In the shadows
The regulations under which lobbyists in the state Capitol operate are not onerous for them, their clients or the legislators they influence to choose the Special Interest over the Common Good. When you receive money from developers and oil-and-gas traders, for example, to influence legislation by contacts with lawmakers, you are expected to fulfill the minimum requirement of political decency by registering as a lobbyist and reporting the fees you have collected from your clients. After you have done these simple things, you are free to foment any attacks on the Common Good your clients pay you for in the practice of your profession as a lobbyist.
But the laws don’t figure in the Rusty Factor. Yes, folks, Rusty, the west side’s heroic Young Farmer of America has stepped in it again. Wherever that man walks, manure piles sprout. From pile to pile – from trying to sell his groundwater to LA off a bankrupt dairy through his legislative career, his state agency career, through his losing campaign for state Senate in new district handmade for him by friends in the Legislature, to his lobbying career – Merced County’s own Rusty Areias has left his boot print on the public mind.
Reports appearing in the last several weeks about Areias and two other associates pretending to be “consultants” instead of lobbyists, therefore, they were not required to report the money they received to “consult” with legislators about their clients’ special interests. We speculate there were three possible reasons for this event: a change in command at the state Fair Political Practices Commission changed the commission’s attitude toward the conventions of corruption practiced in the Capitol; the three “consultants” were trying to hide their clients’ involvement in legislation for political or possibly tax reasons; or arrogant stupidity.
Whatever the real reason or combination of reasons may be, we find cloyingly self-righteous the Merced Sun-Star's editorial that bashes the “consultant” lobbyists one week and praises the local assemblyman, Adam Gray, D-Merced, 10 days later for co-sponsoring the state’s phony “anti”-fracking law. This greasy confection was propelled through the Legislature (particularly its final, weakening amendments) by “consultants” and lobbyists of the oil-and-gas industry and their allied special interests (including, until things got just too stinky, several state and national environmental groups). The Sun-Star moralists are disinterested in the reasons or motives behind the behavior, but roundly castigate the individuals for getting caught.
Like Areias (ethically disabled by prolonged youthful exposure to the dairy industry) and former Rep. Dennis Cardoza (a bookie who promoting lady mud-wrestling and environmental destruction), Adam Gray was born for the shadows.
Just for a laugh, we thought we’d share below the biographies of Areias and his associates as they appear washed in the flak of their firm of influence peddlers, California Strategies LLC. Everything must look extremely respectable as the hands of lobbyists by any other name, warmed by the cash of their corporate clients, mold the buttery will of a term limited Legislature to their special purposes. -- blj
Our View: Those who skirt lobbying laws need to pay the price
By The Editorial Board
By hammering three heavyweight consultants, the California Fair Political Practices Commission this week helped promote fair play and transparency in the otherwise opaque business of consulting and lobbying.
The FPPC proposes to fine three Democratic consultants and their firm, California Strategies, $40,500 for failing to register as lobbyists, even though they sought to influence an agency and lawmakers on behalf of their clients.
By taking the action, the commission put on notice all consultants who act like lobbyists but don’t take the step required of lobbyists to register with the secretary of state, and make quarterly filings disclosing their clients, and the legislation, issues and agencies they seek to influence.
As The Bee’s Laurel Rosenhall reported, the commission has tackled the pervasive practice of shadow lobbying by former politicians and high-level staff members who consult for private industry without disclosing themselves as lobbyists.
By insisting they act as consultants or legal counselors, they contend that they don’t talk to policymakers on behalf of clients, but rather provide advice, as if lobbyists don’t offer strategic advice, too.
There are many reasons that clients would prefer not to hire lobbyists. One is that clients and lobbyists must identify themselves in public filings, and disclose the amounts they pay and collect in lobby fees.
Another is that fees paid to consultants can be counted as business expenses that can be deducted from taxes, while lobbying expenses cannot be written off.
The settlement involves the firm itself, California Strategies, which for years has set the standard for consultants. Its founder, Bob White, was chief of staff to Gov. Pete Wilson and is among the most influential figures in Sacramento.
