A small devoted band of people alone will not make clean elections a reality in San Diego. As detailed in this issue, for the past two months we have concentrated on reaching out to civic-minded groups, seeking their endorsements and their support. But we also need more people working at the core of this effort. We need you. Our general meetings are held on the 1st and 3rd Saturdays of each month from 10:00 AM to noon. You are welcome to attend. The 1st Saturday we meet at the La Jolla Public Library (7555 Draper Ave). The 3rd Saturday meeting is held at the North Park Senior Center (2719 Howard Ave). Call us at (858) 385-0419 for further detail.
San Diego City Council has its own version of TV's Who wants to be a Millionnaire. Their game is played in closed session. This is an excerpt from one of last year's closed sessions which discussed the Padres.
Susan: Are we ready to vote ?
Valerie: I'm not sure- I'd like to call a friend.
Susan: Who do you want to call, Valerie ?
Valerie: I want to call John.
Susan: OK - what does John do ?
Valerie: He owns a baseball team, Susan.
Susan: Get John on the phone, Chuck, he's on speed-dial.
John: Hello.
Susan: This is Susan from We all want to be Millionaires. Valerie has a question for you.
Valerie: We're going to vote to give the Padres another $4 million -- is that enough, John ?
John: That's enough for today, Valerie. And don't forget, I'm sending the limo to take you to Carmel .
The big push this Spring has been to secure endorsements for the our drive to establish the Clean Elections Act. (Check out our web page: ttp://www.cleanelectionsandiego.org .) We led off with our first endorsement of SDACE by the Coalition for Affordable Public Power, secured through Derek Cassady's efforts.
Our biggest effort was making a presentation to each of the eight San Diego area chapters of the League of Women Voters, all in the span of one week. Kudos to regulars Cliff, Roland, Derek, Cathy, Betty Hampton, and our splendid pinch hitters Joan Bleu and Nancy Cassady.
The Clean Elections (CE) presentations were very well received. League members were gracious, enthusiastic and had good questions which kept the speakers on their toes. The 19 minute Clean Elections video about the Clean Election results in Maine and Arizona (hosted by Bill Moyers) is excellent and inspiring. It sparked some lively discussion. An email is in the works to the City Issues Chair and President of the LWV encouraging them to move forward together with us to make CE happen in San Diego.
We are pushing to get the endorsement of San Diego area Democratic clubs. The first SDACE forum went very well a few weeks ago at the Uptown Democratic Club. Cliff and Roland gave their usual excellent presentations, supported by the success of Clean Elections in ME and AZ, as portrayed in our CE video. John Hartley moderated.
The Uptown Democrats voted to endorse SDACE, our second outright endorsement. Congratulations to Cliff, Roland and John for their efforts to make this possible. This is the second of many more needed endorsements. We're on the way!
Maybe the problem with selling people on public funding for elections is the unstated fear that the money will all end up supporting wild-eyed fringe candidates. Or perhaps it's that many people are happier with the image of politics as a mechanical system of wheels, levers, and pulleys and thus prefer narrowly conceived mechanical solutions such as term limits and balanced budget amendments rather than open-ended reform. And maybe it's simply because ``procedural'' rights are often general and abstract, while ``substantive'' rights are specific and concrete. Whatever the reason, much experience in other states has shown that no matter what you call it -- clean elections, campaign finance reform, publicly funded elections -- there is a disconnect between palpable rage at the causes that underlie that reform -- the laissez-faire market in political influence and the consequent sense of disempowerment by the individual voter -- and popular enthusiasm for the proposed solutions. Similarly, you can argue too that winner-take-all is no way to run an election; that instant runoffs and proportional voting measures are worth serious consideration. And they have been tested in various forms in Europe for many years. But just ask Lani Guinier how much public conversation she can recall taking place on the topic. Even allowing for the endless chicken and egg argument of whether the media shape the public dialog or the public's tastes dictate the media coverage, electoral reform is something of a snooze; ``talking heads'' from middle-class good government groups.
Yet no one should doubt the potential energy to be tapped. Seattle and Quebec show that the roots of discontent are wide and deep. (Much wider of course than simply disgust with politics as the art of influence buying and selling. And much deeper than Thomas Friedman can fathom from his stratospheric office at the Times.) A major political realignment is coming just as soon as someone can figure out how to ride the wave. Moreover publicly funded elections have gotten off the ground in Maine and several other states; they are not a pipedream. But in each state and each city, the formula for success has to be adapted to the local circumstances. Proponents for electoral reform in Arizona had a list as long as your arm of former governers indicted for bribery and corruption to which they could point. In San Diego, the ``crimes'' are more genteel, nothing so blatant as the envelope full of small unmarked bills, wrapped in a napkin, handed under the table. Still, the Charger seat guarantee carries that characteristic stench of insider influence that gets people riled, and rightly so. Of course there are people who prefer not to see things quite this way; opinion columnists and pols who try to tar the critics as party poopers, radicals, Luddites, not real Americans, etc., etc. Presumably they'll have to concentrate some of their fire now on George Stevens assuming they've been as attentive in following City Council meetings as our own Mel Shapiro and thus noticed it's not just us that cry foul. (See ``From the Mouths of Babes'') Can these and other examples of wheeling and dealing by special interests in this town provide the momentum for reform? We're betting yes.
