MOORLACH UPDATE — Eric Holder — January 5, 2017

The first day of the 2017 Senate Session was a dramatic one. The Daily Journal reporter called back, as the level of defiance had risen with the retention of former United States Attorney General Eric Holder, and is the first piece below (MOORLACH UPDATE — Talking Pension Tax — January 4, 2017 january 4, 2017 john moorlach). The reporter and I had an interesting conversation, but believed that one of my points really had to be made.

After the Floor Session, I went into a two and one-half hour staff meeting to review our legislative package. But, before we could get rolling, a press release was certainly required for this decision by the Democrats’ leadership. After all, why should innocent bystanders be hurt by Sacramento’s actions? Such as a Federal discontinuance of funding for high speed rail? Or even a request for a reimbursement of prior grants? But, more importantly, how might it impact our counties and cities? So I wrote something down and it is provided by the Orange County Breeze, with a fun graphic, in the second piece below.

It was picked up by the Fresno Bee, which provides the political color of the topic, in the third piece below. And, the Sacramento Bee opined on the matter in the fourth piece below. It looks like it should be a crazy/fun year.

Legislature’s hiring of Obama’s attorney general raises questions

By Malcolm Maclachlan
Daily Journal Staff Writer

SACRAMENTO — The Democrat-controlled state Legislature’s decision to hire former Obama administration Attorney General Eric H. Holder Jr. raises questions about how California’s collection of top attorneys will work together, and if the move will spark or avoid more litigation with the incoming Donald J. Trump administration.

The announcement was made just one day after Gov. Jerry Brown nominated U.S. Rep. Xavier Becerra, D-Los Angeles, to become California’s next attorney general. A spokesperson for Brown declined to comment on the news.

Assembly Speaker Anthony Rendon, D-Paramount, Senate Pro Tem Kevin de León, D-Los Angeles, and other state Democratic leaders have praised Becerra since Brown announced his nomination just over a month ago. The Assembly has scheduled Becerra’s first confirmation hearing for Jan. 10.

According to a Tuesday engagement letter, Covington & Burling LLP — the Washington, D.C.-based firm where Holder is now a partner — will serve as "special counsel. The deal will focus on "three areas of immediate concern:" immigration, health care and environmental policy.

The timing of the announcement was coincidental, said Rendon’s press secretary, Kevin Liao, based on both houses having signed the agreement.

"The AG is the chief law enforcement officer for the state, but does not represent the Legislature," Liao said. "We are seeking legal counsel that will specifically represent us as we explore legal means for defending California. The goal of this is to complement and supplement the AG’s work, not replace it."

Besides "putting the Trump administration on notice," Holder could advise the Legislature on how to craft laws to avoid being sued by Trump’s Department of Justice, said UC Davis School of Law Professor Carlton F. W. Larson.

The letter from Covington says the project will be led by Holder, former California U.S. Rep. Howard Berman, now a senior advisor at the firm, and partner Daniel M. Shallman. It states "the Legislature will be our client" and not "the executive branch or any regulatory body."

The state Legislature will pay $25,000 a month between Feb. 1 and April 30. The letter calls for Covington to offer "our wide array of regulatory experts as appropriate in helping the Legislature to develop legal strategies." Litigation "would not fall within the scope of this undertaking."

The fee is "eminently fair and consistent with industry standards," Liao said. Each house will pay half of the costs from "existing funds."

Holder was President Barack Obama’s attorney general from 2009 to 2015. He spent much of that tenure fighting state-federal battles with Republicans.

Some Republicans have pointed to Holder’s successful 2010 suit to block a tough Arizona immigration law as a blueprint for why California’s efforts to set its own path on immigration may fail.

Holder also fought an Alabama county, accusing it of violating the Voting Rights Act. That case eventually resulted in a U.S. Supreme Court decision that overturned parts of the act.

Covington also has offices in San Francisco and Redwood Shores, and frequently represents companies and states against the federal government.

The Legislature maintains its own staff of almost 90 attorneys in the Office of the Legislative Counsel. That office will sometimes get involved in litigation, but is more focused on day-to-day duties such as drafting bills and determining if legislative proposals are constitutional.

