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All the facts may never be known of how the California Chamber of Commerce, working last year through the Western Growers Association, ousted a couple of Democratic Assembly Speaker John Perez’s incumbent members and replaced them with Democrats more acceptable to business interests.

With some juicy back stories and backbiting from two 2012 Assembly races already spilling over into 2014 campaigns, however, we thought it would be worth checking out some of the intriguing behind-the-scenes activity that went down.

A couple of things are indisputable: 1) Everyone involved in West LA’s AD 50 and especially Marin-Petaluma’s AD 10 has an agenda; 2) And Calbuzz has friends on all sides of both. So unraveling what happened is an exercise in political Rashomon, with sharply conflicting versions from people we normally consider reliable sources.

We also know that we’ll see lots more of this kind of thing in the future — in both Democratic and Republican races — as the top-two primary system encourages moderate candidates with guts and gumption to take on left- and right-wingers in hopes of getting into a run-off election where independent and other-party voters can provide the margin of victory.

What makes these two Assembly races particularly intriguing is the fact that both Republican and Democratic strategists were crucial in electing moderate-to-liberal Democrats who were perceived as less beholden to labor unions and thus more palatable to business interests.

There’s also the fact that the California Chamber and Western Growers – after thumping Mr. Speaker Himself — appear to have tried to hide their involvement by working through shell vendors, sharing valuable data and personnel and failing to report their spending until they were exposed months later. (HT to Dan Morain for digging into this whole issue.)

Whether any laws were broken, we can’t say. But it has the noxious odor of a clumsy attempt to secretly launder money to avoid Perez’s wrath. (Although, with term limits, we think his bark is a lot worse than his bite.) As one Republican consultant told Calbuzz, “It’s always the money that trips people up.”

JobsPAC Takes on Democrats

The story begins not long after California’s newly-drawn district boundaries were adopted for the June 2012 election, when political operatives working for the California Chamber’s JobsPAC began drawing up a list of heavily Democratic districts in which they thought that, if they couldn’t elect a Republican, they could at least toss out labor liberals and replace them with more moderate Democrats.

As they had in the past, the Chamber’s JobsPAC hired Republican and Democratic strategists – this time Rob Stutzman and Steve Glazer — to help them pick candidates and manage independent expenditures, in hopes of shaping a Legislature more to their liking than the labor-liberal government Speaker Perez and Senate leader Darrell Steinberg hoped to consolidate.

Hiring Glazer was an especially deft touch in that he was a longtime ally of Gov. Jerry Brown’s and had just managed Krusty’s electoral trashing of Republican eMeg Whitman. Spending records appear to show both he and GOPer Stutzman were paid at a rate of $15,000 a month.

Glazer was assigned to AD 10, where the Chamber preferred San Rafael City Councilman Marc Levine over incumbent Assemblyman Michael Allen, former executive director of the Service Employees International Union Local 707 and nine-term president of the North Bay Labor Council.

Glazer also consulted on AD 50, where the Chamber preferred Santa Monica Mayor Richard Bloom, a family law attorney and coastal commissioner, over incumbent Assemblywoman Betsy Butler, who had previously worked for the California League of Conservation Voters, the Environmental Defense Fund and the Consumer Attorneys of California.

Perez Wants Glazer Out

Working through JobsPAC, Glazer commissioned polling in the races, by Jim Moore of Moore Methods for AD 10 and by Dave Metz of Fairbank, Maslin, Maullin, Metz & Associates (FM3) for AD 50.

Before Moore’s poll was completed, however, we’re told that Speaker Perez told Gov. Brown in a phone call that he was unhappy that Brown’s longtime political consultant – Glazer – was running independent expenditure campaigns against two of his incumbents.

Perez was also upset with Allan Zaremberg of the Chamber, with whom he thought he had an understanding that the business group would contest races, but not against his incumbent members.

What Brown said to Perez is a matter of conjecture. One source says Brown told Perez essentially that Glazer is his own guy, that the governor wasn’t paying him, and that he had no control over him. What Brown later said to Glazer is also unknown: two sources said Brown asked Glazer to step down. Glazer refused to confirm or discuss any conversation with Brown.

What is known is that sometime in late September, Glazer backed out of the two races. Why? “After discussions with JobsPAC in September, I did step out,” he told Calbuzz. “We agreed that it would be in the best interest of these candidates that I no longer be involved.”

