MOORLACH UPDATE — Cronyism — April 21, 2017

I have always had a dictionary on my credenza. I used it all the time. Now, I can Google for definitions on my laptop or IPhone. So, I keyed in "cronyism" and here’s the definition I got:

"The appointment of friends and associates to positions of authority, without proper regard to their qualifications."

That’s what happened yesterday morning on the Floor of the Senate. The monopoly party voted to approve Governor Brown’s appointment to the Agricultural Labor Relations Board.

Former State Senator Isadore Hall has great credentials. But, it is unclear what someone formerly representing Los Angeles (not a rural farm county) in the Legislature, with a doctorate in theology and strong ties to unions, but having no applicable experience in agriculture or the law, is being appointed to a quasi-judicial board. If outside oversight was the reason, I could easily name a dozen people with the requisite qualifications. Instead, I felt it was cronyism at its finest, and joined many in my Republican Caucus to protest this particular selection.

The Associated Press provides the first story on the subject, which is in numerous newspapers around the state and nation, including the Herald-Whig. It also includes a photo by their renowned photographer, Rich Pedroncelli.

The LA Times also has this unique Floor debate on their website and it is the second piece below. One thing that this piece brings up in its closing paragraph is how low some of my colleagues on the other side of the aisle will stoop in making their arguments. And, they criticize us for using the word "cronyism," as if it referred to them, instead of the Governor.

The third piece, in the Daily Pilot, provides a local perspective on what I’m doing in Sacramento. It may also show how dysfunctional the Capitol is, as the majority of the Huntington Beach City Council was of the opinion that there was time to proceed in an orderly fashion under a system that was established to review legislation. Unfortunately, the wheel’s of government move too slowly. And, when it is self-inflicted, it makes you want to weep.

The bills that two Councilmembers wanted to endorse will be heard on Monday, April 24th. So, procedure will keep a good city out of the mix for the first hearing. But, we can all agree that pension reform is a hot topic, and getting hotter. Just ask the retirees from Loyalton and LA Works, who recently had their pensions slashed by CalPERS.

The state’s unfunded liabilities are massive and California’s balance sheet is in a miserable condition. I’ve been preaching this sermon for years and many of our municipal governments are hoping that the pension tsunami doesn’t overtake them and devastate their finances. But the storm is upon us and we don’t have an ark to retreat to. Now that I’m in the state legislature, I have an opportunity to use my experience in making major reforms to our municipal retirement programs as a former County Treasurer-Tax Collector and Supervisor.

The Daily Pilot piece refers to my pension reform legislative priorities and you can review them on our website. They include the following:

Senate Bill 32, PEPRA II – This bill completes the work unattended to in the first PEPRA bill 5 years ago to reduce costs. Among many other things, it focuses on reducing CalPERS unfunded liabilities to 1980 levels by 2030. If this mechanism is good for reducing greenhouse gases (last year’s SB 32), then why wouldn’t it work for California finances?

Senate Bill 454, Reduce OPEB Costs, Liabilities – The Governor is rapidly approving new contracts for state employees. In a signal to employees to take more responsibility over their retirement benefits, he’s asking that public employees pay 50% of their premiums. This is well-intended, but results in dramatic increases in salaries to cover those costs, offsetting any savings that might come from an employee contribution, and even worse, exacerbating future unfunded medical and pension liabilities.

With this bill, we require that the GASB 45 trust fund be 100% funded and eliminate the 50/50 split between the stat. and its employees. The state should fully fund the plan. When I was an Orange County supervisor, we reduced the county’s liability by 71 percent, $1 billion. Imagine what we could do in for the whole state if we had the same policy. A 71 percent reduction would remove a $50 billion liability.

Senate Bill 681, Local Pension Relief – If you’re a local government pension plan sponsor and you don’t feel like you’re getting the best deal with CalPERS, you currently have the chance to get out of your contract…if you want to take a loss and pay extraordinary fees. This bill would allow local jurisdictions that contract with CalPERS to exit without excessive costs, penalties, etc. under the same assumption rates that they originally paid into the fund. The bill still demands that the jurisdiction continue to provide the benefits that were promised to their employees, but under a plan that actually works for them and is not punitive.

Senate Constitutional Amendment 8, "California Rule," would allow pension plans to reduce future benefits for current employees. Right now, this issue is before the California Supreme Court and they have a chance to overturn decades worth of terrible precedent in the Marin case. Should the court mess this up, we have a constitutional amendment for which the people can decide.

Senate Constitutional Amendment 10, Pension Transparency, is something I did in Orange County in 2008 with Measure J. Since the taxpayers have to back up all unfunded liabilities perpetuated by our government, we think that it’s only fair to require that all future negotiated public pension benefit increases be ratified by a 2/3 vote of the people. We believe it is a good idea to allow citizens to understand the growth in pension costs into the future and to decide if there are other ways to constrain those costs. This is something that San Francisco does with decent effect. I don’t see why the rest of the state can’t follow suit.

