FBI Capitol Sting Shines Light on Latino Caucus

It makes sense that state lawmakers might feud over who gets to lead California’s Latino Legislative Caucus. The 25 Democrats who make up the group, after all, constitute more than a fifth of the Legislature, control hundreds of thousands of dollars in campaign funds and wield influence that affects millions of Californians.

But the details of the most recent leadership fight caught the attention of FBI agents investigating one caucus member, state Sen. Ron Calderon, for allegedly taking bribes, according to a court-sealed affidavit made public by Al Jazeera America last month.

The affidavit alleges that another caucus member, Sen. Kevin de León, brokered a deal between Calderon and Sen. Ricardo Lara that resulted in Lara retaining the caucus chairmanship and the group paying $25,000 to a nonprofit run by Calderon’s brother, former assemblyman Tom Calderon. According to the affidavit, Ron Calderon told an undercover FBI agent that the brothers planned to draw eventually on money held by the nonprofit to make “part of a living.”

No charges have been filed, but the emerging case has exposed caucus decisions to public view just as the group’s influence is peaking. Its membership has grown from five members when it formed in 1973 to 25 members today – and the caucus now controls hundreds of thousands of dollars that donors with business at the Capitol give to its political action committees and nonprofit foundations. The caucus played a major role in influencing legislation this year, including a package of bills expanding rights for undocumented immigrants and killing a bill to ban plastic bags at grocery stores.

“If you look at the last 20 years, the influence and the political clout of the Latino Legislative Caucus has grown tremendously,” said former Assembly Speaker Fabián Núñez. He said the Latino caucus has gained power as the demographics of the Legislature has evolved to more closely reflect Californians.

“When people ask me for advice, I always say, ‘The more power you have, the more attention you’re going to get. And sometimes that’s good, and sometimes that’s bad. You get scrutinized.’”

The affidavit’s allegation that the Latino caucus used money from one of its political fundraising accounts to pay off Calderon during the chairmanship dispute is the first confirmation that the caucus leader has been drawn into the FBI’s broader probe of Calderon, a Montebello Democrat. Lara, the Bell Gardens Democrat who was re-elected caucus chair on Dec. 3, has declined The Bee’s interview requests to discuss the investigation and caucus fundraising since June.

“The longer the investigation goes, the longer the Latino caucus and some of its leadership members look like they’re being investigated,” said Jaime Regalado, former director of the Pat Brown Institute of Public Affairs at California State University, Los Angeles.

“The case starts to take prisoners beyond Ron Calderon. That’s a danger to those legislators even if none of them are (convicted) of wrongdoing in a major sense. It looks bad. It looks like there are favors.”

De León, a Democrat from Los Angeles, announced in June that he’s been subpoenaed in the case. Last week, U.S. attorneys sent De León’s lawyer a letter saying he is a witness, not a target, of their investigation into possible corruption by Calderon and others.

Key legislation pushed

The Legislature has more than a dozen caucuses, collections of lawmakers with common interests that are organized by ethnicity, region, political party or issues. They can work as a bloc to shape policy decisions and, in some cases, band together to support political candidates. The Latino caucus has two staff members paid for by the state Senate, at a cost of roughly $169,000 a year.

When reports first surfaced that the FBI had rolled into the Capitol on June 4, the Senate’s sergeant-at-arms told the media that agents executed search warrants on two offices: one belonging to Calderon, the other to the Latino caucus. The next day, he corrected the first report and said the Latino caucus office had not been searched.

Lara told Latino media that his caucus had been unfairly maligned by erroneous reports.

“What happened will certainly put a cloud on the work we are doing,” Lara told Vida En El Valle, McClatchy’s bilingual newspaper that serves the Central Valley. “Even though we were mistakenly involved in what happened, this investigation (overshadowed) the work we have planned out for our constituencies and the state, especially for the Latino community.”

As it turned out, the Latino caucus was a force in passing – and killing – significant pieces of legislation this year.

