Can Don Perata Return The Money Meant For Party Efforts Now?

Don Perata has been cleared of wrongdoing in an ongoing corruption probe that lasted throughout the Bush Administration and was seen by many as politically motivated.

We have had many problems with Perata, mostly that his terrible leadership contributed to scaring Democrats out of challenging Abel Maldonado and botching the Jeff Denham recall. If we had a real leader who actually sought to win elections instead of making friends or idle threats, and who was successful on both of those fronts, we would have a 2/3 majority in the State Senate today. I'm very glad to have him out of the state legislature. But by and large, corruption issues never made their way into our critique of Perata, and I for one am pleased he has been cleared. You can read the extremely brief letter from the Acting US Attorney here and Perata's statement here.

What we did have a problem with was Perata transferring $1.5 million dollars from a campaign account intended to help elect Democrats and push party issues to his own legal defense fund, one day after the election. The move was not illegal but certainly unethical - if he needed legal defense money he could have raised it for that purpose, and instead he raised money for one ostensible purpose and then used it for himself. I was quoted at the time:

David Dayen, an elected Democratic State Central Committee member from Santa Monica, blogged angrily this summer about his party's contribution to Perata's legal defense fund, contending the money would've been better spent on legislative races. The same goes for Leadership California's money, he said Wednesday; despite a Democratic presidential candidate carrying California by the largest margin since 1936, Democrats netted only three more Assembly seats and none in the state Senate.

"Every time I asked the California Democratic Party about getting more active and involved in local elections, they said the state Senate and the Assembly control those races ... and we don't have a lot of flexibility. So Perata, at that time, and Nunez or Bass had the authority to run those elections," Dayen said. "Now we see what happens when you vest power in these closed loops - suddenly self-interest becomes more important than the good of the party."

He believes this is why Perata didn't step aside as Pro Tem earlier, as Assembly Speaker Fabian Nunez relinquished his post to Karen Bass in May: "Darrell Steinberg was sitting there ready to go ... and we were all like, 'What the hell is going on?'

"We speculated it had to be that he still needed the leverage to make the calls to raise money for himself."

So, now that this legal case has wrapped up, let me pose the question - Will Don Perata return the money left in his legal defense fund to accounts intended to elect Democrats? Both the membership of the California Democratic Party and scores of anonymous donors to Leadership California unwittingly seeded his legal campaign. If Perata used all $1.5 million between November and today, I'd like to see the receipts; no court case was ever filed, no depositions taken in the intervening 7 months, no movement whatsoever. Either some lawyers got rich on having donuts or there's a lot of money left over. What's more likely, of course is that Perata will now siphon that money from the legal defense fund into his campaign account for his run to be Oakland's next mayor. In the end, it's all about Don Perata.

That would be a betrayal, and a disservice to those who donated, expecting to help Hannah-Beth Jackson win in SD-19, or to help defeat Proposition 11, the redistricting measure. There's not much of a way to contact Don Perata anymore, though I'm assuming his Oakland Mayor campaign will ramp up soon. He needs to be asked about this pot of money, and why it cannot now be used toward its intended purpose.

UPDATE: Thanks to Josh Richman for updating this:

UPDATE @ 5:25 P.M.: David Dayen at Calitics wants to know if The Don will give back the $1.9 million he diverted from his Leadership California committee – ostensibly created to support Democratic campaigns and causes – into his legal defense fund late last year. (And hey, what about the $450,000 he got from the California Democratic Party?) Fat chance, David… looks as if it’s all gone into lawyers’ pockets by now. At least the Fair Political Practices Commission has now cracked down on these smelly transfers.

I can't believe he blew through all that money. Look out, City of Oakland Treasury! Clearly he was paying off years' worth of debts with that fund. Wow.

Another $400,000

CapAlert reports that on December 5, Don Perata took ANOTHER $400,000 from his unused campaign account and moved it into his legal defense fund.

The latest transfer means the Oakland Democrat has now taken a total of $1.9 million raised in an account earmarked for ballot campaigns and used it to shore up the legal fund he created to fight an FBI corruption probe.

The transfers are legal, though California's campaign watchdog agency is considering stricter regulations of ballot accounts like Perata's [...]

The FBI has been investigating Perata since 2004, inquiring about his business dealings and those of his family and close friends. Both Perata's and his son's homes were raided by FBI agents four years ago.

No charges have ever been filed, though Perata has tallied up more than $2.1 million in expenses fending off the investigation.

His defense fund was $250,000 in debt as of the end of September, as the former leader faced the unwelcome prospect of being out of office - and without leverage over potential donors.

So Perata has transferred $1.9 million (out of the $2.7 million he had amassed) from the ballot committee to ease his legal debt load.

Once the election ended, Perata had no use for that $1.9 million in his campaign account as a termed-out legislator. However, there was plenty of use for it BEFORE the election, when Prop. 11 was being outspent 10 to 1 and losing by less than 2 percentage points.

Again, the alibi that he needs this money to fight off a "fishing expedition" from Bush partisans at the US Attorneys office doesn't scan at all. Those prosecutors are all resigning in a month. If he's done nothing wrong, what use could he possibly have for $1.9 million dollars over the next 30 days? Or are the expected Obama US Attorneys going to continue this partisan witch hunt?

By the way, the rank and file in the CCPOA is pretty pissed off about what amounts to theft of their political donations.

On PacoVilla's Corrections Blog, a Web site popular with state correctional officers, one user wrote: "Not only did we (CCPOA) back the wrong horse (No on 11) but now we're paying for Perata's corruption defense and from (CCPOA spokesman) Lance (Corcoran)'s comment … it sounds like we're very happy to be privileged to do so."

By the way, there's still $600,000 or so left in that account. So don't be shocked when Perata drains that out too.

The Status Quo, Corruption, And Crisis

When Josh Richman, the fine reporter for the Oakland Tribune, called me for comment yesterday on the breaking news that Don Perata transferred $1.5 million dollars the day after the election from an IE account intended to elect Democrats to the State Senate and wage initiative campaigns into his personal legal defense fund, my initial reaction was "I'm not surprised." My slightly longer reaction is captured in the article:

David Dayen, an elected Democratic State Central Committee member from Santa Monica, blogged angrily this summer about his party's contribution to Perata's legal defense fund, contending the money would've been better spent on legislative races. The same goes for Leadership California's money, he said Wednesday; despite a Democratic presidential candidate carrying California by the largest margin since 1936, Democrats netted only three more Assembly seats and none in the state Senate.

