California Watch - Money and Politics

Explainer: The end of redevelopment agencies

Kendall Taggart — Tue, 31 Jan 2012 08:05:04 +0000

Kendall Taggart

DNY59/istockphoto.com

The gist: In late December, the California Supreme Court upheld legislation that ended a roughly 60-year-old program intended to combat blight. As a result, more than 400 redevelopment agencies are slated to dissolve by tomorrow.

How did redevelopment agencies work?

Redevelopment agencies gave local governments – usually cities, but sometimes counties – the ability to capture a greater share of property taxes. After an area was declared a redevelopment project area, the share of property taxes that goes to schools and other local agencies was frozen. All of the growth in property taxes from that point until the redevelopment area expired – usually 50 years – went back to the redevelopment agency.

What’s happening?

The Legislature passed two bills in June 2011 that laid the groundwork for redevelopment agencies’ demise.

The first bill, AB 26, ended the agencies and laid out a complex process for how they are supposed to be dissolved. The second bill, AB 27, gave local agencies an out: If they agreed to pay a large share of their funding to schools, they could continue to operate.

Redevelopment agencies and cities sued, claiming the bills were unconstitutional.

In a move that shocked many cities, the court decided the state had the authority to quash redevelopment agencies, but it also took away the option to pay to keep the redevelopment agencies open. The court ruled that AB 27 violated a voter-approved constitutional amendment, Proposition 22, which limited the state's authority to direct how redevelopment agencies used their share of property taxes.

Dissolving a massive, multibillion-dollar program is messy and unprecedented. Each city is now grappling with a different set of circumstances – from the amount of outstanding debt to the number of projects under way.

Why did Gov. Jerry Brown push to end redevelopment agencies?

Brown argued that the state could no longer afford redevelopment in a budget crisis. Redevelopment is contentious because of the financial advantage it provides redevelopment agencies and their community sponsors, primarily cities, over school districts, counties and other property tax recipients. He argued that the money would be better spent directly on schools and core city and county services, such as police and fire protection.

The state also has been footing the bill indirectly. Since voters approved a proposition requiring minimum funding for education in 1988, the state has had to make up the difference for some of the money reallocated from schools to redevelopment agencies.

There also have been examples of abuse and questions raised about how effective redevelopment agencies have been at combating blight. A few examples were noted in a recent report by the state controller.

Why are cities objecting?

By ending redevelopment agencies, the state has effectively seized control of billions of dollars of property taxes previously controlled by the cities that established redevelopment agencies.

In addition, many critics of the decision are pointing out flaws in how the Legislature has proposed dissolving the agencies. The California Redevelopment Association is concerned that the process will lead to litigation, bond defaults and a waste of public funds. Additional concerns of the California Redevelopment Association are on its website.

Upcoming timeline:

Sen. Alex Padilla, D-Van Nuys, introduced a bill, SB 659, that would postpone some of the upcoming deadlines by several months, but Brown has indicated that he won't support any legislation for a delay. Senate President Pro Tem Darrell Steinberg, D-Sacramento, said last week that the effort to extend the life of local redevelopment agencies was "not going to happen."

If the bill doesn’t pass, here’s an overview of the upcoming hurdles:

Tomorrow: Redevelopment agencies are officially dissolved. In January, local officials had to determine the successor agency – usually the city that created the redevelopment agency. If the city does not want to serve as the successor, it gets complicated. (Check out this example in Los Angeles if you’re curious.)

March 1: Each successor agency must finalize a schedule to pay off any existing debts and obligations. The county auditor-controller is in charge of setting aside a portion of the property taxes that previously went to redevelopment to pay off the redevelopment agencies' obligations.

April 15: Successor agencies must submit their payment schedules to the state Department of Finance and state controller for approval.

May 1: To supervise each redevelopment agency’s closure, seven-member oversight boards are formed. The boards will consist of two members appointed by the county board of supervisors, two members appointed by the mayor for the city that formed the redevelopment agency, one member appointed by the largest special district in the former redevelopment area, one member appointed by the county superintendent of education to represent local schools, and one member appointed by the community college chancellor. The board is supposed to be representative of the agencies that share property taxes, but counties and schools will have much more control than the city, Bill Fulton of the California Planning & Development Report points out. None of these members will receive additional compensation for their service.

How do I follow what's happening?

We’ll be highlighting work from media outlets around the state in our regular updates (see below).
For breaking news, check out the Twitter #redevelopment hashtag. We'll also post updates at @CaliforniaWatch and @KendallTTaggart.
The California Planning & Development Report blog has some great coverage.
Here’s a good overview of redevelopment the Legislative Analyst's Office published in February 2011.
The Contra Costa Times has a good Q & A as well.

What should we be covering? Let us know.

The latest:

Feb. 2. 2012: End of redevelopment agencies traps $4B in local government loans.

More than 400 redevelopment agencies were officially shuttered yesterday, leaving a trail of uncertainty – and a potentially staggering debt load.

Across the state, cities and counties have loaned more than $4 billion to their redevelopment agencies over the past few decades, but according to the law governing how agencies will be dissolved, they may not be able to recover that money. (Read more in our daily report.)

Feb. 1, 2012: The Governor announced the board members responsible for winding down redevelopment agencies that were not taken over by local officials. In January, cities and counties had to decide if they wanted to serve as the successor for the now defunct redevelopment agencies. While most decided to oversee the process, some local officials in Los Angeles, Ventura, Stanislaus, and Merced opted out. To check out the appointees, visit the Governor's website. For more on the handful of cities that decided not to serve as successors, check out the California Planning and Development Report.

Jan. 31, 2012: California Senate preserved redevelopment money for housing today.

The state Senate approved a bill, SB 654, to allow cities and counties to build affordable housing using $1.36 billion held for that purpose by agencies that are closing. Republicans refused to support passing it as an urgency measure, so it will not take effect until Jan. 1, 2013. It now heads to the Assembly. Read more at the Los Angeles Times.

Jan. 31, 2012: Department of Finance webinar on the end of redevelopment agencies begins at 11 am.
Tune in at http://www.dof.ca.gov/. Questions may be submitted via e-mail beginning at 10:30 to redevelopment@dof.ca.gov

Jan. 27, 2012: Sacramento County Superior Court Judge Lloyd Connelly rejected a request brought by 12 cities to stave off the dissolution of redevelopment agencies.