The members of the firm singled out in the complaint include former San Joaquin Valley legislator Rusty Areias, who was Gov. Gray Davis’ state parks director; Winston Hickox, who was Davis’ secretary of the California Environmental Protection Agency; and Jason Kinney, a Davis speechwriter who worked for former Sen. Don Perata and is one of Senate President Pro Tem Darrell Steinberg’s consultants.
The proposed settlement said Hickox lobbied his former agency, while Kinney and Areias contacted legislators. To their credit, the three agreed to settle the matter, rather than fight, and register when they conduct lobbying.
By filing the case, the commission under Chairwoman Ann Ravel showed that it doesn’t shy away from hammering Democrats, who have relationships with influential Democratic lawmakers and with Gov. Jerry Brown, who appointed Ravel.
President Barack Obama has nominated Ravel to serve on the Federal Election Commission. Her independence ought to serve her and the country well, if the U.S. Senate confirms her, as it should.
Influencing policymakers is as old as the republic. Citizens and corporations have a fundamental First Amendment right petition their government. But as the FPPC made clear by its action, the public has a right to know who tries to sway policymakers, and the amount that moneyed interests spend trying to get their way.
Our View: New fracking law a good step, compromise
One of the accomplishments of the Legislature this year is a compromise bill on fracking that allows the oil extraction technique to continue but with strict regulations to be drafted over the next 18 months. Gov. Jerry Brown signed Senate Bill 4 last week.
Headed into the session, there were multiple proposals to ban fracking, the controversial procedure that most people have heard about and few people understand. The bill that passed will put fracking under more serious scrutiny in California than occurs in any other state, primarily because in 2005 Congress approved the “Halliburton Loophole,” which exempts fracking from the federal Safe Drinking Water Act requirements.
SB4 is of high interest to the San Joaquin Valley for several reasons:
• Fracking now takes place primarily in Kern County, but the practice likely will spread north, eventually possibly reaching Merced and Stanislaus counties. The Monterey shale formation covers 1,750 square miles running the length of the center of the state. The U.S. Energy Department estimates that the Monterey shale contains more than 15 billion barrels of oil, two-thirds of the shale oil reserve in the United States. A USC study suggested this could become a major economic boost for the Valley, creating as many as 512,000 new jobs. More than half of the fuel consumed in California, the state of many motorists, comes from foreign places.
• Assemblyman Adam Gray, D-Merced, was the principal co-author of this bill, which was carried by Sen. Fran Pavley, D-Agoura Hills. Gray told The Modesto Bee that his interest in the subject was piqued by the USC study but also by the concern about groundwater. His district and the whole Valley, of course, are struggling with a shortage of water.
• One of the things that Gray was able to get included in the bill is a provision that all groundwater quality information collected in the fracking studies will go to a “doctoral-degree-granting institution located in the San Joaquin Valley.” That institution is, of course, UC Merced, and this will only enhance the campus’ growing reputation as a repository of knowledge about Valley water issues.
In promoting the bill, Gray organized a legislative trip to North Dakota to learn about fracking operations there. Republican Sens. Tom Berryhill of Modesto and Anthony Cannella of Ceres were part of that trip and ultimately voted for the bill.
The legislation had strong opposition from both sides. Many in the oil industry opposed any regulation while some environmental groups wanted a total ban on fracking. We like several aspects of the compromise that resulted.
The bill will require completion of a statewide environmental impact report and streamlined California Environmental Quality Act review of fracking projects.
Neighboring landowners will receive notice that fracking is taking place. There will be public disclosure of the chemicals used, and of the amount of fluid and pressure employed to fracture underground rock to extract oil. There also would be groundwater monitoring and sampling.
The law applies to all forms of well stimulation, including acidification, which entails injecting acid into wells to create channels through which oil and gas can flow.
California needs to continually embrace alternatives to fossil fuels, but it also should attempt to be less dependent on oil from the Middle East and nations such as Venezuela and Ecuador. In 1992, California produced half the oil it needed. Alaska provided 45 percent, and foreign sources accounted for 5 percent. By 2012, California produced less than 37 percent of the petroleum consumed in this state, and foreign sources accounted for almost 51 percent.
By shunning fracking, Californians would continue to send offshore the damage done by oil drilling even as we remain a state heavily dependent on gasoline-powered cars.