Transcript of a remark by George Stevens at May 7 council meeting:
``I became curious why the same councilmembers kept supporting Hartson Ambulance to get the contract without going out to bid. When I got to the Clerk's office, I found out. Because the contributions came from paramedics to councilmembers That's why they gave it to the same contractor.''
(Noted by Mel Shapiro, our faithful SDCE Correspondent!)
Some recent e-mail of Mel Shapiro:
I hope you will not vote for the governor's bailout of the utilities. He has been bribed by their huge campaign contributions.
If I were you, I would not accept any of their money. Can you tell me how much they have given you, or should I look it up on the Secretary of State web site? I'm proposing that Democratic clubs boycott any candidate who accepts money from energy companies. These companies are the personification of the devil.
To: 'mel shapiro' <melsd@home.com> Subject: RE: utility bailout by Gray Davis To: Assemblymember.Kehoe@assembly.ca.gov
Mel, good to hear from you. I received $1000 from an energy company afer I was elected. I returned it in February and will not take any energy company contribution at this time.
Chris
And, continuing in the grand tradition of political humor of Jonathan Swift and Mark Twain, we note the following advice which Mel tendered our new city councilman, Brain Maienschein:
Dear Brian,
I fear that you do not understand city council protocol. Only the mayor is allowed to have ideas.
It is your job to vote yes on his ideas. If you vote yes all the time, you get to be a committee chair. See how easy it is! Besides, East Village isn't in your district. You are not allowed to have ideas for districts outside your own. Byron is in charge of East Village, so its your job to vote yes on his ideas, in case he has one. Then he will vote yes on stuff for your district: See how it works? This is called collegiality.
After your criticism of the past council giveaway of naming rights, I fear you may be judged uncollegial. So watch that in the future.
I have an idea of my own: I.Q. tests for city council. Score under 100, you're outta there. This could open up more seats than term limits.
See you soon,
Mel
Now that revision of the Ethics Commission ordinance is complete, we can compare some of the concerns noted in the last issue with the text of the new version.
We noted:
The current proposal is to let the city council nominate the members of the Commission and the mayor appoint seven from this group. This means each council member will have their own person to render judgments about the council member's conduct. This is the first line of defense for the city council.
What they did:
Originally, the mayor would appoint the members of the commission. This was changed to let each councilmember nominate people from whom the mayor selects one.
We noted:
The second line of defense is that the council appoints the executive director. If the director is really tough on crime, how long will he or she last?
What they did:
Original let the commision appoint its executive director. Changed to have this subject to city council approval.
And just for good measure:
Original draft about jurisdiction said ``including but not limited to laws pertaining to campaign finance, lobbying and conflicts of interest." This was changed to eliminate ``not limited to". In other words, this limits jurisdiction.
Added a section: ``the ethics commission shall have no jurisdiction over actions or events that occurred prior to July 1, 2001.''
Added a section: ``the Commission shall not act on any complaint until the Commission's complaint and investigative procedures have been approved by the City Council."
Here is an excerpt from a transcript of a court hearing -- Shapiro vs. City Attorney. I asked for records of alleged crimes by government officials which were received by the Public Integrity Unit.
City Atty: ``A lot of the things that the Public Integrity Unit does is baby-sitting. If we review statements of economic interest, for example, and somebody doesn't check the box" ... ``That's a significant portion of the work that this unit does, is look over this stuff."
In the last newsletter I listed some of the allegations listed on the City Attorney's list -- a list I received after filing the lawsuit. Of 120 entries there was not one about checking a box. Yet this is what Deputy City Attorney Chapin told the judge. However,there were 44 charges of Election Law violations. There were 9 charges of conflict of interest.There were 16 charges of violations of the lobbying ordinance. There were 26 allegations of ``waste, fraud and abuse".
Investigating these is not baby sitting.
San Diego County Taxpayers Association is treated with great deference and respect by the media and the city council. They advertise themselves as a "watchdog" organization.
But how many people know they have a PAC - a Political Action Committee? And how many know that this PAC took $15,000 from Sempra/SDGE last October, in the midst of our energy crisis. The PAC does not file their reports locally, since its registered as a statewide organization, but the record of their contributors is on the Secretary of State web site. A look at their board of directors shows one from Sempra and one from SDGE. After looking at a list of their issue papers I did not find any on energy prices.
(Washington, May 30) California's three largest public utilities spent $69 million on political spending and lobbying between 1994 and 2000, with the majority of the total directed toward creating and retaining the state's disastrous deregulation law, according to a Center for Public Integrity investigation.
The law passed unanimously by the California Legislature in 1996 precipitated what has been described as the most costly public policy miscalculation ever by state lawmakers.
An examination of political spending by the major utilities in California found that the Big Three Pacific Gas & Electric Corp., Edison International and Sempra Energy spent $51.6 million toward political activities since 1994. The majority of that, $39 million, was spent in 1998 in an all-out effort to defeat Proposition 9, a statewide referendum that would have overturned parts of the 1996 deregulation law.
