Tag Archives: corporate America

Yacht Party Hijackers

George Skelton finds a nut:

The two-thirds rule is not used merely to protect taxpayers from politicians trying to reach deeper into their pockets. It’s used by special interests — mainly big business — to game the system; a tool handy for legislative leverage, or extortion. If you don’t give us what we want, we’ll withhold the votes needed for the two-thirds.

It’s about buying and selling. Last Friday, at the all-night windup of this year’s regular legislative session, Democrats weren’t in a buying mood.

This is what happened, according to Democrats, and Republicans aren’t exactly denying it: The Senate GOP blocked more than 20 bills requiring a two-thirds vote because Democrats wouldn’t cave on three unrelated demands.

This has been true for years if not decades.  The 2/3 rule does not protect tax increases, it’s a tool for the Yacht Party to hijack the process.  In this case, the GOP wanted to create a forced market for Intuit, makers of TurboTax; to increase the corporate tax breaks from the Februrary budget deal, in particular to help Chevron; and to make Roy Ashburn a lead author on a Democratic bill.  See if you can find the word “tax increase” in there.  But because the Democrats didn’t much feel like giving out even more corporate welfare or fattening the pockets of Intuit, the Yacht Party revolted.  And they knocked down 20 bills, including one that would keep domestic violence shelters open throughout the state (which is nothing more than homicide prevention) by shifting available funds, and another to allow the Treasurer more leeway to renegotiate with banks and save the state $850 million dollars.

These and the other bills, again, did not involve tax increases.  They were taken up under urgency requirements (so the policy takes effect immediately) or other factors, like changes to the budget, which necessitate a 2/3 vote.  And the Yacht Party routinely takes advantage of this, mainly out of spite and an attempt to leverage their votes to reward their corporate backers.

Ashburn candidly defends blocking the legislation: “This was an opportunity for Republicans to have some leverage.” Concerning the merits of measures buried in the fallout: “The subject matter of bills at that point was secondary to what the [GOP] caucus had decided to do with them.”

This is a pretty startling admission.  But not one anybody wasn’t aware of before now.

Skelton has deciphered the problem pretty clearly, and Democrats are well-positioned to highlight it and show the disaster of governance ushered in by the onerous 2/3 rules.

Will they?

Henry Waxman To Insurance CEOs: Show Me The Money

(Disclaimer: I have been hired as a blog fellow for Brave New Films and their Sick For Profit campaign, exposing billionaire health insurance CEOs and their profiting off of denying care.  Join the campaign on Facebook)

It’s a little shocking that the story of health insurance CEO largesse hasn’t been told, by and large, by the Congress in the debate over health care reform.  The debate has covered public options and “death panels” and Nazi comparisons and cost curves without addressing the fact that for-profit health insurance companies add almost nothing of value to access or quality of care and exist only to skim off the top and keep as much of their premiums as possible.  And they rake in giant profits at the same time.  Now Henry Waxman, no stranger to Congressional investigations, wants to put a dollar sign on those profits, specifically what money goes where.

Two powerful House Democrats have sent a letter to insurance companies asking them to provide detailed information about their conferences and retreats, executive pay, and other business practices […]

The Waxman-Stupak letter asks companies to provide, by mid-September, the compensation packages of any employee or officer who made more than $500,000 in any year from 2003 to 2008. It also asks the companies to list all their board members and their compensation.

The congressmen also want information “listing all conferences, retreats or other events held outside company facilities from January 1, 2007, to the present.”

In addition, the letter demands more basic information, such as the companies’ total revenues, net income, and total dividend payments, as well as premium revenue, sales expenses and profits.

It seems like, especially considering the prominence of the subject of health care over the past few months, this should be public information.  Here’s the full letter.

We already have a pretty good understanding of the profits of the insurance companies, as well as the rewards of their CEOs, in salary, options, and additional perks.  That was the subject of Sick For Profit, which in the first installment exposed Steven Helmsley, the CEO of United Health Group, and his $13.2 million in compensation in 2007, his $6 million dollar home in Minnesota, and his $744 million in unexercised stock options ($127 million of which he exercised in 2009).  But Waxman asking for this information puts it into an investigation.  And that gives it a different feel.  He can use subpoena power.  He can haul the CEOs before the committee.  He is in the best position to contrast the 47 million people without health insurance, and the 40 million who are underinsured, with these obscene profits.

This could get interesting.

