Capitol Alert

The latest on California politics and government

March 5, 2014
Ted Gaines sues California insurance exchange over nixed plans


State Sen. Ted Gaines has filed a lawsuit against the state health insurance exchange, claiming agency officials exceeded their power when they instructed participating health insurance companies to terminate existing policies for hundreds of thousands of Californians.

Covered California later declined a presidential offer letting insurance companies extend the canceled policies to roughly 1 million Californians.

The lawsuit, filed in Los Angeles County Superior Court, seeks to prevent the exchange from requiring cancellation of policies that do not comply with the provisions of the federal law. That, presumably, would allow insurance companies to continue offering the plan.

"A lot of people have policies that have not changed, and they've had them in place for decades, and now they are out," said Gaines, R-Rocklin, a candidate for state insurance commissioner. "They were forced out of the plan into something that was more expensive and in many cases with higher deductibles. There are some real abuses."

Gaines' lawsuit also alleges the exchange is wasting taxpayer dollars on public relations.

Anne Gonzales, a spokeswoman for the exchange, declined to address Gaines' claims.

"Covered California hasn't received service in this matter," she said. "When it does, our legal team will review the complaint."

The exchange last fall refused to give insurance companies more time to end individual policies that don't conform to the federal heath care overhaul. The cancellations applied to individual plans purchased after passage of the health law.

The decision came shortly after President Barack Obama in November allowed states to extend millions of canceled insurance policies for one year amid uproar over his statements that customers who like their plans could keep them.

Among the most vocal critics of the exchange at the time was state Insurance Commissioner Dave Jones, a Democrat. Jones also used the threat of legal and other action to persuade two insurance industry giants to delay terminating scores of plans across the state.

Still, Gaines, the president of Gaines Insurance in Roseville, argues Jones did not do enough to prevent the plans from being canceled.

His lawsuit also requests an order from the court to halt exchange spending on things like infomercials and public relations. Specifically, it identifies as unrelated to the exchange's mission allocating $1.3 million for a six-hour infomercial featuring health and fitness guru Richard Simmons, more than $10 million on a contract with the public relations firm Weber Shandwick and "untold funds" on a contract with Ogilvy Public Relations.

PHOTO: Senator Ted Gaines, R-Rocklin, during session in the Senate chambers in Sacramento on March 11, 2013. The Sacramento Bee/Hector Amezcua.

March 5, 2014
Bera reverses himself on health care, and GOP rival pounces


Rep.Ami Bera, an Elk Grove Democrat who's facing a tough re-election in the fall, just gave his Republican opponents a bit more ammunition — by voting with them on health care.

Last summer, Bera voted to delay the mandate for employers to provide insurance, but not for individuals to get insurance. Wednesday, though, he voted for a House Bill to delay the individual mandate, a key component of President Barack Obama's signature health care law.

In a press release, former California Rep. Doug Ose, one of three Republican challengers vying to oust Bera, paraphrased a line that famously sank Secretary of State John Kerry in the 2004 presidential race.

"Congressman Bera was for Obamacare's individual mandate before he was against it," Ose said. "He can't be 'kind-of' for Obamacare one day, and 'kind-of' against it the next."

Ose even took a shot at Bera's involvement in a bipartisan group called the No Labels Coalition. Wednesday's vote, Ose said, demonstrated that Bera couldn't make up his mind.

"Bera's 'No Labels Coalition' should be renamed the 'No Position Coalition,'" Ose said.

In a statement on his website, Bera characterized his vote as a response to the botched rollout of the Affordable Care Act last fall and a way to give people more time to sign up.

"While getting the uninsured coverage remains critical, there have been a whole host of problems with implementation starting with the roll-out of the website," Bera said, "and I couldn't in good conscience vote to penalize people who haven't yet enrolled."

PHOTO: U.S. Rep. Ami Bera, D-Elk Grove, attends the California State Society's inaugural luncheon on Jan. 19, 2013, in Washington, D.C. McClatchy Tribune/Tish Wells

March 5, 2014
Northern California Assembly race takes shape with conservative endorsements

ha_dan_logue.JPGRepublican James Gallagher has scored two key endorsements that could put him ahead in the open race for California's 3rd Assembly District.

The sprawling district north of Sacramento is solidly Republican, and with incumbent Dan Logue, R-Marysville, running for Congress, the race appears to be between Gallagher, a Sutter County supervisor from a longstanding farming family, and Ryan Schohr, another Republican with roots in the region's agricultural community.

The conservative California Republican Assembly backed Gallagher at its convention this past weekend, citing his "core conservative principles."

He also received an endorsement last week from the Howard Jarvis Taxpayers Association. The powerful anti-tax group seldom gets involved in intraparty primary races.

"I am excited to receive the endorsement of such a respected taxpayer organization," Gallagher said in a statement. "I'm humbled that they have recognized my work on the Board of Supervisors and my commitment to protect taxpayers from government waste and abuse."

