State Audit reveals no major malfeasance, but a deep lack of transparency
by Brian Leubitz
Sen. Leland Yee has been all over the UC system, arguing that nobody knows what is going on with the system. But while State Auditor Elaine Howle didn't find anything legally wrong, she did find that much more could be done to shed light on the process
The University of California should justify to the public why it spends thousands of dollars more per student at four of its 10 campuses and also do a better job of explaining how it spends more than $1 billion it allots annually to "miscellaneous services," state auditors said Thursday.
The audit found no major malfeasance in the university system's budgeting or spending, but noted a lack of transparency in the way it handles its finances that could erode public trust.
For example, $6 billion was budgeted for the UC president's office over five years, all of it falling under a line-item category called miscellaneous services. (SF Gate)
Now, most of the money can be traced back to legitimate expenses, but why was so much money just tossed into a "miscellaneous" file. UC can do better than that. Heck, they have a whole fleet of accounting professors that can help them out with that. But we would all be served by a bit more sunshine in the Office of the President.
The report also revealed that several campuses receive much smaller amounts of funding per student. UCSB receives $12,309 per student, while UC-Davis receives $17,660. Much of this has to do with some important underlying factors such as percentage of graduate students, but once again, a little sunshine could make this whole process smoother. If the UC just did a better job in keeping its books open, many of these issues wouldn't get heated at all.
Meanwhile both the UC system and Yee are taking the report as a win. Hooray for that.
I manage the IssaWatch project for the Courage Campaign. Rick Jacobs visited Chairman Issa's office earlier this week to deliver a message from Courage members. He recounts his experience below.
With a petition containing over 18,000 signatures from Courage Campaign members --including thousands from residents of California's 49th Congressional District -- I stopped by Mr. Issa's DC office on Wednesday to personally deliver our request that the Chairman address the growing disconnect between his record and rhetoric on the issue of transparency. Specifically, to publicly post his schedule online.
We'd written through official channels to request an appointment; we still have not heard back.
As you'll see in the attached short video shot by our friends at Media Matters, I met Chairman Issa's Deputy Chief of Staff, Veronica Wong, and asked her if Mr. Issa plans to respond to our request. She would not say. The saddest part of this whole thing is that Mr. Issa is the Co-Founder of the Transparency Caucus. But as you will see in the video, his Deputy Chief of Staff had no idea where he was. I guess Mr. Transparency has something to hide from everyone.
Thanks for stepping up to sign that letter. It's a big deal to walk into Mr. Issa's office and show how many people are watching. That's our job: Holding him accountable and even over time, setting an agenda that serves the people, not just Mr. Issa and his 150 hand-picked special interests.
The PIRG today released their ratings on the transparency of state government spending. And somehow California managed to not fail:
California gets a “D+” when it comes to openness about government spending, according to Following the Money 2011: How the States Rank on Providing Online Access to Government Spending Data, the second annual report of its kind by the California Public Interest Research Group (CALPIRG). Included with the report is an interactive online toolthat allows users to view what California is doing best and worst compared to other states’ transparency practices. “If California’s look hard enough at the budget voted on today they’ll notice some serious holes in their ability to follow the money,” said Pedro Morillas CALPIRG Consumer Advocate. “Billions of dollars in tax breaks and economic development subsidies are spent every year with no disclosure to the public of who gets them or how much they get.”
Now, considering that our budgets were done in the back rooms for so many years in the Big 5 process, it seems like we have a lot of room to improve on our transparency. Check out the full report for some comparison between states.
I proudly manage the IssaWatch.com project for the Courage Campaign.
As Sunshine Week -- an annual, national push to make government more open and transparent -- begins, we at Courage Campaign are calling for Darrell Issa to back up his rhetoric with action. After resisting calls for his own disclosure while criticizing the Obama Administration for similar, we're calling on Rep. Issa to disclose all the meetings he has with lobbyists. While this sort of hypocrisy is nothing new from Issa, the double-standard is particularly audacious. Rick Jacobs recently sent this message to Courage members explaining the effort.
