Co-published by Westword
If you are a Wall Street executive looking to land a lucrative contract to manage Colorado retirees’ pension money, a federal anti-corruption rule is designed to deter you from trying to use campaign cash to influence state officials who oversee those investment decisions. Despite that regulation, however, Republican Treasurer Walker Stapleton’s gubernatorial campaign is being boosted by a political group partially sponsored by financial firms that receive giant investments from the pension fund Stapleton helps run, according to documents reviewed by Capital & Main.
During Stapleton’s tenure as a trustee of the Public Employees Retirement Association (PERA), four real estate investment firms have been given contracts to manage more than $1 billion of Colorado state employees’ retirement savings. During the 2018 election cycle, donors from those firms have delivered more than $492,000 to the Republican Governors Association, which has been blanketing Colorado with ads supporting Stapleton’s candidacy.
In addition, members of a Denver law firm that is registered to lobby at the federal level for another major PERA money manager have collectively given almost $20,000 to Stapleton’s campaign and to a Colorado-based super PAC whose stated mission is to promote Stapleton’s gubernatorial bid. That is on top of a separate $2.2 million worth of anonymous dark money that has flooded into super PACs supporting Stapleton — cash whose source is impossible to trace.
Stapleton’s campaign did not respond to Capital & Main’s questions about the investments and donations.
While Stapleton and his political apparatus have been vacuuming in money from fossil fuel donors and other corporate interests with business before the state, the financial industry donations stand out because they are potentially governed by the Securities and Exchange Commission’s 2010 “pay to play” rule.
Passed in the wake of major pension corruption scandals across the country, the rule is designed to penalize financial firms that direct campaign contributions to public officials who have the power to steer state investments to donors’ financial firms. It is meant to deter such campaign cash from helping those officials — and includes broad anti-circumvention provisions aimed at preventing donors from routing contributions through third-party groups that then support the election campaigns of those public officials.
Stapleton is covered by the rule because as treasurer he is a member of PERA’s board of trustees. He serves on the board’s investment committee, which directly oversees the pension system’s investments — and as a recent Capital & Main investigation revealed, PERA fees paid out to Wall Street firms have skyrocketed during Stapleton’s tenure.
If Stapleton is elected governor, he will leave the pension fund’s board but will appoint three members of PERA’s board, potentially giving him even more influence over which financial firms get pension investments — just after a campaign that has seen Stapleton and Colorado-based super PACs supporting him rake in more than $422,000 from donors in the financial industry, according to state records and data compiled by the National Institute on Money in State Politics.
Ethics expert Craig Holman told Capital & Main that “there has been a slow but steady rise of Wall Street firms seeking an end-run around the SEC pay-to-play rules by giving to outside groups, such as RGA or super PACs, and allowing these outside groups to spend their money promoting the public official responsible for awarding contracts to Wall Street.”
He added: “Laundering campaign money through third parties can be even more corrupting than direct contributions to the candidates, given that third-party donations and spending on behalf of the same candidates have no limits.”
In response to Capital & Main’s open records requests, PERA officials have blocked the release of all details of fees paid to the investment firms in question.
In an emailed statement, PERA spokesperson Luc Hatlestad wrote that PERA includes “language in our management agreements that require the manager to agree to not provide gifts, money, property, etc. with the intention of influencing or appearing to influence the conduct of any PERA staff member or Trustee.”
On the question of whether Stapleton is involved in real estate investment decisions that could enrich campaign donors, Hatlestad added: “The PERA Board is responsible for setting the strategic asset allocation of the PERA funds and has delegated the decisions on specific funds and individual securities to PERA’s investment staff. Therefore, PERA Board members do not have involvement in choosing specific investments.”
However, a PERA newsletter sent out this week made clear that as a trustee, Stapleton is given access to secret granular information about each real estate investment.
“The PERA Board receives information on each Real Estate fund investment made and has the ability to access property-level information as desired,” the newsletter said. “This information, while not publicly available, allows Trustees to have detailed information on the holdings within the portfolio. Fund disclosures made to the Board by staff include a fund overview, investment strategy, a summary of key investment personnel, historical investment performance, and fees.”
The RGA did not respond to Capital & Main’s questions, but RGA spokesman Jon Thompson has previously asserted the organization’s “anti-earmarking policy and other compliance policies ensure that candidates to whom the RGA contributes do not receive prohibited funds.”
“The Modern Campaign-Finance Loophole”
Management of PERA, a public pension fund on which one in 10 Coloradans rely as a replacement for Social Security, has been a top issue for Stapleton during his two terms as state treasurer, and he has been a frequent vocal critic of the system’s long-term financial outlook. A former investment banker and director of acquisitions at Lamar Companies, a commercial real estate firm, Stapleton has frequently touted his experience as a real estate investor.
The SEC rule bars financial firms from earning fees from state pension funds if their executives direct campaign donations to public officials who can influence the funds’ investments. The rule was created to try to make sure investments are made on the basis of merit, not political influence. It applies not only to donations made to a public official before an investment is initiated, but also to donations when investments are in a state’s portfolio — the idea being that donations should not influence public officials’ ongoing decisions to expand or terminate those investments.
“Elected officials who allow political contributions to play a role in the management of these assets and who use these assets to reward contributors violate the public trust,” SEC officials wrote in the rule’s preamble.
The rule has stemmed some of the flow of Wall Street money directly to candidates for state offices that have power over state and local pension systems — and the commission has periodically taken action against firms that violate the rule. Republicans have responded by attempting to overturn the rule in court.
However, in recent years, the GOP has found a way around the rule entirely. Groups like the RGA have served as what the Wall Street Journal deemed “the modern campaign-finance loophole,” using its third-party status to rake in financial industry money and then spend big to support public officials covered by the SEC rule.
