When they needed political money – to make donations urged by Speaker John A. Pérez and to pay for their 2012 campaigns – Democrats in the California Assembly turned to interest groups with a big stake in state government decisions, a Center for Investigative Reporting analysis shows.

For last year’s state elections, Assembly Democrats together raised about $43.2 million, according to state records. As CIR has reported, the lawmakers funneled $5.8 million of that total into key races Pérez had targeted.

Pérez, in turn, named the top fundraisers to powerful legislative posts, including seats on the so-called “juice” policy committees, which control bills affecting the financial bottom line for the Capitol’s wealthiest political donors. Tapping those interests for donations has helped Democrats maintain power in the state Assembly for more than 16 years.

Assembly Speaker John A. Pérez speaks during a legislative session. Twice last year, Pérez wrote memos to Assembly Democrats seeking millions in campaign cash to win a handful of key races. The legislators ended up pumping .8 million into the campaigns Pérez designated, a CIR data analysis shows.Max Whittaker/Prime

Through a spokesman, Pérez said there was no connection between his legislative appointments and political fundraising.

Most of the money the lawmakers raised – $32.7 million, or about 75 percent – came from industries and interests that regularly lobby the Legislature and state agencies, according to CIR’s computer analysis of state campaign finance data.

It’s a group of donors that are such an enduring presence in the Capitol that they are sometimes called the “Third House,” as though they make up another branch of state government.

These donors include labor unions whose members’ wages can turn on a public works project, government workers whose pay and pensions are set by the state, and heavily regulated industries whose profits can soar or plummet depending on state laws and regulatory decisions.

Small donors played a minor role in financing the campaigns, the analysis shows: 68 percent of the money the Democrats raised came in checks of $1,100 or more.

Nor did the lawmakers obtain significant financial support from grass-roots supporters back home: One-third of the money came from donors with an address in Sacramento, where many major interest groups maintain a lobbying presence. Thirteen percent of the funds came from out of state.

The analysis showed that major donors tended to target their contributions, giving money to members of the policy committees that hold sway over legislation that might affect them. CIR’s analysis documents a trend that reformers have complained about for decades: lawmakers’ reliance on monied special interests to finance their political careers.

The findings are worrisome, said Trent Lange, president of the California Clean Money Campaign, which advocates public financing of state politics.

“It is unsurprising that the groups with the greatest financial stake in government make the largest financial investments trying to influence them,” Lange said.

“Sometimes, groups give money in order to try to change elected officials’ minds. Sometimes, groups give money to elected officials because they’re of like mind already. … Voters can never really tell the difference, and that makes them cynical.”

For this report, CIR reviewed 38,000 donations reported by more than four dozen Democratic lawmakers in the 2011-12 election cycle. Campaign donations typically aren’t earmarked, so there is no way to make a direct connection between specific donations to lawmakers and subsequent contributions to Pérez’s targets.

Among the biggest donors:

  • $4.8 million total from health care interests, led by the California Medical Association and California Dental Association. They pushed unsuccessfully to restore public health programs shuttered to save the state hundreds of millions of dollars.
  • $2.8 million from the state’s building trades and construction unions. The unions pushed hard for the controversial high-speed rail project, the biggest public works project in state history and a prospective source of thousands of construction jobs.
  • $1.8 million from Indian tribes and other gaming interests, led by the Pechanga Band of Luiseño Indians, who operate a resort casino in Temecula, in Riverside County. The tribes successfully lobbied to block a bill to allow continued operation of a card club at Hollywood Park racetrack in Inglewood – a competitor to the casinos.
  • $1.5 million from public employees unions, led by the International Association of Fire Fighters. The unions lined up to ease the impact of Gov. Jerry Brown’s public pension cuts, intended to save the California Public Employees’ Retirement System pension fund billions.
  • $1.1 million from the California Teachers Association and other school employees unions. These unions lobbied to preserve pensions and education funding. The teachers association lobbied to kill a measure that would have made it easier for school districts to fire bad teachers.
  • $1.4 million from telecommunication companies, most of it from AT&T, Time Warner and Verizon. The telecoms won passage of a law that blocks the California Public Utilities Commission from regulating Internet phone calls.

Spokesmen for some major donors said they make contributions because lawmakers have power over issues of vital concern.

The firefighters unions donate because they believe “it’s important to be engaged in the political process,” said Carroll Wills, the California Professional Firefighters’ state communications director.

“Sacramento is where decisions are made that affect the lives and health and safety and livelihoods of our members,” he said.

Mikki Cichocki, secretary-treasurer of the California Teachers Association, said: “Every decision that affects our schools, from textbooks to working conditions to what the curriculum is going to be, is made by elected officials. … You’ve got to have an effect on those people who make those decisions.”

Often, the records show, interest groups funneled the bulk of their donations to those with the most power over their issues, giving money directly to the speaker and Democrats who control the committees that regulate their industries.

