now his record of accomplishment would be scant, particularly if measured against that of his immediate predecessor, Jerry Brown.
Brown firmed up the state’s shaky finances, overhauled school finance, addressed overcrowding in prisons and persuaded the Legislature to reform the workers’ compensation program and public employee pensions.
Newsom promised much when he was seeking the office six years ago, claiming to be a student of governance who could deliver transformative change, such as a single-payer health care system and millions of new housing units to solve one of the state’s knottiest problems.
“I’m tired of politicians saying they support single-payer but that it’s too soon, too expensive or someone else’s problem,” Newsom said during the 2018 campaign, winning the support of advocates.
After the election, however, Newsom backed away, citing the difficulties of merging multiple systems and terming his pledge “aspirational.”
Newsom has extended Medi-Cal, California’s health care program for the poor, to millions of additional Californians, including undocumented immigrants, and he can claim more or less universal coverage. However, its costs are massive, while the state budget is plagued by red ink, and poor Californians still struggle to find medical providers.
“As governor, I will lead the effort to develop the 3.5 million new housing units we need by 2025 because our solutions must be as bold as the problem is big,” then-Lt. Gov. Newsom wrote in 2017. During his inaugural speech in 2019, he went even further, announcing a “Marshall Plan for affordable housing.”
While Newsom has signed multiple bills meant to erase roadblocks to construction and he cracked down on communities that impede development, housing construction has not markedly increased and the shortage has continued to grow.
Housing is not California’s only societal basic that’s lacking. Others include a dependable water supply, adequate electrical power — not only to meet current demand but the immense amounts that a carbon-free economy would require — and a truly embarrassing deficit in reading and other academic skills vis-a-vis other states.
Newsom has championed pre-kindergarten education to improve the latter but the jury is still out on its efficacy. The same uncertainty about outcome hovers over another Newsom initiative, improvement of care for the mentally ill, and, of course, the homelessness crisis has actually worsened during his governorship.
Newsom’s greatest mistake, and one that will haunt the state indefinitely, was his 2022 declaration of a $97.5 billion budget surplus. “No other state in American history has ever experienced a surplus as large as this,” Newsom bragged, igniting a frenzy of spending.
The surplus was a mirage. Newsom and his budget team assumed that a one-time spike in revenues would continue indefinitely, creating what was later acknowledged to be a $165 billion error over four years.
The phantom surplus morphed into a multi-billion-dollar deficit, forcing Newsom to slash spending, dip into emergency reserves and borrow money to paper over the gap. The underlying divide between income and outgo will still be there in 2027 — when Newsom hands the keys to his successor.
Tech Industry Layoffs Continue
Siliconvalley.com
Fresh waves of job cuts have surfaced at Cisco Systems, which will slash dozens more workers in San Jose as tech companies eliminate hundreds of positions in the latest round of staffing reductions.
Cisco Systems has decided to chop another 53 jobs in the South Bay, according to an official WARN notice the legendary tech titan sent to the state Employment Development Department.
Other tech companies that recently revealed plans for layoffs in the Bay Area include Cuberg and Five9, according to this news organization’s review of the state EDD WARN notices.
The most recently disclosed layoffs will eliminate 353 tech industry jobs in the Bay Area, the WARN filings show.
— Cisco, 53 job cuts in San Jose. The networking company says the effective date is Oct. 18.
— Five9, 33 layoffs, including 30 in San Ramon and three in San Francisco. The software company said the effective date was Aug. 20.
— Cuberg, an advanced battery company, is cutting 196 jobs in San Leandro as part of a permanent closure of its site. The effective date is scheduled for Oct. 19.
— AppLovin, a software firm, decided to jettison 61 jobs in Palo Alto. These reductions occurred Aug. 15.
— Fastly, an Internet and software company, eliminated 52 jobs in San Francisco. Those cuts are slated to take place Oct. 11.
Penumbra, a biotech firm, is cutting 71 jobs in Alameda. These reductions are scheduled for Nov. 1.
Tech companies launched an elevated level of staffing reductions starting in early 2022.
In 2022, 2023 and so far in 2024, tech companies have revealed plans to chop slightly more than 46,000 jobs in the Bay Area.
While tech companies have also hired new workers as they pursue new opportunities such as artificial intelligence, electric vehicles and green energy endeavors, the layoffs have unleashed an overall effect on tech hiring.
Over the 12 months that ended in July, the Bay Area lost a net total of 16,000 jobs, according to seasonally adjusted estimates released by Beacon Economics that were based on the EDD’s monthly reports.
The San Francisco-San Mateo metro area lost an astounding 14,700 tech jobs during that one-year period
The South Bay lost 4,300 tech jobs during the one year ending in July, according to the Beacon assessment.
The East Bay managed to add 2,900 tech jobs, the Beacon estimate determined. Solano County gained 100 tech jobs.