Of the total, $1.6 million went to campaign contributions to the legislation's sponsor, the seven "principal co-authors," Gov. Gray Davis and former Gov. Pete Wilson, according to a review of campaign finance documents.
The average contribution from California utilities to a handful of select lawmakers since 1994 was tens of thousands of dollars more than the average $2,400 contribution made by utilities to legislators in other states where deregulation was being debated, according to the National Institute of Money and State Politics based in Helena, Mont.
Lobbying expenditures since 1994 total $18.6 million for the three utilities including $640,000 spent by PG& E in the first quarter of 2001 alone when the company was preparing its filing for federal bankruptcy protection and negotiating for a state bailout.
In addition, a review of financial disclosure forms filed by the bill's sponsor and primary co-authors reveals that since 1994, energy interests gave nearly $63,000 in gifts, travel and other compensation on 130 separate occasions to the legislation's sponsors. That includes nearly $48,000 from an industry-backed nonprofit organization that flew legislators and public utility commissioners around the world in the company of utility lobbyists.
PG& E Corp. and Edison International media offices did not return telephone calls seeking comment.
Despite the millions spent by the utilities to ensure passage of a favorable deregulation bill, the three electric companies have lost billions to price-gouging wholesalers in a dysfunctional energy market they could not have anticipated. The utilities are seeking a $13.4 billion bailout from California taxpayers, the largest municipal bond offering in history. Little help is coming from Washington, and Californians are bracing for a long, hot summer, 20 hours of rolling blackouts per week and spiraling energy costs...
PG& E and Southern California Edison began transferring the windfall profits from the utilities themselves to their parent corporations, and onward to unregulated subsidiaries. Between 1997 and 1999, PG& E transferred $4 billion to its parent company, and another $632 million in the first nine months of 2000, according to a state-ordered audit. "Historically, cash has flowed in only one direction," the auditors wrote. ". . . from PG& E to PG& E Corp. and then to the unregulated affiliates." Similarly, Southern California Edison transferred $4.8 billion to its parent company, Edison International.
Executives at both companies knew the industry was undergoing a sea change. In a deregulated market, the big money was to be made in the wholesale market, not in the local utility business. Profits at National Energy Group, PG& E Corp.'s unregulated wholesaler, were $162 million in 2000, according to the company's annual report, a 165 percent increase over 1999. National Energy Group went from $6 billion in assets in 1997 to $13.3 billion in 2000, while the utility subsidiary's assets shrunk from $25.1 billion to $22 billion.
Mission Energy, an unregulated Edison subsidiary that produces electricity outside the state, has become one of the largest suppliers of power in the world, with more than $15 billion in assets. Since deregulation, it has gone on a spending spree, building plants in Australia, Turkey, Great Britain and Spain. In Thailand, the company's efforts to build two coal-fired plants prompted a violent protest from activists who claimed the project would harm the environment.
By 1998, as profits were flowing, consumer groups grew increasingly suspicious of the deregulation effort and the huge profits being made by the utilities. They responded with Proposition 9, a voter referendum that would have narrowed one of the AB 1890 provisions most onerous to consumers - the recovery of stranded costs.
Supporters of Proposition 9 raised $1.4 million to promote the measure. That sum was dwarfed by the campaign to defeat the consumers' proposal. PG& E, Edison, Sempra and a who's who of Wall Street investment bankers spent a staggering $41 million to defeat the referendum.
The leading opponents, naturally, were Edison, which spent $17.7 million, and PG& E, which poured another $17.4 million into the fight.
Covering every angle, opponents of Proposition 9 paid Peace's video production company an estimated $65,000 to produce a 30-minute "special show" purporting to uncover the "secret rip-offs" that would take place if Proposition 9 passed. The program's host, conservative commentator and provocateur David Horowitz, cited an "independent study" that warned of huge tax increases if Proposition 9 passed. But Horowitz never disclosed that the author of the "independent study" was a Sacramento firm that received $103,974 from the "No on 9" utility forces...
By late 2000, the power companies and the legislature discovered they had created a monster.
With barriers to customer access knocked down, designers of the plan assumed that big energy companies would come to California to compete for new retail customers and start building new power plants. Unfortunately, that didn't happen. Instead, out-of-state companies, such as Duke Energy of North Carolina and Reliant Energy of Houston, showed little interest in signing up customers. Nor were they eager to build expensive new plants that would take years to come on line. Instead, they focused on buying the plants owned by the old utilities - at top dollar.
Among its other miscalculations with AB 1890, the legislature forced state utilities to sell off their stakes in California power plants to other companies. The companies that own the California plants have taken them off line at times, saying there were maintenance problems, but the California Public Utilities Commission and other state agencies now claim that some of the off-line time was simply a ploy to drive up prices for wholesalers.
Consequently, deregulation created a market where the utility companies were reliant on unregulated wholesalers for the majority of their power, and thus were vulnerable to price increases. By the summer of 2000, those wholesalers began raising prices - a lot...
Copyright 2001, The Center for Public Integrity. All rights reserved. Check out the full text at ttp://www.public-i.org/50states_01_053001.htm