Schohr, a farmer who serves on the Butte County Water Commission, said he is "not a politician or a bureaucrat," so he has not been seeking out those statewide endorsements.

"I've got the support of hundreds of families and farmers and business owners in the district," he said. "I've got a record of fighting taxes and wasteful spending and harmful regulations... I'm happy to work with anybody who has those same conservative ideals."

Gallagher and Schohr also face Democrat Jim Reed in the June primary.

PHOTO: Assemblyman Dan Logue, R-Marysville, works on the Assembly floor on February 8, 2010.

March 5, 2014
John Burton pledges neutrality in Dem races for California controller, secretary of state

john_burton.jpgAs California Democrats head to Los Angeles this weekend for their state convention, the party's leader has declared neutrality in the two most competitive statewide Democratic primary fights: controller and secretary of state.

In an e-mail Wednesday to party activists, California Democratic Party Chairman John Burton said he has heard complaints that "my name's being used one way or the other or that people are being bullied one way or the other" by the campaigns of competing candidates.

Assembly Speaker John A. Pérez, D-Los Angeles, faces fellow Democrat Betty Yee, a member of the state Board of Equalization, in the race for controller. State senators Leland Yee and Alex Padilla and former California Common Cause official Derek Cressman are Democrats running for secretary of state.

In his e-mail, Burton said he had asked the five in January to not seek the party's endorsement, with mixed success. Pérez and Padilla continue to push for the party's embrace.

"I thought it was in the best interest of the party not to have fights about endorsements between good Democrats. I still feel that way," Burton wrote.

"I've known John Pérez since he worked for the food and commercial workers, I've known Betty Yee since she worked on the Budget Committee in the State Assembly, I've known Alex Padilla since he was on the L.A. City Council, I've known Derek Cressman from his work with Common Cause, and I've known Leland Yee since we were volunteers on Nancy Pelosi's congressional campaign some twenty something years ago."

"They're all friends and they're all good Democrats. So I strongly resist efforts to pull me into one camp or another," he said. "What other members of the Party do is totally up to them. But at least you know now where I actually stand and why."

PHOTO: California Democratic Party Chairman John Burton, left, talks with Sen. Dianne Feinstein and Attorney General Kamala Harris after her remarks to Democratic delegates in April 2011 at the Sacramento Convention Center. The Sacramento Bee/Hector Amezcua

March 5, 2014
Verizon, Accenture drop Kevin Sloat's lobbying firm


Sacramento's Sloat Higgins Jensen & Associates lobbying firm lost three prominent clients last month as revelations surfaced that founder Kevin Sloat would pay a record-breaking fine for giving prohibited campaign contributions to California officials.

Sloat lost contracts with Accenture, the San Francisco 49ers and Verizon, according to the latest filings with the Secretary of State's Office. Verizon was Sloat's most lucrative client last year, paying his firm $352,000 in 2013. Accenture paid the firm $179,000 last year and the 49ers paid it $105,000.

A fourth client — the Orange County Transportation Agency — publicly discussed this week whether to drop Sloat's firm, according to a report in the Voice of OC. The agency paid Sloat Higgins $258,000 last year.

The report quotes Jeff Lalloway, an Irvine councilman, and Todd Spitzer, an Orange County supervisor, saying they want the agency to cut ties with Sloat because of his violations of state lobbying ethics laws. Spitzer said he hopes lobbyist Moira Topp will continue to represent the transportation agency by leaving Sloat's firm, the Voice of OC reported.

Sloat paid a $133,500 fine to the Fair Political Practices Commission last month for hosting dozens of lavish campaign fundraisers at his home that included pricey wine, cigars and liquor in excess of what California law allows lobbyists to give state officials. Nearly 40 politicians — including Gov. Jerry Brown, Lt. Gov. Gavin Newsom and legislative leaders in both houses — received warning letters for participating in the events. Sloat's fine set the record as the largest a lobbyist has paid the state for violating political ethics laws.


Sacramento lobbying firm fined for lavish fundraisers with lawmakers

Sacramento lobbyists can make politicians feel at home - for $500

Record-setting fine hits Sacramento lobbyist Kevin Sloat

PHOTO: Aji Japanese Bistro in El Dorado Hills offers 17 wines and champagne by the glass on January 21, 2014. The Sacramento Bee/Jose Luis Villegas

March 5, 2014
Berryhill urges rejection of campaign money-laundering decision


Lawyers for state Sen. Tom Berryhill, R-Twain Harte, say in a new filing that an administrative law judge got it wrong when he concluded that the lawmaker illegally coordinated with county Republican committees in steering campaign dollars to his brother's Assembly campaign in 2008.

In his Jan. 31 proposed decision, made public Wednesday, Judge Jonathan Lew called the money-laundering violations "serious and deliberate." The senator, Lew wrote, contributed $40,000 to GOP central committees in Stanislaus and San Joaquin counties "with the clear understanding that the monies would be contributed to Bill Berryhill."