While RGA officials assert that the group does not deliberately steer prohibited money around the SEC rule, the same Wall Street Journal report noted that multiple former officials of both the RGA and its Democratic counterpart, the Democratic Governors Association, “described the practice of guiding donations as an open secret.” The result: In the last election cycle, firms managing state pension cash delivered nearly $1.3 million to the RGA, which then supported the election campaigns of state officials controlling those pension funds.
Now, in 2018, the loophole is once again open — this time in Colorado.
“TIAA Does Support the Republican Governors Association”
According to campaign finance disclosures filed with the Colorado Secretary of State’s office, the RGA has funneled $3.4 million to a state PAC created “to support the election of Walker Stapleton for governor.” Campaign finance disclosures and PERA records show that among the RGA’s donors are contributors from four firms that currently manage about $1.4 billion in PERA assets — roughly a third of the system’s real estate portfolio — across 24 different investments. According to a PERA document, nine of the investments in question were made after Stapleton joined the board of trustees as state treasurer in 2011.
Firms that manage PERA money and whose donors have given to the RGA in the 2018 election cycle are:
- Crow Holdings, which gave the RGA $225,000 while managing roughly $105 million in PERA assets. Crow Holdings is run by Republican megadonor Harlan Crow.
- TIAA, which contributed a total of $175,000 to the RGA in the 2018 election cycle, while it manages more than half a billion dollars in assets for PERA across seven different funds.
- Prudential Financial, which gave the RGA $50,000 while its funds manage $624 million of PERA assets
- Morgan Stanley, whose executives gave the RGA more than $42,000 while the firm manages $142 million worth of PERA investments.
TIAA and Prudential have also donated a total of $180,000 to the Democratic Governors Association, which has given $250,000 to a super PAC supporting Representative Jared Polis’ gubernatorial bid.
A TIAA spokesperson told Capital & Main: “TIAA does support the Republican Governors Association and the Democratic Governors Association and, consistent with law, we give explicit written instructions that none of these funds may be used to support or oppose any individual candidate or ballot initiative.”
The remaining three firms declined, or did not respond to, requests for comment.
Lobbyist Money and Dark Money
There is also the case of Apollo Management, which has not donated to the RGA or to Stapleton, but which employs Brownstein Hyatt Farber Schreck LLP as a registered lobbying firm in Washington, DC, according to federal records. PERA has committed $330 million to four active Apollo investments. During Stapleton’s tenure, that includes an $80 million Apollo investment in 2013 and a $100 million investment commitment to a newly launched Apollo fund.
Those investments are in PERA’s portfolio as firm namesake Norman Brownstein, his wife and other Brownstein, Hyatt employees have given more than $10,000 directly to Stapleton’s campaign. Denver’s Norman Brownstein, who in 2018 was personally registered as a lobbyist for Apollo, also gave another $10,000 to Better Colorado Now — a super PAC whose stated mission is “to oppose Democrat candidates for governor and support Walker Stapleton for governor,” according to Colorado disclosure records.
The Brownstein law firm lobbies for Apollo at the same time PERA has contracted the law firm to serve as its board’s fiduciary counsel since 2011 — when Stapleton first joined PERA’s board. State records show that the law firm’s contract with PERA was renewed by the pension system’s board in March 2018, as Brownstein donors’ contributions were flowing to Stapleton.
PERA officials declined to comment on whether it is appropriate for Brownstein to serve as the pension system’s fiduciary counsel while Brownstein is simultaneously registered to lobby for a Wall Street firm managing hundreds of millions of dollars of PERA retirees’ savings.
“We require our attorneys/employees to follow state and federal laws,” Brownstein spokesperson Lara Day told Capital & Main in an email. “In addition, we provide our attorneys/employees ethics training including training on campaign finance rules.”
Day said that Brownstein has never lobbied PERA on behalf of Apollo Management.
In addition to disclosed contributions from donors linked to PERA money managers, other groups promoting Stapleton have received large infusions of anonymous dark money — which can also complicate enforcement of the SEC rule.
In September, Better Colorado Now received a $500,000 donation from the Colorado Taxpayers Advocate Fund, a 501(c)(4) nonprofit that “exists to educate citizens and Colorado public officials on issues of public policy,” according to its website. The fund contributed a further $400,000 to Coloradans for Fiscal Responsibility, a separate super PAC set up “to support Walker Stapleton for Governor,” according to state records.
The Colorado Campaign for Jobs and Opportunity has received a total of $1.25 million in contributions from the Workforce Fairness Institute, a 501(c)(6) nonprofit that has spent heavily on a variety of anti-union causes, as well as a $100,000 donation from Vital for Colorado, a dark-money group created to oppose efforts to regulate fracking. The group has spent nearly all of the cash it has received on TV advertising in support of Stapleton, according to state campaign finance disclosures.
Because that cash comes from groups that do not have to disclose their donors, there is no way to know whether the money came from financial firms that have PERA investments and are covered by the SEC rule.
There is also the question of finance industry donors who do not currently manage PERA investments but who have given more than $422,000 of disclosed donations to Stapleton and Stapleton-supporting PACs. There is no way to know whether they will in the future solicit Colorado pension investments from Stapleton’s PERA appointees if he is elected governor.
“Pay-to-Play Practices Are Rarely Explicit”
To date, the SEC has not invoked provisions in the rule that bar donors from doing indirectly what they are prohibited from doing directly. Those provisions, though, remain on the books.
“Pay to play practices are rarely explicit: Participants do not typically let it be publicly known that contributions or payments are made or accepted for the purpose of influencing the selection of an adviser,” SEC officials wrote. “As it is not possible for us to anticipate all of the ways advisers and government officials may structure pay to play arrangements to attempt to evade the prohibitions of our rule, the rule includes a provision that makes it unlawful for an adviser or any of its covered associates to do anything indirectly which, if done directly, would result in a violation of the rule.”