Today the Sacramento Bee reported on Dan Lungren's latest conflict of interest. While Karl Rove's shadowy front group tries to bail out Lungren in a tough election, the Congressman advocates for unlimited corporate campaign spending. Even worse, if Lungren does win reelection and becomes Chairman of the House Administration Committee, he would have jurisdiction over campaign finance regulation -- Lungren would be responsible for regulating the same shadowy corporations that are funneling hundreds of thousands of dollars to save him.
This news comes just one week after Karl Rove and Big Oil billionaires invaded our living rooms, laundering over $690,000 through Rove's shadowy slush fund, American Crossroads, hoping to hijack our election through false and misleading advertisements.
It's not surprising that Big Oil is protecting Lungren - he's taken $84,950 from oil and gas companies, then does their bidding in Congress - voting to give Big Oil $2.6 billion in tax breaks.
It's also not surprising that Karl Rove is working for Dan Lungren, since Lungren's opposition to transparency paved the way for American Crossroads. Lungren voted against the DISCLOSE Act to require transparency in corporate campaign spending, and applauded the Citizens United Supreme Court decision on the floor of the House. These actions set the stage for American Crossroads to launder billions from the mega corporations who are corrupting our government. Even more egregious, Lungren accepted $15,000 from Citizens United, and is even starring in an incendiary Citizens United film alongside Ann Coulter.
It's not surprising that Karl Rove and Big Oil want to keep Dan Lungren in Congress. But we have a surprise for them, because Rove and Lungren have forgotten the most important part of our democracy: you - and thousands of voters just like you. We don't support shadowy corporations polluting our democracy, and we won't stand by while Karl Rove tries to hijack our election.
You are the strongest weapon we have against American Crossroads, and we need you now. Please, support us in any way you can, and together, we will fight back against Karl Rove and his corporate billionaires, and we will bring the kind of change our country needs.
Yesterday, I mentioned Sarah Palin's little attack on transparency and disclosure. At the same time, the Legislature was looking in another direction: more disclosure during budget negotiations:
The Senate approved a measure that requires disclosure of contributions of at least $1,000 within 24 hours when they are made between the date in May when the finance director issues a revised revenue estimate and the date when a budget is adopted for the fiscal year beginning July 1.
The new disclosure requirements, approved on a 29-3 vote and sent to the Assembly, also would apply to the 15 days before the end of the legislative session and, for the governor, during the 30 days after adjournment of the Legislature when he signs or vetoes the bulk of bills.(LA Times)
Now, this is not going to actually change the world, but if it's good enough for the election cycle, it's good enough for the budget. After all, most elections are well ahead of the time that the big decisions are made. The real power that special interests seek to influence is all about the budget. Why not have the same kind of strict rules?
My guess is that if this passes through the rest of the legislative hurdles, Arnold signs this. He won't have to deal with the consequences, and he gets to look like the goo-goo impresario that he has always wanted to be. It isn't going to change the power of the two weeks surround the budget negotiations, but it just might be a little bit of sunshine-y fresh disinfectant.
Florez, CALPIRG join forces to raise state's "D" grade for reporting spending
SACRAMENTO - Senate Majority Leader Dean Florez (D-Shafter) will hold a news conference Wednesday morning in Sacramento, introducing legislation to bring greater transparency to state spending, particularly billions of dollars in corporate tax subsidies.
A lack of reporting on tax subsidies given to corporations in California was one reason California received a "D" grade today on its reporting of government spending, based on a report introduced by bill sponsor California Public Interest Research Group (CALPIRG).
Corporations in California are projected to receive more than $4 billion in tax subsidies from the state this year, yet the state lacks the transparency of requiring corporations to release tax breaks they receive that are over $1000.
I've shortened up the questions for this poll in the table here, and some may have gotten a little confusing, but most is fairly self-explanatory.
The state wants some sort of big change, it just doesn't really know how it wants, what it wants, or why it wants it. But, it just wants to start all over again.