Tostitos State Park

This is the legacy of historically unpopular Governor Arnold Schwarzenegger and his friends in the Yacht Party – corporate sponsorships for state parks.

State parks officials and nonprofit organizations scrambled Wednesday to find funding and possibly new corporate sponsors to keep as many as 100 parks and beaches open after Gov. Arnold Schwarzenegger slashed an additional $6.2 million out of the state parks system […]

State officials won’t finalize a list of park closures until Labor Day and said they hope to see the parks reopened in one to two years.

“We are actively seeking anyone who can help us with these places, all of them jewels, at a time when people need them most,” said state parks Director Ruth Coleman.

“There are many groups and corporations that will step up to the plate and try to help,” said Elizabeth Goldstein, executive director of the California State Parks Foundation, a nonprofit organization dedicated to protecting state parks. “But it would be a mistake to think that these efforts will be sufficient to replace the public funds being extracted.” […]

The crisis also triggered debate over the kinds of recognition corporate sponsors could expect in return for helping to subsidize a state park.

“We’re reaching out to all possible partners — cities, counties, nonprofits, banks, corporations, newspapers, individuals — who would be interested in helping us,” said Roy Stearns, spokesman for the state parks department. “Maybe we can find agreements that don’t alter, commercialize or degrade our state park system.

“For example, if Budweiser came forward with money for Malibu Beach State Park, we wouldn’t change the name to Budweiser Beach,” he said. “But why not put up a banner saying, ‘This park is kept open by Budweiser’ for as long as they continue helping us?

If this isn’t a hop, skip and a jump to unique licensing agreements to sell products on site, I don’t know what is.

The article makes pretty clear that, while state parks and beaches may not be financially self-sustaining, they generate major amounts of economic activity.  In fact, over the past year, the system “is currently packed with the highest visitation rates ever recorded,” according to the parks director.  This leads to residual spending in the areas around parks and beaches, increased tourism, etc.  The natural beauty of California is a major attraction throughout the world.

Thanks to Governor Hoover we must lock them up or turn to the private sector to sustain them.

All part of his plan.

…I want to also address George Skelton’s complaint that progressives somehow made their bed by voting down the May 19 ballot measures and now they must lie in it.  I’ll ignore for the moment this major error in the piece, the assertion that “state revenue has been plummeting, down 13% in the last two years even with February’s tax increases.” (um, they didn’t take effect until April, not over the “last two years”) And I won’t comment on his barely suppressed glee over eliminating cost-of-living adjustments for poor people on welfare.

Schwarzenegger and the Legislature were widely accused of scare tactics — crying wolf — when they warned about the consequences of voters rejecting the May ballot measures. The wolf just broke down the door.

So let’s do Skelton’s counterfactual.  Let’s envision a world where the ballot measures that impacted the bottom line passed.

Those were worth a little less than $6 billion.

The deficit was $26 billion.

$1 billion of those $6 billion were cuts to different programs.  If a world where cuts to certain programs means we wouldn’t feel cuts to other programs is a world you populate and exalt, I think you’re alone.

The other $5 billion was dubious borrowing.  The most contentious item in the budget, and the most likely to have been dropped in your counterfactual… was $5 billion in dubious borrowing, only to local governments.

So the consequences of voting down very unwise ballot measures was… what, exactly?  Different cuts to vital services and different dubious borrowing?

(And of course, we’d have a permanent spending cap, rather than the political spending cap we have now thanks to the conservative veto.)

CA-31: Becerra Out, Garcetti In?

Xavier Becerra, a Congressman from Hollywood, is at the least being strongly considered for the post of US Trade Representative and may have already accepted the job.  Becerra is in the House leadership as Vice President of the Democratic caucus, and while he voted for NAFTA he has since regretted doing so, and he led the fight against CAFTA and other trade agreements which he felt did not have the proper safeguards, or labor and environmental standards.  And channeling my inner David Sirota, the fact that pro-business conservatives are worried about the direction Becerra will take US trade policy confirms that he would be an excellent choice:

And now Business Week reports on some rumblings of opposition from the pro-business and free-trade camp:

Philip Levy, who’s now with the conservative American Enterprise Institute, told the mag that the choice is “troubling,” arguing that “to oppose Nafta is in many ways to lash out symbolically against trade.” A business lobbyist added to the mag that he and his colleagues are “pretty concerned.”

Well, I’m sold.