Public Citizen’s Craig Holman said that “historically, the SEC has been quite vigilant in enforcing its pay-to-play rule, but it has yet to address this third-party loophole. The anti-circumvention clause provides the SEC with the authority to close this loophole, especially in egregious cases. The end-run by Wall Street is becoming so common these days it is well past time for the SEC to act – or risk losing the entire value of the pay-to-play rule itself.”
Last year, New Mexico Democratic Sen. Tom Udall called for the SEC to invoke the anti-circumvention provisions in an age that has seen ever-more money flow around regulations and into elections.
“We have to make sure that the campaign finance rules that are still on the books are updated to reflect these new and dangerous circumstances — to ensure that no one is able to circumvent these laws by using super PACs, dark money groups or other campaign spending vehicles,” Udall said. “The public deserves to feel confident that decisions made with public money are not being influenced by big money donors.”
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Big Pharma Bankrolled Pro-Trump Group As Trump Pushed Pharma Tax Cut
In 2017 the Pharmaceutical Research and Manufacturers of America gave $2.5 million to America First Policies Inc. — a major dark money group supporting President Donald Trump’s political and economic agenda.
The major dark money group supporting President Donald Trump’s political and economic agenda raked in millions of dollars directly from the pharmaceutical industry’s main lobbying group — at the same time Trump backed off his position on a major drug issue and promoted a tax plan that was a windfall for the industry.
The Pharmaceutical Research and Manufacturers of America gave $2.5 million to America First Policies in 2017, according to IRS documents. America First Policies was formed by former Trump advisers in 2017 and proudly touts itself as a pro-Trump organization. The PhRMA money represented more than 10 percent of America First Policies’ revenues in 2017, according to the group’s own IRS filings.
The IRS documents were obtained by MapLight, a nonpartisan group that tracks the influence of money in politics.
While campaigning for president, Trump pledged to take action to generally reduce drug prices and to allow Medicare to negotiate lower prices for prescription medications. He then appointed a former pharmaceutical executive to run the Department of Health and Human Services, and slammed the Medicare negotiation concept after a meeting with pharmaceutical executives.
“I’ll oppose anything that makes it harder for smaller, younger companies to take the risk of bringing their product to a vibrantly competitive market,” Trump said. “That includes price-fixing by the biggest dog in the market, Medicare.”
While Trump has moved to allow limited negotiation in some parts of Medicare, he has rejected the larger policy he campaigned on, leaving it out of his prescription drug proposal released earlier this year.
Trump also passed a tax cut that benefited the pharmaceutical industry, but that has not corresponded with a drop in prescription drug prices. America First Policies launched an ad campaign to promote those tax cuts, and spent the end of the 2018 campaign promoting them. PhRMA also gave $1.5 million to the American Action Network, which aired an ad campaign in support of the tax-cut legislation.
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ICE’s Stealth Campaign to Expand Its Budget
The new Democratic majority in the House of Representatives could pose a challenge to the agency’s chronic overspending — and to its aggressive detention and deportation policies.
In June the Dept. of Homeland Security asked Congress to allow it to transfer $200 million to ICE to cover agency overspending, continuing a pattern of such requests.
Big spending on immigration enforcement at the Department of Homeland Security promises to be a major sticking point as Congress prepares to negotiate a budget deal early next month.
Even though illegal immigration to the United States appears to be at its lowest point in 46 years, spending on immigration enforcement is at an all-time high. (The U.S. Border Patrol reported that in 2017, the last year for which statistics are available, apprehensions at the U.S.-Mexico border had dropped to 303,000, and had been declining nearly every year since 2000, when a record 1.6 million people were arrested.)
By overspending its congressional allocation, ICE is effectively writing its own budget.
U.S. Immigration and Customs Enforcement’s detention operations exceeded the agency’s budget this year, while ICE spending on its vast system of immigration jails shows no sign of slowing.
But a newly elected Democratic majority in the House of Representatives could pose a challenge to the agency’s chronic overspending — and to its aggressive detention and deportation policies.
ICE jailed so many immigrants in 2018 that it ran out of space in its more than 200 lock-ups, and placed 1,600 people in medium-security prisons.
Congress set detention and deportation spending for 2018 at $4.4 billion, enough to detain some 40,520 people annually.
However, by June, 44,000 men and women languished in immigration detention, filling 4,000 more beds than Congress authorized. DHS asked Congress to allow it to transfer $200 million to ICE to cover agency overspending. The department plucked the funds from several of its agencies, including the Federal Emergency Management Agency, the Coast Guard and the Transportation Security Administration.
Critics of ICE say that by overspending its congressional allocation, the agency has engineered a stealth expansion of the U.S. detention system, effectively writing its own appropriation, and skirting the Constitution’s separation of powers in which Congress, not the executive branch, has the authority to set spending limits.
Congressman: “We shouldn’t be using FEMA as a piggy bank to fund detention beds.”
“It allows them to quickly expand the detention system contrary to congressional intent,” said Heidi Altman, director of policy at the National Immigrant Justice Center, a non-profit immigrant rights group.
Such intradepartmental funds transfers aren’t uncommon, but a congressional staffer who asked that his name not be used for this story said this one was controversial because nearly all of the money went to ICE for detention and deportation. ICE has received other big budget increases in the past two years. In March 2017, the agency got a $2.6 billion supplemental appropriation; three months later, ICE was back, requesting that Congress approve a $91 million funds transfer.
The $200 million June 2018 transfer, wrote DHS spokeswoman Katie Waldman in an email, was “in line with the FY 2019 president’s budget request for U.S. Immigration and Customs Enforcement.”