"Every time I asked the California Democratic Party about getting more active and involved in local elections, they said the state Senate and the Assembly control those races "... and we don't have a lot of flexibility. So Perata, at that time, and Nunez or Bass had the authority to run those elections," Dayen said. "Now we see what happens when you vest power in these closed loops — suddenly self-interest becomes more important than the good of the party."

He believes this is why Perata didn't step aside as Pro Tem earlier, as Assembly Speaker Fabian Nunez relinquished his post to Karen Bass in May: "Darrell Steinberg was sitting there ready to go "... and we were all like, 'What the hell is going on?'

"We speculated it had to be that he still needed the leverage to make the calls to raise money for himself."

I want to expand on that. The behavior of Don Perata can be directly tied to the continuance of a status quo that has failed and is failing California families. At no time is the way elections are run - without transparency, without accountability, without meaningful checks on the potential for corruption - questioned by the powers that be. It is enabled through a shrug of the shoulders and the words "that's the way things are." What Perata did was perfectly legal, although that is subject to change, as the state Fair Political Practices Commission votes today on making such transfers illegal. But as Michael Kinsley famously said, "The scandal isn't what's illegal; it's what's legal." The bigger scandal is that there's no desire or even interest at the top to see that change. And why not - it suits them just fine.

California has 63% majorities in both chambers of the legislature, has just seen a 61% share of the vote for a Democratic Presidential candidate - and yet this state is completely, inescapably and hopelessly beholden to right-wing interests, as a function of a backwards set of governing rules that have climbed the budget hole over $40 billion dollars, without any reasonable hope of getting out of it. It's been beyond clear for several years now that the ultimate solution will come at the ballot box, and yet the state party has entrusted the most crucial elections, the ones that could net a working 2/3 majority in the Senate, to someone more concerned with saving his political hide. And so Hannah-Beth Jackson, who came within 1,200 votes of flipping a Republican seat, reads a story like this in shock and anger. And the citizens in SD-12, promised a recall of Jeff Denham; and those in SD-15, expecting a candidate in their majority-Democratic district to take on Abel Maldonado; they are similarly angry. Money they had every right to expect would go to help them now goes to help one man.

(By the way, the alibi from the defenders of Perata on this doesn't scan at all. First of all, nobody begrudges him from raising money in his own defense - the problem lies in taking that money from an account intended for campaign work. And second, if this is a "political witch hunt," as they say, why would he need this lump sum of money 75 days from the time when a Democratic Administration with no inclination to prosecute Democrats on allegedly bogus charges is about to be installed? It's either a witch hunt about to end or a going concern. The alibi is pathetic.)

But the larger point is that the status quo, the closed systems at the top of the Democratic leadership, the lack of transparency and accountability, create the crises we see in our state, or at least disable anyone from reacting to them. And this is not likely to change. John Burton is going to be the next state CDP Chair. He's been in politics for 205 years, and he's basically muscled out the competition for the job. Does anyone think that a lifelong pol, with a long history of backroom deals, the guy who was Arnold Schwarzenegger's cigar-smoking buddy (that seems like a good profile for the opposition party chair), gives a damn about urgently needed reform? He's making sweet little noises about turning red areas blue, but there's absolutely no hope that he will provide any change from the insular, chummy, mutual backscratching society that exists in Sacramento. Grassroots activists should be furious that, in the wake of seeing countless opportunities wasted and crises lengthened, we're boldly taking off into the future with a Party Chair who was first elected in 1965.

The future of California is a mystery right now, because there is a crisis of leadership and an unwillingness to reform. At the very least, activists should look to electing Hillary Crosby as State Party Controller so that someone in the room will have a reform message that can spark a modicum of change. But until the fundamentals are altered, we will lurch from one disaster to the next.

SD-15: Maldonado's Dishonesty

After running as a write-in candidate on the Democratic ballot line in June, Abel Maldonado is now buying spots on Democratic slate mailers, even though he is facing only token opposition from independent Jim Fitzgerald. This guy REALLY doesn't want to self-identify as a Republican.

Independent state senate candidate Jim Fitzgerald accused incumbent Sen. Abel Maldonado (R-Santa Maria) of wanting to have it both ways, running as a Republican but appearing on slate mailers for Democratic and independent voters.

"I wonder if John McCain would have let him speak at the RNC if he knew that Abel would be paying for flyers that tell voters to vote for Barack Obama," said Fitzgerald, a retired UPS worker who is self-financing his campaign, in a press release. "I wonder if the Republican Party would have contributed over $50,000 to Abel's campaign if they knew that he was going to pay $12,000 to appear on literature that promotes the Democratic ticket."

This is another reason why Don Perata's bullying of Democrats to keep them out of the race against Maldonado was such a failure. He wouldn't have an opportunity to buy his way onto these slate mailers if there was a Democratic candidate. And so he gets to position himself as an independent-minded reformer instead of the down-the-line Yacht Party Republican he is, for the most part. This enhances Maldonado's public image at precisely the time when he is likely to run for statewide office (I know he lost the controller's race in 2006, and afterward claimed that he'll never run for office again, but I don't buy it). He spoke at the RNC this year, a clear sign that the party views him as a rising star. The proper move for opposing parties is to try and cripple the other side's rising star. You don't enable them when they can come back and beat you years later.

Thanks a lot, Don Perata, don't forget to pick up your parting gift in a month...

Perata Finds The Knife

And on the way out the door, he had to twist it one more time.

Legislative Democrats and the governor are backing off their demand that the state budget be balanced with new taxes, according to a confidential e-mail the state Senate leader sent to fellow Democrats and obtained by The Times.

Senate Leader Don Perata (D-Oakland) told his caucus in the e-mail, sent Thursday night, that he informed the governor "we urgently need a budget -- let's see if I can work on a deal with the Reps [Republicans] that is no tax, no borrowing. He agreed."

