A Politico’s Quest to Change Campaign Finance Law

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Like almost all local government agencies of a certain size and significance, the Orange County Water District has a team of lobbyists that is supposed to advocate for the interests of county residents and businesses on water issues, ranging from environmental impacts to rate structures.

But in recent years, the agency has also paid lobbyists taxpayer dollars to promote state legislation that would have enabled directly elected district directors to collect unlimited campaign contributions from agency vendors. And according to interviews with water board directors, this lobbying was at the behest of elected Director Denis Bilodeau, who is also a city councilman in Orange.

The legislation — introduced in 2010 by Bilodeau’s former employer, Assemblyman Chris Norby — sought to remove a restriction set by the 1982 Levine Act.

Excluding directly elected board members from the restriction would be especially advantageous to Bilodeau, because contributors to his water district campaign also give to his City Council campaign.

Former Assemblyman Mel Levine, the author of the act, said in a recent interview that his intent was to stop exactly what Bilodeau is doing. Levine successfully pushed for the law’s passage in the early 1980s after a Los Angeles Times investigation showed that a Los Angeles city councilman was leveraging his appointed position at the California Coastal Commission to obtain campaign contributions from commission applicants.

An Evolving Argument

The law stipulated that a member of a local board — excluding boards with all directly elected members — must abstain from any votes involving individuals or entities that contributed more than $250 to the board member’s election campaign.

“When the Levine Act was passed, there were no elected members of the targeted agencies, Levine said, so it only affected appointed members who were raising money for other seats. But the law was unclear regarding agencies with a mix of elected and appointed members, such as the Orange County Water District.”

Given the Orange County board’s situation, Bilodeau said he sought a ruling from the state Fair Political Practices Commission. The FPPC ruled that the $250 limit applied not only to appointed members of the board but also those like him who were directly elected.

Bilodeau took issue with the FPPC’s interpretation and embarked on his effort to have the Levine Act changed.

“It’s bizarre,” Bilodeau said. “I’m treated differently than all these other elected officials in the state.”

Other water district officials also argue that the application of the law disenfranchises the public because it forces sitting water board directors to recuse themselves from votes involving any individual or business that gives more than a nominal amount to their campaigns.

A good-government expert said he is unimpressed with this argument.

“It doesn’t disenfranchise the voters. It disenfranchises the board member who is taking more than $250,” said Tracy Westen, CEO of the Center for Governmental Studies. “I frankly don’t see the public interest in that.”

Beyond this argument, Bilodeau’s specific reasoning for changing the law continues to evolve. He first asserted that the law was never intended to apply to elected board members.

Levine, meanwhile, says that while certain circumstances may have changed, the law is being applied exactly as it should. It prevents people in Bilodeau’s situation from using one public office to raise money for another.

Levine said in a recent interview it was always his intent that the law would cover all members of a board. “If somebody had asked me what if someone were elected, my answer would have been it should apply to that person too,” Levine said.

After being confronted with Levine’s assertion, Bilodeau contacted the former assemblyman and then backed off his original position. He said that after an “enlightening conversation” with Levine, he discovered that the true intent of the law was to limit only “quasi-judicial bodies,” such as local regulatory agencies that grant licenses and permits. Bilodeau said the water board is not such a body.

But again Levine holds a different view. He said “quasi-judicial” should include contracts and agreements with vendors, which is expressly covered by the law.

Campaign finance records show that Bilodeau has done exactly what Levine had attempted to stop. Companies with business before the water board contributed thousands of dollars directly to Bilodeau’s 2010 City Council campaign:

  • Poseidon Resources, which in 2010 entered into a negotiating agreement with the water district to purchase water, gave Bilodeau $1,000 on Oct. 19, 2010.
  • Christopher Townsend and his wife, Michelle Townsend, gave $250 and $1,000 respectively. Christopher Townsend is the president of Townsend Public Affairs, the water district lobbyist that worked to remove the Levine Act’s restriction on campaign contributions.
  • The firms HDR Engineering and CH2MHill, Mark Butier of Butier Engineering and the Washington, D.C., lobbyist James McConnell all have contracts with the water district and contributed funds directly to Bilodeau’s council campaign.

Bilodeau also made a $32,000 lump-sum transfer from his water district campaign to his council campaign on Nov. 2, 2010. The total of the transfer and direct contributions from water district vendors constituted more than one-third of the $101,000 Bilodeau raised for his council campaign that year.

Levine said that had the Legislature considered the potential of a large transfer from the water board campaign to the council campaign, it would have made that illegal under the Levine Act.

