Officials' overseas trips raise eyebrows
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Special interests skirt gift limits, critics say
SACRAMENTO – 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.
