Capitol Alert

The latest on California politics and government

December 27, 2013
Lawsuit: Sacramento lobbying firm sent illegal gifts to lawmakers

RB_Capitol_Dome.JPGA powerful Sacramento lobbying firm illegally directed campaign contributions and unreported gifts to dozens of California lawmakers, according to a lawsuit filed this week in Sacramento Superior Court.

The lawsuit, filed by former Sloat Higgins Jensen & Associates employee Rhonda Smira, alleges that owner Kevin Sloat and his firm knowingly and regularly skirted lobbying and campaign finance rules.

A representative of Sloat Higgins Jensen & Associates did not respond to requests for comment on Friday.

Smira was terminated in 2012, a firing the lawsuit attributes to Smira refusing to carry out duties she believed to be illegal. She is seeking unspecified compensation for lost wages, as well as court orders requiring the lobbying firm to refund its profits, halt campaign fundraisers and cease giving gifts to elected officials. She wants the firm to pay damages related to the total value of undisclosed gifts given.

Lobbyists cannot, under California law, give gifts to lawmakers worth more than $10.

Sloat Higgins Jensen & Associates nevertheless conferred gifts upon legislators and staff and then failed to disclose it, the lawsuit alleges, even though Sloat "understood the illegality of his action because he attended regular Ethics Training courses where the laws regarding gifts from lobbyists or lobbying firms were thoroughly explained."

Smira's lawsuit also alleges:

* -- The firm regularly gave tickets to see the Sacramento Kings, San Francisco 49ers and San Francisco Giants to elected officials and their staff. The practice was so routine that some lawmakers and staff members began calling the firm to request tickets.

* -- Legislators and staff were treated to complementary rounds of golf, some at a course owned by an unnamed Indian tribe for which the firm lobbies. Among the firm's clients is Yocha Dehe Wintun nation, operator of the Cache Creek Casino Resort and an attached golf course. The firm also provided officials with free tickets to concerts at the resort.

* -- After traveling to Cuba, Sloat brought Cuban artists to the United States and sold one of their pieces to an Assembly member at a "deep discount" that "was not available to any member of the general public."

The lawsuit also contends that lobbyists for Sloat Higgins Jensen & Associates channeled undisclosed "in-kind" campaign support to candidates. If true, that could violate a rule barring lobbyists from contributing to candidates.

That ban does not apply to the interest groups on whose behalf Sloat's firm lobbied, and there is nothing exceptional about interest groups giving money to politicians. Smira's lawsuit contends, however, that Sloat hosted "elaborate" fundraisers at his Crocker Road "mansion" in Sacramento to bring together lawmakers with authority over key legislation and clients, informing legislative offices which clients would attend.

The head of the state's political ethics agency said the activity is common and not necessarily a rules violation.

"The law currently allows lobbyists to connect people to other people," said Gary Winuk, chief of enforcement for the California Fair Political Practices Commission. "It happens every day."

But Smira's lawsuit charges that Sloat neglected to follow reporting rules for the events, furnishing lawmakers with "thousands of dollars" worth of cigars and scotch and an event venue - Sloat's house - that all represent non-monetary campaign contributions.

"Neither Defendants, nor the elected officials, would declare the nonmonetary contributions to the (California Fair Political Practices Commission) and/or the Secretary of State," the complaint reads. It also charges that "of the hundreds of invitations sent to candidates since early 2000, none met the current disclosure and notification laws set forth by the Fair Political Practices Commission."

According to the lawsuit, those unreported fundraisers cumulatively sent "hundreds of thousands of dollars to dozens of elected officials, including but not limited to, 11 Senators, 26 Assembly men/women, and various other high ranking public officials and representatives." None of the alleged recipients are named in the suit.

Smira v Sloat lawsuit

December 27, 2013
California congressman files campaign papers with wrong district


It's been more than two years since California redrew its political map, but old district-numbering habits apparently still linger for Rep. Ed Royce.

Royce, R-Fullerton,filed a statement of candidacy this week for his re-election campaign. But instead of listing the 39th Congressional District he has represented since winning re-election in 2012l, he listed the 40th Congressional District, the number of the district he represented during the 2000's.cd40_screenshot.jpg

And yes, that's a typo, said Royce consultant Dave Gilliard. The redrawn 40th is in Los Angeles County, represented by Rep. Lucille Roybal-Allard, D-Los Angeles, and has a 47-percentage point Democratic registration advantage that would withstand even the tallest of Republican waves in 2014.

"He's running in the 39th," Gilliard said. The campaign corrected its filing Friday.

The 39th covers parts of Orange, Los Angeles and San Bernardino counties. Royce won re-election there last year with 57.8 percent of the vote against Democrat Jay Chen.

It's not like 39 was a completely new district number for Royce. He represented another version of the 39th Congressional District in the 1990s.

Editor's Note: This post was been updated at 3:50 p.m. on Dec. 27, 2013 to note that the paperwork was amended on Friday.

PHOTO: Rep. Ed Royce, R-Fullerton, in his official congressional photo.

December 27, 2013
California once again the nation's top municipal bond issuer

market.jpgA multi-billion-dollar surge of bond issues by state and local governments is making California, once again, the nation's top issuer of municipal debt, the Bloomberg financial news service calculates.

Bloomberg said that California governments have issued $46.2 billion in new debt so far in 2013, a 13 percent increase from 2012, pushing the state ahead of New York for the first time since 2010. Bloomberg calculates that New York has sold $36.4 billion in municipal debt this year, down 18 percent from 2012.

The news service credits the state's improving economy and better fiscal health, especially at the state level, with sparking the uptick in new government debt.

"They've really gotten their fiscal house in order," Bloomberg quotes Peter Hayes, who heads municipal bonds at New York-based BlackRock Inc.. "Now that the economy is stronger, they feel more confident that strength is sustainable, and that gives them the confidence to borrow."

As the state's financial indices have improved, so have its credit ratings, and bond buyers have demanded as little as three-tenths of one percent in extra yield, the lowest margin in years.

The largest California bond sale this year was a $2.3 billion offering by the Foothill/Eastern Transportation Authority in Orange County, an operator of toll roads. The state, meanwhile, is planning to sell about $3 billion in new general obligation bonds by mid-year, plus another $7 billion in general obligation and lease-revenue bonds in the following fiscal year.

PHOTO: Trader Kevin Colter, left, works on the floor of the New York Stock Exchange on June 28, 2013. Associated Press/Richard Drew


Capitol Alert Staff

Jeremy White Jeremy B. White covers California politics and edits Capitol Alert's mobile Insider Edition. Twitter: @capitolalert

Amy Chance Amy Chance is political editor for The Sacramento Bee. Twitter: @Amy_Chance

Dan Smith Dan Smith is Capitol bureau chief for The Sacramento Bee.

Christopher Cadelago Christopher Cadelago covers California politics and health care. Twitter: @ccadelago

Micaela Massimino Micaela Massimino edits Capitol Alert.

Laurel Rosenhall Laurel Rosenhall covers the Legislature, the lobbying community and higher education. Twitter: @LaurelRosenhall

David Siders David Siders covers the Brown administration. Twitter: @davidsiders

Dan Walters Dan Walters is a columnist for The Sacramento Bee. Twitter: @WaltersBee

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