Bilodeau insisted that he did not pressure water district vendors for City Council campaign cash. Rather, the funds come from a base that supports him because he understands engineering issues, Bilobeau said. “I a licensed engineer, so I enjoy support from the engineering community.”

The Lobbying Effort

Bilodeau also claimed that the amount of time the district’s lobbyists have spent on the issue is minimal. Independently verifying this claim is difficult, but interviews and public records indicate that the effort was more significant than Bilodeau and others are willing to acknowledge.

Lobbyists working for three entities — the water district, Townsend Public Affairs and Platinum Advisors — all took part in the effort to lift the Levine Act restriction.

Legislative reports filed with the district say that Townsend and district staff “secured support from other entities” and “provided members of the legislature and relevant committees with letters of support [for] AB 1241,” the bill to change the Levine Act.

Also, Brian Lungren, Sacramento advisor with Platinum Advisors, the county Board of Supervisors’ lobbying firm, briefly testified last year in favor of Norby’s bill before the state Senate Elections Committee.

The legislation was an approved position of the Board of Supervisors, meaning that Platinum could have also been working behind the scenes by urging state legislators to pass the bill.

When reached by a Voice of OC reporter, Christopher Townsend referred questions to water district staff. Platinum officials declined comment.

Robert Ennis, legislative affairs liaison for the water district, acknowledged that he drafted a letter of support for Norby’s bill. He also used his seat at the California Special Districts Association to obtain that group’s endorsement.

Norby himself has said that the lobbying effort from paid advocates was helpful, pointing to the endorsement of the special districts association as evidence. After being pressed further, however, Norby said he wasn’t sure “how active they were, but you’re never really sure who does what.”

Norby is correct. With the exception of video of testimony video and statements made in legislative reports, it is virtually impossible to ascertain how much time lobbyists spent on Norby’s bill because they operate on retainers rather than bill by the hour.

Bilodeau, Ennis and county Supervisor Shawn Nelson, who employs Bilodeau as his chief of staff, all insist that the efforts could be counted in minutes, not hours.

“I don’t know that any effort was expended,” Nelson said. “It certainly wasn’t something that was of major importance to the county.”

Westen said using public agencies’ lobbyists to weaken a law aimed at maintaining public trust in government is an abuse of public resources, even if the lobbying effort was minimal.

“That’s no excuse,” Westen said. “If it’s wrong, it’s wrong, no matter how much time was spent on it.”

The bill ultimately failed to pass, having lost on the Senate floor in a slim 19-20 vote in September 2011.

Is The Act Unfair?

While Ennis and Bilodeau say the Levine Act’s restriction on the water board is unfair to incumbents, there are questions as to whether it has had any significant effect on the ability of directors to be re-elected.

Ennis argues that the public is disenfranchised by the restriction because it bars the directors from voting. His reasoning is that if directors can’t vote, the people they represent lose their voice on the board.

Yet meeting minutes since January 2010 show that directors rarely if ever encounter conflicts of interest arising from the Levine Act. This is because most water board candidates usually raise nominal amounts of campaign cash.

In fact, with the exception of one other instance, only Bilodeau cited the Levine Act in a handful of meetings as the basis for a conflict of interest.

Bilodeau also argued that challengers to his water board seat have a fundraising advantage because he faces a restriction that his competitors don’t. The law prevents Bilodeau from soliciting or accepting a contribution while the contributor has business before the agency and for three months after the vote.

Yet it is clear that the Levine Act has not prevented Bilodeau and other incumbents from raising enough money to retain their seats. For example, Director Kathryn Barr raised nothing for her 2010 water district campaign and still managed to beat challenger Mark Rosen.

Barr said that, other than Bilodeau, only Director Steve Sheldon was concerned with passing the legislation. Sheldon, who loaned himself tens of thousands of dollars to win his seat, could not be reached for comment.

Sheldon’s substantial loan to himself is the exception.

Director Cathy Green, who raised more than $38,000 — possibly the most money raised by an incumbent that year — said she was unconcerned with the restriction. She didn’t abstain from any vote because of contributions.

In 2008, Bilodeau’s water board opponent Bill Nelson raised a total of $990 while Bilodeau raised approximately $38,000.

Bilodeau is running for re-election to the water board this year, but he has yet to raise any funds for the race, according to the most recent disclosure forms.

Levine says that’s the way things should stay.

“Just don’t take the campaign contribution and you can vote on whatever you want,” he said.

Clarification: A previous version of this article implied that the Orange County Water District Board of Directors was not made up of both appointed and elected officials before the Levine Act was passed in 1982. The board’s composition first became a mix of elected and appointed officials in 1954.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: twitter.com/adamelmahrek.

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