Foundation skirts gift limits, critics say
The San Diego Union-Tribune
SACRAMENTO, CA — Its name — the California Foundation on the Environment and the Economy — seems benign, even bland.
Yet critics say the organization’s purpose is anything but benign: paying for luxurious, globe-trotting tours for lawmakers in a way that avoids the state’s restrictive gift laws.
The San Francisco-based group is funded by companies such as AT&T, Chevron, Sempra Energy and Pacific Gas and Electric Co. During this week’s legislative recess, the foundation sent corporate representatives to Japan with a delegation of top state energy officials.
Among the officials were state Sen. Christine Kehoe, D-San Diego, and Assemblyman Lloyd Levine, D-Van Nuys, both of whom chair committees that review energy and utility bills.
Kehoe and Assemblywoman Lori Saldaña, D-San Diego, also went on foreign trips the group sponsored last year.
The travelers to Japan also included AT&T California President Kenneth McNeely and two of Gov. Arnold Schwarzenegger‘s appointees to the Public Utilities Commission — Timothy Simon and Rachelle Chong, who are responsible for regulating telecommunications and utilities companies.
Participants say the trips bring together a broad group of public-policy experts and allow them to learn from other nations. In Japan, the group studied telecommunications and energy policy.
Watchdog groups complain that the foundation — along with others funded by special interests — has found a clever way to get around the strict gift limits approved by voters in 1990, in addition to giving corporate officials unique access to public-policy makers.
Under the law, a donor can give a gift worth up to $360 to a legislator each year. But the limit doesn’t apply to “educational” travel.
“It’s a big loophole,” said Bob Stern, president of the Center for Governmental Studies.
Last year, the foundation paid $12,500 for each legislator and state official it sent to South America and $11,500 for each lawmaker it sent to the Netherlands and Ireland, according to state disclosure forms.
The cost of the visit to Japan won’t be known until next year when lawmakers have to file disclosure forms. Kehoe, who was traveling this week, could not be reached for comment about the Japan trip.
One watchdog group has demanded that Kehoe and Levine disclose details of the trip immediately.
Carmen Balber of the Foundation for Taxpayer and Consumer Rights wrote to Kehoe that it was with “great concern that we learned of your participation in a study trip to a foreign country with the very companies you are charged with overseeing.”
The California Foundation on the Environment and the Economy is funded by a variety of corporations.
PG&E, for example, pays $40,000 a year, while Sempra pays about $30,000 a year. Those funds come from shareholders, not ratepayers, representatives from each company said.
“These trips are very valuable in bringing diverse groups together,” PG&E spokeswoman Jann Taber said. “It helps bring about good policymaking.”
Officials from the foundation did not return repeated phone calls for comment, but the group’s Web site said it enables business, labor, community and environmental leaders to gather with legislative and regulatory officials to solve problems. Its board of directors is made up of officials from corporations, labor unions, public agencies and environmental groups.
Former foundation Chairman and Rep. Paul “Pete” McCloskey of California is quoted on the Web site saying, “The foundation’s greatest strength — and its ongoing challenge — is how best to break down institutional barriers which impede creative problem solving.”
The South America trip included officials from Sempra Energy, Chevron, Comcast, Northern Star Natural Gas, a union representative and an official from the Natural Resources Defense Council, according to documents obtained by the Foundation for Taxpayer and Consumer Rights.
Assembly Speaker Fabian Núñez, D-Los Angeles; Schwarzenegger’s chief of staff, Susan Kennedy; and Saldaña were among the top state officials who participated.
Delegation members looked at Brazil’s efforts to regulate carbon emissions and produce ethanol and Chile’s policies of using private investors to build roads and water projects.
“I learned a lot,” Saldaña said. “There were days when we were extremely busy. We met with lots of ministers.”
The trip also left plenty of time for sightseeing while officials enjoyed top-flight accommodations.
In Rio de Janeiro, the group stayed at the Copacabana Palace, which, according to its Web site, has welcomed “the rich and famous since 1923.” That evening, the delegation was treated to dinner by General Motors.
Participants later flew to Buenos Aires, Argentina, where they were served by personal butlers supplied to all guests at the Alvear Palace Hotel.
In Santiago, Chile, the delegation stayed at the five-star Ritz-Carlton. Frommer’s travel guide raves about the hotel, noting that guests should “expect to be pampered here” and recommended the “bath butler” service.
That service, the review states, includes a nightly package of soaps and bubbles, and brandy and a cigar to be enjoyed “at the end of another successful day,” according to a note furnished by the hotel.
Balber of the taxpayer and consumer group said there is no question that these trips allow private companies to “wine and dine lawmakers.”
“These are more luxury vacations than they are educational trips,” she said.
When they do have serious policy discussions, Balber said, the talks frequently are led by officials from companies with clear policy agendas.
Last year, the foundation sent Kehoe; Senate Republican leader Dick Ackerman, R-Irvine; Sen. Abel Maldonado, R-Santa Maria, and others to the Netherlands and Ireland to look at flood control and transportation.
Kehoe said she learned a lot. “It’s instructional. It’s educational,” she said in an interview before her Japan trip. “I know the concern is that we spend all our time golfing. We didn’t go golfing.”
Kehoe and her group went to Amsterdam, Rotterdam, the Hague and Dublin. She said they learned about how the Netherlands is handling increased flooding expected as the climate becomes warmer.
In Dublin, she said, the delegation examined how Ireland uses public/private partnerships to build roads.
The trip included a variety of industry representatives, among them a representative from Chevron. Kehoe said she already knew the Chevron official from his efforts to oppose two of her bills last year, one to promote petroleum conservation and another to boost renewable fuels.
“For the most part, these are people I would see in Sacramento,” she said.
Yet Stern said that traveling with lawmakers allows special-interest representatives a chance to develop closer relations.
“It gives them a lot of face time with the members,” he said.
The foundation isn’t the only nonprofit that sponsors foreign travel.
This week the California Climate Action Registry, which was set up by the state to promote greenhouse gas reduction, sent a variety of top Schwarzenegger administration officials and one legislator to Europe to talk about fighting global warming.
The registry, which counts counties, universities and manufacturing companies as members, gets much of its funding from a variety of large corporations, including Shell Oil, BP America and Chevron USA.
“We see it as an educational trip,” said Aaron McClear, press secretary for Schwarzenegger.
Núñez led a separate legislative delegation to France this week to examine high-speed trains and other transportation issues. The French government picked up most of the tab, but the Assembly speaker’s travel was partially paid for by the William Velazquez Institute, which focuses on Latino voting issues.
A spokeswoman for the institute would not comment on why it was funding part of the trip.
Balber of the taxpayer group believes that any necessary foreign travel by legislators should be paid for by the state, not private corporations that have an agenda.
“There is no way to get around the appearance of a conflict,” she said.