However, the additional funds covered FY 2018 overspending – not future shortfalls in 2019; Congress has yet to agree to a permanent fiscal year 2019 budget. Waldman didn’t answer an email asking to clarify her comments.
Congressional Staffer: Whenever ICE outspends its budget and adds detention beds, it gains leverage for the next round of budget negotiations.
The same congressional staffer who discussed the controversy surrounding the $200 million DHS funds transfer also noted that when ICE outspends its budget and adds detention beds, it gains leverage for the next round of budget negotiations because reducing beds would mean freeing detainees and, ICE argues, their release could jeopardize public safety.
Growth by funds transfer also generally avoids public scrutiny. Transfer documents submitted by government agencies are not released to the public. But earlier this year, Sen. Jeff Merkley (D-OR) released DHS’s June 2018 transfer and reprogramming request, noting that $10 million had been taken from FEMA just as Hurricane Florence was making landfall in North Carolina.
DHS shot back, claiming the funds were administrative and weren’t earmarked for hurricane relief. But according to Ur Jaddou, director of the advocacy group DHS Watch, and a former Chief Counsel at U.S. Citizenship and Immigration Services, the DHS agency that oversees immigration and citizenship applications, “The government these days doesn’t operate on a plethora of administrative resources. It’s really functioning on a very limited budget. When they say they’re using unused money, it’s just a ruse.”
Congress has shown its frustration with ICE’s disregard for its authority, but hasn’t acted to rein in agency spending.
Congress has scolded ICE for its “lack of fiscal discipline and cavalier management.”
In budget recommendations for fiscal year 2019, the Senate Appropriations Committee wrote, “In light of the Committee’s persistent and growing concerns about ICE’s lack of fiscal discipline, whether real or manufactured, and its inability to manage detention resources…the Committee strongly discourages transfers or reprogramming requests to cover ICE’s excesses.”
Two years before, the explanatory language in the supplemental appropriations bill was even harsher. Appropriators pointed to a “lack of fiscal discipline and cavalier management” of detention funding, saying the agency seemed to think its detention operations were “funded by an indefinite appropriation. This belief is incorrect.”
“We shouldn’t be using FEMA as a piggy bank to fund detention beds,” said Rep. Dutch Ruppersberger (D-MD). “Unelected agency heads shouldn’t unilaterally shift taxpayer dollars for purposes they weren’t intended.”
Still, despite congressional annoyance with ICE’s free-spending ways, it hasn’t conducted meaningful oversight of the immigration detention system, said Greg Chen, director of government relations for the American Immigration Lawyers Association.
“The current leadership in Congress hasn’t been interested in conducting hearings on detention spending and whether detention is even necessary at the scale it is now,” Chen said.
When President Trump issued an executive order calling for no-holds-barred arrests of undocumented immigrants in January 2017, the border patrol reported that apprehensions at the U.S.-Mexico border were lower than at any time since 1972 — when the detention population was a fraction of its current size.
ICE reported that in fiscal year 2017, 41 percent of crimes of which detainees had been convicted were traffic- or immigration-related. Just 11.4 involved murder, sexual assault, kidnapping, robbery or assault.
Chen argued that ICE has a legal responsibility to screen each person in its custody for risk – either of flight or to public safety. “ICE is just not doing that and defaulting to the practice of detaining people.”
Democrats in Congress could take on a more robust role in overseeing ICE spending, now that they’ve gained a majority in the House. They could put conditions on spending, call for Government Accounting Office reports and hearings, cut funding, demand answers if ICE overspends and bring its actions to the attention of the press, said DHS Watch director Ur Jaddou, who is also a former congressional staffer.
“The next time they [ICE] need something,” Jaddou said, Congress can respond, ‘Do you really want it? You better listen.’”
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Will New York Fund Amazon Subsidies or Student Debt Relief?
New York Gov. Andrew Cuomo made headlines begging Amazon to site its second headquarters in the state. Now, however, prominent Democrats in the state Senate and Assembly have slammed the idea of offering taxpayer subsidies to the retail giant.
Co-published by Splinter
Elections have consequences, and they may have particularly immediate consequences for billionaire Jeff Bezos, as newly empowered New York Democrats appear to be positioning themselves to try to block new state subsidies for Amazon, now that the online retailing titan has chosen New York City and Northern Virginia as new headquarters locations.
A day before last week’s midterm elections, when Amazon’s choice was still up in the air, New York Gov. Andrew Cuomo made headlines begging Amazon to site its second headquarters in the state. “I’ll change my name to Amazon Cuomo if that’s what it takes,” said Cuomo, as reports surfaced about Amazon potentially moving in to Long Island City.
The next day, though, Democrats won control of the state Assembly and state Senate. Now, prominent Democrats in those chambers have slammed the idea of New York offering taxpayer subsidies to Amazon. And one lawmaker wants the legislature to decide between giving Amazon taxpayer largesse or addressing the state’s student debt crisis.
Democratic Assemblyman Ron Kim announced that he will introduce legislation to slash New York’s economic development subsidies and use the money to buy up and cancel student debt — a move he said would provide a bigger boost to the state’s economy. The legislation, says Kim, would halt any Cuomo administration offer of taxpayer money to Amazon, which could reap up to $1 billion in tax incentives if it moves to Long Island City. The deal is a goodie bag for Amazon: It includes everything from a $325 million cash grant to a promise that taxpayers will help secure a helipad for Amazon executives.
“Giving Jeff Bezos hundreds of millions of dollars is an immoral waste of taxpayers’ money when it’s crystal clear that the money would create more jobs and more economic growth when it is used to relieve student debt,” said Kim, who recently published an op-ed with law professor Zephyr Teachout criticizing the Amazon deal. “Giving Amazon this type of corporate welfare is no different, if not worse, than Donald Trump giving trillions in corporate tax breaks at the federal level. There’s no correlation between healthy, sustainable job creation and corporate giveaways. If we used this money to cancel distressed student debt instead, there would be immediate positive GDP growth, job creation and impactful social-economic returns.”