Except keeping Prop 13 apparently. The split roll and the majority vote for revenue faired very poorly, but what can you expect? The question was basically, would you like consensus to raise taxes. Well, sure, and I like apple pie too. But when one party refuses logic, what then?
The problem with a poll like this is that these concepts are very loose in voters minds. They are almost completely defined by the question that is asked by the pollster. For an example of that, on the Parsky Commission Flat tax question, it was asked two different ways, and the answers changed by nearly ten points.
Finally, "waste and fraud delusion" in the chart refers to a question that asks respondents about waste and fraud. This makes me both sad and increases the chances that my head will explode by a factor of 10.
By a 57% to 37% margin voters believe the state can provide about the same level of services by simply eliminating waste and inefficiencies, even if its budget had to be cut by billions of dollars.
Not only is this so astronomically off the mark as to be laughable, it shows that the Republicans have destroyed us at messaging. They have made "public employee" into a synonym for all that is evil and wasteful. Despite the fact that our state employees work in some very demanding positions, the conservative movement has repeated over and over again how the government is just stealing. And now the state believes it.
Despite all the evidence to the contrary, California believes that it is "waste" that is bankrupting the state. Despite the fact that the Republicans couldn't come up with anything near even a billion dollars of identifiable waste. Despite the fact that the Republican budget slashed services, cut to the very core of what Californians have requested, nay demanded, since the days of Pat Brown.
Californians want their yummy chocolate cake, but they also want to eat the tasty carrot cake on the shelf. The key is that we can't give up, and give in to this. We must continue to fight for changes that will make the state productive once again.
But I refer back to the problem with a poll like this: the questions define the answers. The poll on this last question sounds like something you'd hear on Fox and Friends:
The state government has been facing large budget deficits over the past several years. Some people believe that by simply eliminating waste and inefficiencies our state government can provide roughly the same level of services that it currently does, even if its budget has to be cut by 20-25 billion dollars. Do you agree strongly, agree somewhat, disagree somewhat or disagree strongly with this view?
Really? Some people believe? Care to name one of them that doesn't have a financial or electoral stake in that fact gaining traction? And even given that standard, you would be hard pressed to find anybody that really pays attention to the state government who thinks you can cut $20 billion from a budget that is now well below $100 billion and expect no service cuts. I would love to chit-chat with that person.
In the end, polling for these kinds of nebulous question goes only so far, no matter how good the pollster. This is the problem with all of this direct democracy, it allows one person or another to put their finger on the scale, whether in the form of the AG's description or the pollster's question.
We elect representatives to think about these issues for us, to come up with good answers. Yet we have consistenly knee-capped them over the last 30 years. Californians want big change, they just don't want to change.
Incidentally, if you'd like to see some different questions get asked, you could look to George Lakoff. Some progressive activists are seeking money to fund a poll. They've raised $10,000 and are looking for another $25,000. You can help by giving on ActBlue.
UPDATE by Robert: This morning Brian beat me to the Field Poll post. What I was going to say is: It's easy for Californians to say they want change, just as it turned out be fairly easy for the American people to say they wanted change by electing Obama last fall. As we're seeing in Washington D.C., actually implementing change is the hard part. Are people - and legislators - really willing to give up long-held assumptions, beliefs, and ways of doing business, without which change cannot happen?
We're witnessing the same thing here in California. Voters want change, but they are wary of the details, and are not yet abandoning old ideologies. That's not to say they'll refuse to do so - instead, in the absence of a clearly articulated and defined alternative vision for California, polls show that voters are not automatically going to give up on the 1978 model of California governance, even though its failure is obvious to all.
I agree with Brian that we've been getting "destroyed" at messaging. Even now, progressive and Democratic organizations still do not want to accept the importance of doing the basic work of creating and actively, consistently, and coherently pushing progressive frames. The consultantocracy still believes in playing for the near-term narrow victory, and has no confidence in their ability to produce fundamental changes in voter thought or voter behavior.
These poll numbers do show that Californians want change. And they are a starting point for how we can produce it. The numbers on Prop 13 are a baseline, not a sign that we should stay away from the topic. And the numbers on the Parsky Commission proposals show that voters do want progressive solutions. It's time we offered them.