If Obama brushes off the concerns of the American Enterprise Institute (and really, everyone should) and Becerra gets the job, a very safe Democratic seat in the heart of Los Angeles would be up for grabs.  Considering the density of the city it’s actually a pretty large district (with lots of it in rapidly gentrifying Hollywood), and has a good deal of Latino voters.  However, this would be up for grabs in a special election, and the universe of special election voters is probably a smaller Hispanic universe than on a normal Election Day, so I wouldn’t say that only a Latino candidate could win here. In fact, LA City Council President Eric Garcetti represents a good portion of the district on the council.

Garcetti would be a progressive leader in the Congress and a major upgrade.  Becerra is a member of the Progressive Caucus and generally solid on the issues, but he’s not particularly outspoken, and as part of the leadership team, wouldn’t stray too much from the party line.  On the other hand, Garcetti is a smart, committed young leader, a Rhodes Scholar at Oxford and a graduate of the London School of Economics who has led on so many progressive issues in the city it’s hard to even count them all.  It would be great to have someone in the Congress with the background of dealing with key urban issues from graffiti to housing to development, while at the same time having led on important national initiatives like clean money, the war in Iraq (the LA City Council was among the first to pass a resolution opposing it) and renewable energy.  Garcetti jumped aboard the Barack Obama campaign from almost the very beginning as a California chairperson, so he would be able to tap that network of organizers pretty easily.  He would make a fantastic member of Congress, among the best in the nation in my view. (and that’s not just because he appeared on Calitics Radio on primary election night!)

Rep. Becerra would get to set trade policy, and Los Angeles would experience no dropoff in leadership.  Everybody wins!

UPDATE: In this LA Times article, Sen. Gil Cedillo is also mentioned as a possible candidate.  I’m a fan of Cedillo’s as well, particularly his leadership on the DREAM Act and his advocacy for comprehensive immigration reform.  Garcetti is quoted in the article saying “it was premature to speculate on a possible run but did not rule it out.”

Arnold’s Canadian Vacation – All-Expenses Paid!

This is about the eighth time I've seen a report simliar to this one that undisclosed donors are financing a Schwarzenegger trade mission.

Fifty-two business delegates will join Schwarzenegger on the trip, according to a list the Governor's Office released Friday. A third of those going represent interests that have donated to Schwarzenegger's campaigns.

The governor's trip will be financed by the California State Protocol Foundation, a tax-exempt organization not required to disclose its donors. California Chamber of Commerce leaders, including President Allan Zaremberg, serve as the group's officers.

The foundation is not required by law to disclose its contributors and has not done so. In 2005, the last year for which IRS forms were available, the group received nearly $2 million in revenue. It reported $1 million in travel expenditures that year after Schwarzenegger led a weeklong trade mission in China.

The excuse put forth by the Governor's spokespeople is always the same: this SAVES taxpayer money because they don't have to finance these trade missions!  Really?  What about all the corporate welfare checks that get cut as a result of this access?  What about all the watered-down regulations that cost taxpayers, not only with money but with public health and quality of life?  What about the state contracts that could go to lower bidders who don't have the same relationships (read: bribery poke) with the Governor?


Frank Russo is right:

Take a look around and you'll see that this is a bipartisan problem that needs fixing–the same way that a true reformer, Hiram Johnson– took on the railroads which controlled our state a hundred years ago. His legacy is a California Constitutional prohibition against accepting any gifts of free transportation from railroad or other transportation companies. It needs to be extended to cover today's corruption, subtle and otherwise, of our elected officials. […]

We've seen a record of obscene campaign contributions in California the last election cycle–topping $600 million dollars. The next campaign season is upon us, and the Governor has proposed bans on fundraising during certain months of the year when the budget is being considered and at the end of the session and bill signing times. The California Progress Report has railed against the influence of campaign contributions on the political process and the corruption of state government. But these other “gifts” to public officials also need to be scrutinized.


Action is needed, not because our elected officeholders are corrupt–any more than anyone else–but because they are human and influence is why campaign donations and private funding for trips and the like are given by private interests in this state. The same was true in when bold Progressive Reforms were needed in 1911 and human nature is the same today. Only now it's not the railroads.

 It should frankly be outlawed for a private company with business before the state to finance the Governor's travel, especially when it's supposed to be official business.  This is government for sale from the guy who was supposed to be such a big reformer because he was richer than dirt.  This is also why I've been so adamant about the CDP-Chevron donation.  Influence peddling in the capital is an epidemic that needs to stop.