I quibble with the words "Legislative Democrats" at the head of the article. It sounds like Don Perata is backing off his demand. The Assembly appears to have no say whatsoever. Later in the email, Perata writes "We then bring in Assembly leaders to show them what we're sending them," as if they are supposed to just carry out whatever The Don wishes. Maybe he'll force them to contribute to his legal defense fund while he's at it.

A no tax, no borrowing budget is either cuts-only or the mother of all accounting gimmicks, probably both. We do urgently need a budget - but we more urgently need Don Perata to extricate himself from this process. He is nothing but a poison. At a time when 82% of Californians are extremely worried about the late budget, and large majorities favor a balanced approach over the cruelty of the Yacht Party, NOW he decides to cave in? If so, why wait 74 days and cripple working Californians everywhere?

Without 2/3, we can't move forward as a state. But of course Perata has single-handedly made it impossible to get to 2/3 in the Senate, so he's been wrong in practically every respect.

Please resign, Don.

Steinberg Goes There

Man, it'll be good to have a Democrat in charge who understands the importance of progress instead of covering your ass and rewarding your friends:

“First of all, though it doesn’t help much this year, I think this process and the frustration many of us are expressing reveals what must be done next year.

We need to not only think about but begin planning for taking significant questions about state and public finance back to the people of California. And next year as your leader I intend to do that. I’m not going through this anymore. I’m tired of it. It’s unproductive. It does nothing for the way people view us.

You’re right Senator Aanestad, under the current state of the Constitution; it is a two-thirds requirement to pass a state budget. And I know that question has been taken to the people in one form or another. But maybe it has not been take to the people in the right form, at the right time. And so, be prepared next year. Whether it is through the legislature or by the initiative process, we’re not going to go through this anymore.

If Darrell Steinberg was in charge right now, Jeff Denham wouldn't be in the State Senate. Abel Maldonado would be hanging on for dear life. And we'd have a 2/3 majority. Because he would prioritize it. He would design the entire year around achieving it. Don Perata simply has failed in understanding what is crippling this state. Steinberg gets it. And finally, progressives and the legislature will be on the same page. For now, we struggle with the failed perspective of the past.

SD-15: Independent to challenge Maldonado

Despite Don Perata's extreme efforts to keep Democrats off the ballot to face his BFF Abel Maldonado in a plurality-Democratic district, Jim Fitzgerald has succeeded in getting enough petitions to mount a challenge on the November ballot. This is from his press release:

Independent Candidate, Jim Fitzgerald, is building support to unseat Abel Maldonado on November’s Ballot.

“I am running for office to bring independent thinking and change to Sacramento. Our state is still operating without an approved budget. The price of gas is out of control. Schools should not pay the price for wasteful government spending. These are just a few of the issues that are important to me and the citizens of our district.” (Independent Candidate Jim Fitzgerald)

Fitzgerald is not a career politician beholden to any party. He is an ordinary citizen who wants to breakup the gridlock in the State Senate divided on party lines.

Fitzgerald has worked for UPS for over 30 years ending his career as an account manager. He had personal dealings daily with small businesses throughout the Central Coast. Working from the ground floor up, he knows what it is like to work long days in order to support a family. Fitzgerald is not a professional politician but rather a hard working individual who will give back to the very people he is supposed to be representing.

Now, Fitzgerald is an independent candidate, not a Democrat. But his issue positions certainly lean Democratic. His main proposal on his website concerns modernizing the government fleet to make every state-issued car a hybrid or electric vehicle.

This is obviously longer than a longshot, but I appreciate Fitzgerald's efforts if only to force Don Perata to make good on his word to walk precincts for his good buddy Abel in the fall. That'll be a good use of time for the guy who just got $250,000 for his legal defense fund from the CDP.

House Judiciary Warns DoJ on Perata Leaks

I've been mulling this around in my head for a few days. Three powerful members of the House Judiciary committee have have sent a letter to the Justice Department calling for an investigation into leaks surrounding the inquiry into State Senate President Pro Tem Don Perata.

No article since November 2004 has explicitly said that any information came from a federal government source. But in a letter to U.S. Atty. Gen. Michael B. Mukasey obtained by The Times on Monday, U.S. Reps. John Conyers Jr., Linda Sanchez and Zoe Lofgren wrote, "We are disturbed and concerned that news story after news story . . . has cited federal law enforcement sources as the basis of information."

The only article specifically mentioned in the July 31 letter was a story in the San Francisco Chronicle. The article cited "sources familiar with the probe," a broad term that could encompass federal agents, defense attorneys and people who have been questioned [...]

On Friday, the day after the congressional letter was sent, a Wall Street Journal article said the investigation into Perata "gained momentum over the past year." The article's details were attributed to anonymous people "close to the defense," who said Perata's longtime political consultant, Sandi Polka, was granted immunity to compel her to answer questions.

(Here's that SF Chron article mentioned in the letter.)

The Perata investigation certainly has dragged on for years, leading to him needing more and more funds to raise in his defense. In particular, the dumping of $250,000 from the California Democratic Party into his legal defense fund raised a lot of eyebrows around these parts. After the initial explanation of "We're the CDP and we can do what we want," a secondary explanation was that the investigation had been politicized and that this was part of the DoJ's efforts to prosecute and delegitimize Democrats. A couple weeks later, out comes this letter, signed by two members of the California delegation. But it's Conyers' participation that makes me believe that this is a real concern. I trust Conyers enough to think that he wouldn't simply badger the DoJ to help out a political problem in California.

Of course, let's look at what the letter is actually alleging. It's not suggesting that the investigation itself is unnecessarily political, but that someone inside the investigation is using the media to disparage Perata. That may well be true, but it doesn't necessarily follow that the whole investigation is a farce.

Let's now look at what this does NOT suggest:

• It in no way excuses the CDP for paying off Perata with $250,000 in the middle of an election year, whether that money was simply laundered through them and earmarked for Perata or not. Based on this SacBee report, it appears Perata is perfectly capable of raising money for himself:

Senate President Pro Tem Don Perata has solicited at least $200,000 this year from political interest groups for a nonprofit foundation that promotes and rallies support for one of his bills.

The arrangement, apparently legal, allows the Senate leader to solicit unlimited funds for his own political agenda without having to detail how the money is spent.

"He may have found a loophole in the Political Reform Act that needs to be closed," said attorney Bob Stern, a co-author of the state's Political Reform Act who now runs the Center for Governmental Studies in Los Angeles.