Arnold re-launched the transparency in government website today, with a whole lot of virtual pomp. Laura Chick, the stimulus watchdog or something like that, has been pressing for the site to have all the details of the various spending projects.
It didn't really work the first time:
Chick said the intent of the governor's original order was clear, to make government more transparent by posting online all kinds of reports, reviews and audits. But she got significant amount of push back from agencies, Chick said.
Chick accused many departments of having a culture of "resistance, sabotage and ... denial." (SF Gate 9/9/09)
But there is a bigger problem, one which Chick recognizes, the state's IT infrastructure, really, really, really stinks. The "newly redesigned site" is straight out of 1998. It's not totally unworkable, but really fails to use any modern web technology to make this stuff easy.
I'm not saying there isn't resistance to this in Sacramento, of course there is. The reporting, given the IT infrastructure, is likely a huge pain. Also, it would be naïve to dismiss the claims of flat out wanting to hide the ball. But this isn't really a problem of just the bureaucracy. This is a problem of the entire state government.
When you build a system that is designed to fail, eventually it will break down. And a broken government, such as we have now, will seek to hide those very real facts. Transparency (or lack thereof) is a symptom of the problem, neither a cure nor the ailment.
If we were to build a better government, we'd get a more transparency. But building a window into a pitch black room really doesn't give you a whole lot of information.
When business groups began to object to various provisions in the Parsky Commission effort to upend the tax structure in California, including anything that even smelled like an increase (even though the plan had to be revenue-neutral to clear the Legislature), I figured the effort was dead and buried. It appeared that the entire effort was a complete waste of time, and the effort to Latvia-ize the state by shifting the tax burden from the upper class to the lower class had been sniffed out and extinguished. However, the recent secrecy on the part of the commission, after a pledge of transparency, has many wondering if the shock doctrine is alive and well.
The plan is that, just about 24 hours from now - or 11 a.m. Thursday, to be precise - a state commission will consider and potentially adopt a proposal for an entirely new tax system for the state of California.
It would be a radical undertaking, slashing some taxes, eliminating others and establishing a new tax about which no one in California is familiar. No one can say with anything approaching certainty how much it would cost businesses and consumers or how much revenue it would generate to finance state services.
Yet, despite the significance of the task, despite all the unanswered questions and despite the imminence of a decision, as of this writing - midafternoon Tuesday - the details of the proposed new tax plan have not been made available for public review.
A spokeswoman told me a little after 3 p.m. there was still hope that the detailed proposal would be posted on the commission's Web site before the day was out.
The Legislature has made no indication that they would take up whatever plan the Parsky Commission votes out, even after the Governor orders a special session to deal with it. And with both sides of the aisle condemning aspects of the plan, liberals for the tax burden shift, and conservatives for the unknown tax increases that may be part of any deal, I wouldn't call the prospects likely for a Parsky Commission plan to become law. But the secrecy is certainly troubling, as well as the revival of provisions voted down by the people on multiple occasions.
But members of the tax commission are reviving the rainy-day fund idea once again. Most notably, the idea has had some of its strongest support from Democratic-appointed commissioners.
Former Assemblyman Fred Keeley said recently that while many commissioners believe the state can reduce its budget volatility through changes in the tax system, he believes the tax system isn't so much the problem.
"My belief is that volatility of the general fund, to the degree it's a problem, is due to the governor and Legislature with regard to spending," Keeley said. "That can be solved by way of an appropriately designed rainy-day fund or lockbox."
Another Democratic appointee, University of Connecticut law professor Richard D. Pomp, reminded the commission this month that he has long believed the reduction of volatility was a spending issue.
"From the outset, I have argued, and continue to believe, that volatility, which is a feature of every state's tax system, is a spending problem and not a tax problem," Pomp wrote. (That comes awfully close to the oft-used GOP line that California's budget problems are "a spending problem, not a revenue problem.")
