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Archive for 2010



Difi Detritus Meets Campbell Jihad Fall-Out

Sunday, February 28th, 2010

Are you going to believe us or your lying eyes? Our aging tickers have almost, finally, chilled out from all the excitement of the big finish to Dianne Feinstein’s epic Dance of the Seven Veils (free at last, free at last!)

So it’s time to shoot the wounded among the insiders and other hacks who kept retailing the rumors that she was about to jump into the governor’s race – Psst! We hear it’s any minute now! – months after all right-thinking people agreed that this would never happen.

Few find themselves in a state of such embarrassing exposure  as Sherry Greenberg, who blogs occasionally over at California Majority Report.

As grizzled, veteran, long-time Capitol Hill Outsiders, Calbuzz was most impressed with Greenberg’s blog credentials as “a long-time Capitol Hill insider.” And her connections came in pretty handy when she wrote, on Feb. 15, that Indiana Senator Evan Bayh’s surprise retirement was a clear signal that DiFi was about to flee Capitol Hill for our parochial governor’s race.

So, what does (Bayh’s move) have to do with California?  Quite possibly a lot…I can’t help but think that faced with serving in the minority in the next Senate, Dianne Feinstein might decide that trying to cure California’s many ailments is more desirable than remaining in the Senate.  Certainly, the gridlock in California is no worse than that in the US Senate and the opportunity to cap her career by becoming California’s first female governor and the savior of the state might outweigh remaining in a likely hostile Senate.

While Feinstein just missed making history as the first female Vice Presdiential candidate in 1984, she has the opportunity to become a role model to young girls by showing that a woman can be a tougher and more effective governor than a film action star…

The record will show that:

a) Generally speaking,  “I can’t help but think” is not what you want to lean on for your Well-Informed, Reliable Source.

b) Difi “just missed making history as the first female Vice Presidential  candidate in 1984” by a considerably greater amount than former Rep. Geraldine Ferraro, who actually did make history as the first female Vice Presidential candidate in 1984.

c) To the surprise of no one, Feinstein officially announced she wasn’t running for governor. Less than 48 hours after Greenberg’s 7:10 p.m. post.

Considerably more effective at covering his tracks was Willie Brown, who had at least stopped flogging the Feinstein rumors a couple of weeks earlier.

Faced with the fact-based reality that she wasn’t running, despite his best and repeated efforts to sell it in the news pages of the Chronicle, Mr. Speaker at least had the grace to construct an entertaining narrative to explain away his energetic bid to keep the DiFi speculation alive for the past year.

The first indication I got that she was cooling to the idea was when Jerry Brown and his wife, Anne Gust, were seated front and center at her 30th wedding anniversary party at the Fairmont a few weeks back.

For some of us, politics is a bit like the Mafia: Kiss you one day, kill you the next. Not Dianne. She would never invite someone she was planning to run against.

As Mrs. Humphry Ward famously said: “The first law of story-telling – Every man is bound to leave a story better than he found it.”

He told me he taught The Political History of the Mideast: Tom Campbell was doing some serious whistling past the graveyard Friday, hyping a new poll from something called M4Strategies that was featured in a Fox & Hounds piece proclaiming he’s widened his lead in the GOP Senate primary.

Team Campbell was doubtless glad to have something to talk about other than his past ties to Professor and Islamic jihad figure Sami Al-Arian, a nasty little controversy that suddenly gave Dudley Do Right foes Carly Fiorina and Chuck DeVore a hammer with which to bash him over the question of how good a friend Campbell is to Israel.

Conservative blogs were smoking for several days with tough attacks on Campbell over the Al-Arian connection before LATer Seema Mehta put the legal and policy issues in context. As for the politics of the matter, check out Politico’s reprise of how a Senate candidate in Florida lost his race amid a similar controversy involving the good professor.

How about 10 cents on the dollar? DBI honors to Chronicler Wyatt Buchanan, whose piece on whether California can/will/should go bankrupt  was excellent. Buchanan also gets credit for capturing the quote of the week, from L.A. Assembly member and newly-minted congressional candidate Karen Bass, who’s pretty darned pleased with herself for her not-very-impressive term as Speaker:

“I am one of those that serves out of a calling and not out of a personal ambition,” she said. And I guess I’d add that my biggest weakness is really my incredible humility.

Please don’t call my wife: Don Ringe takes a hard look at the candidacy for governor of alleged Prince Frederic von Anhalt, ninth husband of Zsa Zsa Gabor.

