Lawmakers’ outside jobs raise questions

SACRAMENTO —  Assemblyman Mike Eng, one of more than two dozen California lawmakers who hold outside jobs, was a steady vote for the Los Angeles Unified School District’s interests this year at the same time his law firm was working for the district under a $550,000 contract.

A Democrat from Monterey Park who sits on the Assembly Education Committee, Eng voted multiple times for legislation sponsored by the district that allows it to obtain $267 million in extra state money.

His five-man law firm, meanwhile, collected $321,000 as part of its three-year deal from L.A. Unified, sometimes in payments made just weeks after Eng’s vote. The payments were reported in district records as compensation for help in getting visas and processing paperwork for foreign teachers.

“Having legislators voting on bills that affect their sources of income raises questions of conflict of interest,” said Bob Stern, president of the Center for Governmental Studies in Los Angeles. “Who is their loyalty owed to, the state or their income sources?”

Eng didn’t violate any laws, Stern said. California allows legislators to cast votes affecting their industries or professions as long as the measures apply generally and do not affect only one company or agency.

But the assemblyman’s actions highlight what some see as the state’s failure to tightly govern moonlighting by lawmakers.

California’s full-time lawmakers are the highest paid in the nation, earning $150,000 a year including salary and expenses (those in leadership posts make more). The salary is justified, lawmakers often say, because it enables them to live and support their families without outside income.

Yet 30 of the state’s 120 legislators own businesses or hold other outside jobs, according to their most recent statements of economic interest, and some earn more income away from the Capitol than from the public payroll. They own such enterprises as car dealerships, farms, insurance companies, a plastics firm and a real estate appraisal firm. They work in law, agriculture, health insurance and other medical fields.

Some have routinely voted on legislation that affects their private income. Several lawmakers sit on committees that oversee legislation governing their professions or industries.

State Sen. Dave Cox (R-Fair Oaks), owner and president of Integrated Benefits and Insurance Services Inc., an insurance company doing business with large healthcare groups, sits on the Senate Health Committee.

In August, and three times last year, Cox voted against the creation of a state-run health insurance program that was lobbied against by four of his biggest sources of income: Kaiser Permanente, Blue Cross, Blue Shield and Health Net. Those companies have paid Cox’s firm at least $240,000 since 1999.

Cox said his vote was philosophical, reflected the position of the Senate Republican caucus and had nothing to do with his business, which he owns with his wife, who runs it.

“We [in California] do not have the ability to afford universal healthcare,” he said.

Assemblyman Michael Duvall also voted against the healthcare bill. In addition to being a Republican legislator from Yorba Linda, he is sole owner of the Michael Duvall Agency, an insurance company that received at least $10,000 last year from Blue Cross.

“I don’t want the government in charge of my healthcare,” he said to explain his vote, adding that it had nothing to do with his source of outside income.

Other legislators with outside businesses include:

* Assemblyman Edward Hernandez (D-West Covina). He and his wife are optometrists with private practices; his is in La Puente, hers in Duarte. Hernandez is also past president of the California Optometric Assn., which lobbied this year for legislation that significantly expanded the procedures optometrists can perform. Hernandez voted for the bill (SB 1406) in June as a member of the Assembly Business and Professions Committee and in August on the Assembly floor. Ophthalmologists, who are medical doctors able to perform more extensive treatment, including surgery, opposed it.

* Assemblyman Tom Berryhill (R-Modesto), owner and manager of Tom Berryhill Ranch, which grows grapes and almonds. Berryhill voted in June in favor of legislation that allows winery customers to consume the wine they purchase while still on the premises. The bill was pushed by the Wine Institute, a group that includes the Robert Mondavi Winery, a major source of income for Berryhill. The assemblyman said he supervises workers during the pruning season but otherwise doesn’t spend much time in the vineyard.

* Assemblyman Roger Niello (R-Fair Oaks). His disclosure forms call him an “employee/officer/director” of the Niello Co., which owns several car dealerships. Niello voted against legislation last year that would have allowed the state to levy a surcharge of up to $2,500 against new vehicles that emit high amounts of greenhouse gases. The bill, SB 493, was lobbied against by the California Motor Car Dealers Assn., of which Niello’s firm is a member. The bill was also opposed by a coalition of carmakers. Niello reported three of the carmakers as major sources of income last year. The bill died.