After huddles on the Senate and Assembly floors in the final days of session, Latino lawmakers successfully shepherded a bill to give drivers licenses to undocumented immigrants. Gov. Jerry Brown signed Assembly Bill 60 with fanfare at ceremonies in Los Angeles and Fresno.

Other achievements for the caucus this year included bills that Brown signed to raise California’s minimum wage, expand Medi-Cal eligibility, allow undocumented immigrants to become lawyers, give overtime pay to domestic workers and limit the ability of local law enforcement agencies to detain people for immigration violations.

The eight senators and 17 Assembly members in the Latino caucus are all Democrats, but they are not uniformly liberal. Many are business-friendly Democrats, making the caucus a frequent focus of industry lobbying efforts.

Oil, pharmaceutical and technology companies have given some of the largest donations to the caucus nonprofit foundation at Lara’s behest. This year, Lara has directed $192,000 from interest groups to the Latino Caucus Leadership Foundation, one of two nonprofits affiliated with the caucus.

The caucus also has two political fundraising committees – Yes We Can and the Latino Caucus Leadership PAC – that accept donations from interest groups and give money to support Latino candidates. Lara canceled a Latino Caucus Leadership PAC fundraiser in May after The Bee reported that the owner of the Las Vegas casino hosting the event stood to benefit from a contentious gambling bill awaiting a vote on the Senate floor.

Bag ban is killed

While donors can give only $4,100 per election to legislative candidates, state law allows unlimited contributions to independent PACs, such as those connected to the Latino caucus. Since 2011, the two campaign committees affiliated with the Latino caucus have raised $1.17 million and spent $1.06 million.

The San Manuel Indian tribe, which has been pushing for a bill to allow Internet poker in California, has given $211,000. The Realtors’ association, which lobbied hard against a proposed fee to pay for more affordable housing, has given $105,000. Pacific Gas and Electric has given $46,000. Cigarette companies have given $45,000. Plastic bag manufacturer Hilex Poly gave $25,000.

The company opposed a bill that sought to ban plastic shopping bags statewide, and the Latino caucus killed the measure on the Senate floor in May. Senate Bill 405 was carried by Sen. Alex Padilla, a Democrat who represents a moderate San Fernando Valley district and is a member of the Latino caucus. It had the support of the grocers association, which argued that a statewide policy on plastic bag use would be better than the patchwork of local ordinances now in effect.

During a lengthy floor debate, Lara was the first Democrat to voice opposition to the bill, saying it would result in the loss of 700 jobs at a bag factory in his district.

“These are hard-working immigrant families who are undereducated, monolingual, and are not going to have an opportunity to find another type of employment,” Lara said.

Four more Latino Democrats spoke against the bill, backing up Lara’s argument that it would be bad for poor people who can’t pay for bags, or harm those who work in bag factories.

“These jobs are by far and large held by immigrants. The vast majority are women. Women head of households. Women who have to work to put the food on the table. Women who have to work to pay for the roof over their families’ head. Women who have to work to put clothes on their children’s back,” de León said.

“So I consider myself an environmentalist, but this is not an abstract concept to me. These are real jobs. These are real lives.”

After the Latino caucus spoke, it was clear that Padilla’s bill was going down. In his closing remarks, Padilla called out his Latino colleagues, saying three times that his district “ain’t that different” from theirs. In a house where bills carried by Democrats almost always pass handily, Padilla’s measure fell three votes short.

Reasons for the bill’s defeat have become a source of discussion on blogs and editorial pages around the state. Some supporters of the plastic bag ban say Latino caucus members were persuaded by Núñez, the former Assembly speaker, who now works for the company that lobbies on behalf of plastic bag makers. Núñez is a partner at Mercury Public Affairs, which represents the plastic bag association. He is not a registered lobbyist but said he provides Mercury clients, including the plastic bag group, with strategic advice.