The use of petroleum won’t end anytime soon. With this law, California policymakers have helped provide a bridge by allowing safe extraction of old fuel, while continuing to encourage alternative fuel.
Finally, passage of this law is a feather in the cap for Gray in his first year in the Assembly. We have no doubt that his experience as a former legislative staffer was useful in bringing together people who frequently disagree. It is unusual for a first-year legislator to be so heavily involved in carrying a bill of statewide significance and interest.
Gray campaigned as a moderate who would promote economic vitality for the Valley, watch out for agriculture and yet not ignore the environment. His role in SB4 is a good example of achieving that balance.
Los Angeles Times
State watchdog cracks down on stealth lobbying in Capitol
By Patrick McGreevy
SACRAMENTO -- Launching a crackdown on stealth lobbying at the Capitol, the state’s ethics watchdog agency on Thursday imposed $43,800 in fines on lobbyists and their clients for not properly reporting their activity.
The state Fair Political Practices Commission cases include one that implicates one of the most influential government affairs firms in the state— California Strategies LLC. and some of its high-profile partners, including former state Assemblyman Rusty Areias.
Areias, Jason Kinney and Winston Hickox acknowledged that they failed to register as lobbyists and report their paid advocacy work for part of this year and last year on behalf of clients seeking favorable actions from state government.
Commission Chairwoman Ann Ravel said the California Strategies case is “very significant” and is part of a new enforcement strategy.
“This is the first time that the commission has ever dealt with an issue like this of shadow lobbying and it was a proactive investigation that was done at the instigation of the [commission’s] enforcement division,” Ravel said.
“It is part of our emphasis now on looking at more significant matters that impact the public trust and this is exactly that kind of a case,” Ravel said.
California Strategies and its three lobbyists agreed to pay $40,500 in fines for failing to disclose lobbying in which they were paid $83,000 by firms including Focil-MB, a company managed by Mission Bay Development Group; Kaiser Ventures; Kaiser Eagle Mountain; and CE2 Carbon Capital LLC.
None of the clients were fined in that case.
In a separate case, the FPPC imposed a $2,500 fine against prominent lobbyist Barry Broad and his firm, Broad & Gusman, for failing to properly report $222,908 they received to lobby from July 1, through Sept. 30, 2012.
And in two other cases, clients paid a penalty. Property ID Corp. was fined $600 for failing to file on time a report on payments for lobbying services it made last year, while Performance Marketing Assn. was hit with a $200 fine for the same violation.
California Strategies LLC
Rusty Areias creates solutions on behalf of California Strategies' clients facing the state's most intense regulatory scrutiny, specifically within environmental, agricultural and coastal arenas. His distinguished public service career provides clients a clear understanding of what must be done to achieve their strategic business objectives.
Rusty Areias' long and successful record of public service is characterized by his ability to balance complex issues, especially environmental, land-use, transportation, agriculture and water, into legislative and public policy success. His ability to bring people together and achieve bipartisan solutions is most evident in the more than 100 pieces of legislation he authored as a legislator that were signed into law by two different Republican governors.
Areias served 12 years in the California Assembly, representing Merced, San Benito, Santa Cruz, Monterey and Santa Clara counties. He chaired the Agriculture; Earthquakes, Repair and Response; and Consumer Protection committees, working to strengthen the agricultural economy, preserve farmland, increase seismic safety standards, lower credit card interest rates and stand up for consumer rights. He also served on the Transportation Committee and led the successful effort to secure funds for improvement of Highway 152 over the Pacheco Pass.
As Director of the California Department of Parks and Recreation, he cut park fees in half, boosting attendance at state parks by 23 million visitors. He also oversaw the passage of two major park bonds, totaling more than $6 billion.He served four years as a California Coastal Commissioner, including two years as chairman. His term was characterized by problem-solving and bringing a sense of reasonableness back to the Commission's decisions.
Prior to his public service, Areias managed the day-to-day operations of the Areias Dairy farms and received numerous awards for farming excellence. In 1982, Areias was awarded the prestigious Outstanding Young Farmer in America.
Areias completed the Harvard Executive Leadership Programs at the Kennedy School of Government. He was also active in Harvard's Young Presidents Organization.
Areias and his wife are the proud parents of two children.