I think these Democrats are trying to argue that volatility in the tax structure is a good thing, which it is. But the leap from that to a spending cap doesn't follow. There's a difference between spending wisely in good years and a third-party mechanism that limits the ability to restore chronic budget cuts from bad years, which is what a cap would inevitably do. (A rainy-day fund without a cap would be different, but may end up serving the same purpose.)
I stick with my prediction that the commission is doomed, but it still bears watching.
Everything that is corrosive and broken about California politics can be seen in this incredible article by Kevin Yamamura. In it, he explains that negotiations on the budget are being held by the Assembly and Senate leadership in secret, so as not to upset the critical balance needed to pass it.
Five Californians are trying to solve the state's budget crisis, in part by keeping the other 38 million residents in the dark.
Gov. Arnold Schwarzenegger and the four legislative leaders have continued their negotiations behind closed doors for weeks, bypassing open legislative committees and offering the outside world few details as a precondition of their talks.
See, what happens is that the population of 38 million elects 120 representatives to go to Sacramento, and they vest all their power in the hands of four leaders, and they go off to run the state by themselves. It's such a brilliant program, not subject to personal ambitions or petty jealousies. Not at all.
Among the people the Big Five are hiding from are their own fellow legislators, and lobbyists:
They fear special interests will mobilize on every proposal they hear about, ramp up pressure on lawmakers and prevent any possibility of reaching a deal that could secure enough votes.
"Whether it's education or labor or any of the other groups, when we get wind of something that has significant jeopardy for us, we fight against it," said Kevin Gordon, a lobbyist for hundreds of California school districts. "It's a (lobbying) system set up to defeat the latest idea that's been hatched, which makes it that much harder to get a solution."
When they do reach a deal, legislative leaders intend to hide it as long as they can until a floor vote, for fear that lobbyists may undermine the agreement by persuading key legislators to vote against it.
Wow, there's an honest lobbyist.
So let's get this straight: budget negotiations are happening in secret, because if they were even remotely public, special interests would scuttle the deal. And when an agreement is reached, they're going to SNEAK IT ONTO THE FLOOR so no wayward lawmaker gets in his silly little head that he wants to read it.
The increased secrecy behind this year's "Big Five" leadership negotiations has made interest groups nervous and has alarmed open-government proponents.
"The thought that to be able to solve this you have to ram it down members' throats just to lock something up before a constituency finds it outrageous is evidence of how bad the process has gotten," said Terry Francke of Californians Aware, an open-government advocacy group.
Yep. Keep in mind that there has not been one Budget Committee hearing this year. When a deal is reached, that committee will probably meet in the middle of the night and rubber-stamp the deal, moving to the floor as fast as possible to outflank the special interests who clearly run the state.
The Big Five process is absurd. There are ways to decrease the influence of special interests, the biggest being full public financing of all elections. The best practice is NOT to hide from them so that the legislative process is like a team of burglars trying to rob a jewelry store without being detected. And the less people involved in any negotiation, the more possibility for eventual corruption through backroom dealing.
The entire brief for a Constitutional convention can now be "Read A-1 of the Sac Bee on February 4, 2009."
The Sunlight Foundation launched a new web site, Pass223.com, to harness the distributed power of the Internet to pressure the Senate into increasing disclosure of campaign contributions by passing a bill - S. 223, the Senate Campaign Disclosure Parity Act - requiring senators to file their contribution reports electronically.
We need your help to pass this bill. Please follow the link to Pass223.com and call your senators to find out where they stand on S. 223. The site has full instructions on who your senators are, how to call, what to say, and how to report back to us. For more detail on the bill, keep reading.
This week's edition of the SF Weekly has an article on Stealth Bloggers which argues that our work is "compromised" because some Calitics writers were paid by campaigns this last cycle - specifically, Bob Brigham and Brian Leubitz were paid by Mark Leno's campaign. The Weekly wants to believe this is some sort of scandal, perhaps to deflect from the Weekly's own criminal practices.
But there's no there there. As the article notes, Brigham and Leubitz were completely honest about their affiliations. Brigham repeatedly explained that he was proud to do work for Mark Leno. Leubitz said the same. How is it stealth when there is open and prominent disclosure?