Which leads me to point 2:

• There is no way that Perata should still be Senate President Pro Tem at this point. While he has done a good job of hammering Republicans for their intransigence on the budget, this image hit, as well as the constant distraction of having to find new ways to raise money for his legal bills, are not what we need at this sensitive time, ESPECIALLY when Darrell Steinberg is waiting in the wings and perfectly capable of performing the same duties without the black cloud of indictment hanging over the head of the Democratic leadership. They haven't even taken a caucus vote on this yet, to my knowledge - it's currently scheduled for August 21, but during these budget negotiations that's doubtful to come off.

It is perfectly consistent to be skeptical of the Justice Department's case against Perata and to ALSO demand that he step down from his leadership position, and to excoriate the CDP for their conduct in either shoveling Perata money or acting as a conduit for that fund transfer.

Why The Perata/CDP Scandal Threatens The Budget Fight

(Air America readers take note: I also cover California politics at my site and Calitics, the progressive website for the Golden State. Forgive my parochial interests today)

As many have noticed, the Leadership has moved on the offense in the budget fight. They're not negotiating with themselves, instead staking out a fairly strong position for changing the revenue model and rejecting a stop-gap, borrow-and-spend, cuts-only approach. Media wags, who normally act like two year-olds and talk about "working together" as if this would solve the problems in Sacramento, are responding to the aggressive approach. George Skelton writes today about how California voters "can't handle the truth," how they want unlimited services without paying for them, and how they need to face reality. He also specifically cited the 2/3 requirement as crippling the state. Dan Walters says it's about time for a "budget cage-match," the ideological battle to once and for all address the structural deficit and budgeting-by-catastrophe that has become commonplace.

Yet at the same time, the California Democratic Party hands $250,000 to the Senate President Pro Tem to pay for his legal bills, causing oodles of outrage. Over the last two days I've been given a lot of reasons for this. "The money was earmarked for Perata," they say. Perata has his own campaign account already and he's perfectly capable of raising his own cash. If people want to hide their donations by legally laundering them through the CDP, that's nothing the state party should involve itself with. There ought to be transparency. "He's being railroaded," they say. That's certainly possible in an era of Bush league justice, but nobody is making that case credibly, just talking about how long the investigation has dragged on.

And then there's this excuse. "If the Senate leader is indicted, that will hurt downticket races." But the appearance of impropriety in the CDP legally laundering contributions and paying for Perata's legal defense fund is doing the EXACT same thing, and at a crucial time. The LAT op-ed that Bob mentioned is just the beginning.

Furthermore, I have no idea why Sen. Perata is still the leader. Sen. Steinberg, who did a $10 fundraiser in Sacramento a couple days ago and who I feel represents a breath of fresh air, is perfectly capable of carrying out the duties, and having someone this tainted as the face of the budget fight is incredibly damaging. It won't be long before the press connects this story and the budget story, and then all the mostly laudable efforts to cast a stark difference between Democrats and Republicans on the budget will be compromised. For the life of me, I can't figure out why the caucus has not demanded immediate leadership elections. I believe Steinberg is scheduled to take over on August 11, when we'll already be down the road in budget negotiations. It is the height of stupidity to thrust someone into the leadership at that late date. He should have been in there a month ago.

At the least, Perata can return the money and throw himself fully into this budget fight as a means of preserving what's left of his legacy. The CDP can return to its core mission of electing Democrats, and if it has to give back this $250K to donors, so be it. But at a time when the momentum is on Democrats' side and the budget fight is going to consume all the oxygen for the next couple months, allowing a distraction like this is a huge mistake.

The Money Goes In, The Favors Go Out

This article by Frank Russo got me pretty depressed about the state of California politics.

There’s something amiss in the state of Sacramento—and it has something to do with the state’s banking and lending institutions and the stacking of committees that deal with them with legislators that are either weak kneed or just a bit overfriendly with the industry that they should be protecting us from.

What else is new?

Well, this afternoon, the Senate Committee on Banking, Finance, and Insurance, Chaired by Senator Michael Machado of Stockton, will be hearing two bills that have been gutted down behind a closed door process such that today’s public proceedings on them may amount to little more than a sham [...]

It’s difficult enough to get bills passed through the Assembly Banking Committee and the Assembly floor when going up against the behemoth banking industry which has a lot of spare change to throw around in legislative races and many high paid lobbyists scurrying about the Capitol.

It looks like AB 69 by Assemblymember Ted Lieu, originally a great bill, has been amended since it left the Assembly—and before today’s hearing—such that the Center for Responsible Lending, a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices, initially listed in support, has withdrawn that position.

Read the whole thing. The bottom line is that in this recent primary election special interest groups spent nearly $10 million, and a good bulk of them were business interests who are now playing inside Democratic primaries in traditionally liberal areas to sell low-information voters a bill of goods. This doesn't always work, but it works just enough to frustrate progress in Sacramento.

Lesson 3: The business lobby can influence Democratic politics, even in a largely minority district.

Former Assemblyman Rod Wright, a moderate, defeated liberal Assemblyman Mervyn Dymally -- reversing the pattern of leftist victories -- in a South Los Angeles Senate district after business donors invested roughly $1 million in Wright's campaign.

"Business has tended to stay out of black politics," says Sragow, who advises the business lobby. "But some black politicians ask, 'Why? We're always out looking for economic development in our districts.'

"The business community has decided it can't get a Republican Legislature, so it will play in districts where there's a Democratic candidate it can work with."

A major Democratic strategist has all but said that Don Perata shepherded along the candidacy of Rod Wright, and actually put it in terms that come very close to illegal coordination (note "a flurry of record spending by closely-aligned IE groups focusing all of their attention and ammo in one, concerted direction.")

This is the game. IE's are increasingly the only way to reach the electorate, as the low-dollar revolution has pretty much not reached the Golden State. So the Chamber of Commerce and industry groups fill the pockets of the politicians who, once elected, feel obligated to repay them. The US Constitution allows the right for anyone to petition their government for redress of grievances; outlawing lobbyists or the ability of merchants to consult their politicians is not tenable. What is tenable is to either create a parallel public financing system by employing the residents of the state to pay attention to local politics enough to fund progressive-minded candidates, or to bring clean money to California, where it's arguably needed more than anywhere else, and end the pernicious influence of special interests in state elections. Otherwise, you get a steady parade of mortgage relief bills that offer no relief.