Why Meg Went Negative on Poiz; Hell Freezes Over

Saturday, February 27th, 2010

Inquiring minds want to know: Scoop of the week honors to KTVU-TV in Oakland, which did the first story on new, 15-second eMeg spots attacking Steve Poizner, after some anonymous hero saw them suddenly turn up in the ad rotation and heads-upped the newsroom.

Channel 2’s Frank Sommerville did a report on “Mornings on 2,” about three hours before Poizner put out a release attacking eMeg for the attack, and about five hours before Team Whitman acknowledged the ads in their own release with its link to their “Why We Can’t Trust Steve Poizner” web site.

The key question — Why is Whitman bashing Poizner when she’s sitting on a 30-point lead?

The official line on that, from Sarah Pompei, Whitman’s volcanic mouthpiece,  is that “our campaign strongly believes Californians deserve a lengthened debate between the candidates.” (We note, however, that debate just won’t be uncontrolled or in front of actual human beings like, oh say, delegates to her party’s state convention).

After talking to other analysts and Dem and Reep consultants, we’ve got some more believable theories:

1) Meg’s got a glass jaw and she’s scared. Worried that her support is soft and that Poizner could smack her upside the head, the Armies of eMeg are a bit panicky and are striking out even though nobody knows who they’re talking about. (Steve Poizner: Isn’t he somebody’s insurance agent?) “Best case — she’s proactively pre-emptive; worst case — she bounces the rubble,” said Dan Schnur, director of the Jesse Unruh Institute of Politics at the University of Southern California.

2) She’s trying to drive him out of the race. Her consultants have done everything they can to cajole, bribe and threaten anyone in earshot in an effort to clear the field because eMeg does not want to run in a competitive primary. So it’s a last ditch attempt — $400,000 over four days, according to one GOP source — to convince Poizner not to run.

3) She’s hoping to kill the baby in the crib — to finish him off before he goes on the air. Who knows how much he could really spend. He’s damn near as rich as she is, so why couldn’t he spend 40 or 60 or 100 million dollars? Better to force him now to have to defend himself than to leave the path open for him to run positives for himself and negatives against her.

We think it’s a bit of all of the above. And we were, frankly, surprised to see eMeg rip into the Commish when she’s sitting on such a big fat lead. But then, we don’t think Stevie Wonder can be driven from the race, so all this negative airtime aimed at someone nobody knows seems kinda nutso to us. Unless you’re the media consultant getting 15% on the buy, of course.

We’re pretty sure the cry for a cease fire from folks like Bill Whalen, the former Pete Wilson operative now ensconced at the Hoover Institution, is pretty much a pipe dream.

“Which candidate is willing to move back to the high road and halt this destructive cycle before the Republicans produce what California Democrats want: a tarnished nominee?” Whalen asked.

Calbuzz bet: neither.

And the winner is: The prestigious Little Pulitzer for Investigative Punditry this week goes hands-down to Mark Paul, of the New America Foundation’s California Program, whose Friday piece in Calbuzz offered a moment of clarity about the state budget that should transform the way the issue is covered in the governor’s race.

Putting on a clinic of Actual Reporting, Paul not only shattered the easy demagoguery of every candidate who’s ever mouthed the phrase “waste, fraud and abuse,” but also put the lie to Meg Whitman’s bogus argument that she’ll fix everything by firing 40,000 surplus state employees.

Paul offered a healthy dose of fact-based reality to show that: a) the state is spending less this year than five years ago, despite population growth of two million people; b) the number of state employees per 1,000 Californians has declined over the last three decades; c) half of the bloated state workforce that eMeg is always caterwauling about consists of UC employees (many of whom are paid from independent sources) and guards and other workers in state prisons (many hired to keep up with demand generated by Three Strikes and other throw-away-the-key measures).

Excepting these two groups, the number of all other state employees has decreased over the last 30 years.  So: The next time Her Megness talks about cutting 40,000 workers, she can mean to do only one of three things:

1-Dump UC staff and faculty.

2-Fire many thousands of corrections officers, necessitating the early release of many thousands of felons.

3-Cut other state programs – which ones, please? – to 1970s levels.

…if you examine California state government as a business, one of the first things you are likely to notice is how few people it employs compared to others in its “industry.” Over that past decade, California has ranked between 46th and 50th among the states in the annual federal listing comparing state workforces to population; its state workforce is about 25 percent smaller than the national average.

Mark’s piece is a must-read. It’s here.