There was nothing to prevent Joe Nation and his supporters from writing their own pieces here at Calitics. A blog such as Calitics encourages such contributions - the front page has prominence, sure, but other diaries can get recommended and even promoted.
The problem is that the Weekly author, Matt Smith, wants to put blogs in the same category as journalists, who supposedly maintain neutral objectivity about what they cover. We have NEVER made such a claim to objectivity. Our biases and positions are open. That's the real difference between us and other journalists, who hide their affiliations and biases and pretend to be objective. Smith holds up traditional journalism as pure and ideal, when it is clearly no such thing - witness their fawning support for John McCain.
There are no hidden affiliations here. Some Calitics writers, myself included, work for the Courage Campaign. Others have worked for candidates and ballot proposition supporters or opponents. And many aren't paid by any political group at all.
Our writing is positional. You know that going in. Anyone who reads Calitics and who is shocked to know that we espouse progressive Democratic causes is either not paying attention or being intentionally misleading.
Bloggers believe that the reader is intelligent enough to come to their own opinions on the matter. We disclose our affiliations so that the reader can make up their own mind about whether to take our opinions seriously or not. Matt Smith implies an intent to deceive that simply isn't there - it's a dishonest article.
Finally, there's nothing to stop someone from starting their own blog to cover California politics. We believe more bloggers should be credentialed to the CDP convention, to the state legislature, to press conferences. The more the merrier. We're not afraid of it, no matter what the position or opinion is of the blogger.
Of course, this IS the same Matt Smith who told his readers a few weeks ago to ignore who was backing Prop 98 and focus instead on its supposed benefits. Consistency doesn't seem to be a strength of his.
There's been a lot of noise about campaign expenditures, travel expenses, etc being too costly. Well, one way to avoid that: Don't disclose. And that's just what Arnold is doing. It's hard to imagine anything much worse for democracy than what was profiled in the LA Times today:
Gov. Arnold Schwarzenegger's office has avoided fully disclosing payments of $1.7 million in nonprofit funds for private jets, hotel suites and support staff for his trips overseas, according to state documents and interviews. Record-keeping for many of the governor's luxury-class jaunts has been by word of mouth. Asked how the staff tracks the costs, subject to public disclosure laws, Schwarzenegger attorney Daniel Maguire said: "Orally."
In late 2004, the multimillionaire governor stopped reporting the travel expenses on state disclosure forms that itemize gifts to elected officials. Instead, Schwarzenegger's top aides recorded some of the costs -- and made only general references to others -- in memos they wrote to themselves and filed away in the governor's legal affairs office. (LAT 12.10.07)
Uh, so let's see here, how many things are wrong in this picture. Well, let's start off with the obvious thing: They keep the costs orally? Are you freaking kidding me here? By word of mouth. Oh, there's some real sunshine. Do I have to personally speak to Susan Kennedy to know what hotels he's staying at and how much they cost? What expensive restaurants is he going to? All of this is hidden away in some black box somewhere deep within the bowels of the "horseshoe" in Sacramento?
What's next? Oh, right, the non-profit, California Protocol Foundation, that funds most of his lavish expenses doesn't disclose its donors, doesn't really itemize its expenses, and as a kicker, is a 501c(3). Yup, that means all the donations to keep Arnold in his swanky Hollywood action hero lifestyle of the rich and famous are TAX-DEDUCTIBLE. So, if you're a Chamber of Commerce regular (which is tied to the CPF) and you want to reduce your taxes, you can choose to give your money to some Opera or something. Or you could get a little return and contribute to the purchase of a big-time politician. Which do you choose?
Oh, and if you want to talk about expensive hotel suites, don't forget about the $65,000/year suite where the Governator resides while in Sacramento. Oh, yup, that's paid for by the CPF as well (PDF). But perhaps Trent Stamp, president of Charity Navigator , says it best when he describes Arnold's use of charity dollars as "beyond the pale."
In a decision handed down today, the California Supreme Court ruled that public employee salary information should be public information. The case pitted all sorts of interests against each other.