New York has the most expensive set of corporate subsidy programs in the country, and a report by the W.E. Upjohn Institute for Employment Research found that such subsidies “are not cost-effective, with either no statistically significant effects or large costs per job created.” Kim noted that in 2015 alone, New York gave out more than $8 billion in corporate incentives. He pointed to a recent study by the Levy Institute that found cancelling student debt would result “in an increase in real GDP [and] a decrease in the average unemployment rate.”
In New York, student debt has ballooned. A 2016 report by State Comptroller Thomas DiNapoli’s office found that “the delinquency rate among New York student loan borrowers rose by more than a third over the past decade while average borrower balances in the State increased by nearly 48 percent, to $32,200.” A memo outlining Kim’s bill says the legislation would empower New York officials to “exercise their eminent domain powers to buy, cancel, and/or monetize the state’s out of control student debt,” which the memo says totals more than $82 billion.
Kim’s move followed criticism of a possible Amazon deal by Senator Michael Gianaris, who led Democrats’ successful effort to win control of the chamber, and who is expected to be in one of the Senate’s top jobs.
“Offering massive corporate welfare from scarce public resources to one of the wealthiest corporations in the world at a time of great need in our state is just wrong,” Gianaris and City Council Member Jimmy Van Bramer, both of whom represent Long Island City, said in a press release. “The burden should not be on the 99 percent to prove we are worthy of the one percent’s presence in our communities, but rather on Amazon to prove it would be a responsible corporate neighbor.”
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7 Takeaways from California’s Elections
Two of the biggest shockers happened in Los Angeles and Orange counties, in races that have historically drawn the most conservative voters: sheriff and district attorney.
Official voting results are weeks away from getting verified for the 2018 general election, but big, historic trends are already emerging: some old, some new, some bad — and a lot of Blue.
1. Real estate interests prove again that they’re some of the evilest people in California history
The people who helped to bring to the Golden State housing covenants, redlining, Proposition 13, the overturning of the Rumford Fair Housing Act, McMansions in canyons that always burn and so much more housing nastiness were on the wrong side of history again this election cycle. They spent at least $74 million to demonize Proposition 10—which would only allow municipalities the right to consider rent control—to the point where even renters felt it was a nefarious plot to destroy property values and bankrupt elderly landlords. Unsurprisingly, Prop. 10 lost by a nearly two-thirds majority, and real estate special-interests groups will spend even more if another such measure ever goes statewide again.
2. The Democrats’ next big battleground will be the Central Valley
Most of the Dems’ millions were spent on flipping Orange County blue, but as I wrote for the Los Angeles Times recently, the Democrats can learn a lot for 2020 by what’s happening in the Central Valley. There, Latino candidates have climbed the political ladder from school board seats to a majority of the Valley’s state Assembly and state Senate seats, flipping two of the latter with Latinas (Anna Caballero in the 12th, Melissa Hurtado in the 14th) on Tuesday. What they yet don’t have is one of the congressional seats held by the region’s Four Horsemen of the Apocalypse: David Valadao, Jeff Denham, Kevin McCarthy and Devin Nunes, all whom won their races this time around (although Denham is still sweating his out). Expect the Dems to groom some rising stars for 2020—and expect them to mine data from the Valley about how to attract rural voters.
3. People in Southern California mistrust law enforcement more than ever before
Two of the biggest shockers happened around elected positions that have historically drawn the most conservative voters: sheriff and district attorney. In Orange County, Supervisor Todd Spitzer handily beat 20-year incumbent DA Tony Rackauckas, who has been dogged by a jailhouse snitch scandal for years. But even more surprising was the Los Angeles County Sheriff’s race, where Jim McConnell—supported by virtually the entire L.A. political class—lost to former deputy Alex Villanueva. Villanueva will be the first Democratic sheriff in more than 100 years.
4. Los Alamitos is now unofficially Southern California’s City of Hate
The tiny northwest Orange County town made news earlier this year when the city council decided to pass an ordinance protesting California’s sanctuary state law. The councilman who pushed that resolution, Warren Kusumoto, was reelected this week. But also winning a seat was former councilmember Dean Grose, who made national headlines in 2009 when he emailed a racist cartoon of a watermelon patch growing outside the Obama White House.
5. AIDS Healthcare Foundation needs to stop wasting money on propositions
The nonprofit giant spent over $23 million on the Yes on 10 battle, two years after spending $4.5 million on Proposition 60 to mandate condoms on adult films sets in California and more than $14 million on Proposition 61 to regulate prescription drugs bought by the state. Last year, it spent $5.5 million on Measure S, an anti-development ordinance in Los Angeles. All that money went to nothing, as each measure lost handily. Maybe AIDS Healthcare Foundation head Michael Weinstein should’ve spent that $47 million on services?
6. The California GOP’s last, best hope are Asians
The party has long been dead in the state, but a glimmer of hope has emerged for it in Orange County. Asian-American Republicans there now hold one congressional and state Senate seat, two state Assembly spots, three of the five chairs on the Board of Supervisors, and multiple school board and city council positions. And the new mayor of Anaheim, Orange County’s largest city, is Indian-American Harry Sidhu. Leave it to Orange County to get minorities to side with the Party of Trump!
7. With five of seven congressional seats now Democrat, this ain’t your dad’s Orange County anymore
It’s not even your Orange County. A brave new OC awaits all of us, indeed….
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Why Was Climate Change Omitted From Colorado’s Debate Over Fracking?
Co-published by Westword
The total absence of climate change discussion in Colorado’s 2018 election was striking, considering the state’s intensified floods, droughts and wildfires.