Hell Freezes Over: Mega-kudos to Ken McClaughlin of the Murky News, who scored the first in-depth interview with eMeg since she botched her way through a session with the LAT’s Michael Finnegan more than a year ago.

Three things jump out to us from the interview:

1-On the budget, Whitman has no clue what she’s talking about (see above).

2-On social issues, she’s all over the lot – equal rights for gays but no gay marriage, against illegal immigration but in favor of benefits – but she’s basically a liberal.

3-On governance, she confirmed her belief that the sign on the door of the Capitol says “Empress of California,” not “Governor of California.”

Asked by McLaughlin how she would be more successful than Arnold, who peddled much the same tired campaign wheeze as her when he first ran in 2003, eMeg said she would “get to know every senator and assembly member by name, letting them know what she ‘will and will not put up with.’”

What she “will and will not put up with?” Really?

Memo to John Perez: Put that cookie down, clean your room and then do your homework! And I mean NOW, Mister!

OK Meg and Steve: Let’s Analyze California, Inc.

Friday, February 26th, 2010

By Mark Paul
Special to Calbuzz

Meg Whitman says she wants to run California state government like a business.

Given all we’ve learned in the past decade about business — Enron, IndyMac, Bernie Madoff, Wall Street — some people hear that as a threat. I prefer to be hopeful. Long mired in consultant-speak and ideology, California government and politics could use a dose of the practices by which the best businesses thrive — open-eyed realism about a firm’s strengths and weaknesses; rigorous analysis; strategic thinking.

That hope withered the other day when I heard one of Whitman’s recent radio ads. “We know spending has been out of control in Sacramento,” she crooned from the speakers. Et tu, Meg? Say it ain’t so.

The only people who “know” state spending is “out of control” don’t know what they’re talking about. According to the latest budget estimates, the state will spend less this year than it did in 2005, when there were two million fewer people in California. And as this chart shows, when measured as a share of California ’s personal income, state spending is at the lowest level in a generation. If it’s smaller government you want, California has already got it, the smallest since Ronald Reagan’s final years in Sacramento .

When they say what they’ll do about “out of control” spending, Whitman and Steve Poizner, her rival for the Republican nomination for governor, point quickly to how many people work for the state. Here, too, they have flunked their business due diligence.

Yes, more people work for the state today than a generation ago. As this chart shows, their number has almost doubled in the last 35 years. But so has California ’s population. If state government employment were increasing faster than state population, you’d be worried. In this chart, you can see the opposite is true. The number of state employees per 1,000 Californians has declined since the mid-1970s.

And there’s more to the story. Not everybody counted in the tally of state employees cited by Whitman and others is a state worker in the usual understanding of that term.  More than 120,000 of them work for the University of California and California State University , public institutions that get some of their money from the state but control their own hiring.

The University of California , in particular, is a collection of many businesses, involving everything from undergraduate teaching to research institutes to hospital medical centers to nuclear weapons laboratories.

Most of the revenue for UC comes from sources other than the state budget — research grants, student fees, patient reimbursements for medical care, management fees, gifts. That explains how the university added nearly 25,000 people to its “state employee” headcount over the past decade even though it today receives less direct support from the state than it did in 2001.

It’s nonsensical to count all those new UC employees, who get paid from sources other than the state, as evidence of “out of control” spending in Sacramento . But that’s the horse Whitman is riding.

When you take all the university employees out of the mix, and look only at state civil servants — the blue line in this chart—there’s been almost no change over a generation. But the story doesn’t end there.

As everybody knows, California over the past three decades has locked up a lot more criminals, in the process quadrupling the number of people working in corrections. Corrections employees now make up a third of the state workforce, and an even larger share of workers paid from the deficit-ridden general fund.

In this chart, the green line shows that, when university and corrections employees are taken out of the mix (and they make up half the total), what people think of as the state “bureaucracy” has shrunk dramatically relative to California ’s population. In fact, since 2001, the number of non-college, non-corrections state workers has barely increased — even as the number of Californians has grown by the equivalent of the state of Louisiana .

That’s why, if you examine California state government as a business, one of the first things you are likely to notice is how few people it employs compared to others in its “industry.” Over that past decade, California has ranked between 46th and 50th among the states in the annual federal listing comparing state workforces to  population; its state workforce is about 25 percent smaller than the national average.