The California Supreme Court didn’t consider the legal arguments raised in the lawsuits led by the cities of Cerritos and Carlsbad when it issued its ruling in December. The cities had asked for a court order blocking enforcement of the measure pending the outcome of their cases.

The case is City of Cerritos v. California. Read more at the The Sacramento Bee and Bloomberg.

Jan. 27, 2012: In a letter [PDF] to Gov. Jerry Brown, the League of California Cities urged the governor to correct problems in the legislation outlining how redevelopment agencies should be dissolved, citing concerns about bond defaults, loss of taxpayer funds and violations of federal law.

Jan. 26, 2012: Three major bond-rating agencies are nervous about redevelopment bonds.

In the last two weeks, Moody's, Fitch Ratings and Standard & Poor's all have expressed concern about the process of shutting down redevelopment agencies. The agencies are responsible for assessing the credit-worthiness of borrowers. Fitch and Standard & Poor's both cited the short timeframe for redevelopment agencies to dissolve as part of their concern.

Brown rejects rail cost estimate of $100B

David Siders — Tue, 31 Jan 2012 00:50:47 +0000

Anonymous

Steve Rhodes/Flickr

California's high-speed rail project will cost far less than the state's current estimate of nearly $100 billion, and environmental fees paid by carbon producers will be a source of funding, Gov. Jerry Brown said in an interview aired in Los Angeles on Sunday.

The Democratic governor’s remarks suggest Brown may make substantial changes to the rail plan before seeking legislative approval this year.

“It’s not going to be $100 billion,” Brown said on ABC 7’s Eyewitness Newsmakers program. “That’s way off.”

It was the California High-Speed Rail Authority’s own business plan – a document embraced by Brown’s administration – that said the project could cost $98.5 billion over 20 years. Brown supported the project in his State of the State address and said further revisions to the plan would be released within weeks.

"Phase 1, I'm trying to redesign it in a way that in and of itself will be justified by the state investment," Brown said Sunday. "We do have other sources of money: For example, cap-and-trade, which is this measure where you make people who produce greenhouse gasses pay certain fees – that will be a source of funding going forward for the high speed rail.”

Brown said, "It's going to be a lot cheaper than people are saying."

The annual spending plan Brown proposed this month included $1 billion in cap-and-trade revenue for programs to reduce greenhouse gas emissions. The budget document lacked detail, however, saying, "Further detail on specific program areas will be developed when there is more certainty of fees received from the Cap and Trade Program."

Brown’s office declined to elaborate Sunday on the cap-and-trade funding plan or on how Brown might redesign the rail project.

Brown spokesman Gil Duran said in an e-mail, “The new leadership at the High-Speed Rail Authority is working hard to make sure California gets the maximum value at each stage of the project.”

The rail authority plans to start construction in the Central Valley this fall. But public opinion has turned against the project since voters approved it in 2008, and the Legislature has become increasingly critical.

Brown suggested Sunday that he remains committed to starting construction in the Central Valley. The federal government, which is contributing billions of dollars to the project, is requiring construction to start in that area, controversial because it is far from California’s population centers.

“The first phase, most of the money is coming from the federal government,” Brown said. “If we don’t spend it, they take it back.”

Brown said it is “silly” for critics to call the Central Valley starting point a “track to nowhere.”

Last week, California's state auditor became the latest observer to criticize the project, saying its reliance on future federal funding is risky. The Legislative Analyst’s Office and the rail authority’s own peer review group previously criticized the plan.

The interview with Brown aired following his trip last week to Southern California, his second in two weeks as he begins campaigning for his ballot initiative to raise taxes.

"It isn't all, you know, going to football games and buying clothes and cars and gasoline and all the things people want to do in their private life," Brown said. "We also have a public investment, and that's part of the balance of a civilization."

Call David Siders, Bee Capitol Bureau, at 916-321-1215. Follow him on Twitter: @davidsiders. This story resulted from a partnership among California news organizations following the state's high-speed rail program, including The Fresno Bee, The Sacramento Bee, California Watch, The Bakersfield Californian, The Orange County Register, the San Francisco Chronicle, The (Riverside) Press-Enterprise, U-T San Diego, KQED, the Merced Sun-Star, The Tribune of San Luis Obispo and The Modesto Bee.

More coverage of the high-speed rail project

Madera County joins bullet train opponents

Tim Sheehan — Tue, 31 Jan 2012 00:26:29 +0000

Anonymous

California High-Speed Rail Authority

The ranks of local government agencies in the central San Joaquin Valley that have turned their backs on California’s proposed high-speed rail system is growing.

The latest to join the chorus is Madera County, where the Board of Supervisors voted 4-1 last week to reverse its earlier conditional support. Supervisors cited a rising price tag, a growing lack of confidence in the state High-Speed Rail Authority and frustration with the selection of a route through the county that disrupts more agricultural acreage than their preferred option.

The rail authority is proposing to build a 520-mile system of electric trains from San Francisco to Los Angeles and Anaheim. A stretch of tracks from Merced to Bakersfield would represent the “backbone” of the statewide system where construction would begin later this year. High-speed electric trains would not run on the tracks until the system reaches either San Jose or the Los Angeles basin.

Ultimately, plans call for extensions of the system to Sacramento and San Diego.

After listening to more than two hours of statements from the public – most against the train plans – Madera supervisors expressed their own concerns about cost estimates that leaped in November from $45 billion for the San Francisco-Los Angeles phase to more than $98 billion and the rail authority’s choice in December of a route that wanders between the Union Pacific rail line near Highway 99 to the Burlington Northern Santa Fe rail line a few miles to the east – an option that contradicts a route that the supervisors earlier supported.

“This puts the High-Speed Rail Authority on notice that we’re serious,” said Supervisor Frank Bigelow. “We’re tired of being jacked with.”

Bigelow said that while the resolution rescinds earlier votes of conditional support for the system and declares outright opposition to the high-speed rail plans, it does not diminish the board’s support for locating a heavy maintenance station for the trains in Madera County.

But Supervisor Max Rodriguez said the resolution sends the wrong message to state rail officials. “The maintenance yard is ours to lose,” he said. “To oppose the project only hinders our opportunity to be selected.”

“As leaders, we need to make the choice to stay engaged and continue fighting for the economic benefit of this project,” added Rodriguez, who was the lone holdout against the resolution.

The maintenance yard is considered an economic golden goose – a permanent installation with as many as 1,500 or more employees to service trains for the statewide system. Sites in Merced, Madera, Fresno and Kern counties are all vying for consideration.