The Legislature also sometimes hires outside attorneys to help with lawsuits, such as personnel cases.

A more high-profile example came about 15 years ago when the state Senate hired outside attorneys to help litigate energy price manipulation claims against Enron Corp.

Steven Maviglio, founder and president of Forza Communications in Sacramento who was Gov. Gray Davis’ press secretary during the energy crisis, said the Enron situation was different because the Legislature had helped create the energy crisis with deregulation but disagreed with Davis about how to fix it.

"There was a frosty relationship between the governor and the Legislature on those issues," Maviglio said.

He sees the contract with Holder as more complementary: "He knows about the administration and Becerra knows about Congress. That’s a potent combination."

Retaining Holder could serve as a "stopgap" measure while waiting for Becerra to get confirmed and staff up the state Department of Justice, said Jon D. Michaels, a professor at UCLA School of Law.

While the Legislature lacks the in-house legal resources someone like Holder can provide, Michaels warned that Democrats should think about how they would view it if Trump or a Republican governor did something similar.

"I worry about the message being sent when a state, especially a state like ours with a deep legal talent pool, hires privately," he said.

Senate Judiciary Committee vice-chair John Moorlach, R-Costa Mesa, said he is concerned about taxpayers footing the bill for Holder.

But he’s more concerned about the state risking billions of dollars in federal funds by provoking the new administration, and is cautiously optimistic about de León’s comments that Holder will help defend the state’s finances.

"My mother always said, ‘Sometime you’ve got to spend a dime to save a quarter,’" Moorlach said. "But if Eric Holder is being retained to poke a sharp stick in the eye of the president, then that’s a mistake."


California State Senator John Moorlach asserts Democrats jeopardize federal funding

Read the full article here:

The decision by California Democratic legislators to hire former US Attorney General Erick Holder could mean Democrats jeopardize federal funding.

Senator John Moorlach (R-Costa Mesa) provided the following statement today regarding the legislative Democrats’ decision to hire former U.S. Attorney General Eric Holder as their next line of defense against the incoming Trump Administration.

“If the majority party continues to poke President-Elect Trump with a short stick, then they better be prepared with a Plan B. And, as far as I can tell, there is no alternative plan should these combative moves not be received well by the incoming Trump Administration.

“We cannot and must not jeopardize Federal funding to our state, counties and cities. They cannot afford it, especially with increasing pensions costs at the door.”

About Senator Moorlach

State Senator John Moorlach represents the 37th District of California, is a trained Certified Financial Planner and is the only CPA in the California State Senate. He gained national attention 20 years ago when he was appointed Orange County Treasurer-Tax Collector and helped the County recover from its bankruptcy filing — at the time the largest municipal bankruptcy in U.S. History.

Valley GOP legislators decry Dems’ hiring of Holder to battle Trump

Read the full article here:



Republican legislators, including those in the Valley, are unhappy that Democratic leaders of the state Senate and Assembly have signed a deal to hire the nation’s former top legal gun “in defense of our values and constitutional guarantees” against President-elect Donald Trump’s forthcoming administration.

State Senate President Pro Tem Kevin de León, D-Los Angeles, and Assembly Speaker Anthony Rendon, D-Paramount, issued a statement explaining their rationale for unilaterally hiring former U.S. Attorney General Eric Holder and his Washington, D.C., law firm as an outside legal counsel in what they foresee as likely head-butting over policy issues between the state and the Trump administration.

“With the upcoming change in administrations, we expect that there will be extraordinary challenges for California in the uncertain times ahead,” de León and Rendon said. “This is a critical moment in the history of our nation. We have an obligation to defend the people who elected us and the policies and diversity that make California an example of what truly makes our nation great.”

Read more here:

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The two Democratic leaders hired Covington & Burling LLP, which includes Holder among its partners, for an initial three-month term at $25,000 per month starting Feb. 1. Holder served as attorney general under President Barack Obama from 2009 to 2015. He had previously been with the firm before joining the Obama administration.
Read more here:

One of the two Assembly assistant Republican leaders from the Valley, Jim Patterson of Fresno, was critical of the Holder hiring.

