Capitol Alert

The latest on California politics and government

February 7, 2014
Jerry Brown, Gavin Newsom to get warning letters in FPPC case

brownchamberbreakfast.jpgGov. Jerry Brown and Lt. Gov. Gavin Newsom are among state officials who will receive warning letters in the California Fair Political Practices Commission's investigation of a firm headed by a Sacramento lobbyist who held lavish fundraisers for politicians at his home, a source said.

Thomas Willis, whose law firm represents Brown, Newsom, state lawmakers and various political committees, said in an email that his firm has not seen any warning letters.

"What we can say is that our clients properly paid and disclosed all known expenses," he wrote. "Of course, they did not disclose expenses that they were not made aware of."

Senate President Pro Tem Darrell Steinberg and Assembly Speaker John Perez also expect to get letters.

Stephen Kaufman, Perez' lawyer, said in a statement that the speaker held one fundraising event at lobbyist Kevin Sloat's home in June 2011.

"The Speaker's committee paid the full amount of the catering invoice that was submitted," the statement said. "The Speaker has no knowledge of any other costs associated with the event. It is our understanding that because legislators were unaware of such expenses and properly reported all known expenses, the FPPC intends to resolve the issue with a warning letter and no further action."

In addition to Brown and Newsom, as many as 40 elected officials are expected to receive warning letters from the commission in the case, in which Sloat Higgins Jensen and Associates, a lobbying firm headed by Sloat, has reached a tentative agreement with FPPC staff to pay fines involving violations of state political disclosure rules.

The action was prompted by a lawsuit filed in Sacramento Superior Court against Sloat and his firm in December by a disgruntled former employee under investigation for embezzlement. The former employee claimed Sloat's elaborate events amount to non-monetary campaign contributions that lobbyists are not permitted to give.

A list provided to The Bee of senators who can expect to get letters included Kevin de Leon, Jerry Hill, Marty Block, Norma Torres, Lou Correa, Alex Padilla, Cathleen Galgiani and Rod Wright.

PHOTO: Gov. Jerry Brown speaks at the California Chamber of Commerce's annual host breakfast in Sacramento on May 22, 2013. The Associated Press/Rich Pedroncelli

February 7, 2014
Sacramento lobbyists can make politicians feel at home-for $500

wine_bottles.JPGBy Laurel Rosenhall

Entertaining politicians at home has long been an accepted part of doing business for Sacramento lobbyists.

So Thursday's news that the state's political watchdog agency is cracking down on a prominent lobbyist for throwing fundraisers at his home hit the Capitol with both outrage and confusion. Among the politicians who will receive warning letters after participating in the events are Gov. Jerry Brown and Lt. Gov. Gavin Newsom, a source told The Sacramento Bee.

California law puts strict limits on lobbyists, forbidding them from making any campaign contributions to state officials, and limiting gifts - including meals - to no more than $10 in a month.

But it allows lobbyists to host low-key political fundraisers in their homes, connecting their clients with key lawmakers as they donate to a the legislator's campaign. So while lobbyists may not give a penny to a political campaign, they can offer up their homes for a low-cost campaign fundraiser and invite interest-group clients to mingle and donate.

sloat.jpegThe key, though, is that the total cost of the event must stay under $500 - and that's how lobbyist Kevin Sloat ran into trouble. Fundraisers at Sloat's house routinely involved catered menus, expensive cigars, flowers, fine wines and top-shelf liquor, according to a lawsuit filed against him in December by a former employee under investigation for embezzlement.

February 7, 2014
Nonprofits claim $122 billion in property-tax exemptions


Churches, affordable-housing projects and other California nonprofits avoided property taxes on $122 billion in assessed value in 2013-2014 thanks to the state's welfare exemption for nonprofits, according to a recent report by the Legislative Analyst's Office.

The $122 billion represents about 3 percent of all taxable property value in California and translates into about $1 billion in lost revenue for cities and counties.

In the Capitol, though, the main focus is on exemptions for affordable-housing projects — and how that benefit can be upended by substitute payments that some project developers make to cities.

Under the rules for welfare exemptions, affordable housing projects must spend what they save on property tax to "maintain the affordability of, or reduce rents otherwise necessary for, the units occupied by lower income households."