The California Report

• As I noted at Calitics, Dennis Morris, a resident in San Luis Obispo County, got his ballot, saw that no Democrat was running in the 15th Senate District, and did something about it:

And so today he is mounting a last-minute write-in campaign to get his name on the November Ballot. From the SLO County Dems:

"The San Luis Obispo County Democratic Party endorsed Dennis Morris on May 14th in his write-in bid to run against Republican Abel Maldonado for the 15th Senatorial District which includes all of San Luis Obispo County as well as parts of several neighboring counties. The Party is urging all Democrats in San Luis Obispo County and elsewhere in the 15th Senatorial District to WRITE-IN "Dennis Morris" for that office on their JUNE 3rd BALLOT" [...]

This is crucially important. With the possible demise of the Denham recall and an unopposed Maldonado seat, Democrats were missing out on two of their best opportunities to achieve a 2/3 majority in the State Senate. Morris' bid at least provides the opportunity for a real race in one of them. Don Perata allegedly prevented top local Dems from running in this race. But this is a people-powered action that could actually be more impactful.

• So Arnold wanted to have a yacht party yesterday - at a time when his budget dropped the closure of the loophole that lets yacht owners avoid sales tax. So after his appearance got some publicity, the coward skipped out:

I waited, and waited, and waited, but Gov. Arnold Schwarzenegger didn’t show today at the St. Francis Yacht Club in San Francisco’s Marina District for an event unveiling a hybrid pleasure-boat engine [...]

But although Frauscher’s public relations firm had insisted Wednesday, Thursday and through much of this morning that Schwarzenegger had been confirmed to attend — and that the event had been moved from Thursday to Friday to accommodate his schedule — there was no governor. He was in San Francisco, apparently meeting with a certain newspaper’s editorial board, but he didn’t make the yacht event (though many reporters did, with most splitting as soon as it appeared he wouldn’t show).

• San Francisco is leading at the forefront of the electric car movement, investing heavily in charging infrastructure. Mayor Newsom actually had an E-car back when he was on the Board of Supervisors IIRC.

• It looks like Mark Leno is cruising to victory in his challenge of Carole Migden in SD-03. Mark's a really good guy and a transformative progressive; this is good news.

• Lost amid the budget wrangling is the fact that college fees are going up again for Cal State students, with UC likely to follow. California used to have the best education system in the world. Remember those times?

• As our warehousing of human beings continues, a California man who was shipped off to Mississippi has died in prison, reportedly of "asthma," which is, you know, often treatable. What a shame.

Perata "Ends" The Recall

He has no ability to do that, mind you, but in his mind he's done it.

Senate leader Don Perata announced late Wednesday that he was dropping the recall campaign of Sen. Jeff Denham, due to his "best judgment about how to stop the long, slow slide into another long stalemate" on the budget [...]

At a late afternoon news conference on the steps of the Capitol, Perata said he decided not to pursue the recall after meeting Wednesday with Senate Republican Leader Dave Cogdill.

"I told him I had come to a decision that it would seem to me to be destructive to continue the recall while at the same time he and I were going to sit down with our counterparts in the Assembly and in seven weeks try to put together a budget that may well have to eliminate a $14 billion deficit.," Perata said.

"There was no quid pro quo. I didn't ask for anything. I just told him that I did not believe that this kind of politics, cast against the huge problem that we're having in this state, made a lot of sense."

Perata said he was swayed by a conversation he had with state Treasurer Bill Lockyer "who said that you all don't have a whole lot of time this year (to agree on a budget) because we're going to be broke."

"So in contemplating that -- and remembering the (53-day) stalemate that we had last year -- which simply embittered a lot lof people to no end, to no purpose, I sat down with Dave Cogdill and talked to him about something he had said the first time we met and that was about the recall."

Well, let's say that I'm happy to have been on the right side of Prop. 93, the outcome of which will send Don Perata into the sunset. What a laughable bit of incompetence this is.

First of all, he doesn't get to say what's on the ballot and what's not. The authoritarian style of "what I say goes" is the only thing that would've doomed this otherwise perfectly justifiable recall of a legislator who forgot his district and went along with an obstructionist GOP that is harming the state to a severe degree. A real Senate leader would have broadened the race into a referendum on state Republicans and would have done very well. You either do something like this full-speed or you never start it in the first place. This half-step just furthers the narrative of Democratic weakness.

Combined with the stab in the back on SD-15, where Perata demanded that nobody contest Abel Maldonado in another winnable seat, the Senate Pro Tem has assured that there is no way we reach a 2/3 majority in 2008. It's still possible by 2010 but this is a wave election, a realignment year and we're waving the white flag in two prime Senate races. That's just stupid politics. I appreciate the need to speed along the budget; the state is broke. But this recall is over by June 3, and it's not like everything's going to be wrapped up by then. And the stupidest part is that Perata RECOGNIZES that the threat of the recall was helping provide leverage for the Republicans.

In a statement, Perata credited the recall for recent legislation that passed out of the Senate:

"The vote we couldn't get last year to close the tax loophole for yacht owners -- we got that vote," he said. "The vote we couldn't get to help homeowners facing foreclosure - we got that vote. You put everyone here on notice -- and I don't think people are going to forget that anytime soon."

No, you now let everyone off the hook because you've proven you can be bullied by a Republican hissy fit and tut-tuts from the conventional wisdom crowd in the media. No Republican will EVER take a Democratic threat seriously from here on. And all the leverage on getting legislation passed in the Senate just ended.

Great friggin' job, Don. If you want to just go ahead and quit now and let any stray cat from Berkeley finish out your term, that'd be just fine with me.

...the thought has crossed my mind that Perata is just taking his name and aura off the recall because it'd be easier to pass without him, but if any organization associated with him donated a dime there'd be an even bigger hissy fit cry of "hypocrite," so his dropping the recall really signals a drop of any financial infusion, and I'm not seeing how Simon Salinas or the Dump Denham group will raise the necessary funds (especially considering that Denham is not restricted by any fundraising limits in a recall).

