MOORLACH UPDATE — SB 331 — May 4, 2015

The Voice of OC‘s Publisher provides an editorial on Senate Bill 331. The good news is that someone is watching what is occurring in Sacramento. The bad news is that it may not provide a full perspective of what the legislation is intended to do. Here are some essential details:

First, I took my first three days of vacation in more than eight months last week (see MOORLACH UPDATE — SB 277 — April 30, 2015 April 30, 2015). I requested this time off several weeks ago, so it is interesting that SB 331 would be heard by the Judiciary Committee while I was scheduled to be out of town.

Second, an incident about OC Parks spending is addressed, which was the topic of

MOORLACH UPDATE — Puzzling — August 6, 2014 August 6, 2014.

Thirdly, If CRONEY is good for those who adopt COIN, then it should be good for everyone. Perhaps the author should consider expanding this concept to every contract throughout the state? Otherwise, I believe that SB 331 is an improper use of legislation. It is being used to intimidate. Good government is one thing, but bullying is another.

Finally, my office conferred with Senator Nguyen’s office before the meeting and she valiantly addressed the immaturity of this maneuver. My hat goes off to Senator Nguyen for stating the obvious in a building that is often too heavily influenced by public employee unions.

Santana: OC Gets a Chance to Stomp Out Cronyism in Government

By Norberto Santana Jr.

Orange County supervisors this week find themselves in a unique position, having been handed the ability to seemingly stomp out cronyism in government…starting in their own backyard.

This past week, a state Senate committee approved legislation that would allow the county to adopt an unprecedented level of scrutiny on government contract approvals for private sector vendors wanting to do business with the county government.

It’s called the Civic Reporting Openness in Negotiations Efficiency Act – quietly called CRONEY in the hallways of power – and this past week, the Senate’s Government and Finance Committee approved SB 331 on a 8-1 vote. Freshly minted Sen. Janet Nguyen, (R-Garden Grove), not only voted no but fumed over the legislation sponsored by the Orange County Employees Association and backed up by a powerful arsenal of labor allies operating from a friendly state capitol environment.

Oddly enough, Sen. John Moorlach – who as a county supervisor introduced the openness-in-labor talks legislation (COIN) that is now law in Orange County and triggered the same call for transparency on commercial contracts – missed the opportunity to vote or speak at the public hearing in Sacramento.

That left Nguyen (herself a former Orange County supervisor) alone to battle against the legislation – which was introduced in February – and would mandate the appointment of an independent auditor to review and report on the cost of any proposed contract in excess of $50,000 in any jurisdiction that has adopted any ordinance that sets up more transparent labor negotiations – often called COIN (Civic Openness in Negotiations).

The county and Costa Mesa (which made headlines with an aggressive effort to target labor contracts in recent years) have already adopted the COIN ordinance, joined recently by Fullerton and Beverly Hills.

Yet auditing, similar to COIN, is just the beginning of disclosure with CRONEY.

SB 331 also would require most local public agencies – like the county, cities or special districts – to disclose prescribed information relating to contract negotiations on its web site. The act also would require a minimum of 2 public meetings of the governing body before contract approvals.

The independent auditor’s report also would be required to be made available to the public months before a governing body could take any action to approve or disapprove the contract.

The report also would be required to offer a recommendation regarding the viability of the contract, including determinations as to the fiscal impacts of each term and condition of the contract.

The legislation also would set up a high, in some ways unprecedented, standard for transparency on contracts.

It would require disclosure of all offers and counteroffers 24 hours before public meetings – the offers whose success that are most vulnerable to public disclosure.

SB 331 also would require release of the names of all persons in attendance, whether in person or by electronic means, during any negotiation session regarding the contract, the date of the session, the length of the session, the location where the session took place, and any pertinent facts regarding the negotiations that occurred in that session.

Representatives of the governing body and their staff members also would be required to advise the governing body of all offers, counteroffers, information, or statements of position discussed by the contracting person, or any representative and the public agency.

Nguyen attacked the legislation as direct payback from labor to the county Supervisors and their campaign donors and business associates for the COIN ordinance.

“I get what’s going on here,” Nguyen said at the hearing. “It’s tit for tat.”

She’s probably right on that one.

This is likely a power play because even though labor is an easy political target in Orange County, they have lots of friends up in the state capital. Friends like Sen. Tony Mendoza, who is sponsoring SB 331. Friends like the Association of Orange County Deputy Sheriffs, SEIU, Firefighters and ASFCSME – who all testified in favor of the legislation.

Yet this is also good government.

And that presents an interesting challenge for the board of supervisors from "CRONY County," as it’s now been dubbed.