And if you think about it, that shouldn’t come as a surprise. Since 1967, every California state budget has been proposed — and later subjected to line-item veto — as by a fiscally conservative governor: Reagan, Brown, Deukmejian, Wilson, Davis, and Schwarzenegger, skinflints every one of them. If you believe California is out of line in how many people it employs in state government, you haven’t been paying attention.

Control the size of the state workforce? Sorry, Meg and Steve. Been there, done that.

Mark Paul, senior scholar and deputy director of the California program at the New America Foundation, is co-author, with Joe Mathews, of California Crackup: How Reform Broke the Golden State and How It Can Be Fixed (UC Press, forthcoming).

eMeg Offshore Tax Dodge? Why’s Poiz Waiting?

Thursday, February 25th, 2010

By pledging to release his income taxes for public inspection, Steve Poizner has set a trap for Meg Whitman: If she doesn’t release them, you gotta ask, “What’s she hiding?” And if she does, we can expect a treasure trove of damned interesting reading.

To wit: The question raised by the California Accountability Project – a wholly owned, million-dollar subsidiary of the Democratic Governors Association – “Is Meg Whitman still shifting her millions into offshore tax havens to avoid having to pay her fair share?”

In a tidy op research package — tied up in a bow and delivered as a “Memo to Reporters: Meg Whitman’s Bermuda and Cayman Islands Tax Shelters; Why She Must Release Her Taxes”‏ — Nick Velasquez of the CAP showed what’s needed to take a good whack at Meg is already in the public domain.

“According to documents filed with the Internal Revenue Service, in 2007 Meg Whitman’s charitable foundation invested $4 million offshore, in Hedge Funds based in Bermuda and the Cayman Islands,” Velasquez wrote. Then he proceeded to provide citations for every charge in the missive, including this one. (in pdf).

Archipelago Holdings, Mason Capital, TPG-Axon Partners – all in Bermuda or the Cayman Islands, and all with a kind of, um, fishy odor, sitting there in the Griffith R. Harsh IV and Margaret C. Whitman Charitable Foundation – per her foundation’s 2007 and 2008 tax returns, according to our old friend Ken McLaughlin of the Mercury News.

Is eMeg one of those sneaky billionaires who’s sheltering income in offshore investments? Is she trying to avoid paying taxes that most citizens have to pay? Can we trust her to manage California’s budget if she won’t show us how she spend her own money?

(Response from Bounds or Pompei goes here). (Hey, it’s midnight, I’m going to bed – Ed.)

For eMeg, these kinds of nagging questions can be cumulatively damaging if they go unanswered. As a practical matter, ordinary folks fork over their tax returns every time they apply for a mortgage or car loan or money for their kid’s college, so sympathizing with the sanctity of a rich person’s demand for privacy about their returns is a bit of a stretch for most voters.

Which is why you can almost hear the doomsday baritone in the Poizner ad:

“What does Meg Whitman have to hide?”

It’s time for your close-up, Commish: In an interview with the AP’s Juliet Williams, Poizner took issue with anonymous sources recently quoted by the Contra Costa Times (and deconstructed by us) to the effect that The Commish intended to wait until May to start advertising on TV.

Writing that Poizner now is “set to launch an aggressive television advertising campaign to counter months of advertising by billionaire rival Meg Whitman,” Williams reported that:

Poizner acknowledged that Whitman has had free rein to define herself to voters in part because of his failure to launch a paid media campaign but he said that would soon end.

Whitman has given her campaign $39 million so far and has been spending at an unprecedented pace. Poizner, a multimillionaire who developed GPS chips for cell phones, said Tuesday that he will add to the $19 million he already has given his campaign.

“We’re going to spend it all,” he said. “I mean, it’s not like I’m trying to keep my resources for the general (election) or something. We’re going to spend what it takes.”

It isn’t clear from his comments how soon “soon” might be, however. We hear nothing is imminent in terms of advertising, and the campaign may in fact be dark for several weeks. Which all right-thinking people agree would be a miscalculation.

Job one for Team Poizner right now is to reassure his supporters, as well the media and political  professionals, that he’s in the race for real. Nothing would make that point more clearly or swiftly than putting a couple million dollars on the air right here, right now.

Hoping that eMeg takes a few hits from the Jerry Brown IE’s is wishful thinking – we hear there’s no there there yet, cashbox-wise – and while eMeg may take a few love taps from editorial writers over the tax disclosure issue, what will be gained by waiting, if the game plan is to “spend it all?” Inquiring minds want to know.

(Memo to Poizner Accounting: Kindly remember to pay that Calbuzz ad invoice before spending it all.)