Núñez is close with both Lara and de León. Lara served on Núñez’s staff when he was speaker. De León has said he considers Núñez family; their friendship goes back to growing up together in Los Angeles.

Those relationships are not why the bill failed, Núñez said.

“Just because someone is your friend doesn’t mean they are going to agree with you all the time,” Núñez said. “It’s outrageous for anybody to make that kind of reach.”

De León wrote in a Los Angeles Daily News op-ed last week that he would support a plastic bag ban if the law contained protections for workers.

Marce Gutierrez is an advocate in San Francisco who heads Azul, a group aimed at getting Latinos involved in environmental causes. She co-wrote an op-ed in the San Jose Mercury News last month that said the Latino caucus “played a role in two of the biggest disappointments on environmental policy this year” in killing the plastic bag ban and supporting amendments to weaken a bill to regulate hydraulic fracturing.

In an interview with The Bee, Gutierrez said she considers the Latino caucus’s position on environmental issues “a growing pain.”

“Any caucus growing in power is going to be subject to (a lot of) influences,” she said.

Donation questioned

Lobbying and campaign contributions are forces that every lawmaker has to contend with. But representatives from poor districts may be especially vulnerable to the power of deep pockets, said Wesley Hussey, an assistant professor of government at California State University, Sacramento.

People of modest means are less likely to give to political campaigns and less likely to vote, he said, and many Latino lawmakers represent districts where large portions of the adult population can’t vote because they are not U.S. citizens. That creates what Hussey called an “accountability issue” for some legislators.

“If they win the primary and get into office, they are very secure. They’re not going to lose re-election. So a lot of interest groups can come to them and say, ‘Sponsor my rule change,’ and they do,” Hussey said.

Voter turnout in Calderon’s district was among the lowest in the state during his most recent election in 2010. Just 18 percent of registered voters in his district came out to vote that year, according to Political Data Inc.

Even as Calderon accepted $60,000 in bribes from an undercover FBI agent posing as a film studio owner, the affidavit alleges, he talked of wanting to help his constituents by pushing for the policy the agent requested.

In August of last year, as the agent and Calderon discussed a failed plan to amend a bill so that smaller productions could qualify for the tax credit, Calderon said: “I am the Chair of the Latino Caucus next year. I want to help my people. And, they are all, they are all small businesses,” according to the affidavit.

At the time, Calderon was vice chairman of the caucus and Lara was its chair, having taken over in February 2012 after turmoil over the way then-Assemblyman Tony Mendoza ran the caucus. There had been allegations that Mendoza didn’t handle caucus finances transparently and tensions over whether the caucus would endorse Tom Calderon in his run that year for Assembly.

Ron Calderon was in line to become chairman in December, when legislators began a new two-year session. Instead, the Latino caucus voted to keep Lara as chair. Just a few weeks later, campaign finance reports show that one of the fundraising arms of the Latino caucus contributed $25,000 to Tom Calderon’s nonprofit called Californians for Diversity.

The contribution was an unusual payment for the Yes We Can political action committee. It is the only “civic donation” the political action committee has ever reported.

“That was a nonprofit we were trying to raise money for to heighten public awareness of the Latino caucus,” Tom Calderon told The Bee in a phone interview before the FBI affidavit became public. “We had just started fundraising. We haven’t done very much.”

If the allegation that the caucus paid Tom Calderon’s group in exchange for Ron Calderon stepping down from the race for caucus chairman proves true, it’s unclear whether such a deal would be illegal. Choosing a caucus chairman is a political decision, not a governmental action, experts in California political law said.

“It’s a tricky area because the political process has negotiation and bargaining and compromise all the way through it,” said Daniel Lowenstein, a retired professor at UCLA’s law school who was the first chairman of the Fair Political Practices Commission.

“So when does that kind of bargaining and compromising become improper? One important factor in that is if somebody is getting personal benefits rather than political benefits.”

Reprinted from The Sacramento Bee (11/10/2013).