“The Democrats like to say, ‘We’re leading the world,’ but nobody is following us,” Patterson told The Bee on Wednesday. “Nobody is following our taxation policies, our energy policies.”

He accused de León and Rendon of “declaring war on the federal government and the rest of the country, and declaring war on 5 million people who didn’t vote for them.”

Statewide, Democratic candidate Hillary Clinton outpolled Trump by a huge margin, rolling up more than 8.7 million votes to just under 4.5 million for Trump. But the Central and Southern San Joaquin Valley went to Trump, who garnered a collective 382,107 votes from Fresno, Kings, Kern, Madera, Merced and Tulare counties, compared with 355,578 for Clinton.

Assemblyman Joaquin Arambula, D-Kinsgburg, was not involved in the Holder hiring, nor was he consulted by the Assembly leader, according to Arambula’s chief of staff, Hans Hemann. But Arambula expressed hope for continuing to foster cooperation with the federal government through the Valley’s representatives in Congress.

“I plan on working closely with the Valley’s congressional delegation to find areas of common interest,” Arambula said. “As the new chair of the Assembly Budget Subcommittee on Health and Human Services, I look forward to the opportunity to work with our federal and state representatives to ensure programs better serve the people of the Central Valley.”

Holder will lead efforts “in helping the Legislature develop legal strategies regarding potential actions of the federal government that may be of concern to the state of California,” according to the firm’s engagement letter with the legislative leaders. Also on the team will be former Rep. Howard Berman, a Democrat from Los Angeles, and Daniel Shallman, a founding partner of the firm’s Los Angeles office.

According to the engagement letter, three of the chief policy areas on which the state anticipates potential clashes with a Trump presidency are immigration, health care and the environment. De León and Rendon said in their statement that the firm’s role will be “advising us in our efforts to resist any attempts to roll back the progress California has made” on climate change, civil rights and other issues.

The legal bill is being evenly split between the budgets of the Senate and the Assembly, and Senate and Assembly leaders jointly said that “given the urgency, intensity and complexity of the work, these terms are eminently fair and consistent with industry standards.”

Patterson said he considers the hiring “a terrible decision” and “a waste of money.”

Read more here:

“To my thinking, it’s unprecedented. We already have a (state) attorney general’s office with a multimillion-dollar budget, but this looks to be hiring some kind of political operation,” he said.

“And it’s costly as a political move; it does nothing to help California have influence with the federal government,” Patterson told The Bee. “It unnecessarily shuts the door on California being at the table to talk about how the Environmental Protection Agency gets reformed or how federal water projects get reformed.”

State Sen. Andy Vidak, R-Hanford, tried to take a more tongue-in-cheek approach to criticize the Holder hiring, comparing it to the expansion of the U.S. in the 19th century “that drove numerous outlaws, carpetbaggers and card cheats westward as the country was growing tired of these individuals who primarily thrived on taking things away from others.

“The killing of jobs in resources industries (such as oil, agriculture and mining) and the attempts to repeatedly violate the Second Amendment finally reached a point of rebellion as demonstrated through the victory of Donald Trump in many previously ‘safe’ Democrat states throughout the nation,” Vidak added.

Kevin Liao, a spokesman for Rendon, told The Bee that the speaker and de León began exploring the possibility of hiring outside counsel soon after the November election.

The hiring came without a vote of either legislative house or the Democratic caucuses, “but some members were engaged in discussions with the speaker,” Liao said. “The members were in their districts and it was not easy to communicate with them.”

Liao said other law firms were considered for the work, but he declined to identify them.

“What stood out about Covington was the diversity of both their policy and legal experience,” he said.

“And having Eric Holder, the former attorney general and the country’s top law enforcement officer, as a partner certainly doesn’t hurt,” Liao added. “We couldn’t get Obama, but we went with the second-best option.”

Republicans in other parts of the state also lambasted the two Democratic leaders.