As Secretary of CalEPA and in other senior level government appointments, Winston Hickox used his extensive experience in areas critical to California's natural and business environment to help advance many important public policy initiatives. He has also spent considerable time in real estate investment banking, institutional investment management, private equity clean-tech investing, and with the development and management of the FTSE Environmental Markets Index Series.
During his time in public service, Winston Hickox has worked in several important policy areas, including climate change, water quality, air quality, toxics, pesticide regulation, waste management and reduction, and a range of other public health and environmental areas of importance to all Californians. As a result, when he joined California Strategies as a partner in 2006 he brought to the firm's clients the benefits of his experience in environmental public policy and regulation, private sector investment banking, and pension fund management.
His environmental-policy experience includes five years as Secretary of the California Environmental Protection Agency (CalEPA), seven years as a Special Assistant for Environmental Affairs to Governor Jerry Brown, and two years as an alternate to the California Coastal Commission. Hickox's administration at CalEPA saw the implementation of some of California's most important environmental policy initiatives, including the "Pavley Bill" in 2002 that granted the California Air Resources Board (CARB) authority to reduce green house gas emissions from cars and light duty trucks, the Clean Beaches Initiative, and the creation of the "Fuel Cell Partnership," established to advance fuel cell technology in California, and oversaw the achievement of a LEEDS Platinum designation for the CalEPA Building, a first for buildings of its kind in the western United States.
Hickox completed a two-year assignment with the California Public Employees' Retirement System (CalPERS) Investment Office where he assisted with the design and implementation of a series of environmental investment initiatives in the private equity, real estate, global public equity and corporate governance segments of the fund's $240 billion investment portfolio.He was also asked by the Schwarzenegger Administration to chair the Market Advisory Committee (MAC) in 2007, which developed a report intended to advise CARB regarding the use of market mechanisms, such as cap and trade, to reduce greenhouse gas emissions. The report was in response to AB32, the California Global Warming Solutions Act of 2006.In 1998, the Sacramento County Board of Supervisors appointed Hickox to the Board of the $6 billion Sacramento County Employees' Retirement System (SCERS).
From 1987 to 1996, he was a Managing Director and Partner with LaSalle Investment Management, a major force in the world's real estate capital markets. Hickox also serves as a member of the Board of Directors of Thomas Properties Group Inc., Cadiz Inc., GRIDiant Inc., and Renewable Energy Products LLC.Between 1989 and 2007, he served on the Board of three environmental non-governmental organizations, including the California League of Conservation Voters (President from 1990 to 1994), Audubon California and Sustainable Conservation.
Jason Kinney provides California Strategies' clients with issues management, crisis communications, messaging and media relations expertise, designing campaigns that have earned him the distinction as one of California's premier problem-solvers.
Jason Kinney serves as a communications strategist for many of California Strategies' clients, including elected leaders, political coalitions, business associations and non-profits. Clients include California Medical Association, Dignity Health, The Auto Club Speedway, The National Football League (NFL), The Think Long Committee of California and AT&T. His work on their behalf includes public outreach and education campaigns, strategic consulting, media relations and event management.
In his more than two decades of politics, Kinney has developed core expertise in issues management, helping to win more than 30 political and public affairs campaigns. He most recently served as lead strategist for the Gavin Newsom for Lieutenant Governor campaign.
Kinney was named to Capitol Weekly's Top 100 "Most Powerful Political Players in California," which referred to him as the "young turk in Bob White's super firm of political heavies."
Before joining California Strategies, Kinney was Director of the Sacramento office of global public relations company Burson Marsteller. Prior to that, Kinney led his own public affairs practice, The Kinney Company.
For more than five years, Kinney served as Senior Communications Advisor and Chief Speechwriter to Governor Gray Davis. Before entering the Davis Administration, Kinney served as Communications Director to California State Senator Don Perata (D-Oakland).
He is also the co-publisher of the California Majority Report, a blog for Democratic political insiders.
A native of Indiana, Kinney launched a career in political campaign management at the age of 13, when he helped run his mother's campaign for state senate. Kinney is an attorney licensed to practice law in the state of Indiana. He attended Princeton University and Indiana University School of Law.
He lives in Sacramento with his wife, Mary Gonsalves Kinney, daughters Stella and Violet, and son Dashiell.