$400 Mil Tax Break For Corporate Clients of Governor’s Advisor

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Manufacturers Get Only Business Tax Break Detailed in State of the State

Governor Davis announced a $420 million tax break last night to benefit clients of one of his budget advisors, the only corporate tax break mentioned in the State of the State address. Consumer advocates with the Foundation for Taxpayer and Consumer Rights (FTCR) condemned Davis’ announcement which would directly benefit the Alliance of Automobile Manufacturers, one of the top clients of corporate lobbyist and Davis budget advisor, Phil Isenberg.

Consumer advocates sent a letter to Senate President Pro Tem John Burton yesterday, calling for an investigation and report by the State Auditor on Governor Davis’ practice of using private lobbyists as government advisors.

“Now more than ever, we need an immediate investigation into the Governor’s reliance on corporate-financed private advisors,” stated Balber. “There’s no such thing as free advice, and the $400 million in manufacturer tax breaks that the Governor announced last night proved just how well-paid Phil Isenberg will be.”

According to filings with the Secretary of State’s office, in 2001-02 alone Phil Isenberg’s firm was paid $183,000 by the Alliance of Automobile Manufacturers, $147,000 by Kaiser Foundation Health Plan, and $236,000 by FPL Energy. All of these clients have significant interests in the budget debate.

“It’s an outrage for Davis to award half a billion dollars in corporate welfare at the podium while quietly cutting funding for healthcare and schools,” stated FTCR consumer advocate Carmen Balber. “Big business has benefited from billions of dollars in corporate welfare from the state — we cannot continue these handouts on the backs of the working people of California. This callous disregard for regular Californians will continue to dominate the Governor’s proposals as long as corporate lobbyists enjoy insider access to closed-door negotiations.”

Johnston and Isenberg’s role in the budget process continues the Governor’s disturbing trend of assembling an inner circle of advisers from outside lobbyists who are not employed by the state and do not have to abide by conflict of interest laws. For example, Darius Anderson, the Governor’s chief fundraiser and privy to inner circle conversations, counted Calpine, General Motors and PG&E as clients of his firm while each company had significant interests before the legislature and Governor.


Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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