Republicans refuse attempt to moderate their platform

by Brian Leubitz

In a move that will shock few watchers of the California Republican party, conservatives blocked an effort by the Corporatists of the Republican party (including Charles T. Munger) to modernize their platform.  You know, try to hide the crazy stuff that the CRP’s grassroots fervently believes, but the state has rejected over, and over (and over) again.  But, they aren’t going quietly.

The proposed language, which downplayed traditional GOP positions on gun rights, abortion and same-sex marriage, had come under fire from conservatives. Supporters had argued that the changes emphasized jobs and the economy and presented the party’s issue stances in a way that would appeal to more voters. … The committee instead approved an updated version of the current state GOP platform, which includes more detailed language sought by conservatives.

“The platform committee reversed the horrendous decisions of the drafting committee and restored core principles of the party platform,” said Mike Spence, a leading critic of the more moderate plan. “It’s proof that people that care about issues can beat money.”(SacBee)

Instead of a platform that pushed on the issues where Democrats are struggling nationally, mostly the economy, the Republicans in California stick with their right-wing social conservative agenda.  Which, oh by the way, now wedges the state in favor of Democrats.

So, for now anyway, it seems the Republicans are content to try to play nice but then act stupid.  If they do lose their superminority, perhaps they can look back at their convention.

Republicans aim to get new map drawn

by Brian Leubitz

After their fallen savior, Arnold Schwarzenegger, set up the redistricting commission and pushed it through the electorate, Republicans were admittedly a bit worried.  Well, it seems they are in an all-out panic as they are concerned that Democrats could get a 2/3 majority in the Senate.  They are already gathering signatures to put the measure on the ballot, and they have raised a decent amount of cash for that effort.  

But there is some concern on their side that the maps would be used for 2012 even if they do get it on the ballot.  And so, a lawsuit:

The plaintiff in the lawsuit is an Orange County businesswoman but it was prepared by attorneys for the group Fairness and Accountability in Redistricting (FAIR) , which is backed by the California Republican Party and Senate Republican Caucus.

“We think there are serious constitutional flaws in the Senate plan related to what the commission was required to do and what they ended up doing,” said Dave Gilliard, the political consultant behind the group.  “There were numerous examples of cities and counties being split between districts irrationally and without explanation.” (LA Times)

Except there is one, giant, gaping whole in their logic: somebody had to be split up.  In every redistricting process where you have to divide every district equally, you have to split some geographic or political community up somehow.  That’s just the numbers.  This year Sacramento County drew the short stick, but it is always somebody.  It seems a big stretch to say that the commission didn’t follow the new rules requiring consideration of boundaries, especially as that was third down the line, with Voting Rights Act considerations trumping all else.

Of course, they are bringing the VRA up in this legislation, but considering the lengths the commission went to in their process on the VRA, anything more than a few minor tweaks seems unlikely.  But, facing irrelevance, the Senate Republicans are pulling out all the stops.

Investors snap up California debt on first day of issuance

by Brian Leubitz

Sometimes you can learn something from a market, or maybe the credit rating agencies can learn something from a market.  Specifically, we’ve been downgraded to just over junk status, yet we have state constitutional rules that prioritize debt service over everything but K12 education. In other words, even if we didn’t raise revenue in any way, we would be legally required to cut, cut, cut our way into paying back bond investors.

And perhaps investors understand something that the credit rating agencies aren’t acknowledging, as they gobbled up California debt quickly yesterday as  Lockyer’s office offered some short-term debt to cover some gaps.

Yield-hungry individual investors on Tuesday put in orders to buy more than half of the short-term notes that California is selling this week to raise cash.

Brokerages handling the deal for state Treasurer Bill Lockyer said they had orders for $3.05 billion of the notes, or 56.5% of the planned $5.4-billion deal, by late afternoon.

The brokerages will continue to take orders from individual investors on Wednesday. Institutional investors will bid for what’s left on Thursday, which is when final interest rates will be set.

The state is preliminarily estimating that the nine-month notes will pay an annualized tax-free yield of between 0.40% and 0.55%. Because that interest is exempt from state and federal income taxes it’s equivalent to a higher taxable yield, depending on an investor’s tax bracket. (LA Times)

We’re still slightly higher than Texas, but hardly a “failed state.”  You want to see failed state? Greece is paying 111.7% for its 1-year  debt, and well, at this point you have to assume the interest pressures are close to breaking the EU. Investors are fairly well convinced there will be a Greek debt default.  

