It’s not always clear what benefit Californians derive from one political party having total control over the state, but it sure seems to be paying off for well-connected Democrats. Recent stories revealing questionable monetary contributions and lucrative no-bid contracts suggest there’s truth to the adage that “absolute power corrupts absolutely.”
Let’s start with Assembly Speaker Anthony Rendon, D-Lakewood. An investigation by The Sacramento Bee and the Center for Investigative Reporting revealed that politically-connected corporate donors have pumped over $500,000 into nonprofits associated with Rendon’s wife, Annie Lam, in recent years.
“Nonprofits are not required to publicly disclose their donors,” wrote Hannah Wiley and Lance Williams. “But since 2016, when Rendon ascended to the speakership, five nonprofits where Lam is employed have received donations or sponsorships from more than 50 entities, according to public records, promotional flyers and interviews.”
Top donors include companies like PG&E, which donated $360,000 to three of Lam’s nonprofits from 2017 through 2019. Other big corporate donors include AT&T, Comcast, Coca Cola and PepsiCo.
“More than half of the sponsors and donors are corporations that regularly lobby the Legislature on bills that have the potential to affect their bottom lines, records show,” wrote Wiley and Williams.
“In a 2018 Sacramento Business Journal report, Lam said she had bumped fundraising by 768% for the API Caucus and boosted the Women’s Caucus budget by 530%,” they added.
Rendon vehemently denies any connection between his position as speaker and the surge in contributions to his wife’s employers.
Contributions to nonprofits
Yet, as The Bee reported: “Twenty-one of the companies that have supported Lam’s nonprofits have also made a total of more than $350,000 in campaign donations to Rendon since he first ran for the Assembly in 2012, records show.”
There’s nothing illegal about such contributions, but they raise obvious concerns about ethics.
“The real question is if he weren’t speaker, would the nonprofits be getting this money?” asked Bob Stern, who co-authored the 1974 Political Reform Act. “And the answer is probably no.”
Asked whether state disclosure laws should require legislators to report contributions to nonprofits controlled by their spouses, Rendon demurred.
“I’m not going to speculate on broad, vague ideas,” he said.
Yet it’s quite a narrow and specific question, and the answer is clear: The Legislature should increase transparency to ensure that legislative spouses don’t rake in cash from connected donors while hiding the bonanza from public view.
Padilla’s ‘shady deal’
It’s doubtful any legislator will rush forward to author such a bill. But the Legislature is making an extraordinary effort to pass legislation to funnel millions of dollars in taxpayer money to pay for an illegal no-bid government contract that former Secretary of State Alex Padilla awarded to a politically-connected firm.
Padilla’s office handed SKD Knickerbocker, a Democratic public affairs firm that billed itself as part of “Team Biden,” a $35 million no-bid contract to conduct voter outreach last year. The problem: Padilla wasn’t legally authorized to do this. Under state law, the money was supposed to go to voter outreach efforts in California’s counties. As a result, Controller Betty Yee refused to authorize the transfer of funds, leaving SKDK unpaid for the $34 million in work it claims to have done.
When Gov. Gavin Newsom appointed Padilla to the U.S. Senate in January, we asked how he planned to clean up Padilla’s mess. The answer: Assembly Bill 85. The bill includes a provision that will retroactively change the law in order to pay SKDK the millions of dollars Padilla promised.
“Taxpayers should not have to pay for the shady deal that was executed by the previous Secretary of State,” said state Sens. Pat Bates, R-Laguna Niguel, and Jim Nielsen, R-Tehama, in a statement.
The Republicans are right, but no one will listen in a state where Democrats have supermajorities in the Legislature and hold every statewide office. With enough votes and the stroke of Newsom’s pen, Democrats will pay off Padilla’s shameful $35 million contract — which will miraculously become legal.
Newsom donors win
Speaking of Newsom: A recent investigation by Scott Rodd of Capital Public Radio found that the state has awarded massive no-bid contracts to healthcare companies that have given big to Newsom’s political campaigns.
“A CapRadio investigation found an overlap of at least a half-dozen companies that made substantial contributions to Newsom and received no-bid contracts from the state, influential appointments, or other opportunities related to the state’s pandemic response,” wrote Rodd. “The contributions range from tens of thousands to hundreds of thousands of dollars. The contracts range from $2 million to over $1 billion — including the one awarded to Blue Shield for vaccine distribution … worth up to $15 million.”
For example, UnitedHealth received a no-bid state contract worth up to $177 million to help with COVID-19 testing and data tracking. The state then awarded another $315 million to the company’s other subsidiaries in what CapRadio called “an expedited bidding process.”
The lucrative contracts were both preceded and followed by major contributions from the company.
“In 2018, the health care giant made two contributions to Newsom for over $58,000,” wrote Rodd. “In December 2019, it dropped another $31,000 into his reelection campaign.”
In Dec. 2020, after receiving major pandemic-related contracts to expand COVID-19 testing in the state, “UnitedHealth contributed $31,000 to Newsom’s reelection campaign, and another $100,000 to his ballot measure committee,” reported Rodd.
Newsom’s ‘tin ear’
Other major Newsom donors, including Blue Shield of California, Bloom Energy and BYD, have also reaped state contracts during the pandemic.
“I really think that the governor has a tin ear in terms of receiving huge campaign contributions and providing sole-source contracts for corporations that were giving him these contributions,” Bob Stern, the political ethics expert, told Rodd.
The governor’s office says donor money has no impact on such decisions. But most people get the picture, and it’s not a pretty one.
In 2021, there are no balances in California politics. But there seem to be plenty of big checks for people with connections to powerful Democrats.
*story by The Sacramento Bee