All along the route through the Valley, a majority of city councils and county boards of supervisors have staked out positions opposing high-speed rail to one degree or another.

Madera County joins Kings and Tulare counties in opposing the state’s plans. Merced and Fresno counties officially support high-speed rail, and Kern County has taken no formal position.

Among Valley cities along the proposed route, those opposed to the current rail plans or routes are Chowchilla in Madera County, Hanford and Corcoran in Kings County, and Wasco and Bakersfield in Kern County. The cities of Merced and Madera officially support the proposed project, while the Merced County town of Los Banos and Shafter, in Kern County, have taken no formal position.

Fresno Mayor Ashley Swearengin has been an outspoken supporter of high-speed rail, but the city council in the Valley’s largest city has taken no formal position, said Council Member Lee Brand, the immediate past council president.

“Right now, if a vote came to the city council, I think it would be a close vote,” said Brand, who said he opposes high-speed rail. “I think it would be a 4-3 vote or a 3-4 vote, and I don’t know which way it would go.”

The debate between fiscal responsibility and economic promise can be seen in Merced. There, the city council voted in recent weeks to support the rail authority’s latest business plan. Mayor Stan Thurston was one of two council members who disagreed in the 5-2 vote.

“We did not support the business plan because there was no identifiable funding source to build the project in Merced,” Thurston said. “To me, a business plan without funding is just a wish list.”

But high-speed rail and a station in Merced “would make us more of a hub for the central part of the state,” Merced City Manager John Bramble said, “and that will help us grow on a reasonable basis and become a part to the overall state solution to our economic foundation.”

The latest version of plans, he added, have “a lot of potential, but still needs work.”

Merced Sun-Star staff writer Ameera Butt contributed to this report. The reporter can be reached at tsheehan@fresnobee.com or 559-441-6319. This story resulted from a partnership among California news organizations following the state's high-speed rail program, including The Fresno Bee, The Sacramento Bee, California Watch, The Bakersfield Californian, The Orange County Register, the San Francisco Chronicle, The (Riverside) Press-Enterprise, U-T San Diego, KQED, the Merced Sun-Star, The Tribune of San Luis Obispo and The Modesto Bee.

Billionaire insurance exec backs initiative to change rate rules

Will Evans — Fri, 27 Jan 2012 08:05:03 +0000

Will Evans

tforgo/istockphoto.com

UPDATE, Jan. 27, 2011: Mercury Insurance provided this response to questions about its record.

The 90-year-old billionaire chairman of Mercury Insurance just won’t give up.

George Joseph gave $8.2 million to put an initiative on the November ballot that supporters say would lower car insurance rates for consumers who maintain continuous coverage. His Los Angeles-based company spent $15.8 million on a similar proposition, derided as a deceptive move to increase rates, that failed in 2010.

The new initiative qualified for the ballot last week, putting a renewed spotlight on Joseph and the company he founded in 1962. Joseph is a longtime conservative political donor, giving $1 million to the California Republican Party in 2010, though his company has given hundreds of thousands of dollars to the state Democratic party as well. Joseph also gave $1 million to a political action committee that spent millions against Dave Jones, a Democrat who won the state post of insurance commissioner in 2010.

Joseph owns just over a third of Mercury's stock. The company has tangled with the state Department of Insurance over the years and currently faces an ongoing enforcement action against it for allegations of violating consumer protections. The company denies any wrongdoing.

In a separate case, the department is opposing Mercury's application to raise homeowners' insurance rates, arguing that the company's rates already are too high, according to senior staff counsel Daniel Goodell. Mercury is also pursuing a 6 percent increase in auto insurance rates, but the department hasn't weighed in yet.

This year's ballot initiative would allow companies to base auto insurance rates on whether a customer had previously been insured. Under tough regulations passed by ballot initiative in 1988, companies can't charge customers more simply because they had been uninsured; they also can't charge less if customers had been insured.

So while consumer advocates say the initiative would let companies jack up rates for the previously uninsured, industry proponents argue it would lead to discounts. The new initiative improves on the old one, supporters say, in that it allows continuous-coverage discounts for those who dropped insurance due to military service or losing a job.

"This initiative is all about creating competition, driving down prices and insuring more folks," said campaign spokeswoman Rachel Hooper.

Hooper distanced the current initiative, which is sponsored by a trade association of insurance agents, from 2010's Proposition 17.

"This is not a Mercury initiative," she said.

Unlike in 2010, Mercury doesn't plan to spend company money on the current initiative campaign, according to a company representative.

Joseph has been trying to change the rules for years. His company sponsored a bill to do so in 2003, but it was struck down in court. Portrayed by his critics as a greedy "Grinch," Hooper said Joseph has been misunderstood.

"They don’t realize that this is a World War II vet," Hooper said. "They don’t realize how hard he’s worked to make this company successful. They don’t realize how much he’s done for California."

Over the last decade, Joseph gave more than $200,000 in federal campaign contributions, the vast majority to Republican candidates and committees. In California, he gave $100,000 to oppose the failed 2006 initiative that would have taxed the wealthy to provide free preschool to 4-year-olds. He spent $200,000 on the successful effort to defeat another 2006 initiative to provide public financing for political candidates and restrict campaign contributions.

The advocacy group Consumer Watchdog is a persistent thorn in Joseph's side. The group's founder wrote the 1988 initiative regulating insurance rates. Executive Director Doug Heller argues that this year's initiative will raise rates and invokes Mercury's record.

"You have a corporation and a chairman who have been found to ignore California law on several occasions, and now they’re asking voters to say yes to a slickly advertised initiative campaign," Heller said.

In 2010, then-Insurance Commissioner Steve Poizner accused Mercury of breaking the law, announcing that "an examination done by the Department of Insurance appears to show that Mercury Insurance has disregarded California's consumer protection statutes and overcharged consumers."

Mercury denied and provided a rebuttal to each allegation, according to the company's Securities and Exchange Commission filings. The department will begin a hearing process before an administrative law judge later this year.

In a separate case, the department accused Mercury of illegally allowing its agents to charge broker fees. The company "does not believe that it has done anything to warrant a monetary penalty," according to its filings. An administrative hearing process is ongoing, according to the department.

Disclosure of corporate campaign spending sought in Calif. bill

Chase Davis — Thu, 26 Jan 2012 08:05:03 +0000

Chase Davis

Kativ/istockphoto.com

Corporations that donate to political campaigns – including through so-called super PACs that have no contribution limits – would have to report their activity if they have shareholders in California under a bill introduced this week in the state Legislature.