Niello said he has recused himself on occasions when he thought a conflict might be perceived -- as when the Legislature considered raising processing fees for car sales.

Government watchdog groups contend that private business can be a distraction from a public official’s job and raises questions about whether decisions are made on merit. They note that Congress prohibits its members from engaging in professions that provide services involving a fiduciary relationship.

Kathay Feng, executive director of California Common Cause, called for similar restrictions in California, saying: “The loophole that allows legislators to moonlight and have an outside business should be closed.”

In Eng’s case, the education bill sponsored by L.A. Unified also affected three small school districts. Eng, who reported more than $100,000 in income from his law firm last year, said he did not see any conflict in his vote because other attorneys in his firm did the work on the school contract.

Eng said he works about 60 hours a week on his legislative job. He said it makes him a better legislator because it gives him expertise in the critical area of immigration.

“I feel I have a special place in the California Legislature because I’ve dealt with that issue,” he said.

Others raised the issue of restrictions that term limits impose. Legislators need to keep businesses so they have something to return to when they leave office, said Assemblyman Bill Maze (R-Visalia).

“You don’t have any kind of retirement [benefit] with the Legislature,” said Maze, owner of a farming enterprise and a property-inspection business.

One lawmaker who sympathizes with the arguments of the public-interest groups is Assemblyman Mark De Saulnier (D-Concord). He said a factor in his decision to sell his bar and grill when he was elected in 2006 was to avoid the appearance of conflict. Lawmakers are considering a nickel tax on alcoholic drinks, for instance.

And he said he did not believe that as a full-time assemblyman he would have time to run a business. “I just couldn’t do both,” he said.

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Legislators’ outside jobs

California legislators are allowed to own businesses or hold other outside jobs, and 30 report doing so.

SENATORS

Sam Aanestad (R-Grass Valley): Oral surgeon. Owns private practice.

Dave Cox (R-Fair Oaks): President and owner of insurance company.

Jeff Denham (R-Atwater): Partner in plastics manufacturing firm.

Denise Moreno Ducheny (D-San Diego): Attorney. Owns law firm.

Bob Dutton (R-Rancho Cucamonga): Owner, president and chief executive of commercial real estate brokerage.

Dean Florez (D-Shafter): Owner, president and chief executive of finance corporation.

Michael Machado (D-Linden): Partner in farm.

Abel Maldonado (R-Santa Maria): Controller-auditor of farming business.

Bob Margett (R-Arcadia): President, real estate management firm.

Jack Scott (D-Altadena): Part-time minister.

ASSEMBLY MEMBERS

Tom Berryhill (R-Modesto): Owner-manager, grape and almond ranch.

Sam Blakeslee (R-San Luis Obispo): President, financial planning company.

Wilmer Amina Carter (D-Rialto): Owns flooring company.

Michael Duvall (R-Yorba Linda): Owns insurance business, vending machine company.

Mike Eng (D-Monterey Park): Partner in law firm.

Bill Emmerson (R-Redlands): Orthodontist; partner in private practice.

Ted Gaines (R-Roseville): Vice president, insurance company.

Martin Garrick (R-Solano Beach): President, property management firm.

Edward Hernandez (D-West Covina): Optometrist in private practice.

Guy Houston (R-Livermore): Real estate and mortgage sales consultant.

Bob Huff (R-Diamond Bar): Owns commodities wholesale firm.

Kevin Jeffries (R-Lake Elsinore): Partner in investment firm.

Doug La Malfa (R-Richvale): Partner in rice farm.

Mark Leno (D-San Francisco): President of sign company.

Ted Lieu (D-Torrance): Major, Air Force Reserve.

Bill Maze (R-Visalia): Owns farming business, property- inspection company.

Alan Nakanishi (R-Lodi): Eye doctor, private practice.

Roger Niello (R-Fair Oaks): Employee, officer and director for firm that owns and operates several car dealerships.

Todd Spitzer (R-Orange): Attorney; does work for law firm, public affairs company.

Alberto Torrico (D- Newark): Attorney; owns law practice.

Source: Times reporting; Fair Political Practices Commission records