While I acknowledge that these bills face a tough crowd and most (if not all) are unlikely to get out of a committee controlled by public employee interests, we hope to influence the dialog, especially on SB 681 with the imminent local government fiscal disaster as pension obligations subsume more and more of their annual budgets.

The fourth and final piece is from the Newport Beach Independent (Indy) about a local issue in Newport Beach. I respect the right to recall an elected official. But, it should be for something egregious that was voted for and implemented, like Senate Bill 1 (see MOORLACH UPDATE — Not Amused — April 17, 2017 april 17, 2017 john moorlach).

Brown’s California agriculture board pick hit by backlash

State Sen. Andy Vidak, R-Hanford, left, talks with fellow GOP Sen. John Moorlach, of Costa Mesa, Thursday, April 20, 2017, in Sacramento, Calif. Vidak lead Republican opposition to the confirmation of former Democratic state Sen. Isadore Hall’s nomination to the Agricultural Labor Relations Board. Despite the GOP opposition the Senate confirmed Hall. (AP Photo/Rich Pedroncelli)
The Associated Press


Isadore Hall was a veteran Democratic legislator from Compton until he gave up his seat to run for Congress and lost. But Gov. Jerry Brown gave him a soft landing when he appointed Hall to a six-figure job mediating disputes between farmers and union workers.

Hall’s former Democratic colleagues in the California Senate confirmed him Thursday to the Agricultural Labor Relations Board despite allegations that he threatened farmers who opposed his nomination and is too close to labor interests.

The obscure board often draws fierce partisan conflict between agriculture-backed Republicans and labor-supported Democrats. But the fight over Hall was especially touchy.

"The once thorough and extensive Senate confirmation process for appointees of the governor has been corrupted," said Sen. Andy Vidak, a Republican from Hanford in California’s Central Valley agricultural heartland. "Isadore Hall is a classic case of someone who is completely unqualified, ill-suited and ethically challenged getting rubber-stamped rather than vetted."

According to Vidak, Farmers opposed to Hall’s nomination told the GOP lawmaker that Hall threatened to "get" them during a confrontation at a Sacramento hotel bar the night before his confirmation hearing.

Vidak last month called for Hall’s confirmation vote to be delayed pending an investigation. When Democratic leaders refused, he filed a complaint with the Legislative Ethics Committee. Vidak also asked Brown to withdraw Hall’s nomination.

"It’s not our practice to review or investigate barroom conversations," said Senate President Pro Tem Kevin de Leon, D-Los Angeles.

Hall was a well-liked lawmaker known for bantering and joking with colleagues. He represented Compton in the Assembly and Senate for eight years until he opted against a re-election bid and ran instead for Congress. He lost to fellow Democrat Nanette Barragan in November.

Brown appointed Hall to the $142,000 a year job in January. Hall has spent 15 years in public office and has a doctorate in theology but does not have a background in labor law or agriculture.

The board is a quasi-judicial agency that rules on allegations of unfair labor practices at farms and conducts elections for workers deciding whether to unionize.

The appointment smacks of "cronyism," said Sen. John Moorlach of Costa Mesa, among all 13 Republicans who voted against confirming Hall.

Some of the state’s most influential agricultural organizations opposed Hall’s nomination, alleging he’s too closely tied with the United Farm Workers union. They said Hall received campaign contributions from the UFW, supported legislation sponsored by the union and marched with UFW members locked in a long-running labor dispute.

Mark Soble, the board’s acting executive secretary, said Hall declined to comment on the alleged bar confrontation. He pointed to Hall’s testimony to the Senate Rules Committee, in which he pledged to work with people from all sides. The alleged confrontation did not come up during that hearing.

"I can’t make a decision with 50 percent of the knowledge," Hall said at the March 1 event. "I have to have information from all stakeholders in order to be an effective member of the board."

Democrats defended Hall’s nomination, saying they know him well as a committed colleague who works hard to understand issues and build consensus.

"I see somebody that can serve in this position in an effective, fair manner," said Sen. Jim Beall, D-San Jose. "I do not see one incident that someone might bring up as a reason to turn down someone we’ve worked with, as I have, for eight years."

Evan Westrup, a Brown spokesman, said the governor’s top priority is to select the best candidate for every appointment.

But Brown gave an unusually candid look into the political nature of his appointments in an offhand comment at the end of a speech Wednesday to the League of California Cities. He launched into a story from his first campaign for governor in 1974.