The bill, introduced by Sen. Noreen Evans, D-Santa Rosa, would require corporations to publicly disclose a summary of their previous year's political spending and plans for future spending once each year.

Similar legislation introduced in 2010 by then-Assemblyman Pedro Nava, a Santa Barbara Democrat, failed to gain traction and died in committee. Both bills were sponsored by the California Public Interest Research Group.

Since the 2010 Supreme Court ruling in Citizens United v. Federal Election Commission, campaign reform advocates often have worried aloud about the newfound ability of corporations to influence campaigns by spending unlimited amounts from their own treasuries in support of their favored candidates.

But many of those concerns have only begun to manifest in recent months, as super political action committees have begun financing expensive advertising campaigns in the early stages of the Republican presidential primary. The Center for Responsive Politics estimates that super PACs have spent more than $35 million so far, largely on television advertisements in key primary states.

Still, with limited exceptions, most of the donors bankrolling the major super PACs have not yet been revealed. Of the major super PACs supporting Republican candidates, only Restore Our Future, which supports former Massachusetts Gov. Mitt Romney, has disclosed its donors so far.

Because of federal filing deadlines, the rest of the major organizations – some of which have been operating since last summer – will not be required to disclose their contributors until the end of this month. Some groups would have been required to make key disclosures in advance of state primary contests, but instead shifted their filing status to hold off disclosure for several more weeks.

Evans' bill would not require corporations to disclose their political contributions more frequently, but it would require them to report all of their major political spending in one place. Beyond super PACs, corporations have a number of other conduits through which to spend money on elections, including independent expenditure committees, ballot measure campaigns and other soft money groups.

"Shareholders should have enough information regarding a corporation’s political activity to make an informed decision about where they invest their money," CALPIRG Legislative Director Pedro Morillas said in a statement. "Right now, a corporation could be sinking millions of dollars into a political campaign and the actual owners of the company, the shareholders, would have no idea."

A key difference between this year's version of the bill and Nava's in 2010 is a narrower focus on disclosure provisions. In addition to annual disclosure, the 2010 bill also would have allowed shareholders who objected to a corporate contribution to essentially receive a refund for their share of the contribution in the form of a small dividend. Both bills would expose companies to civil lawsuits if they fail to disclose their contributions.

A broad coalition of business groups that opposed the previous version of the legislation argued that forcing corporations to disclose their contributions – and opening them up to lawsuits if they do not comply – would create a chilling effect on their campaign activities that would violate their free-speech rights after the Citizens United ruling.

Study: Super PACs attract donors who have given legal max

Reform group argues against tax break for political committees

Hollywood money flows to Calif. politicians who support anti-piracy bills

Will Evans — Tue, 24 Jan 2012 08:05:04 +0000

Will Evans

Fred Prouser/ReutersChris Dodd, former U.S. senator and chief executive of the Motion Picture Association of America

Hollywood is threatening politicians with one thing they hold very dear: campaign cash.

As anti-piracy legislation stalled in Congress last week, the movie industry's top lobbyist, former U.S. Sen. Chris Dodd, warned Democrats not to count on Hollywood money if they turn their backs on the industry's legislative priority.

Among the biggest recipients of Hollywood money are Californian members of Congress who remain supportive of the controversial anti-piracy bills. Eight Californians in the House of Representatives, as well as Democratic U.S. Sens. Dianne Feinstein and Barbara Boxer, co-sponsored the bills, representing more co-sponsors than from any other state.

Boxer was the top Senate recipient of campaign contributions from the movie production industry over the last six years, picking up nearly $413,000, according to data compiled by MapLight.org and the Center for Responsive Politics.

Democratic Rep. Howard Berman, whose Los Angeles district includes the famed Hollywood sign, is the industry's top beneficiary in the House, picking up $106,500 in the last two years of reported contributions. Berman was an early co-sponsor of the Stop Online Piracy Act that the Motion Picture Association of America has been pushing.

The movie industry and other supporters maintain that the bills, known as SOPA in the House and PIPA [PDF] in the Senate, are necessary to fight foreign websites that pirate American films and music. Opponents, including tech companies, claim the bills threaten freedom of expression on the Internet.

The debate pits two powerful California industries against each other, but one gives much more political money than the other. In the Senate, for example, MapLight.org found that the entertainment industry gave $14 million in contributions over the last six years, compared with $2 million from Internet interest groups.

The rare admission of the power of campaign contributions from Dodd, a former senator and past presidential candidate, puts a spotlight on the influence of money in this policy debate.

"Candidly, those who count on quote 'Hollywood' for support need to understand that this industry is watching very carefully who's going to stand up for them when their job is at stake," Dodd told Fox News last week. "Don't ask me to write a check for you when you think your job is at risk and then don't pay any attention to me when my job is at stake."

Dodd, CEO of the movie industry association, added: "I would caution people don't make the assumption that because the quote 'Hollywood community' has been historically supportive of Democrats, which they have, don't make the false assumptions this year that because we did it in years past, we will do it this year."

Davel5957/istockphoto.com

Howard Gantman, spokesman for the association, said in an e-mail that Dodd "was merely making the obvious point that people support politicians whose views coincide with their own. When politicians take positions that people disagree with, those people tend not to support those politicians."

Meredith McGehee, policy director of the Washington-based Campaign Legal Center, said Dodd's statement "reveals how much the current system is legalized bribery."

"It’s notable that it’s coming from someone who was so steeped in the system," she said.

Art Brodsky, spokesman for Public Knowledge, an advocacy group that fought the anti-piracy bills, said campaign contributions have indeed factored into the policy battle.

"You’d have to be totally naive not to think so," he said. "Look at the contributions and look where people were on the issue."

Californian co-sponsors of anti-piracy legislation in the House include Los Angeles-area Democrats Karen Bass, who received nearly $30,000 from the movie industry; Brad Sherman, who got $23,000; and Adam Schiff, who picked up about $19,000. Another co-sponsor, Rep. Mary Bono Mack, a Palm Springs Republican, received almost $22,000 over two years.

Technology companies and Internet activists succeeded in stalling the bills despite the fact that Hollywood gives more money. But that doesn't mean that campaign cash didn't matter, said McGehee, because the fight isn't over. "We're only in round one," she said.