California Reform Movement 2010: R.I.P.

Wednesday, February 24th, 2010

Calbuzz is way overdue for a rant about the rich irony of the once-promising reform campaign to convene a state constitutional convention ignobly sinking because of…a lack of money.

Really?

The last time we checked, the membership of the Bay Area Council, the corporate coalition whose staff leadership got the ConCon effort started in the first place, included: Amgen, AT&T, BofA, Blue Shield, Chevron, Comcast, Del Monte, Franklin Templeton Investments, Genentech, Goldman-Sachs, Hewlett-Packard, Kaiser Foundation Health Plan, Levi-Strauss, Oracle, Pacific Gas & Electric, Shell Oil, T-Mobile, Verizon Wireless and Wells Fargo, along with more than 200 other of the most successful companies with operations or outposts in the Bay Area.

And so: The effort to qualify for the ballot the group’s signature issue foundered because it couldn’t raise more than a measly $3 million for the campaign? Come on. These guys make Gordon Gekko look like Mother Teresa.

The plain fact is that if the high-end companies that populate the council wanted the convention to go, it would have gone. Instead they slammed shut their wallets, the clearest evidence there could be that they don’t want major reform, because they already know how to navigate the twisted, dysfunctional, Byzantine, gridlocked system just the way it is; unlike average citizens, they can penetrate it with mega-bucks campaign contributions and initiative campaigns.

Exhibit A: PG&E. The Pacific Greed and Extortion Co. will spend up to $35 million on its special interest Prop. 16 on the June ballot. The measure would block cities and counties from going into the public power business without a two-thirds local vote. As Chronicler David Baker reported :

So far, PG&E has supplied all of the proposition campaign’s funding, totaling $6.5 million. On Friday, PG&E took the unusual step of telling its investors that funding for the campaign would affect the company’s 2010 profits, lowering them by 6 to 9 cents per share. PG&E Corp. provided the information while reporting its 2009 profit ($1.22 billion, down from $1.34 billion in 2008) and giving its forecast for 2010.

PG&E describes the ballot initiative as a matter of fairness.

Fairness, indeed.

Our sources inside the Bay Area Council and its “Repair California” political wing note that member companies are also holding back their cash in preparation, as one put it, “for a nuclear arms race in November.”

They’re worried about at least two measures to split the property tax roll to allow higher taxes on business properties, an oil extraction tax, limitations on insurance rates, repeal of Proposition 13′s two-thirds requirement for local tax increases and the potential to overturn AB 32′s climate change provisions. And that’s just for starters.

California Backward: So pathetic are current prospects that Repair California is seriously considering throwing in with the California Forward folks and creating some kind of alliance or united front for reform, even if they have to drop their proposal to actually call a constitutional convention and just push the measure that would authorize voters to call a convention.

California Forward, that other paragon of reform circa 2009, is meanwhile dying a somewhat slower death. The incrementalist sponsors of this once-ballyhooed goo-goo group  are also having trouble, um, raising money – to campaign for two proposed initiatives.

Excuse us if the Calbuzz Paranoid Caucus entertains the notion that what you like to call your  Corporate Interests lost interest in this sucker the minute we blew the whistle on Cal Forward’s backroom attempt to dump the Sinclair Paint exemption, which would allow a majority of the Legislature to raise revenue by imposing mitigation fees on business.

Much of what’s left in one of the Cal Forward measures is spinach-and-broccoli good government stuff like performance-based budgeting, while the other tracks a similar initiative sponsored by the League of California Cities. The one element well worth saving in the Cal Forward soup is authorizing communities to raise the local tax by 1 cent with a majority of the people — which is NOT in the League’s “Keep Your Mitts Off Our Budgets” measure.

Some of the Cal Forward folks — most of whom have been totally feckless at raising money — think they can still get a) a billionaire angel to be named later to fund their ballot measures or b) a two-thirds vote in the Legislature to put something like their measure on the November ballot that would allow approval of a state budget by a majority vote, instead of the two-thirds required now. FFC. Good luck with that, guys.

Meanwhile, the bottom line on the collapse of the goo-goos was articulated nicely by the L.A. Times edit page:

This election year will bring many promises about bold leadership and new ideas, but there comes a point in most democratic societies at which the machinery gums up and some of the most cherished hallmarks of liberty — campaigning, voting, serving in office — descend into mere ritual. That’s when it’s time to rebuild the machinery.

Or not.