"I met a dentist in Lodi and he did a fundraiser for me," Brown said. "So after I got elected I put him on the dental board. And people said, ‘Why’d you put this guy on the dental board?’ And I said, ‘Because I wanted some representation from Lodi,’ which we didn’t have."

California Senate confirms former Sen. Isadore Hall for farm labor board over GOP objections

By Patrick McGreevy

The state Senate on Thursday confirmed former state Sen. Isadore Hall III for the Agricultural Labor Relations Board despite opposition from Republicans.

Gov. Jerry Brown appointed Hall, a 45-year-old Democrat from Compton, to the position in January, drawing objections from agricultural leaders who noted he had supported the United Farm Workers in labor disputes with growers.

Republicans also want an investigation into allegations that Hall threatenedfarming leaders who opposed his selection.

Hall’s appointment to the job, which pays $142,095 a year, was approved by a 25-13 party-line vote.

Hall lost a bid for a congressional seat in last November’s election to fellow Democrat Nanette Barragán.

Senate President Pro Tem Kevin De León (D-Los Angeles) described Hall as “intelligent as well as thoughtful and fair-minded."

De León defended his decision not to launch a probe of Hall’s alleged threats against farming leaders, which were said to be made at a hotel bar. “It’s not our practice to review or investigate bar room conversations," De Leon said.

Sen. Andy Vidak (R-Fresno) said he was disappointed de León decided against an investigation, calling Hall “ill-suited to a judicial position.”

Sen. John Moorlach (R-Costa Mesa) agreed that Hall is not qualified for the job and said the appointment meets the definition of “cronyism."

However, Democratic Sen. Ben Hueso of San Diego said Hall has integrity and will be a fair member of the board. He said some attacks against Hall, who is African American, are “racially motivated.”

Proposed state pension reform is hot topic at H.B. council meeting

State Sen. John Moorlach (R-Costa Mesa) recently introduced reform legislation that seeks to address unfunded pension liabilities. (File photo | Associated Press)

By Ben Brazil

The statewide pension issue was a hot topic Monday at the Huntington Beach City Council meeting.

The council voted unanimously to have the city’s Intergovernmental Relations Committee consider proposed state pension reform legislation and bring the item to the council’s next meeting.

Council members Erik Peterson and Lyn Semeta originally asked that the council vote to issue a statement of support for legislation put forward by state Sen. John Moorlach (R-Costa Mesa). But that request failed 4-3 because some council members felt the issue needed to go before the committee before being considered by the council.

The Intergovernmental Relations Committee is a council subcommittee formed by Mayor Barbara Delgleize and council members Mike Posey and Jill Hardy. The group reviews pending legislation and its potential effects on the city.

Peterson said he believes the council should lend support to the legislation now because the city’s backing could be meaningful to the future of the proposed reforms.

“I am asking everybody here to be an executive,” he said.

But Posey and other council members said they have a problem with bypassing the protocol, especially since the legislation isn’t facing immediate action.

Moorlach has proposed three bills and three amendments to the state Constitution. One of the constitutional amendments would “prohibit public employers from increasing retirement benefits for their employees without two-thirds voter approval.”

Another would give “the Legislature and public pension systems the ability to adjust public employees’ retirement benefit formulas on a prospective basis without impacting any benefits earned.”

The Intergovernmental Relations Committee will review the proposals April 26.

The council voted unanimously to request that a representative of the California Public Employees’ Retirement System attend a study session to discuss pension liabilities.

Councilman Billy O’Connell, who made the proposal, said CalPERS has increased pension costs, which has jeopardized the city’s ability to provide services to its residents.

“CalPERS has failed in [its] fiduciary responsibility, and this failure poses great risk to cities, our hard-working employees and the taxpayers who will ultimately foot the bill for CalPERS’ failures,” O’Connell read from a statement.



Peotter Gets Endorsement from OCGOP

By : Newport Indy Staff

According to a press release from Newport Beach City Councilman Scott Peotter, the Orange County Republican Party has passed a resolution opposing the recall filed against him.

“The OCGOP stands firmly with Councilman Scott Peotter in opposition to the proposed recall. Scott has a right to his opinions and the First Amendment. We believe this recall is an attempt to overturn the 2014 elections that Scott won on a platform of reduced spending, debt reduction, and shrinking the size of Newport’s city government,” said Hon. Fred Whitaker, Chairman, Republican Party of Orange County, in the press release.

Peotter stated in his press release that the proposed recall could cost $500,000 for a special election, and that “recalls should be used for malfeasance, not policy disagreements or worse, fulfilling campaign promises.”

Other politicians listed in the press release as being opposed to the recall include Senator John Moorlach, Assemblyman Matthew Harper, Assemblyman Travis Allen, Assemblyman Dr. Steven Choi, and Supervisor Michelle Steel.


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