Over eight debates between gubernatorial candidates Jared Polis and Walker Stapleton, Colorado’s press corps mustered just three questions about climate change.
Co-published by Westword
It is no overstatement to say that Colorado’s Proposition 112 and Amendment 74 were two of the most significant and far-reaching climate change measures in America’s entire midterm election. But don’t blame yourself if you didn’t know that. While the initiatives sparked a pitched battle about the fossil fuel industry just as scientists were issuing a dire warning about climate change, that term — “climate change” — was largely absent from the state’s political conversation in 2018, even though some local officials say climate change could cost the state hundreds of millions of dollars in the near future.
While Colorado’s oil and gas industry was asserting that burning carbon-emitting fracked gas is “helping to reduce carbon emissions,” it sponsored an anonymous website attacking journalists who report on energy and climate issues.
Oil and gas corporations spent roughly $40 million to oppose 112, which would have mandated larger distances between fossil fuel extraction sites and schools, hospitals and residential neighborhoods, and likely restricted some fossil fuel development. Some of that money also went into promoting 74, which would have empowered those same oil and gas companies to sue towns that try to restrict drilling and fracking. While the industry offered a smorgasbord of arguments in its campaign — it would defund schools, it would kill jobs, etc. — those criticisms were all based on one central premise: that the setbacks measure would allegedly ban all new oil and gas exploration.
Had climate change been a central topic of conversation, that assertion could have boomeranged on the industry — proponents could have argued that an all-out ban was in fact urgently needed in light of a recent United Nations report warning of a full-fledged dystopia if new fossil fuel development is not halted. And they might have found a receptive audience: Recent polling from the University of Colorado has shown that 70 percent of Coloradans say they are at least somewhat concerned about climate change — and that survey was done before a summer of climate-change-intensified wildfires.
Even though Prop. 112 was not a total ban on fossil fuel extraction, at least a few national voices noted that it represented an important front in the climate change battle.
However, the Colorado press corps barely mentioned climate change in its coverage of the fight, and groups pushing the proposition never made climate change a central argument in their campaign.
An analysis by Media Matters found that out of 12 Colorado newspaper editorials about 112, just one — that of the Boulder Daily Camera, which endorsed the measure — even mentioned climate change. News coverage of 112 focused alternately on the health and environmental hazards highlighted by activists and industry doomsaying about its economic and budgetary implications, but reporting on fossil fuel-related carbon emissions and their contribution to climate change was almost nonexistent.
That was true not only of the fight over 112, but of the state’s wider political discourse. Over eight debates between governor-elect Jared Polis and opponent Walker Stapleton, the Colorado press corps mustered just three questions about climate change, accounting for less than 10 minutes of discussion during eight and a half hours of debate.
Meanwhile, the Colorado Oil and Gas Association was sponsoring an anonymous website attacking journalists who report on energy and climate issues. And as a backup measure to defang any potential climate arguments, the industry also ramped up its production of promotional PR asserting that burning carbon-emitting fracked gas is “helping to reduce carbon emissions,” as COGA insists. That assertion relies on the public never realizing that it’s only true in comparison to burning coal, but not actually true overall: Natural gas is a fossil fuel, so carbon is emitted when it is burned — no matter what COGA tries to insinuate.
The defeat of an explicitly climate-related ballot measure in Washington State suggests that many voters are not willing to support even modest efforts to frontally address climate change.
That context, though, is rarely noted in a political arena that has long been dominated by armies of fossil fuel lobbyists and millions of dollars of fossil fuel campaign spending. This year, much of that money was spent on ads designed to narrow the debate to one primarily about jobs and economic impact, thereby precluding 112 campaigners from broadening the conversation to one about the climate change dangers of fossil fuel extraction. Colorado Rising, the group behind Proposition 112, was boxed into making arguments only about better protecting the public health and safety of those living near fracking rigs, and to defensively insist that the measure wasn’t an actual ban.
In a media environment that was already erasing climate change from the conversation, there was no space for them to more straightforwardly argue that dramatic reductions in fossil fuel extraction are necessary to address climate change.
“What the polling is showing is that if people are really convinced that it’s an outright ban, they aren’t going to vote for it,” Colorado Rising’s Anne Lee Foster told Capital & Main when asked why climate change wasn’t a more prominent part of the campaign. “It’s not about what the actual percentage [ban] is, it’s proving that they have been blowing this out of proportion the whole time.”
At times, 112’s proponents ended up publicly asserting that the measure would not significantly reduce fossil fuel extraction at all, even as climate scientists argue that’s exactly what’s necessary.
“The oil and gas folks out there will still be able to do their thing,” said Mark Williams, a former Democratic congressional candidate, at a Longmont town hall where he promoted 112. “My concern is you have all these operators that are out there that are trying to make a quick buck, [but] Colorado does not have strong enough regulations.”
There’s no guarantee 112 would have been more successful had the proponents tried to focus the fight on climate change; the oil and gas industry’s success in defeating an explicitly climate-related ballot measure in Washington State suggests that many voters are not willing to support even modest efforts to frontally address climate change.
However, the total absence of the issue in Colorado’s 2018 election was striking, considering not only the IPCC report, but also the state’s own specific struggles with the effects of climate change. After all, leading scientists say that climate change is already intensifying Colorado’s floods, droughts and wildfires. And although COGA has demanded that “natural gas must be part of the climate change conversation,” many of those scientists disagree.
“There is more than enough carbon in the world’s already developed, operating oil, gas, and coal fields globally to exceed 2°C,” wrote a group of 26 climate scientists in a July letter to California Governor Jerry Brown, urging him to immediately halt the approval of all new oil and gas drilling. “There is simply no room in the carbon budget for any new fossil fuel extraction.”