More than half of the $4.8 million donated by health care interests to Assembly Democrats went to Pérez’s leadership team or to the Committee on Health, the juice committee that holds sway over health care programs. The speaker was the top recipient, with $498,000; Health Committee Chairman Richard Pan of Sacramento – a doctor – was second, at $446,000. Pan declined to comment.

Donations from Indian tribes and the gaming and liquor industries also flowed to the relevant juice committee, the Committee on Governmental Organization. Of $2.4 million in donations from these groups to Assembly Democrats, $1.5 million went to members of the committee or Assembly leaders.

A similar dynamic was evident with the telecommunication companies that lobbied on the utilities commission issue: More than half of their $1.4 million in donations to Assembly Democrats went either to the leadership or Utilities and Commerce Committee members.

Some lawmakers were particularly adept at mining their committees for donations.

Assemblywoman Toni Atkins, D-San Diego, shown at a hearing this month at the state Capitol, donated 2,000 to 2011-12 races targeted by Speaker John A. Pérez. She was the Assembly’s top donor, and Pérez named her Assembly majority floor leader.Randy Allen/For the Center for Investigative Reporting

That was the case with Assemblywoman Toni Atkins, a former San Diego City Council member with a safe seat and leadership ambitions.

For her 2012 campaign, Atkins raised $783,000, almost all of it from interests that regularly lobby the Legislature, according to CIR’s analysis.

About one-third came from donors with business before the two juice committees on which Atkins served at the time: Health and Governmental Organization. Health care interests, led by the state medical and dental associations, contributed $181,000; Indian tribes, horse racing interests and the alcoholic beverage industry contributed about $72,000 more.

As she cruised to re-election, Atkins raised far more money than she needed. She had enough leftover to donate more than one-third of it – $282,000 – to Pérez’s targeted races, making her tops among Assembly Democrats.

Atkins’ fundraising ramped up after Aug. 8, when Pérez announced she would become majority leader in the coming session. From then through the election, she raised $206,000, a rate of about $2,300 per day – double her fundraising rate before being named leader. Atkins didn’t respond to requests for comment.

Assemblyman Henry Perea (left), D-Fresno, and Assemblyman Mike Gatto, D-Los Angeles, were two of the top three donors, giving and 7,000 and 8,000, respectively, to Speaker John A. Pérez’s targeted campaigns.Max Whittaker/Prime

Assemblyman Mike Gatto of Los Angeles traced a similar trajectory. Gatto served on two juice committees last year, Banking and Finance and Governmental Organization. On his way to re-election, he raised $1.2 million, 85 percent of it from donors with a financial stake in state government decisions.

Indian tribes and other interests with business before the Governmental Organization Committee donated $120,000 to Gatto. Banks, loan companies and other interests regulated by the Banking and Finance Committee gave him $88,000.

In turn, Gatto donated $258,000 to the committees the speaker designated. On Aug. 8, Pérez named him to the important post of chairman of the Assembly Appropriations Committee, the juice committee with jurisdiction over all spending bills.

Like Atkins, Gatto’s fundraising ramped up after he was named to his new post. From then to Election Day, he took in $407,000 – about $4,500 per day, or triple the rate he had achieved before being named chairman of the Appropriations Committee. Gatto declined to comment.

This story was edited by Amy Pyle and copy edited by Nikki Frick and Christine Lee.

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Lance Williams is a former senior reporter for Reveal, focusing on money and politics. He has twice won journalism’s George Polk Award – for medical reporting while at The Center for Investigative Reporting, and for coverage of the BALCO sports steroid scandal while at the San Francisco Chronicle. With partner Mark Fainaru-Wada, Williams wrote the national bestseller “Game of Shadows: Barry Bonds, BALCO, and the Steroids Scandal that Rocked Professional Sports.” In 2006, the reporting duo was held in contempt of court and threatened with 18 months in federal prison for refusing to testify about their confidential sources on the BALCO investigation. The subpoenas were later withdrawn. Williams’ reporting also has been honored with the White House Correspondents’ Association’s Edgar A. Poe Award; the Gerald Loeb Award for financial reporting; and the Scripps Howard Foundation’s Award for Distinguished Service to the First Amendment. He graduated from Brown University and UC Berkeley. He also worked at the San Francisco Examiner, the Oakland Tribune and the Daily Review in Hayward, California.

Agustin Armendariz

aarmendariz@revealnews.org

Agustín Armendariz is an investigative reporter specializing in data analysis for The Center for Investigative Reporting. He previously worked at the San Diego Union-Tribune where he was a database specialist on the watchdog reporting team. While there, he delved into city finances, redevelopment projects and foreclosures. He earned his masters in journalism from American University in Washington, D.C. Agustin worked at the Center for Public Integrity and was a contributor to the publication "The Buying of the President" (2004) which was a New York Times bestseller.