“If the majority party continues to poke President-elect Trump with a short stick, then they better be prepared with a Plan B,” said state Sen. John Moorlach, R-Costa Mesa. “We cannot and must not jeopardize federal funding to our state, counties and cities. They cannot afford it, especially with increasing pensions costs at the door.”

Assembly Republican Leader Chad Mayes of Yucca Valley said the controversy is “a distraction from the very real problems facing everyday Californians.”

“Donald Trump did not cause California’s transportation crisis, nor did he play a role in our state’s sky-high housing costs,” Mayes said. “Democrats should focus on these real-world problems instead of wasting taxpayer money to score political points before the president-elect even takes office.”

Tim Sheehan: 559-441-6319, @TimSheehanNews

Democrats lawyer up as they prepare to confront Trump

Read the full article here:


Senate and Assembly Democratic leaders clearly are taking seriously the notion that they should never show up at a showdown underprepared.

Speaker Anthony Rendon of Paramount and Senate President Pro Tem Kevin de León of Los Angeles have retained former Attorney General Eric Holder and his high-end law firm, Covington & Burling, to defend the state against what they see as a likely domestic enemy – Donald Trump.

As Democrats prepare to face down Trump, who better to hire than the lawyer who until recently headed the Department of Justice and some of his partners? Holder, the attorney general for much of President Barack Obama’s tenure, would be a worthy opponent for President-elect Trump’s nominee as attorney general, Sen. Jeff Sessions of Alabama.

Read more here:

Other lawyers written into the Senate and Assembly’s agreement with Covington are no slouches, either. One is former Rep. Howard Berman, a Los Angeles Democrat. Another is Dan Shallman, the brother one of de León’s top political advisers and a former assistant U.S. attorney in Los Angeles who led a significant Southern California public corruption prosecution.

The move is not without risks. Some Democrats worry that Rendon and de León are being too pugilistic and too public in their willingness to fight. Republicans warned that Democrats risk finding the fight for which they seem to be spoiling, and losing.

“If the majority party continues to poke President-elect Trump with a short stick, then they better be prepared with a Plan B,” Sen. John Moorlach, a Costa Mesa Republican, said in a statement. “And, as far as I can tell, there is no alternative plan should these combative moves not be received well by the incoming Trump administration.”

There’s also a question of duplication. Gov. Jerry Brown has nominated Rep. Xavier Becerra to replace Sen. Kamala Harris as California’s attorney general. Becerra, who is expected to be confirmed later this month, had been the fourth-highest-ranking Democrat in Congress and is steeped in Beltway issues. The California attorney general’s office has plenty of fine lawyers who can defend the state’s interests.

But the Legislature is its own branch of government. And Rendon and de León are well within their rights to hire their own counsel.

For now, their move is more bluster than blunderbuss, as evidenced by the amount of taxpayer funds the Legislature is earmarking for Covington: $25,000 a month for three months starting Feb. 1, with a limit of 40 hours per month.

The $25,000 is a blip to a firm of Covington & Burling’s size, and it represents a fraction of the Legislature’s $300 million annual budget. The contract is written so that billings could rise, and lawyers’ fees can add up quickly – Holder reportedly bills at $1,700 an hour. The stakes are huge.

Trump and the Republican-controlled Congress have made clear their intention to unravel the Affordable Care Act. That could cost California $21 billion and upend health care coverage for nearly 5 million Californians.

In addition to having expertise in government-funded health care programs, Covington lawyers are steeped in immigration and environmental law, and in the issues surrounding firearms – all topics near and dear to California Democrats. At a minimum, Covington litigators could slow efforts to unwind Obama administration policies that benefit California.

Rendon and de León no doubt are confident that the electorate is on their side. Trump lost to Hillary Clinton in California by 4.2 million votes. Although some Trump supporters say he should be taken seriously but not literally, de León and Rendon are wise to take Trump at his word. Their decision to hire Holder and Covington carries some risk. But the risk would be far greater if they were caught flat-footed if and when Trump starts to make good on some of his promises.


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