Special Interests Scramble for Deals as California Ends Legislative Session

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San Jose Mercury News

SACRAMENTO, Calif.– With state lawmakers wrestling with vexing questions about privacy, farmworker rights and epic budget deficits, the Capitol’s hallways in recent days have been clogged with an army of lobbyists, each seeking favors, making threats or pushing deals.

But in the frenzied lobbying and negotiating that always characterize the waning days of a legislative session, not all conversations have been about weighty public policy. Special interests and their allies have been quietly trying to carve out new business and head off regulation, as well.

Among those scrambling for special bills in the hectic last weeks of the session were an insurance company, a fax company, Hollywood studios and even a senior lawmaker trying to protect his hobby.

Some efforts succeeded; some failed. But, say many observers, the oft-repeated process is always a troubling part of the legislative process.

“It’s truly a circus,” said former acting Secretary of State Tony Miller.
“There’s a certain lying in wait until the final few days or minutes or seconds, because in the final flurry of activity, there’s a great deal of confusion. . . It’s a dangerous time, to be sure.”

Mercury Insurance, a major state insurance company, scored a big victory Saturday, winning the right to offer discounts on auto insurance to longtime customers, a move that consumer groups said would penalize young and low-income drivers.

The measure — opposed by the Consumers Union and the Foundation for Taxpayer and Consumer Rights — had been defeated in a legislative committee. But it was resurrected when Sen. Don Perata, D-Oakland, inserted the insurance bill into another measure meant to finance prostate cancer research. That
prompted accusations that Perata and others were quietly rewarding a major campaign contributor.

Mercury Insurance gave a total of more than $300,000 to nearly two-thirds of the Legislature this year. It also gave $150,000 to a failed ballot initiative backed by Senate President Pro Tem John Burton, D-San Francisco, and Perata that would have rolled back term limits. In 2000, Mercury gave another $100,000 to the Senate Majority Fund that supports Senate Democrats.

Senators voted 30-0 Saturday to approve the Mercury bill. Perata has denied any special treatment.

Also this week, Sen. Maurice Johannessen, R-Redding, succeeded in carving out a new perk for his hobby of collecting old cars, when he won passage of a bill that exempted small car dealers from a new requirement to carry more insurance.

The bill was opposed by consumer groups and other car dealers. But it won quick passage, two months after Johannessen cast a critical vote for the state budget.

Johannessen denied there was any connection, explaining he was just looking out for small businesses. “It’s a family hobby, and I try to protect a family hobby.” With the help of Assembly Speaker Herb Wesson, D-Los Angeles, Hollywood studios also made a last- ditch effort Saturday to win tax breaks for producing films and television series in California.

They were turned down after being rebuked by Burton for “acting like you’re entitled to something.” And Fax.com, a “fax broadcaster” that faxes messages on behalf of clients, did not succeed in derailing a bill designed to help stop the practice of what critics call “junk faxing.”

Federal law already prohibits the practice, and Fax.com is facing a $5.4 million fine. But the campaign to clean up California law and shut down junk faxes stalled for months in what several observers said was a classic example of backroom special-interest lobbying.

Fax.com turned for help to a lobbyist who has close ties to many influential lawmakers. Brian Hatch made at least $30,000 for his work, which almost blocked the bill from getting a critical committee hearing Saturday.

Hatch said of his client’s work: “It’s a free-speech right.”


Staff writer Ann E. Marimow contributed to this report.

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