“Absolutely no new fossil fuel developments. None,” said climate scientist Will Steffen, when asked earlier this year what the U.S. needs to do to help avoid global catastrophe. “That means no new coal mines, no new oil wells, no new gas fields, no new unconventional gas fracking. Nothing new.”
This is why even though 112 was not a total ban on fossil fuel extraction, at least a few national voices noted that its potential to somewhat reduce that extraction represented an important front in the climate change battle.
In a guest column for the Denver Post, former NASA scientist James Hansen encouraged Coloradans to vote for 112 because it would “help prevent climate change by making oil and gas harder to access.” Senator Bernie Sanders, who has called for a nationwide ban on fracking, also endorsed the measure on climate-related grounds. And toward the end of the campaign, 350.org founder Bill McKibben promoted the measure as part of his organization’s nationwide push to combat climate change.
But by that point, the industry’s PR machine was already skilled at suppressing any discussion of climate change and transforming every 112 argument into economic alarmism. An editorial in oil magnate Phil Anschutz’s Colorado Springs Gazette was emblematic: In attacking McKibben, it didn’t even bother to mention climate change, much less address his substantive argument.
Instead, its headline simply screamed, “Out-of-stater comes to kill Colorado jobs.”
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CA-49: A GOP District Realigns With Democrats After Mike Levin Victory
Republican Diane Harkey ended her dispirited campaign by attempting to distance herself from Trump’s personality but supporting him on “substance.”
Was the victory of Democrat Mike Levin in the 49th Congressional District race a decisive one? It seems so. Levin’s roughly seven point victory over Republican Diane Harkey might make newcomers to the district – running from southern Orange County down the coast to northern San Diego – wonder how Republicans have dominated that stretch of California for so long.
Demographic shifts explain part of what happened. Educated high-tech workers have moved into the area, and Levin targeted Latinos and women in this “year of the woman.” Levin was also blessed with a weak opponent plagued by her husband’s financial scandals.
But perhaps something beyond political math was also taking place. Decades ago political scientist Walter Dean Burnham worried that American political parties had deteriorated to such an extent that they could not deal with critical national and international issues. Burnham lamented the decline in voting participation, particularly among the lower classes, and trained his analytical eye on “realignment” elections that led to durable shifts in political coalitions and public policy. The results in the 49th district could be such a realignment where a general political crisis can force a breakthrough and renewal.
One sign of how much has changed in the 49th is that Levin brought Bernie Sanders to campaign with him in the final week of the campaign, a risk in what most political observers regard as a “centrist” district. Sander’s message denouncing the state of our health care system and the cost of higher education is neither scary nor politically costly when it resonates with the realities of so many people’s lives.
Harkey ended her dispirited campaign by attempting to distance herself from Trump’s personality but supporting him on “substance,” meaning the “booming” economy she said he created.
For many voters, the “substance” now is their aesthetic and existential disgust at how President Trump is attempting to re-create our country.
The current battle may lead to the rebuilding of a political force on the progressive side that is able to fight more effectively by forging broader, more sustainable coalitions. That rebuilding is certainly under way in the 49th Congressional District.
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Proposition 11: Emergency Crews Lose Out
Framing Prop. 11 as necessary to protect public safety was a strong argument, but it didn’t help that the opposition failed to file paperwork in time to have their arguments against the measure included in the state’s voter guide.
Proposition 11, which rewrites California’s Labor Code to allow private ambulance companies to require paramedics and EMTs to be on call during breaks, cruised to an easy victory on election night, with 60 percent voter support. The result wasn’t surprising; polling showed the measure was leading by a two-to-one margin. Prop. 11’s primary supporter, private ambulance company American Medical Response, vastly outspent the opposition, pouring $22 million into the campaign to argue that response times to emergencies would increase if the measure were defeated.
The proposition came in the wake of a 2016 California Supreme Court ruling that private security guards are required to be given uninterrupted rest breaks. That ruling likely would apply to the state’s private sector EMTs and paramedics, who are also on call during breaks, and who have filed several lawsuits challenging the practice, including one against AMR. Last year, a legislative attempt to solve the problem stalled in the face of AMR opposition; one of the sticking points was whether the bill would protect AMR from active lawsuits. (As written, Prop. 11 shields AMR from liability regarding breaks in pending litigation.)
Framing Prop. 11 as necessary to protect public safety was a strong argument, but it didn’t help that the opposition, led by the United EMS Workers, an American Federation of State, County and Municipal Employees local, failed to file paperwork in time to have its arguments against the measure included in the state’s voter guide. (Disclosure: AFSCME is a financial supporter of this website.) AMR largely drowned out the local’s attempts to highlight the grueling working conditions faced by emergency workers, and the need for extra staffing to allow more predictable breaks.
What remains to be seen is whether Prop. 11 will in fact shield AMR and other private ambulance companies from pending lawsuits, a decision likely to be determined in court. Jason Brollini, president-executive director of United EMS Workers, estimates that AMR could owe workers as much as $100 million in settlements if the cases are allowed to proceed.
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CA-25: Katie Hill Ends Knight Reign in Changing District
While Hill’s youth, bisexuality and comfortably modern persona got the attention of Vice and other media, Steve Knight was seemingly out of touch with his own constituents.
Katie Hill went to bed last night at the end of an excruciatingly tight congressional race, not knowing if her home district was red or blue. At stake was California’s 25th District, where Hill spent the last 18 months on an unlikely quest to unseat two-term GOP Rep. Steve Knight. By six this morning, Hill, a 31-year-old first-time candidate, appeared to have won by more than 4,000 votes.
