The Third House:Lobbyists, Money, and Power in Sacramento

Jay Michael and Dan Walters, with Dan Weintraub

Ch. 1: Who are these people? Lobbyists are a key player in the “three-

legged stool” of effective political action: Money Grassroots Action Lobbying Expertise

These interact to generate policy success

Lobbyist Power Thousands of interest groups are affected

by state decisions every day Lobbyists represent affected groups,

working to craft legislation and regulations that benefit their clients “Cream of the crop” of elite lobbyists calls the

shots on most government decisions

Southern Pacific Monopoly on transportation by Southern

Pacific Railroad in the late 19th century led to reforms of 1911 Public Utilities Commission Direct Democracy

1930s growth of state government Transformation from agrarian to

manufacturing economy Motion pictures Oil

Expansion of New Deal policies Artie Samish and the “select and elect”

system

Artie Samish The Secret Boss of

California pushed regulations that protected his clients from competition and/or ensured their ability to set prices (e.g. “fair trade” liquor laws)

1940s-50s: Two Capitols? Samish focused on minute but lucrative

issues affecting his clients Governor Earl Warren and legislators took

the high road on major issues such as highways, colleges, parks and government services

Still Two Capitols? Most people know that California state

legislators are making big decisions on major issues such as the budget, taxes, and high-speed rail

They are also making decisions on minor issues such as pet microchips, the sale of shark fins, surface mining and outdoor advertising

Jesse Unruh Unruh took control of

the “select and elect” system and brought it inside Legislative leaders

now decided how the money was collected and spent

1960s-1980s 1961: Unruh elected speaker 1964: SC ends “federal system” in Senate

Shifts power from rural areas to cities 1966: Legislature made full-time and

professional Increasing centralization and control under

Unruh and then Willie Brown (1980)

1980s & Willie Brown Flow of legislative

campaign money escalated

Intense pressure on lobbyists to contribute

Issues kept alive year after year to milk system

Booted using term limits

Reform & Expansion Increased growth of lobbyists as CA shifted

to postindustrial economy Medical care, high tech

Prop 13 Regulatory Activism

Ch. 2: Who Hires Lobbyists? Potential every day for

serious consequences of decisions made in the Capitol

“Mushroom Bills” Blatant grabs for power,

money, or both that can only be enacted if virtually no one knows they exist

Government Lobbyists Proposition 13 made the state the primary

source of funds for local agencies Cities and Counties School Boards

Foreign governments Indian tribes

Health Care Lobbyists Health care is now California’s largest

single industry, leading to turf wars and struggles between providers and lawyers The Ankle War (podiatrists vs. orthopedic

surgeons) Dog Teeth (veterinarians vs. dog groomers) Colonics (doctors and clinics)

How much does it cost? http://cal-access.sos.ca.gov/Lobbying/ PG&E spent $2 million in 2009-2010

http://cal-access.sos.ca.gov/Lobbying/Employers/Detail.aspx?id=1146888&view=activity&session=2009

Atherton spent $58K, trying to influence the high speed rail issue

http://cal-access.sos.ca.gov/Lobbying/Employers/Detail.aspx?id=1325474&view=activity&session=2009

Google spent $400,000 on tax issues, internet policies, and telephone number privacy

http://cal-access.sos.ca.gov/Lobbying/Employers/Detail.aspx?id=1265187&view=activity&session=2009

Who are these lobbyists? Former elected officials & legislative

staffers Expertise and personal contacts One-year ban on “revolving door” not a serious

impediment Former political campaign aids Goo-goos