With Republican Support, State Senate Passes Mortgage Relief Bill

Yesterday I noted that even Dan Walters was coming around on budget solutions that addressed the revenue problem. Today there's news that Republicans in the State Senate crossed party lines to pass a mortgage relief bill.

SB 1137 would give notice to property residents that the foreclosure process has begun, provide tenants additional time to move from a foreclosed property, and mandate maintenance of foreclosed properties to diminish the impact on the value of neighboring homes.

A previous version of this bill, SB 926, failed on the Senate floor in January when it fell one vote short of passage and faced opposition from the financial services industry. Since then, Senator Perata has addressed industry concerns and produced a more workable bill that has broad support and no known opposition.

One of those Senator who voted for the bill? Senator Scared as a Chicken in a Fox Cage Jeff Denham. He actually spoke on the Senate floor in favor of the bill. That's no accident: two of the worst-hit counties in terms of foreclosures are in his district (Stanislaus and Merced). Cox, Maldonado and Wyland joined the majority as well. The final vote was 28-10.

This is a compromise bill, to be sure (only loans from January 1, 2003 and December 31, 2007 are included), but would provide more transparency and the ability for homeowners to get help before foreclosure, as well as increased notification for renters whose property heads into foreclosure, which is an increasing problem.

What's notable here is the Republican support, which suggests that they're starting to feel pressure on issues like the mortgage crisis from their constituents. The old saw in California politics is that these Republicans are so gerrymandered into their seats that they can't be moved by public outcry. I'm not sure that's true anymore, and it's something to be recognized as we head into the budget fight.

As for Denham, I think he's got a bigger problem with his racist campaign manager, but clearly he's trying to radically backtrack his Senate history and come off as a nice moderate. Since this week is the deadline for bills to move from the Senate to the Assembly, we're going to see him tested on a lot of votes in the coming days.

SD-12: Hissy Fits And Asymmetrical Warfare

Over the weekend the CDP resolutions committee endorsed the recall of Jeff Denham in SD-12. The Republicans have thrown a massive hissy fit over this, similar to the hissy fit Yacht Party regulars like Sam Blakeslee have thrown, denouncing those who dare to identify his record in public. All of a sudden we're seeing op-eds throughout the region and across the state decrying what is routinely identified as a "Don Perata-engineered power grab." The latest comes from the fount of conventional wisdom in the California political media, George Skelton:

This is the time of year when the northern San Joaquin Valley is actually bucolic. Temperatures are bearable. The hills are green and the orchards are in full bloom -- almonds gussied in white, peaches in pink.

Too bad that this spring there's also a foul odor of Sacramento political pollution.

In a nutshell, the local state senator -- Republican Jeff Denham of Merced -- didn't vote for the state budget last summer. That contributed to a 52-day stalemate and angered the Senate leader, Democrat Don Perata of Oakland. So Perata now is trying to recall Denham.

Not just a payback, but the political death penalty.

Funny, I don't remember such high dudgeon back in 2003, when the recall of Gray Davis was viewed as a victory for democracy and an opportunity for the people to have their say.

Here's what's actually going on. Professional hack Kevin Spillane is good at getting his propaganda into the papers. And the media obliges without any historical perspective whatsoever. If Republicans want to put forth a measure ending recall petitions and allowing any state officer to finish out their term, go ahead; I'd probably support it. But they don't. They want to use the recall when it suits them and whine about "fairness" and "power grabs" when it doesn't. There could not have possibly been a bigger power grab than the Darrell Issa and Ted Costa-funded recall of Gray Davis. Anyone in the so-called liberal media dumb enough not to understand this notion of asymmetrical warfare isn't worth reading.

I fear that the Spillane hack-o-thon is bearing fruit in scaring off Democrats from pressing forward on this recall; there certainly wasn't a lot of talk about it or enthusiasm at the convention, nor was there any potential challenger in sight pressing the flesh. The Denham recall, in fact, is what the process was invented for: when legislators protect their own or their party's interest at the expense of the people they should be held accountable. Jeff Denham is part of an effort to stop California lawmakers from doing their jobs and eliminate, for practical purposes, the role of government in the state. The Iron Law of Institutions dictate that "people within institutions act to increase their own power rather than the power of the institution itself." The only way to deal with that from the outside is use the legal tools available to exact leverage on the institution. If it was OK for a Republican to use, so too for a Democrat.

So these media types and their hacktastic Republican spinmeisters can shut their whiny little mouths and defend their role in the shutdown of democracy in California to the voters. Jeff Denham ought to be able to defend himself instead of crying about the "process."

What A Tremendous A-Hole

When the Legislature dares not to act as his puppet, the Governor gets mad. Guv, smash!

"Now even though I was criticized by Sen. Perata, who said, 'Boy, he should not mind our business. We know exactly what we are doing.' Well, obviously they don't know exactly what they are doing because otherwise we wouldn't have a $14 billion deficit.

...based on budgets that I signed...

If everyone knows exactly what they are doing, we wouldn't have the budget mess in 2003 which created the recall election.

...which elected me so I could lead the state into exactly the same budget mess...

"Sometimes you see schools protesting out there or sending me letters," Schwarzenegger said. "I'm with them. I wish I could stand there protesting, too.

...but I'm too busy cutting their afterschool programs and music classes and firing their teachers, it takes up most of my day...

Because we have to protest the budget system. Not this year's budget. The budget system is the failure. That is what has to be corrected as quickly as possible."

I'm going to have to cut the snark and address this. In Schwarzenegger's little "rally the crew for the budget" tour, this above all is his message: in the midst of continuing budget crises, what you have to do is give me more power. Even though I've put the state under mountains of debt that won't clear up until you're great-grandchildren retire and stubbornly rejected any changes to an obviously woeful revenue structure, and even though my first act as governor stripped the state of billions in revenue and put us in the hole we find ourselves in, you should definitely invest all power to change budgets on a whim to me since I exhibited such good judgment.

The Governor is absolutely going shock doctrine and trying to use this crisis as a pretext to expand executive power in exactly the same way that was defeated by the voters in 2005. And nobody should be surprised, since during the 2006 campaign he very explicitly stated that those discredited and unpopular proposals were "good ideas" that were merely implemented the wrong way. First the redistricting proposal was resurrected and now this.