The seat was among several Republican-held offices targeted by the Democratic Party, in districts won by Hillary Clinton in 2016, but it was never going to be easy. CA-25 had been in Republican hands since 1993, representing territory stretching from northern Los Angeles County to parts of Ventura County. It may have been tilting from red to purple, but Hill wisely shaped her campaign to the immediate kitchen-table interests of the district, and avoided all discussion of presidential impeachment, Russia or special counsel Robert Mueller.
“We’re not running an anti-Trump campaign,” Hill told Capital & Main early in the campaign. “I just don’t think that’s the issue that people care the most about here.”
Hill grew up in the tiny district town of Rosamond and, later, in Santa Clarita, and now resides in rural Agua Dulce. She was a cop’s daughter running against former LAPD officer Knight. Hill began her campaign after working eight years at PATH, one of the largest homeless services providers in California. Growing homelessness in CA-25 was one of her core concerns, along with health care and economic opportunity.
While her youth, bisexuality and comfortably modern persona got the attention of Vice and other media, Knight was seemingly out of touch with his own constituents, many of whom commuted daily to Los Angeles. He was on record as supporting legislation banning gay marriage and voted with President Trump 99 percent of the time, including the failed attempt to eliminate the Affordable Care Act. If her lead holds through the week’s final ballot count, Hill will join an unprecedented wave of women elected to Congress and presumably will take a new and far different path than Knight.
Capital & Main
CA-10: AP Calls Election for Josh Harder Over Republican Incumbent
Four-term Central Valley Congressman Jeff Denham appears to have been defeated after a week of ballot counting.
UPDATE, Nov. 13: The Associated Press tonight has declared Democratic challenger Josh Harder to be the winner over GOP incumbent Jeff Denham in the hard-fought 10th District race. According to AP, “With votes continuing to be counted, Harder’s edge has grown after Denham grabbed a slim lead on Election Day. After the latest update, Harder had a 4,919-vote lead out of about 185,000 votes counted, a margin too large for the congressman to overcome with remaining votes.”
A TV ad
A TV adfor incumbent Republican Congressman Jeff Denham stated that his Democratic challenger Josh Harder “shares Nancy Pelosi’s liberal San Francisco values.” The ad, running in the Sacramento media market and on digital platforms throughout California’s 10th District, went on to state that Harder, if victorious, would leave residents of this Central Valley district with dramatically worse health care options.
It was a puzzling claim, considering Denham voted with his party to repeal the Affordable Care Act, or Obamacare, several times, and voted for the Republican replacement, the unpopular American Health Care Act.
As of Wednesday morning, Jeff Denham clung to a lead of 50.6 percent of the vote, with Harder claiming 49.4 percent. While 100 percent of precincts had reported, the race had not been called, pending the counting of mail-in and provisional ballots. Democratic activists said enthusiasm and campaign cash were up. Harder raised more than $7 million in this cycle to Denham’s $4.4 million.
Back in February, most of the volunteer canvassers trying to boost Democratic registration in Modesto, the heart of the district, were from the Bay Area. They said they had driven east to turn this purplish district solid blue. CA-10, which voted for Hillary Clinton by three points in 2016 while giving Denham a similar margin of victory, was one of the top Democratic targets for flipping in 2018.
Whether Denham or Harder end up winning, the trend of people relocating from the pricey Bay Area could end up re-shaping the electorate in the district. New research from BuildZoom and the Terner Center for Housing Innovation at the University of California, Berkeley shows a growing connection between the Bay Area and its neighbor to the east, CA-10. “More than 55 percent of Bay Area out-migrants in households earning less than $50,000 a year stayed in California, [heading to] more affordable markets, such as the Sacramento region or Central Valley metro areas, like Modesto or Fresno,” the study said.
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CA-21: TJ Cox Reverses Tally to Declare Victory
Throughout the campaign, Cox was on the offensive, blasting the GOP incumbent’s votes for the unpopular Republican tax reform bill, and the even more unpopular American Health Care Act (ACHA) or “Trumpcare.”
UPDATED November 28: Late ballot counting continues to show Democratic Party candidate TJ Cox with a slight lead (currently 506 votes) over GOP incumbent David Valadao. Cox has declared victory. The following story was written when election-night returns showed Valadao ahead by 4,400 votes.
California’s 21st District seemed like a plausible target to flip from red to blue in 2018 even though incumbent Republican Congressman David Valadao had beaten his Democratic challenger Emelio Huerta by 13 points in 2016. Hillary Clinton handily carried the district, and the demographics also looked good for a Democrat. The district is 71 percent Latino, a group that gave Clinton 66 percent of its vote nationwide two years ago. Republicans account for 27 percent of registered voters in CA-21, 16 points lower than Democratic registration. According to the political forecasting site FiveThirtyEight, Valadao voted with Trump policies nearly 99 percent of the time.
Despite those headwinds for Valadao, and visits from Obama, former Vice President Joe Biden and Lt. Gov. Gavin Newsom, Democratic challenger TJ Cox fell far short. By early Wednesday, Valadao claimed 53.7 percent of the vote to 46.3 percent for Cox with provisional and mail-in ballots still to be counted.
Throughout the campaign, Cox was on the offensive, blasting Valadao’s votes for the unpopular Republican tax reform bill, and the even more unpopular American Health Care Act (ACHA) or “Trumpcare.”
Valadao claimed the Republican tax plan saved families thousands of dollars in a district with a far lower median household income than California as a whole. He also touted his willingness to break from Trump in a failed attempt at immigration reform earlier this year.
Valadao’s strong ties to the district may have given him an advantage. A dairy farmer, small-business owner and son of Portuguese immigrants, Valadao grew up in the district, and has given unwavering support to agribusiness interests, a very important position in this largely agricultural region. Cox, an engineer who has never held elected office, owns a home just outside the district in Fresno and earlier in the election cycle claimed a home in suburban Washington, D.C. as his principal residence.
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