Already cast into an intensifying debate over a future ethics commission – even an upcoming ballot initiative – it will be interesting to see how the new board of supervisors reacts to such calls for openness in contracting.

Supervisor Michelle Steele has been blazing an amazingly conservative voting record on the board – steadfastly opposing all kinds of fee increases and even arguing against private-sector developer taxes like the Mello Roos taxes recently sought for a series of new home developments by the Rancho Mission Viejo development company.

Steele’s votes have been triggering all sorts of indigestion on the board.

One week, her colleague Supervisor Lisa Bartlett looked as if she had been sucker punched in the gut as she strained to explain how “we” needed such taxes in order to make homes affordable after a Steel anti-tax vote.

It’s not clear who the “we” she represents is.

What is clear is that one of the first things Bartlett did right after her win was send out fundraising materials to county vendors – an almost immediate nod to the political realities of elected life, ie: the fundraising merry-go-round.

Supervisors’ Chairman Todd Spitzer already tried to get one of his vendors paid quietly through the OC Parks department to roll out the Victims Memorial (which was supposed to not cost any public dollars per the supervisors’ own public vote) until Voice of OC wrote about the issue.

That’s the same parks department that continues to operate under a cloud after it was revealed (again by Voice of OC) that county internal auditors have raised red flags about nearly $1 million in questionable consulting contracts – to politically connected friends.

Yet to hear Nguyen at last week’s hearing, the County of Orange operates like a Swiss watch when it comes to private sector involvement for public contracts.

There are public requests for proposals (called RFPs), public hearings…all sorts of checks and balances on contracts when compared to labor negotiations.

She was there, Nguyen told OCEA Ass. Gen Manager Jennifer Muir last week, when large contracts such as the IT contracts were negotiated.

Nguyen even said she finds it offensive that anyone would dare suggest even a hint of corruption at the process.

That’s a stunning statement given that in the midst of all this, the county’s IT contracts are seemingly unraveling with mounting costs for taxpayers.

County officials are already in lawsuits with one vendor, Tata Consulting.

They are also threatening lawsuits with Xerox Corporation over a new IT relationship that took years to negotiate – largely under Nguyen’s leadership.

That contract started unraveling almost immediately for taxpayers, just after Nguyen’s election to state senate.

And the process, which was strung out for years with an RFP process that was largely stalled while Nguyen and an array of other lobbyists worked endless fundraising angles before a final vote was cast.

Janet Nguyen can get as offended as she likes.

It’s the same kind of indigestion folks like the Orange County Register’s restaurant critics feels when he travels to an OC restaurant and doesn’t see a letter grade like any other county.

That’s because Nguyen (who once drew income from a food business run by her husband) largely blocked any kind of restaurant inspection process that resulted in letter grades when she was in office.

Orange County consumers got less protection because her colleagues listened to her.

Now, the Register has revealed that guess what? Restaurant inspections have been reduced since. Supervisors are now talking about a rating system. But guess who gets to pay? Consumers, through their taxes. Not businesses.

Now that’s transparent.

I found it very illustrative that Moorlach – who would have concieveably argued on the same side as Nguyen – wasn’t’ there.

Nguyen sound frustrated by that at the hearing.

And having covered Moorlach for more than a decade, I can tell you that him missing a public meeting is a real rarity.

Yet the word “Crony Capitalism” isn’t one that you only hear in union halls.

You’ll hear it from Moorlach himself.

When Moorlach was running for state Senate this last spring, he was shocked at the intensity of the Orange County Business Council campaign against him.

And crony capitalism is exactly how he publicly described the forces arrayed against him as he sought to influence policy at a higher level.

Taxpayers backed Moorlach overwhelming despite being inundated with mail warning them not to send him to the state Senate.

I wonder if he sent the business interests arrayed against him his own message by not showing up?

I’ve haven’t had time to reach out to John this week – as he is always the most accessible elected official in government – so I’ll wait for his Moorlach update to hear why he wasn’t at the meeting.

Back in Orange County, Auditor Controller Eric Woolery looks like he’s gearing up for the Iran Contra style hearings on upcoming labor talks, according to a recent press advisory.

All of this is now been made possible by the new COIN ordinance.

It will be interesting to see what kind of media appetite this gets from my colleagues at the mainstream dailies and broadcast outlets.

It will be especially interesting to see if there’s the same appetite by county supervisors for that kind of disclosure on the next private-sector contract for politically-connected friends.

If his colleagues pass Sen. Mendoza’s legislation later this year, Orange County supervisors may soon get to show us their appetite for transparency.

This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District.

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