Before he stepped down, apparently, Glazer had arranged for Jim Crounse, of what was then the Mack|Crounse Group in Virginia, to handle the campaign mail for the biz group’s IEs. He would have used Jim Stearns of San Francisco, but Stearns had a conflict – the California Teachers Association was a major client of his and was supporting Perez’s incumbents.

For whatever reason – perhaps because his partner Kevin Mack had built up so much business with labor unions – Crounse billed the business group through one of their shell companies — Blue Works LLC. (The conflicting interests later caused Mack and Crounse to break up their firm.)

Farmers Take the Cheese

But before any mail was sent out to voters, Glazer backed out of the races and Stutzman took over as consultant; suddenly the new patron for all the work was the Western Growers Association – not the California Chamber of Commerce and its JobsPAC. The Growers’ PAC was titled “Family Farmers For a Better California.”

But the Growers weren’t starting from scratch – they had valuable polling from Metz and also from Moore, whose baseline survey of the 10^th AD had been completed Sept. 6. (Metz apparently later did a tracking poll in the 50^th AD but Moore did no more work in the 10^th AD after Glazer bailed). They also had opposition research. (When, long after the election, the Chamber filed amended spending reports, it showed nearly $100,000 worth of data had been given to the Western Growers.)

The IE campaigns against Butler and Allen were then funded by the Western Growers with Stutzman as consultant, paid commissions, he says, out of the $526,388 that the Growers paid to Blue Works. Calbuzz could find no evidence that Glazer did any work for either campaign after late September. Or that he ever was paid by Blue Works, the Growers or Stutzman.

Here’s how our friend Juliet Williams of the Associated Press outlined the problem facing the Chamber and Western Growers: “The arrangement was not reported before the election, as required by law, so both organizations could face substantial fines if the state’s political watchdog agency determines that they deliberately failed to report the exchange.”

AD50 and Pervert Teachers

Betsy Butler was especially vulnerable.

Back in June she had abstained from voting in committee for a bill by Sen. Alex Padilla that would have allowed school districts to more easily fire teachers for committing physical abuse, sexual abuse or drug-related acts upon their students. The bill had been prompted by the case of 61-year-old teacher Mark Henry Berndt of Miramonte Elementary in South L.A. who had been found with hundreds of photos of his third-grade students — bound, gagged, crawling with cockroaches and sometimes fed semen.

Despite opposition from the California Teachers Association, it flew through the Senate. But Butler’s abstention, one of four in committee, helped kill the bill in the Assembly. Not only did Anderson Cooper highlight the bill on CNN, but local media savaged Butler. “Will Betsy Butler’s Sex Pervert Vote Kill Her Political Career?” asked the LA Weekly.

Not surprisingly, her opponents used the issue to kill her political career.

The Western Growers didn’t like her anyway since she’d sponsored AB 2346, ghost-written by the United Farmworkers Union, placing growers on a list of “high hazard industry employers” and requiring shade and water for farmworkers. Gov. Brown vetoed the bill.

Outspent and with far less institutional Democratic Party support, Bloom won the seat 50.5-49.5% — a squeaker.

AD10 and a Union Boss

Marc Levine’s victory over Michael Allen was almost as close.

With Allen’s extensive union background, the Levine campaign and especially the Western Grower’s IE had a fat target in a district that while 54% Democrat, includes 22% independents and 19% Republicans.

In their materials targeted to Republicans, the Western Growers IE labeled Allen a Sacramento insider, bankrolled by unions. Among the charges: “Allen has received a staggering $606,175 in campaign contributions from special interest unions, an amount that represents 41% of his all-time fundraising – more than $245,000 of it came from public employee unions.”

Allen, they said, also voted for seven “job killer” bills, costing the region 500 jobs and tens of millions in tax revenues and, to boot, as a union rep in 1995 he “insisted on keeping union jobs in a local hospital even though it might force the hospital to close.”

What really pissed off Perez and his allies was the fact that the mailer was really good. And effective. Levine, after coming in second in the June primary, won the seat 51-49%.

The Great and Powerful Speaker of the Assembly had lost two incumbent seats. Despite his bullyboy threats to punish anyone who opposed his people, the Western Growers had kicked his ass.

