Oil Watchdog

SACRAMENTO, CA — Every summer for the past four years, a talented
group of recent college graduates has arrived at the state capital to
work as government policy aides in a fellowship program.

The fellows take up desks in the Senate and Assembly, where
they help write legislation, attend committee hearings, analyze bills,
meet with policy advocates and perform research for their bosses, the
lawmakers.

But there’s one factor that distinguishes these fellows from other entry-level legislative aides: the source of their paychecks.

The Latino Legislative Caucus Institute for Public Policy
program is funded almost entirely by some of the biggest corporate
entities that have a stake in California legislation, such as AT&T,
Chevron, Bank of America and Chrysler.

At least one of the corporations assigns an in-house lobbyist
to the interview panel that selects the fellows for the yearlong
program.

"It’s tantamount to corporations being able to pay and hire
legislative staff," said Kathay Feng, executive director of California
Common Cause, a government watchdog group concerned about the influence
of special-interest lobbying in Sacramento. "Staff — whether they’re
paid, unpaid, volunteer, interns or consultants — ought to be making
decisions based on broad policy, not special interests."

There is no evidence that corporations are turning their
donations into favorable policies — and all involved steadfastly deny
that is the case — but good-government groups question whether the
program is ripe for undue influence.

In part, that is because lobbyists are not required to document contact with the fellows because they are not state employees.

The program also now names two of the fellowship positions after
specific corporate sponsors, and it has them devoted to policy areas
important to that sponsor.

The Kaiser fellow works on health legislation. The Bank of America fellow deals with housing policy.

The program’s director, Max Benavidez, insists there is nothing
wrong with corporations giving hundreds of thousands of dollars to the
nonprofit institute, which uses the money to pay the fellows’ $1,880
monthly stipends.

"The fact that the money may come from A, B or C corporation
does not mean that A, B or C corporation is going to have a leg up
regarding any specific legislation," Benavidez said. "To go any further
than that is to blow the situation out of proportion."

None of the 20 sponsors — which represent powerful interests
in the fields of telecommunications, health care, banking, oil,
pharmaceuticals, beverage and energy — has asked fellows for special
favors, Benavidez said.

Naming fellowship positions after specific sponsors, he added,
is simply an acknowledgment of gratitude to the corporation, "not
unlike a university naming a building after somebody who gave the funds
for the building."

Conflict concerns aside, the program is recognized as one of
the most successful ventures of the state’s influential Latino
Legislative Caucus, providing valuable experience to bright, young
Latinos starting careers in public service.

The program, also known as the Richard G. Polanco Fellows
program — named after a highly regarded Latino caucus leader and
former state senator who inspired it — has graduated 24 fellows since
its first class in 2003-04, some of whom now work in state government.

Benavidez, the organization’s spokesman, declined to make
Polanco available for an interview over the phone or in person.
Benavidez said he could speak on behalf of Polanco, who is now a
lobbyist.

The institute, which raised $721,868 in 2005, according to its
most recent available federal tax filing, spent about $300,000 to run
the fellowships, Benavidez said. The institute also produces
fundraisers, seminars and workshops, and hires consultants.

Fellows work for a state department for three months, followed
by nine months for a lawmaker — all Democrats until this past year.
They also attend numerous lunches and dinners with their sponsors, take
on a community service project and attend a weekly class for six
graduate-level credits through Sacramento State.

The fellowship is similar to, but not directly affiliated with,
the venerable Capital Fellows Program run by the university that places
64 students in government offices each year, fully funded by the state
budget.

Sara Bachez, last year’s Kaiser fellow, worked as a consultant
on the Senate Health Committee and helped research and secure support
for four bills for Sen. Sheila Kuehl, D-Los Angeles.

During Bachez’s nine months in the Legislature, Kaiser funded
her stipend and the Health Maintenance Organization titan also spent
nearly $700,000 lobbying in California, though Bachez said Kaiser never
tried to influence her.

"I know, in a way, they can be lobbying us," said Bachez, who
was raised in South Central Los Angeles and graduated from UC Berkeley.
"They’ve been very respectful."

They also may have been low key. Kuehl said she was not aware
Polanco fellows were primarily supported by corporations, such as
Kaiser.

Kuehl said it was a "good thing" she didn’t know, and she noted
there were no special favors done for Kaiser: Bachez, whom Kuehl called
an "excellent" fellow, worked on a health care bill Kaiser opposed.

Former fellows said that even at the "power luncheon series"
they were required to attend — hosted by a different sponsor each
month — company officials refrained from formal lobbying.

"They talk about how they see policy, but not specific
legislation," said last year’s Bank of America fellow, Carolina
Salazar, who now works for the Senate Transportation and Housing
Committee, and was recently appointed to the city of Concord’s Human
Relations Commission.

Former fellows say most of the contact with sponsors deals with issues such as how to navigate the Capitol.

Still, good-government advocates worry the close contact with
powerful sponsors may subtly influence fellows or, at worst, make them
feel obligated to do favors.

"It would be very natural for them not to bite the hand that
pays them," said Robert Stern of the Center for Governmental Studies in
Los Angeles. "I love intern programs; they’re very helpful and useful
for everybody, but they shouldn’t be set up like this."

Jamie Court, president of the Foundation for Taxpayer and
Consumer Rights, said the fellowship is akin to a shadow corporate
government infiltrating the Capitol.

"It’s a new way the private sector has influenced the public sphere, and I think there should be an audit by the state auditor."

Corporate sponsors disagree.

"Give me a break," said Diana Bonta, a Kaiser vice president
whose organization gave $50,000 to the program last year. "This is a
student, a young person learning, and it’s not as if we’re paying their
salary; it’s nothing beholding, the money goes to the institute."

The donations, typically raised through golf tournaments and
galas, are payable to the institute and forwarded to a nonprofit group
at Sacramento State, which pays the fellows.

About 60 graduates, often from top universities, apply to be a
Polanco fellow, and a dozen are interviewed by the board of directors
and a corporate advisory board that includes Denny Samuel, a lobbyist
for Chevron, which has given the institute more than $200,000.

"Chevron has never once, ever, ever, used that as any kind of
leverage in developing public policy," Samuel said. "I’ve been with the
company 41 years, and there’s no way in hell I’m naive, and I have
never once drawn a correlation."

The Polanco program is believed to be the first — and perhaps
only — fellowship program in California to use corporate sponsors to
pay for legislative aides. But it is not a unique idea.

The Congressional Hispanic Caucus Institute, in Washington,
D.C., raises millions of dollars and places interns and fellows in
Congress.

They, too, are branded by corporate sponsors.
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Reach Edwin Garcia at [email protected] or 916-441-4651.