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Interest Groups Rain Money on California Democrats

| May 16, 2013
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by Lance Williams and Agustin Armendariz, Center for Investigative Reporting

When they needed political money – to make donations urged by Speaker John A. Pérez and to pay for their 2012 campaigns – Democrats in the California Assembly turned to interest groups with a big stake in state government decisions, a Center for Investigative Reporting analysis shows.

For last year’s state elections, Assembly Democrats together raised about $43.2 million, according to state records. The lawmakers funneled $5.8 million of that total into key races Pérez had targeted.

Assemblyman Chris Holden (L), D-Pasadena, talks to Speaker John A. Pérez. (Max Whittaker/Prime)

Pérez, in turn, named the top fundraisers to powerful legislative posts, including seats on the so-called “juice” policy committees, which control bills affecting the financial bottom line for the Capitol’s wealthiest political donors. Tapping those interests for donations has helped Democrats maintain power in the state Assembly for more than 16 years.

Through a spokesman, Pérez said there was no connection between his legislative appointments and political fundraising.

Most of the money the lawmakers raised – $32.7 million, or about 75 percent – came from industries and interests that regularly lobby the Legislature and state agencies, according to CIR’s computer analysis of state campaign finance data.

It’s a group of donors that are such an enduring presence in the Capitol that they are sometimes called the “Third House,” as though they make up another branch of state government.

These donors include labor unions whose members’ wages can turn on a public works project, government workers whose pay and pensions are set by the state, and heavily regulated industries whose profits can soar or plummet depending on state laws and regulatory decisions.

Small donors played a minor role in financing the campaigns, the analysis shows: 68 percent of the money the Democrats raised came in checks of $1,100 or more.

Nor did the lawmakers obtain significant financial support from grass-roots supporters back home: One-third of the money came from donors with an address in Sacramento, where many major interest groups maintain a lobbying presence. Thirteen percent of the funds came from out of state.

The analysis showed that major donors tended to target their contributions, giving money to members of the policy committees that hold sway over legislation that might affect them. CIR’s analysis documents a trend that reformers have complained about for decades: lawmakers’ reliance on monied special interests to finance their political careers.

The findings are worrisome, said Trent Lange, president of the California Clean Money Campaign, which advocates public financing of state politics.

“It is unsurprising that the groups with the greatest financial stake in government make the largest financial investments trying to influence them,” Lange said.

For this report, CIR reviewed 38,000 donations reported by more than four dozen Democratic lawmakers in the 2011-12 election cycle. Among the biggest donors:

• $4.8 million total from health care interests, led by the California Medical Association and California Dental Association. They pushed unsuccessfully to restore shuttered public health programs.

• $2.8 million from the state’s building trades and construction unions. The unions pushed hard for the controversial high-speed rail project, the biggest public works project in state history and a source of thousands of construction jobs.

• $1.8 million from Indian tribes and other gaming interests, led by the Pechanga Band of Luiseño Indians, who operate a resort casino in Riverside County. The tribes successfully lobbied to block a bill to allow continued operation of a card club at Hollywood Park racetrack in Inglewood – a competitor to the casinos.

• $1.5 million from public employees unions, led by the International Association of Fire Fighters. The unions lined up to ease the impact of Gov. Jerry Brown’s public pension cuts, intended to save the California Public Employees’ Retirement System pension fund billions.

• $1.1 million from the California Teachers Association and other school employees unions. These unions lobbied to preserve pensions and education funding. The teachers association lobbied to kill a measure that would have made it easier for school districts to fire bad teachers.

Spokesmen for some major donors said they make contributions because lawmakers have power over issues of vital concern.

Assemblyman Henry Perea (left) and Assemblyman Kike Gatto. (Max Whittaker/Prime)

Assemblyman Henry Perea (left) and Assemblyman Kike Gatto. (Max Whittaker/Prime)

The firefighters unions donate because “Sacramento is where decisions are made that affect the lives and health and safety and livelihoods of our members,” said Carroll Wills, the California Professional Firefighters’ state communications director.

Mikki Cichocki, secretary-treasurer of the California Teachers Association, said elected officials make every decision that affects the state’s public schools. “You’ve got to have an effect on those people who make those decisions,” she said.

Often, the records show, interest groups funneled the bulk of their donations to those with the most power over their issues, giving money directly to the speaker and Democrats who control the committees that regulate their industries.

More than half of the $4.8 million donated by health care interests to Assembly Democrats went to Pérez’s leadership team or to the Committee on Health, the juice committee that holds sway over health care programs. The speaker was the top recipient, with $498,000; Health Committee Chairman Richard Pan of Sacramento – a doctor – was second, at $446,000. Pan declined to comment.

Donations from Indian tribes and the gaming and liquor industries also flowed to the relevant juice committee, the Committee on Governmental Organization. Of $2.4 million in donations from these groups to Assembly Democrats, $1.5 million went to members of the committee or Assembly leaders.

Some lawmakers were particularly adept at mining their committees for donations.

That was the case with Assemblywoman Toni Atkins, a former San Diego City Council member with a safe seat and leadership ambitions. For her 2012 campaign, Atkins raised $783,000, almost all of it from interests that regularly lobby the Legislature, according to CIR’s analysis.

About one-third came from donors with business before the two juice committees on which Atkins served at the time: Health and Governmental Organization. Health care interests, led by the state medical and dental associations, contributed $181,000; Indian tribes, horse racing interests and the alcoholic beverage industry contributed about $72,000 more.

As she cruised to re-election, Atkins raised far more money than she needed. She had enough leftover to donate more than one-third of it – $282,000 – to Pérez’s targeted races, making her tops among Assembly Democrats.

Atkins’ fundraising ramped up after Aug. 8, when Pérez announced she would become the Assembly’s majority leader in the coming session. From then through the election, she raised $206,000, a rate of about $2,300 per day – double her fundraising rate before being named leader. Atkins didn’t respond to requests for comment.

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