War on Chamber, Growers and Glazer

But the story doesn’t end there.

With Glazer himself now seeking an Assembly seat, there’s a campaign swirling around Sacramento to make him and others pay for having been involved in the campaigns against Perez’s incumbents. The AFL-CIO’s political committee is planning to take up the question, later this month, of whether any of the Democratic consultants involved should be placed on the unions’ Do Not Patronize (DNP) list.

According to Steve Smith, spokesman for the California Labor Federation, the unions aren’t happy about consultants who count labor among their clients producing nasty anti-labor campaign propaganda. And they don’t like that “they went to lengths to hide the source of the funding.” Although who, exactly, tried to hide the funding is open to debate.

What makes the potential DNP issue complicated is that the anger seems to stem mostly from Perez, who lost two incumbents. His own political consultant, Doug Herman, has been working for months in the Los Angeles mayor’s race for Eric Garcetti, who has been bashing Wendy Greuel as a tool of the greedy unions. In fact, The Strategy Group, Herman’s firm, has billed Garcetti at least $1.3 million, of which about $10,000 a month appears to be for Herman’s consulting. That doesn’t seem to bother Perez: that’s just about ideology and principle, not about “his” members.

Another political twist in the the effort to show that Glazer was disloyal to the Democrats, is that his strongest opponent in the 2014 race in the 16^th Assembly District, is Tim Sbranti, who is chairman of the California Teachers Association Political Involvement Committee and past president of the Dublin Teachers Association.

As a moderate Democratic proponent of pension reform, Glazer poses a threat to certain public employee unions close to Perez who have shown little willingness to compromise on state pension costs. The district is 40% Democrat, 34% Republican and 22% independent – no slam dunk for a labor liberal.

Other Agendas at Work

Sbranti’s consultant is Gale Kaufman, chief political adviser to the CTA, who has made it clear she and her union are outraged by the subterfuge the Chamber and Western Growers used to hide their roles in ousting Perez’s incumbents. “This is no accident,” she told Calbuzz. “This was all done in a coordinated fashion. This wasn’t sloppy bookkeeping. They didn’t want the Democrats to know what they had done.”

At the same time, Kaufman is none too happy about Glazer’s role against Democrats on behalf of JobsPAC; clearly, it would benefit her client – Sbranti – if Glazer’s name were to appear in a complaint filed with the Fair Political Practices Commission, even if he was just mentioned as part of the historical narrative. Then, Sbranti or an IE on his behalf, could produce mail charging “Glazer Named in FPPC Investigation of Money Laundering.” We don’t know for a fact that such a complaint is in the works but there’s speculation in Sacramento that’s what’s coming next.

Calbuzz has even caught wind of a rumor floating around Sacramento that Perez has told members of his Democratic caucus that he intends to demand that Gov. Brown endorse Sbranti in the 16^th AD. Whether Brown would throw his longtime adviser – Glazer – under the bus in order to have peace with Perez and the CTA, is unclear. It’s hard to imagine, but we hear politics can be a nasty business.

Bottom Line

For now,  although he says he did everything Perez asked of him,  Glazer is on the defensive. Perez and the CTA still want him out of the way. And every minute he spends explaining how he didn’t sell out the Democrats is time spent on Sbranti’s turf.

As we said, the top-two primary system will surely create more of these situations. In Silicon Valley, for example, incumbent U.S. Rep. Mike Honda, 71, is being challenged by Ro Khanna, 36, a former Obama administration trade representative.

President Obama, House Minority Leader Nancy Pelosi and most of the Congressional delegation have endorsed Honda, who is a longtime lead-pipe cinch vote for labor on almost every issue. But Khanna, who picked up Lt. Gov. Gavin Newsom’s endorsement, has a campaign team that includes Obama strategist Larry Grisolano, partner in AKPD, the firm founded by David Axelrod, and David Binder, of San Francisco, one of labor’s preferred pollsters.

Khanna will have to go negative on Honda – the first task of a challenger is to show why an incumbent should be tossed out. But how he goes negative will be telling: will Khanna try to make Honda out to be an out-of-touch do-nothing? Or will he tag him as a hand-puppet for labor union interests at odds with Silicon Valley?

Welcome to the world of the top-two primary.