Feinstein, who garnered about $146,000 over six years from movie production interests, is working toward compromise legislation. In a statement, Feinstein said: "The only way we can resolve the differences on this bill is by the key CEOs sitting down together."

3 Calif. municipalities sidestep pension debate

Kendall Taggart — Mon, 23 Jan 2012 08:05:03 +0000

Kendall Taggart

AlexKalina/istockphoto.com

While most of the state's roughly 480 cities and towns are entangled in a heated debate about future pension costs, three small cities in Contra Costa County are quietly sitting on the sidelines.

Most public employees in California receive a defined-benefits pension, which guarantees an employee a specific monthly payment upon retirement.

But the town of Danville and the cities of Lafayette and Orinda don't offer one.

It’s a relief not to be grappling with the pension issue on top of other financial issues, said Joe Calabrigo, town manager of Danville.

Instead of a pension with guaranteed benefits, each of the three municipalities offers a retirement plan similar to the private sector. Employees and employers contribute to the plan, but the annual return is dependent upon how the market performs and isn’t guaranteed.

“We've always operated the same way,” Calabrigo said. “It's the way that this organization was established. We didn't get there by accident, and we didn't convert from one system to the other."

Lafayette, which incorporated in 1968 – more than a decade before its two neighbors – may have served as a template. All three were small when they initially formed and contracted out for most of their services. Starting with few employees and a small operating budget made it hard to support a pension.

All have historically strong property values and have avoided many of the fiscal troubles other cities face. Lafayette has a reserve that nearly equals its annual budget.

Steve Falk, city manager of Lafayette, said the City Council is committed to providing a fair retirement program, but also wants to make sure it does not bankrupt the city in the process.

Lafayette’s contributions to employee retirement plans are substantial, he said, and its retirement plan has ensured that, over the long term, the city does not have any unfunded obligations.

In contrast, cities like Oakland, San Jose and San Diego are grappling with hundreds of millions of dollars in unfunded pension liabilities.

Over the past decade, employees in Orinda, Danville and Lafayette have considered switching to a pension that would guarantee benefits. A few years ago, a provision in the Orinda employee union contract required the city to explore the option. But the city decided against it because of concerns about rising pension costs and an uncertain financial landscape, said Trish Raver, the city’s human resources manager.

Mike Moran, an engineer and member of the Association of Lafayette Employees, said employees have asked to buy into the California Public Employees' Retirement System, the state-managed retirement system.

“Within the employee association, I think people are mixed. There are definitely some people who have always wanted our city to join PERS because it’s just a more lucrative retirement,” Moran said. But given the tight budget situation for the past few years, he said he doesn't expect the conversation to come up again soon.

Minimal impact on cities, farms helped Spain avoid high-speed rail opposition

Tim Sheehan — Sun, 22 Jan 2012 08:05:03 +0000

Tim Sheehan

Tim Sheehan is a business reporter for The Fresno Bee and covers high-speed rail issues. The reporter can be reached at tsheehan@fresnobee.com or 559-441-6319. This special project is the result of a partnership among California news organizations following the state's high-speed rail program, including The Fresno Bee, The Bakersfield Californian, California Watch, The Sacramento Bee, The Orange County Register, the San Francisco Chronicle, The (Riverside) Press-Enterprise, U-T San Diego, KQED, The Merced Sun-Star, The Tribune of San Luis Obispo and The Modesto Bee.

Tim Sheehan/The Fresno BeeFarmer Luis Valciente talks about the train tracks that run behind his fence. Valciente says AVE trains pass by his farm several times an hour but says he's not bothered by the noise. His operations have also been unaffected.

LA ESTACIÓN, SPAIN – On a crisp fall Saturday morning, Luis Valciente and Mercedes Martin enjoy the quiet of their farm about 20 miles northeast of Seville.

The retired husband and wife bought their patch of land in 1987, several years before Spain’s first high-speed trains started running between Madrid and Seville.

“It’s very tranquil, which is what we like after all these years,” Martin says through an interpreter.

Without warning, a loud “swoosh” briefly interrupts the couple’s conversation with a reporter. Within seconds, the noise subsides, and the couple picks up the chat, unruffled, right where they left off.

It’s one of Spain’s AVE high-speed trains rushing from Madrid to Seville on tracks about 100 feet from the rear of the couple’s modest home. The high-speed tracks – a portion of the nation’s first high-speed rail line that opened in 1992 – are n ext to older conventional rail tracks just over the back fence.

To passengers aboard the train, the Valciente farm is little more than a blur at the side of the tracks about 10 minutes before they get to Seville, the southern terminus for AVE trains that come and go from the Santa Justa Station. Each train sends a fresh buzz of activity through the station and a small surge of cabs, cars and pedestrians onto the busy streets near the historic city’s commercial center. Nearby restaurants, shops and rental-car agencies vie for attention from the new arrivals.

As Spain’s system connects major urban centers and smaller provincial capitals, it also runs across fertile agricultural regions, including Castile-La Mancha and Andalusia, known for fine olive oils; Valencia, where citrus is prominent; and Catalonia, where vineyards produce most of the grapes fermented for cava, the region’s sparkling wine.

But despite crossing both cityscapes and farmland, Spain’s high-speed rail program stirred no major opposition in either urban or rural environs. When work began in the late 1980s, the nation’s economy was in good shape, and Spain was readying itself to host both a world exposition and the Olympics.

In the countryside, Barcelona transportation engineer Andreu Ulied said, the Spanish government went to great lengths – and great expense – to minimize effects on farms. They skirted farmland where they could, built frequent overpasses and underpasses, and generously compensated owners who lost property to the project.

In larger Spanish cities such as Madrid, Seville, Valencia, Cordova and Barcelona, stations for high-speed trains are in already-developed central-city commercial districts, often near existing train stations to minimize disruptions. In Barcelona, preservationists’ fears about a train tunnel under the Basilica de la Sagrada Familia forced extensive and expensive engineering measures to avoid damaging the iconic church.

Merchants doing business near the stations generally say high-speed rail is good for commerce, even when they are unsure if it has directly helped their own stores and restaurants.

Ulied, economist Germà Bel and others, however, say the prospects for economic gains by high-speed rail cities are murky at best, and at worst might actually bleed commerce from smaller cities along the routes between larger destinations.

Bridges, underpasses help in farmland

Valciente and Martin, both in their 70s, tend to orange trees, fruit trees and corn on their 6 ½-acre farm. Chickens roam uncaged, pecking at the dirt around the pomegranate trees, pepper plants and cacti in the yard.

