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Assemblymen Hall, Perea attended Kentucky Derby with gambling lobbyist

By on May 7, 2014
GO Chair Isadore Hall with GO Lobbyist

At least two members of a legislative committee that regulates the gambling industry attended the 140th Kentucky Derby with one of Sacramento’s top gaming lobbyists.

Assemblyman Isadore Hall, D- Compton, who serves as chairman of the Assembly Committee on Governmental Organization, and Assemblyman Henry Perea, D-Fresno, a member of the committee, joined G.O. lobbyist Dennis Loper at Churchill Downs this past weekend, according to photos obtained by CalNewsroom.com.

It is unclear who paid for the trip. Neither Loper nor the legislators’ offices responded to email requests for comment.

Known as a “juice” committee, the Assembly Committee on Governmental Organization is considered one of the legislature’s most lucrative posts for campaign fundraising. It oversees such vice industries as alcohol, tribal gaming, horse-racing, gambling and tobacco.

Loper, the president of Capitol Strategies Group, routinely lobbies the committee on behalf of his clients that include the Commerce Club, Wyndham Hotels and the California Beer and Beverage Distributors.

Cressman: Wealthy interests betting on more than a horse race

Isadore Hall Research at Kentucky Derby

Derek Cressman, a Democratic candidate for Secretary of State who is campaigning to reduce the influence of money in politics, said that the trip poses a problem, regardless of how it was financed.

“It’s worth remembering that luxury trips with legislators was a key tactic of Jack Abramoff,” Cressman said.  “However the trip is financed, voters can be sure that some wealthy interest was betting on a lot more than a horse race, they were betting they’d get a return in public policy that they couldn’t get simply by sending in a letter to a legislator or taking any of the other simple and honest steps that ordinary Californians take to influence policy.”

Hall is no stranger to the “The Most Exciting Two Minutes In Sports,” having used campaign funds to attend the event in 2012 and 2013. Last year, Hall’s campaign committee spent $3,200 at Churchill Downs on what the campaign categorized as “campaign paraphernalia” and “legislative research,” according to CalNewsroom.com’s review of campaign finance reports. Within weeks of last year’s Kentucky Derby, Hall’s campaign committee accepted contributions from Loper’s clients.

In 2012, the Los Angeles Times reported that Hall attended the event as a “fact-finding trip and fundraiser.”

Lobbyist’s clients donate big to legislators’ campaigns

PereaSince 2013, Loper’s clients have made more than two dozen campaign contributions to Hall and Perea’s campaign committees.

According to state disclosure reports, Loper’s firm is the lobbyist of record for Abbott Laboratories, Association of California Life and Health Insurance Companies, California Beer and Beverage Distributors, California Distributors Association, California Hospital Association, Sempra Energy, Commerce Club, Luxottica, Reed Elsevier, Sprint Nextel, and Wyndham Hotels, all of whom made campaign contributions to either Hall or Perea.

Since January 1, 2013, Loper’s clients have made at least 15 contributions totaling $26,400 to Hall’s campaign and 16 contributions totaling $22,600 to Perea’s campaign.

“Whether the issues have been procurement of million dollar state contracts, energy deregulation, alcohol regulation or telecommunications, Loper has provided leadership, political savvy, and follow-through for clients, that not only leads to the best result but fosters better relationships in the process,” the Capitol Strategies website says of Loper’s influence.

The Monday following Loper’s trip to Louisville, one of his clients, the California Hospital Association, donated $1,500 to Perea’s campaign, which could legally be used to cover Perea’s trip expenses.

Gift loophole: Campaign accounts pay for luxury trips

The practice of using campaign funds to pay for legislators’ junkets demonstrates the absurdity of the state’s gift restrictions. Under the CA Political Reform Act, legislators and their staff cannot accept gifts worth more than $10 per month from a registered lobbyist.

However, campaign accounts provide legislators with an easy vehicle for circumventing these strict limits on lobbyist gifts. Lobbyists can direct their clients to donate to a member’s campaign account. Then, the member can use the campaign account to pay for personal expenses, including luxury travel. It’s more paperwork, but for lobbyists interested in contributing to their chosen candidates, it’s worth the hassle.

That means it’s illegal to buy a few cups of coffee, but not to arrange a luxury trip.

Legislative trips, gifts under spotlight

This year, two State Senators have been arrested on public corruption charges, with a third Senator convicted of perjury.

In March, Senate Democrats proposed a comprehensive reform of the state’s gift and trip rules that includes a ban on “accepting certain types of gifts that have nothing to do with lawmaking, including tickets for theme parks and professional sporting events, spa and golf trips.”

According to a 2013 report by the Center for Investigative Reporting, California State Assembly Speaker John Perez “gave lawmakers who raised the most money the best assignments in the new Legislature – posts on the speaker’s leadership team and seats on the powerful ‘juice committees.'” Perea was named in that report as one of the biggest beneficiaries of the lucrative committee assignments.

Henry Perea of Fresno, a Pérez loyalist who gave a total of $277,000, was named chairman of the committee that oversees the insurance industry. He retained seats on two other juice committees: the Governmental Organization Committee, with jurisdiction over casino gaming, horse racing and the alcoholic beverage industry; and the Banking and Finance Committee, which oversees financial institutions. Perea is a former Fresno City Council member who previously worked as a congressman’s aide.

From 2007-2010, Hall raised $1.2 million for his campaign committees, according to MapLight, a nonpartisan research organization that tracks money in politics. Ninety percent of those funds were raised from outside his district.

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About John Hrabe

John Hrabe spends his time traveling the world as a freelance journalist. When he isn’t on an international flight, John writes about state and national politics for CalWatchdog.com, FlashReport.org, Huffington Post and the editorial pages of the Orange County Register. John’s most recent high-profile investigation uncovered the questionable labor practices of Goodwill Industries, the nonprofit organization famous for its secondhand clothing stores.

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