Schwarzenegger gave a briefing to about 40 local business and city leaders during a stop at Anaheim City Hall, part of a statewide tour meant to garner support for his proposal to institute a constitutional amendment to more closely regulate state spending. The state faces a $14 billion deficit over the next two years.

"It's not the fault of the people we're short on money. It's the fault of the Legislature and governor," Schwarzenegger said at the City Hall stop before continuing on to Santa Ana for a meeting with Orange County Register editorial and news writers. "I think we have screwed up a little bit."

The amendment, which would require voter approval, would put a ceiling on state spending and grant the governor power to make midyear budget cuts. Surpluses in good years would be put in a "rainy-day fund" to cover expenses in weak economic years.

Listen to this logic. It's the fault of the legislature and the governor that we have a serious budget deficit, and "I think we have screwed up a little bit," but the solution is to give the guy who screwed up singular power to screw up some more. That way lies madness.

It's time to pay attention to this. We've been looking at this budget fight along a linear revenues vs. cuts standard, but Schwarzenegger has his own agenda. He was to empower the executive with almost unilateral control over the budget. This is a Bush-style power play. And it needs to be universally rejected.

Such Lovely People

So you expect a couple of conservative bitter-enders like KFI shock jocks John and Ken to depict Italian-American Don Perata as a Mafia boss. Slightly less expected was that the same graphic would make its way onto local news in Sacramento.

A televised graphic depicting Senate President Pro Tem Don Perata as an apparent Mafia leader, pointing a gun skyward, has angered Italian-Americans.

Bill Cerruti, who is chairman of a state Italian-American task force and leader of the Italian-American Cultural Society, blasted the characterization today and demanded an apology.

The graphic, depicting Perata in a purple suit and white tie, was broadcast by Sacramento's KOVR 13 – with anchor Chris Burrous – and on the website of talk-show hosts “John and Ken” of KFI radio in Los Angeles, Cerruti said.

Burrous goes on to blast Perata for suggesting the state raise taxes to help balance the state budget.

Yes, anyone who doesn't want to see thousands of teachers fired and elderly people denied health care is most certainly a gangster.

I'm not wired for outrage, so you tell me if this slur is beyond the pale or not. What I do know and expect is that the Denham recall will provide plenty more opportunities for the "Don" Perata slur to manifest itself, and the dead-ender anti-tax forces running his recall opposition campaign are not likely to disappoint. Hopefully they have Perata shoot bullets from a Tommy gun into their "No on the Recall" logo! Hey guys, pay me for that idea before you use it!

SD-12: Denham Recall Reaches The Ballot: Vote Must Happen Within 60-80 Days

This is a pretty big deal. I really hadn't been paying much attention to this recall possibility, but it's come to fruition. There have only been 4 other recall elections of sitting state legislators in the past 90 years. Jeff Denham becomes the fifth.

The recall attempt of Sen. Jeff Denham, R-Atwater, has gathered enough signatures to qualify for the ballot, California Secretary of State Debra Bowen announced Tuesday.

Gov. Arnold Schwarzenegger must set the recall election for a date 60 to 80 days from today, Bowen's office reports.

Once the Governor sets the date, (it seems almost certain that he'll pick June 3, which is 77 days away and also the day of the statewide primary) candidates can emerge. And given Sen. Perata's interest in this race, I think we'll see some strong Democrats contest this seat, unlike the somewhat shameful behavior in SD-15, where apparently Abel Maldonado's vote for last year's budget got him a reprieve from any challenge (right now there's no Democrat on the ballot to face Maldonado, though a write-in campaign still has time to emerge). However, this does put the Senate in play to flip to a 2/3 majority, given this race and the race in SD-19 with Hannah-Beth Jackson versus Tony Strickland.

Like the gubernatorial recall in 2003, there will be two questions on the ballot. The first will ask if Denham should be recalled, and the second will ask who among a list of challengers should replace him.

It seems to me that this is an excellent opportunity to message-test the major themes around the budget, revenues, and spending in advance of the nasty legislative fight and the November general election. While I don't expect this recall to be as exciting as Gray Davis', or to feature Gary Coleman, to the extent that it's a referendum on failed conservative ideology I think it could be extremely revelatory.

Robert is our resident expert in this neck of the state, I expect him to chime in.

UPDATE: Apparently, the old No on 93 team is getting back together to support Denham. So expect them to make this about Perata and a power grab. Whatever they choose, this will be extremely costly to the CRP at a time when they don't have the money. And they have to be extremely nervous about this stat:

The recall campaign, funded by the Democratic Party and a campaign committee linked to Senate President Pro Tem Don Perata, D-Oakland, turned in more than 61,000 signatures last month, nearly double the 31,084 need to qualify.

I would guess that 61,000 voters would be more than enough to dump Denham in June.

Legislative Democrats Come Out Very Strong On The Budget

The headline, State Democrats determined to raise taxes, is kind of ridiculous, but the meat of the story indicates that Democratic leaders are drawing a line in the sand.

Democratic legislative leaders declared this morning that they are prepared to delay the state budget this year if that's what it takes to get tax increases, which they called the only reasonable solution to California's multibillion-dollar shortfall.

"This is going to be the fight of a lifetime," Senate leader Don Perata (D-Oakland) declared at a news conference on the steps of a Sacramento high school that faces teacher layoffs and bigger classes under the governor's proposed budget, which closes the deficit with spending cuts, borrowing and deferrals.

"We are not going to be going anywhere this summer," he said, referring to the annual midyear process of trying to agree on a budget by the July 1 start of the new fiscal year. "I told everybody that wants to go to the Democratic [National] Convention, ... TiVo it. That is close as you are going to get."

Perata drew his line in the sand while standing with his successor as Senate chief, Democrat Darrell Steinberg of Sacramento, and other Democratic senators and school leaders. Perata said the governor's proposal to cut school spending by 10% is unacceptable, and Democrats will reject any budget that includes less for education next year than this year.

There was a big press conference with a union coalition and the LAUSD today that essentially had the same purpose. The Democrats are going to use this proposed slash to the education budget - with which will impact almost every county in the state - to demand a sensible resolution to our broken revenue structure. Here's Perata's message:

Asked how Democrats propose to make up the difference, Perata said: "Raise taxes. That clear enough? Raise taxes."