Ventura County Assessor Dan Goodwin recently ordered some affordable-housing developers to pay up on their property taxes because they made "payments in lieu of property taxes" — a relatively uncommon practice in California known as PILOT's — to cities. Goodwin contends that the payments violated the welfare-exemption rules.

Now lawmakers are looking at the issue. At a joint hearing Monday of the Assembly's local government, housing and taxation committees, lawmakers seemed inclined to beef up the ground rules for PILOT payments while protecting the tax perks for affordable-housing projects.

The chart below shows, by county, the dollar amount of assessed property value covered by welfare exemptions. Affordable housing projects fall into the "other charitable properties" column.

Source: State Board of Equalization

PHOTO: The Arbor Creek Apartments affordable housing development in Elk Grove had its grand opening Thursday, July 18, 2013. The Sacramento Bee/Randall Benton

February 7, 2014
AM Alert: Mark Leno announces cell phone theft prevention bill

IPhone.jpgAs smartphones have become increasingly essential items for many Californians, they have also become a favorite target for thieves: The Federal Communications Commission estimates that 30-to-40 percent of all robberies nationwide now involve cell phone theft, and that figure is more than 50 percent in high-tech San Francisco.

The growing problem has prompted state Sen. Mark Leno, D-San Francisco, to announce new legislation that would require a so-called "kill switch" to render phones inoperable if they are stolen, discouraging theft. A wireless trade group opposed a similar proposal when carrier Samsung floated the idea last summer.

Leno will hold a press conference at 9 a.m. at the State Building in San Francisco to discuss the details of the bill. He will be joined by Assemblywoman Nancy Skinner, D-Berkeley, as well as Bay Area law enforcement officials and Oakland Mayor Jean Quan.

VIDEO: By demanding action on some pension debts while ignoring others, Gov. Jerry Brown has undermined his credibility on the issue, Dan Walters says.

ELECTION LUNCH: It's not often you get the executive directors of California's Democratic and Republican parties in the same room, but Shawnda Westly and Cynthia Bryant come together to discuss the 2014 election at a luncheon hosted by professional women's organization Capitol Network. Also participating in the conversation are Democratic strategist Robin Swanson and Sabrina Lockhart, communications director for Assembly Republican leader Connie Conway. The event takes place at the California Chamber of Commerce at 11:30 a.m. and is moderated by Marcey Brightwell of Grayling Communications.

NOT SO FAST: Is increased political participation always a good thing? It might not be when it comes to municipal budgeting. The American Society of Public Administration's Sacramento chapter hosts a discussion of a new report from Cal State Sacramento's Center for California Studies examining civic engagement and its impact on attitudes towards taxes and government spending. The event begins at noon in Room 3191 of the Capitol.

LOCAL HISTORY: The State Historical Resources Commission meets at Sacramento City Hall at 9 a.m. to discuss new nominations for the National Register of Historic Places. Of local significance on the agenda is New Helvetia Historic District, a public housing project constructed to improve the housing conditions of Sacramento's African-American community that was used as defense housing during World War II.

INSIDER EXCLUSIVE: Subscribers to the Capitol Alert Insider Edition can get veteran political analyst Tony Quinn's take on key legislative races, as Republicans seek to cut into Democrats' supermajority status this year. In the fourth of five parts released this week, Quinn and reporter Christopher Cadelago look at key state Senate races in Northern California. You can subscribe to the Insider Edition app for iPad and iPhone.

PHOTO: Instagram is demonstrated on an iPhone. The Associated Press/Karly Domb Sadof

February 7, 2014
Dan Walters Daily: Jerry Brown undermines his credibility on pension issues

CalPERS_building.JPGBy encouraging the public employees' retirement system to address its unfunded liabilities while avoiding action on the teachers' pension debt, Gov. Jerry Brown undermines his own credibility, Dan says.

Have a question you'd like Dan to answer? Post it on our Facebook page.

See other Dan Walters Daily clips here.

PHOTO: The CalPERS building in Sacramento.The Sacramento Bee/Anne Chadwick William


Capitol Alert Staff

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. Twitter: @DanielSnowSmith

Jim Miller Jim Miller covers California policy and politics and edits Capitol Alert. Twitter: @jimmiller2

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

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

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

Jeremy White Jeremy B. White covers the Legislature. Twitter: @capitolalert

Koseff Alexei Koseff edits Capitol Alert's mobile Insider Edition. Twitter: @akoseff

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

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