The AVE trains speed by the small farmstead several times an hour, “and it hasn’t affected us at all,” Valciente said.

“We don’t even feel them,” added Martin. Even though their house is so near the tracks, she said, the high-speed trains create no wind turbulence and are less bothersome than the slower-moving regional commuter trains because noise from the AVE trains passes so quickly.

Because conventional trains were already there when Valciente bought the farm, he doesn’t think the AVE trains affected his property value, and if the neighbors have any complaints, he says he hasn’t heard them. In fact, high-speed rail raised little, if any, opposition from Spain’s agriculture industry, said Ulied, a critic of the nation’s rampant expansion of high-speed rail lines. Ulied runs MCRIT, a prominent civil engineering, economic and urban planning firm in Barcelona that does transportation analysis for major clients, including the European Union.

“In Catalonia, one line from Tarragona to Barcelona crosses an area where there are a lot of vineyards that make a Champagne called cava,” Ulied said. “It’s a rich area, and the landscape has to be well managed because it is linked to this industry. But the infrastructure was well designed, and the integration with the landscape is as best as possible.”

The Spanish experience contrasts sharply with the loud and growing objections to California’s plans by some farmers in the San Joaquin Valley, where faith in both the state rail authority and the economy are in short supply.

Growers and ranchers say they fear losing farmland and even their homes to the tracks, they worry that tracks across their land will keep them from moving easily across their fields, and they doubt they’ll be fairly compensated for their property or troubles.

In Spain, the government worked with farmers from the outset to head off such concerns, said Pedro Pérez del Campo, environmental policy director for ADIF, the government-owned company that runs the track system.

“It’s in our interest to make it easier for the farmers,” he said, speaking through an interpreter. Pérez del Campo said the first priority is to make sure that farmers whose properties are divided by the tracks can still reach the other side of their land.

“About every 500 meters, there is the ability to pass from one side of the rail to the other,” he said. “We are obligated that if the rails were to cross your property, we have to give you the ability to cross.”

That access doesn’t come cheap. To prevent collisions, bridges and tunnels carry roads over or under the line. There are no at-grade crossings. Likewise, California proposes to build its high-speed line without at-grade crossings but with bridges and underpasses for selected roads and streets. It’s not clear yet how many crossings would be provided for farms in the Central Valley.

If building a bridge or tunnel for a farmer is too complicated, Pérez del Campo said, it can be cheaper for ADIF to pay more than the land is worth to simply buy the remnant parcel from the owner. That eliminates the need for the farmer to cross.

Pérez del Campo was adamant that the train system hasn’t hurt farming: “Especially in the wine industry, which is very important to Spain’s economy, if there were an issue, we would know by now.

“They have a lot of money and very good lawyers.”

To build Spain’s first high-speed line, 300 miles of track between Madrid and Seville, the Ministry of Public Works had to acquire 8,154 acres of private land for about $120 million, according to a ministry official.

For the more recent line from Madrid to Barcelona and on to the French border, land costs were much higher – about $1.5 billion for 15,694 acres in the 495-mile corridor and temporary access to another 7,194 acres.

The coastal part of the Barcelona route crosses some of Spain’s densest areas, said Juan Ignacio Lema, a technical adviser for the ministry. Also, Spain had experienced a real estate boom that drove prices up, he said.

Trains bring tourists, business travelers

In the cities, high-speed trains are good for business because they drive tourism – the nation’s biggest industry – and business travel, the government says.

Spain’s Ministry of Public Works reports that Madrid, Ciudad Real, Cordova and Seville, all along the oldest high-speed line, saw greater growth in the number of hotel beds than the nation as a whole after the line connecting them was launched in 1992. Collectively, the four cities grew from about 70,000 hotel beds in 1990 to more than 130,000 in 2007.

In Ciudad Real, a city of 75,000 people about 100 miles south of Madrid, hotel beds and hotel stays more than doubled between 1990 and 2007. The city’s population also grew at a much faster rate than the rest of Spain during the same period.

Renfe, the government-owned company that operates the AVE trains, said high-speed trains have made it easier for students and professors to commute to Ciudad Real’s University of Castilla-La Mancha and for people in the town to commute daily to Madrid for work.

The public works ministry also boasts of job creation related to high-speed rail: about 115,000 jobs building it and an additional 35,000 running it. And in cities along the lines, the government said, more than a dozen companies involved in high-speed rail engineering, manufacturing, operations and maintenance are investing about $17 billion to develop 1,700 acres for offices, plants and yards near stations.

But academic researchers, including Chris Nash of England’s University of Leeds, say it’s difficult to measure the effects of high-speed rail on commerce, employment, and the economies of cities and regions. Most of Spain’s high-speed lines are too new to have made a significant mark. And experts are still looking for ways to distinguish the influence of high-speed trains from other economic factors – especially when stations are built in already-established city centers.

“The issue of wider economic benefits remains one of the hardest to tackle,” Nash wrote in a 2009 International Transport Forum article. “Such benefits could be significant, but vary significantly from case to case, so an in-depth study of each case is required.”

City merchants see benefits

Merchants near the train stations mostly spoke favorably when asked about the high-speed network.

Bar Carlos Alberto is a typical Spanish bar/restaurant, perched on the corner of a busy intersection in Seville for more than 20 years. During a weekday lunch hour in November, the bar was bustling with customers nibbling on deep-fried prawns and anchovies or paper-thin slices of Iberian ham. More cured hams hung above the bar, and diners washed down their snacks with bracing-cold beer.

Manager Isabel del Morel gazed across a traffic circle at the large Santa Justa Station, where Spain’s high-speed AVE trains come and go 18 times a day. Each arriving train from Madrid represents another load of potential customers looking for something to eat after their trip, before heading off for business or sightseeing.

The bar was already going strong when the train station opened in 1992 to serve the new AVE trains, del Morel said. But the trains, she added, “helped a lot because people come off the train and when they’re hungry; they bring in more business.”

Candy shop owner Vicente Garcia, in Valencia, has a different perspective, tempered by Europe’s economic struggles.

Spain’s newest high-speed service, between Madrid and Valencia, started in December 2010. There are 13 round-trips on AVE trains each day, and each train can carry up to 365 passengers.

“I think it brings more tourism to Valencia, but it’s come at a time when there is an economic crisis, so that has an effect,” said Garcia, who owns Casa de los Caramelos.