Given the state's dire finances, he said, "no one is going to tell me . . . the average Californian would not be willing to pay pennies on the dollar more for an education system . . . that is worth what we believe California is about."

The second statement is exactly the way to play this. California is worth paying for. This state deserves a better education system than it's getting, a better health care system than it's getting, better infrastructure than it's getting. Because of the broken revenue model, we can't even fund the landmark global warming law that got the Governor on the cover of all those magazines. Paying for this state to have the society everyone generally wants is a patriotic act. That's exactly the frame the Democrats are using.

There's a hint of a "go-for-broke" strategy here, which I believe is sped up by the transition in the leadership. We've needed to have this fight for 20 years. Despite legislative majorities, the conservatives have been leading the way on fiscal issues for far too long. It's time to have this conversation once and for all, out in the open so that every Californian knows what's going on. Let's put on our helmets. This is going to be a long, tough slog.

Prop. 93's Achilles Heel

As we reach the beginning of the post-Nuñez and Perata era in the California Legislature, I want to reiterate what I said in a comment thread to the Speaker's top spokesman, almost a year ago, just days after the term limits measure was announced:

If it's so disastrous to (Nuñez') career and future plans to go through with this, why doesn't he sign a simple pledge stating that he will not benefit from a last-minute change in the law? He can certainly run for a State Senate seat, or Congress, or LA mayor, or whatever. But certainly, signing such a pledge would remove any appearance of impropriety, and give the Speaker freedom to serve MORE time in Sacramento, making him even wiser in how to negotiate that difficult terrain.

So can I fax the pledge right over?

The bottom line is that if the law wasn't seen to have benefited the 120 legislators in office to an outsized degree, it would have passed, because this is what turned off liberals and Democrats. George Skelton agrees.

What really stunk up Prop. 93 was an incumbents' sweetheart provision that mostly helped senators, including Perata. It would have allowed incumbents to serve 12 years in their current house regardless of previous service in the other house. So some senators could have spent 18 years in the Legislature, six more than advertised in Prop. 93.

Voters probably would have accepted a straight-up deal that allowed incumbents to choose either the new 12-year arrangement or the old 14-year system, but not be awarded extra "transition" years.

"They could have had term limits on a silver platter, but they got greedy," says Dan Schnur, a Republican consultant who has worked for redistricting reform. "They could have passed it with both hands tied behind their backs."

Of course, there would be no incentive for them to pass a term limits change if they didn't benefit from it. Where would the money come from? Good government groups don't have that kind of scratch.

But if Nuñez and Perata held a joint press conference three weeks before the election and said "We thought it over and we will not seek another term. The other legislators are free to do as they wish, but we believe in improving the state of California more than ourselves," then the "No" side would have had their legs cut out from under them. It was their entire strategy to make the proposition a referendum on the leadership. And liberals and Democrats had problems with the narrow tailoring of the initiative. They would have gotten the 4% they needed to pass the thing; all they had to do was sign my pledge.

That said, I'm very excited with Darrell Steinberg as the new President Pro Tem; he's a solid progressive. As for the Assembly, if this part of the palace intrigue is true, there's going to be some serious pushback:

Meanwhile, very reliable sources tell me that Democratic Assemblymember Charles Calderon has been trying to put together a deal with the Republicans in the Assembly-who number 32 in all-and to cobble together at least 9 Democrats in the body to get to 41, the magical number to become Speaker.

If we have a Lieber-Speaker in the midst, that's not going to work out well, to put it charitably. This needs some attention.

Health Reform in California Dies

It looks like the dream of major health care reform is over in California, at least for this year. The LA Times reports:

Gov. Arnold Schwarzenegger's yearlong effort to arrange medical insurance for nearly all Californians will be rejected by a state Senate panel this afternoon, according to people familiar with the decision.

The move would effectively kill one of the governor's most ambitious policy goals.

Senate President Don Perata (D-Oakland) made the decision after canvassing Democratic senators over the weekend and finding almost no support for the measure, which the Assembly passed last month.

There was some thought that Perata would use some parliamentary maneuvers to ensure the bill's passage, but apparently he couldn't find anyone to create a majority for the measure.

Anthony York openly wonders whether or not this spells the end of the current leadership structure in the state Legislature.

But watching the California Legislature in action last week felt like watching the end of an era -- and bearing witness to the creation of a power vacuum. In a political ballet that played out over several days, the prospects for two seemingly unrelated but intimately connected political issues -- a healthcare reform bill and a change in the state's term-limits law -- withered simultaneously. And as their fortunes sank, so did the power of the current legislative leadership [...]

Then more bad news for the healthcare bill. Mid-afternoon Wednesday, Gloria Negrete McLeod (D-Chino) announced that she too was voting against the legislation, citing concerns about the affordability of the mandated insurance.After her vote, a senator who sits on the committee characterized the situation as a "total implosion." He told me that the rumored poll numbers on Proposition 93 were making it harder to get the healthcare bill out of committee. If the prospects for the initiative's passage were as bad as the numbers suggested, he said, the stigma of a lame duck, and a corresponding loss of influence, might attach to Perata and Nuñez.

Let me say that health care reform may end in California for now, but it does not end nationally, and indeed one has little effect on the other. This is still something in which Americans are broadly in favor. And it's still a framework that every Democratic candidate has laid out. With a new Democratic President, health care reform will be at the top of the agenda, and at the federal level it has a far greater chance of being fiscally sustainable. There are still significant measures that could be taken in California that would improve conditions, in particular mandating guaranteed issue and expanding public programs. But the perils and pitfalls of balancing an enormous overhaul on an unsteady budgetary picture proved too great. Perhaps some sanity in the fiscal structure would allow the next governor to revisit this, if need be.

UPDATE: Ezra Klein, echoing a familiar theme:

I'm not shocked, or even particularly saddened, by this. It never really looked to me like the finances worked out, and though the political coalition around the bill was heartening and impressive, the rabid dead-enders of the Californian GOP (they're actually worse than national Republicans) wouldn't allow even a cent of new money, and without a truly stable funding source, you really can't do this at the state level. Indeed, money is why all these state plans fail. For fiscal reasons, this has to be a federal initiative. Because states are more politically flexible than the federal government, they can often seem a more viable arena for health reform. But the policies always collapse.