Now, I’ll not get too into the weeds here, as there is a lot to digest here. But, I will add the disclaimer that these bonds were actually given the credit rating agencies’ highest rating. Apparently they are high on our short term debt.  But from a macro perspective, Lockyer, in general, hasn’t had a huge problem selling our debt.  Perhaps the market is saying something…

Former campaign treasurer may have stolen millions of dollars from SoCal Democratic campaigns

by Brian Leubitz

The Kinde Durkee debacle is widening in scope and depth.  If you are on many Democratic email lists, you may have noticed a slew of emails in your inbox either telling you that their bank account was wiped out or asking for money.  Yesterday, we learned that Sen. Feinstein, who is looking at reelection for next year, might have lost millions of dollars:

Sen. Dianne Feinstein (D-Calif.) said her campaign is among those that may have been “wiped out” by a Burbank-based Democratic campaign treasurer who was arrested on federal fraud charges earlier this month.

Kinde Durkee is accused of taking thousands of dollars from the campaigns of several elected officials, including Rep. Loretta Sanchez (D-Garden Grove), Rep. Susan A. Davis (D-San Diego) and Assemblyman Jose Solorio (D-Santa Ana). The Los Angeles County Democratic Party reported that more than $200,000 had been taken from its fund. (LA Times)

First, to clarify, Sen. Feinstein doesn’t know if she was really “wiped out,” but some money was stolen.  Part of the problem is that the bank that Durkee used is being rather unhelpful.  She kept millions of dollars at the bank, and they are concerned for their own liability.  I have heard that they are now attempting to get campaigns to sign a waiver of legal liability to access their accounts.

I’m not giving the bank, or any of the campaigns, any legal advice, but let me explain a legal concept right quick: promises given in exchange for no consideration are called “illusory” and are thus unenforceable.  The campaigns should legally have the right to access their accounts.  The money in those accounts belongs to them.  Giving them the access they are legally empowered to have is not consideration. Heck, even giving them the money to transfer out of the account is not consideration.  It is their money, and they should be able to access it.

That being said, the scope of the mess is growing ever wider.  It appears that Durkee played fast and loose with campaign funds for years.  Much of that time after a San Francisco Chronicle report about a “Californians for Obama” scam that Durkee was a part of.

Of, course, there is one more issue here: California campaigns have given far too much power to external campaign treasurers.  They are given sole access to bank accounts, sole authority to write checks, and typically get very little oversight from the campaigns.  If we are to learn anything from this mess, we should be sure that campaigns are better managed, we have better oversight systems, and campaigns don’t allow individuals too much access.  Campaign treasurers are 99.99 honest, but at the same time we need to ensure that campaigns see actual bank statements once in a while, know how much money is in their account, and can handle their business in case of emergency.

Insurer trying to pass measure previously defeated last June

by Brian Leubitz

I’m not sure what Mercury Insurance Chairman George Joseph thinks will be more in his favor come next November, but he’s looking to qualify a measure stunningly similar to last year’s loser, Prop 17. Today Joseph was revealed as having donated over $8mil towards qualifying Prop 17’s virtual clone.

The current proposal, like Proposition 17, would repeal Proposition 103’s ban on considering a driver’s insurance coverage history when setting rates and premiums.  It would allow insurers to surcharge customers who had not purchased auto insurance at some point during the past five years, whether or not they had been driving.  Consumer Watchdog estimates that those surcharges would increase premiums by as much as 40% or more for millions of Californians including students who went away for college, Californians who previously used mass-transit, and the long-term unemployed.
 


It was a bad idea in 2010, and it is a bad idea in 2012.  While June 2012 might seem an inviting target for ambitious corporatisits, that is a risky gambit considering the legislation on the Governor’s desk that would restore all future signature driven measures to the general election ballot. November 2012 will not really be the opportunity to pass already-rejected crap, but it looks like Mercury Insurance will take that bet.

Because, they want to save you money, don’t you know?!?

Legislation waits for Governor’s yay or nay

by Brian Leubitz

During that long legislative session, the legislature sent on a number of notable bills to consider.  However, none will get the attention of SB202, which will push initiatives put on the ballot by signature back where they should have been in the first place: the general election.

When the idea came up a few weeks ago, CalBuzz did a nice look at the history of initiative timing.  Long story short, signature based initiatives were always on either a special election called by the governor or the general election.  The constitution did not envision a raft of them on various primary elections.

Of course, what Jerry Brown will do with this measure is never an easy question.  You would think that he would support this measure, but there are several measures that looked set for approval that met Brown’s veto stamp.  But, if it does go through, the two measures that have already qualified will stay on the June ballot.  However, I’m sure the measures in question, a term limits reform that switches all terms to 12 years and the tobacco tax for cancer, would rather be on a November ballot.

The other big news was that the Amazon deal was also approved by the Legislature.  The deal was hammered out a few days ago and remains basically unchanged since then.

In other legislation, Jerry will also see legislation on:

You can find more examples at the Bee’s Capitol Alert.