Through an interpreter, Garcia said he believes things would be worse without the visitors the trains bring. “I think in the long term, there will be big benefits,” he said.

In 2008, high-speed trains from Madrid finally began running to Barcelona, the nation’s second-largest city. Many merchants there also said anecdotallythe trains have been good for business.

But construction on a tunnel to link AVE service between Barcelona’s two rail stations has virtually shut down a street lined with small stores and restaurants for about two years.

On Carrer de Provença, about 250 yards from Barcelona’s Sants station, Maria Radu’s two businesses – Unirea, a Romanian grocery and deli, and Crama Dracula, a Romanian restaurant – are suffering, she said.

“This happened at the same time as the economic crisis,” she said through an interpreter. “There was a 30-meter hole out there that was almost to our door. It had quite an effect.”

Still, she said, “I suppose it’s a good investment if we ever get out of this economic crisis.”

“It will be worth it because someone will be grateful that someone made the sacrifice. They’ll say, ‘What a beautiful train system,’ and how convenient and wonderful it is that we have this.”

Lines may drain smaller cities

Experts say there is potential, but no guarantee, that cities with high-speed rail stops will realize significant, lasting economic benefit.

“I don’t think there’s a clear relation between the high-speed rail investments and the economic performance of cities,” said Ulied, the engineer. “But it largely depends on the strategies in place. If there is a strategic plan and everything is well prepared, there are chances for positive economic effects.”

Bel, a professor of political economics at the University of Barcelona, said it’s much more likely that smaller cities along the line between Madrid and the larger destinations suffer economically because most of the travel and commerce by residents flows to the big cities.

“High-speed rail encourages the centralization of activities in the large hubs, especially in the services sector,” Bel wrote in a new book on infrastructure economics to be published this year. “The primary hubs of the network – more dynamic – can benefit at the expense of intermediary cities, which are usually the big losers of high-speed rail. For this reason, the efforts by many smaller-sized cities to get high-speed rail stations can be unfruitful and even counterproductive.”

Bel simplified his ideas in an interview at his university office. “If you are the small guy, you get sucked. Most of the trips go to the big hubs, not to the small cities,” he said.

In California’s recession-racked San Joaquin Valley, economic development officials have high hopes for more and faster high-speed rail connections from Fresno, Bakersfield and Merced to the Bay Area and the Southland.

“There are examples in the Valley now,” said Steve Geil, CEO of the Fresno County Economic Development Corporation. “You have the ACE (Altamont Commuter Express) trains that run from Stockton to Santa Clara, a two-hour train ride that people commute on every morning and afternoon. Can you imagine when we can go in an hour to the heart of San Jose from Fresno?”

“What that does is it allows you to connect with jobs that pay much better up in the Bay Area and Silicon Valley, and you bring that money back home and spend it here,” Geil said.

Valley residents also would gain easier access to entertainment and recreational opportunities and see increased tourism here, too, said Al Smith, president of the Greater Fresno Area Chamber of Commerce.

“If you want to go to San Francisco for a theater performance or a concert, you could jump on the train and be back that night,” he said. “And more people will start coming here. The Save Mart Center (at CSU Fresno) is one of the most-used concert venues on the West Coast these days. People will be coming to Fresno to do stuff.”

But Bel has his doubts. “In California, nobody in San Francisco is going to travel to Fresno to buy things,” he said. “From time to time, somebody from Los Angeles will travel to Bakersfield. But they will not be going every weekend to Bakersfield.”

Congressman, lobbyist meet state lawmakers over online gaming

Lance Williams — Fri, 20 Jan 2012 08:05:02 +0000

Lance Williams

Office of Rep. Dennis CardozaU.S. Rep. Dennis Cardoza, D-Calif.

Congress was in session Wednesday, with officials sparring over the federal debt ceiling and President Barack Obama’s rejection of the Keystone XL energy pipeline project.

But U.S. Rep. Dennis Cardoza, a Merced Democrat, was nearly 3,000 miles away in Sacramento. With a lobbyist, two racehorse owners and a Hall of Fame jockey, Cardoza met with California lawmakers to discuss Internet poker laws, according to records and interviews.

Cardoza owns 10 racehorses and has won more than $125,000 in racing purses, according to his financial disclosure reports, and he has obtained campaign donations of more than $60,000 from horse racing interests. First elected to Congress in 2002, he is not running for re-election this year.

Cardoza’s Sacramento meetings were scheduled “to discuss Internet poker, and other Internet gaming issues,” according to an e-mail sent to lawmakers last month by Platinum Advisors, a prominent lobbying firm with offices in Sacramento, Orange County, San Francisco and Washington, D.C.

For the meetings, Cardoza targeted lawmakers who serve on the 13-member state Senate Governmental Organization Committee, which holds sway over the contentious issue of whether California will legalize online gaming – and if so, who will profit from it.

At the Capitol, Cardoza was accompanied by Mike Pegram and Bob Baffert, who are prominent racehorse owners and officials of the Thoroughbred Owners of California trade association. Also with Cardoza were jockey Gary Stevens, who rode three Kentucky Derby champions, and Robyn Black of Platinum Advisors, the association’s lobbyist.

It was Cardoza’s second recent visit to Sacramento: On Jan. 4, a California Watch journalist saw the congressman in the Capitol, also accompanied by lobbyist Black.

In a telephone interview, Cardoza said he is an unpaid member of the board of directors of the thoroughbred owners association. The House of Representatives’ Ethics Committee approved his service last year, he said.

He said the Sacramento meetings were aimed at calling attention to the economic problems of the state’s $2.8 billion horse racing industry. He was “absolutely not lobbying,” Cardoza said.

“I wouldn’t consider it being a lobbyist,” he said. “It’s just visiting friends, and I certainly am unpaid.”

When asked whether his work with the association posed a conflict of interest, he said, “I don’t have a conflict of interest – I’m a citizen who is talking to my old colleagues.”

He declined to identify the lawmakers with whom he met.

Cardoza’s role with the trade association raises ethical concerns, said Meredith McGehee, policy director of the Washington-based Campaign Legal Center and an expert on congressional ethics policies. House ethics rules forbid members from receiving “any income that could be funneled from lobbyists.”

Serving as an unpaid lobbyist for racing interests could be problematic as well, McGehee said.

“If he is allying himself with a lobbyist for private interests, that raises all sorts of questions,” she said. “It looks as though he is using his office for private gain.”

Cardoza’s “talking with old colleagues” characterization is “ridiculous on its face,” she said.