Tom Berryhill, Bill Berryhill, and Republican central committees in San Joaquin and Stanislaus counties face a combined $40,000 in fines. The California Fair Political Practices Commission is scheduled to consider Lew's decision April 17.

But Wednesday's opposition brief said Lew misinterprets the law as well as contradicts the legal standard applied in last year's case by the Fair Political Practices Commission challenging an Arizona nonprofit organization's donations to California campaigns before the November 2012 election.

Last October, the FPPC approved a $1 million fine as part of a settlement with several political groups that had given about $15 million to block a tax increase and weaken union influence in California in 2012 without properly reporting the source of the money. Among the groups were the Center to Protect Patient Rights, Americans for Responsible LeadershipAmericans for Job Security.

The latter group was not included in the fine because of insufficient proof that it had earmarked its contributions to ARL, according to Wednesday's filing. That contradicts the FPPC's standard in the Berryhill case, it contends.

"There is substantial doubt about why the Enforcement Division would contend in settling the ARL case that 'hope' and 'no specific direction' or 'no specific purpose' were insufficient to conclude that AJS had 'earmarked" its contributions to CPPR, and that AJS had acted in accordance with current law, whereas when Tom Berryhill acknowledged that he 'hoped,' but did not specifically direct or specify a purpose for his contributions of $40,000 to two central committees, that earmarking had occurred," it reads.

PHOTO: Sen. Tom Berryhill, R-Twain Harte, is shown during session in the Senate chambers in Sacramento on March 11, 2013. The Sacramento Bee/Hector Amezcua.

March 5, 2014
Fresno mayor to run for state Controller

Fresnomayor.JPGFresno Mayor Ashley Swearengin has filed papers to run for state Controller.

Swearengin, a Republican, would likely face two Democrats -- Assembly Speaker John A. Pérez and Board of Equalization member Betty Yee -- in the June primary, with the top two heading to the November general. The seat is open because State Controller John Chiang is termed out and running for state treasurer.

The Fresno Bee's John Ellis has more.

PHOTO: Ashley Swearengin responds to questions from other mayors during the United States Conference of Mayors at the Capital Hilton in Washington, D.C., on Wednesday, Jan. 22, 2013. MCT/Rod Lamkey Jr.

March 5, 2014
AM Alert: Jerry Brown expands Israeli partnership

brownchamberbreakfast.jpgGov. Jerry Brown has been quite the diplomat recently: Last week, he established a trade agreement with Peru and met with the president of Portugal. Today, he joins Israeli Prime Minister Benjamin Netanyahu in the Bay Area to sign an economic pact between California and Israel.

According to the governor's office, the agreement will emphasize "water conservation, alternative energy, cybersecurity, health and biotechnology, education and agriculture technology," along with allowing Israeli companies to access California's Innovation Hub network of research parks, technology incubators and business development programs.

The meeting takes place at 10:30 a.m. at the Computer History Museum in Mountain View.

VIDEO: Legislators' financial disclosure statements are an annual source of political dirt, Dan Walters says.

HEAR YE, HEAR YE: The Senate Committee on Education holds an informational hearing at 9 a.m. in Room 4203 of the Capitol to discuss teaching in the 21st century. The hearing includes panels on teacher recruitment, professional development and Common Core standards, as well as remarks from State Superintendent of Public Instruction Tom Torlakson.

The Senate Committee on Health convenes at 1:30 p.m. in Room 4203 to explore the cost of health care in California and the state's efforts to provide affordable options.

The Senate Committee on Rules also gathers at 1:30 p.m. in Room 113 to confirm Laura A. Alarcon as chief of the Bureau of Security and Investigative Services. Though sent to the rules committee last week, the Republican resolution to expel Sen. Rod Wright, D-Baldwin Hills, from the Senate is unlikely to be heard.

OVERTIME BATTLE: In January, in-home supportive caregivers rallied on the steps of the Capitol in opposition to a budget proposal that would prohibit them from working overtime. They'll attend the Assembly's budget hearing on health and human services today, appearing outside Room 4202 at 1:00 p.m. to ask legislators to reject the restriction.

COMING HOME: State Sen. Mark Leno, D-San Francisco, in conjunction with the California Youth Homeless Project research initiative, hosts a screening of the short film "Children of Re-Entry" at 1 p.m. in Room 112 of the Capitol. The film is followed by a panel talk on how incarceration and re-entry into society affect families.

CATCH A FIRE: Members of California Professional Firefighters are holding "live fire" training sessions for the public on the west steps of the Capitol starting at 9 a.m., with a special trailer that simulates the conditions of a fire attack.

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

March 5, 2014
Dan Walters Daily: Legislators' financial reports reveal political dirt

RB_Capitol_Dome.JPGThe annual filings show who is trying to influence whom in Sacramento, Dan says.

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

See other Dan Walters Daily clips here.


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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