Cardoza, 52, is a former assemblyman who was elected to Congress after U.S. Rep. Gary Condit’s career was wrecked in the scandal over the disappearance of intern Chandra Levy. Cardoza announced his retirement last year after his Central Valley district was combined under redistricting with that of U.S. Rep. Jim Costa, a Democrat from Fresno. Cardoza said he has not decided what he will do after leaving office.

In the House, Cardoza became a leader of the Blue Dog Coalition of conservative Democrats. He has championed more irrigation water for Central Valley farmers and has criticized wasteful federal spending.

He has a longstanding interest in racing and gaming. During six years in the state Legislature, Cardoza spent $10,800 in campaign donations on trips to the Kentucky Derby, the Del Mar racetrack near San Diego and Nevada casinos, the Associated Press reported.

In Congress, Cardoza and his political action committee, the Moderate Victory Fund, have obtained more than $54,000 in donations from racing interests, most of it from the National Thoroughbred Racing Association’s PAC.

Meanwhile, Cardoza’s PAC has spent $47,000 at the Pimlico Race Course in Baltimore on fundraising events, the records show.

Starting in 2009, Cardoza also began buying racehorses. He has bought 13 and sold three, his disclosure reports show. The most successful was a horse called Regrettable Romance. It won purses of more than $50,000 in 2009 and more than $15,000 in 2010, according to Cardoza’s disclosure reports.

As a lawmaker, Cardoza occasionally has sponsored measures affecting horse racing. In 2001, in the state Assembly, he carried legislation that exempted racehorse breeders from sales tax – a $2 million-per-year tax break, The Sacramento Bee reported.

In Congress, he was a co-sponsor of a 2009 measure that would have eased tax withholding on winners of big purses at racetracks, records show. The bill wasn’t enacted.

Cardoza’s Sacramento visit came amid growing state and federal interest in legalizing online gambling in hopes of reaping a multimillion-dollar bonanza in tax revenues. Two bills are pending before Congress – one that would legalize online gaming and have the U.S. Treasury regulate it, and another that would establish state regulation of Internet poker.

In California, two competing online gaming bills were before the state Legislature last year, but neither passed. A new effort to license online gaming is expected this year.

Card parlors, horse racing interests and Native American tribes that operate casinos all have lobbied on the measure. To varying degrees, these industries are wary: They fear that online gaming might draw away their customers, but they also would like to share in its profits if it proves a success.

In the interview, Cardoza said he has carefully followed the House Ethics Committee’s guidance in his work on the thoroughbred owners board.

“I cannot discuss federal legislation” pertaining to horse racing, he said. “And I cannot lobby – I shouldn’t say lobby, I should say discuss (it) with my federal colleagues, and I have been very careful not to do that.”

State, USPS battle over postal records of former school board official

Corey G. Johnson — Thu, 19 Jan 2012 08:05:03 +0000

Corey G. Johnson

Brigaid/Flickr

A former Manhattan Beach school board official's refusal to relinquish postal records is at the center of an unusual public records spat between a state agency assigned to uphold election laws and the U.S. Postal Service.

The California Fair Political Practices Commission has filed a lawsuit in federal court over what it called the "improper" withholding of records by the Postal Service.

The commission regulates the political activities of public officials, lobbyists and campaign committees and enforces California's campaign reporting and disclosure requirements, conflict-of-interest rules, and election laws.

Since 2008, the state watchdog agency has been looking into allegations that William Eisen, a former member of the Manhattan Beach Unified School District board, violated campaign disclosure rules in an attempt to stave off a bitter recall campaign.

In particular, commission investigators wanted to know whether mass mailings sent in support of Eisen's re-election that purportedly came from the South Bay Taxpayers Association and the South Bay Republican Club were actually sent by Eisen.

An investigator sent a subpoena to the Postal Service office in downtown Los Angeles. But before turning over Eisen's information, a post office official e-mailed the retired school board official to get consent, Eisen told California Watch this week. Eisen refused.

"Have some government agency poking around in my mail? Of course I would object to it," Eisen said. "I have a right to privacy, just like any mailer or mailing house."

Sidestepping the state's subpoena, the Postal Service eventually provided documents in response to the commission's request under the federal Freedom of Information Act. But the records were heavily redacted, according to the state's lawsuit. The Postal Service cited a federal exemption allowing the withholding of information of a "commercial nature," which wouldn't be "good business practice" to disclose, the lawsuit stated.

The Freedom of Information Act allows requestors to appeal decisions to withhold information.

Commission staff then took the matter to the federal Office of Government Information Services, which hears appeals of agency decisions to withhold records. The office sided with the Postal Service, saying that because the agency is a profit-making organization for the federal government, it had valid "commercial considerations" undergirding its decision to withhold records.

Commission Chairwoman Ann Ravel said this week that such a ruling could effectively "shut down enforcement" of all state election laws. According to the lawsuit:

California, twelve other states, and the Federal Election Commission, all regulate mailed political communications with regard to either the number of mailed pieces or dollar amount spent on the mail pieces before being categorized as a mass mailing.

Without compliance from the USPS, neither these 13 states, nor the federal government will be able to determine whether a mailing is in violation of their respective laws. The USPS denial of these claims will effectively shut down enforcement of state and federal laws regarding campaign communication disclosure on mass mailings, thereby depriving the public of the ability to identify and take action against persons in violation of these laws.

The commission ultimately determined that Eisen might have violated state law. But no final action was taken because the records that would fully substantiate the case remain with the Postal Service. Post office officials have not commented on the lawsuit.

Eisen, 69, who has been living with friends in the Manhattan Beach area while tending a recycling business, said he was surprised to see his name back in the news over the 2008 recall election.

He said he never received word about a hearing and thought the Fair Political Practices Commission had dropped the case. He blamed the commission investigation on past political opponents, still seething over his criticisms of wasteful spending and other political stands.

"For the last year and a half, I'd thought this whole thing was dead," Eisen said. "Now I see they're back on the track, trying to drum up stuff against me."

Eisen said he hadn't decided if he was going to take legal action, since the case has surfaced publicly. But he remains steadfast in his innocence, pointing out that he previously refused a settlement offer from the commission to pay an $8,000 fine because he didn't have the money and didn't believe he broke any laws.

Eisen did, however, find the current records spat between the state and federal government to be ironic in one way. He said that when he asked for copies of any evidence the commission had of his wrongdoing, he, too, was refused.

"They said it was privileged," he said.