February 26, 2014

Can Smartphones Conceal Officials' Dumb Comments?

Public officials who say something stupid or corrupt often don't use their work computer.

The device du jour for sending incriminating or embarrassing messages has become the "personal" computer or smartphone.

Recent revelations of such incriminating or embarrassing e-mails by aides to Governor Chris Christie of New Jersey and Scott Walker of Wisconsin have shone a bright spotlight on the extent to which public officials are attempting to use "private" electronic devices to conduct public business, and to evade disclosure of their writings. The revelations also raise the issue of whether such e-mails and texts are covered by states' public records laws.

In Wisconsin, newly-released e-mails showed that Gov. Walker's aides did campaign business on government time. An investigation revealed that some of Mr. Walker's aides while he was a county executive routinely used personal laptop computers, a non-county computer network, and private Yahoo and Google e-mail accounts to conduct campaign-related business while at work. His chief of staff forwarded a chain e-mail to undisclosed recipients that concluded, "I can handle being a black, disabled, one-armed, drug-addicted, Jewish homosexual on a pacemaker who is H.I.V.-positive, bald, orphaned, unemployed, lives in a slum, and has a Mexican boyfriend, but please, Oh dear God, please don't tell me I'm a Democrat."

Gov. Christie's aides used various e-mail accounts while orchestrating lane closures in the George Washington Bridge scandal that has jeopardized Christie's Presidential ambitions.

In California, a Court of Appeal in San Jose will hear arguments in a case March 11 which will decide whether officials' e-mails on "personal" electronic devices are subject to disclosure under the state's Public Records Act or Constitution.

San Jose officials, backed by the League of California Cities, argue that only records "prepared, owned, used or retained" by the city as a whole are subject to the Public Records Act. The plaintiff in the case, Ted Smith, backed by media outlets and open government groups, argues that the city can only act through its employees and officials, and that the content of the messages -- not their location or the type of device on which a message is sent -- should determine whether the messages are public.

The recent examples in New Jersey and Wisconsin -- where top gubernatorial aides tried to hide wrongdoing by using personal smartphones and the like -- underscores the importance of this case. Public officials shouldn't be allowed to cover their tracks by the simple expedient of using their own smartphone to conduct shady government business or to electioneer at public expense.

February 17, 2014

California Regents Coddle Billionaires

Income inequality is one of the biggest issues in the country.

The University of California Regents recently joined that issue squarely on the side of the billionaires, and against everyone else -- including taxpayers -- in a case involving the degree of transparency which should be allowed into the university's venture capital investments.

In a recent court case, Regents of the University of California v. Superior Court, the Regents coddled two of the richest venture capital funds, Sequoia Capital and Kleiner Perkins Caulfield & Byers, by spending taxpayer money to hide the individual fund performance of UC's investments in those two well-connected and fabulously-rich firms.

In the insular world of the Regents, if a billionaire venture capitalist says "jump," the Regents ask "how high"? The Regents count themselves lucky if they can give the venture capital firms tens of millions of taxpayer dollars.

If the name Kleiner Perkins sounds familiar, it should. The firm's co-founder, Tom Perkins, who is worth an estimated $8 billion, recently made news by comparing those who wonder about income inequality to Nazis. Perkins said in a letter to the Wall Street Journal, "I would call attention to the parallels of fascist Nazi Germany to its war on its 'one percent,' namely its Jews, to the progressive war on the American one percent, namely the 'rich.'"

It's easy to see why Mr. Perkins feels persecuted, since he's down to his last $8 billion. And it's easy to see why the UC Regents would spend taxpayer money to help out the Kleiner Perkins firm, given the firm's dire financial situation. Of course, Kleiner Perkins may need to hold on to some of its money since it's now fighting a gender discrimination suit brought by a former partner, Ellen Pao.

The Sequoia Capital firm is no less self-absorbed and self-righteous than Mr. Perkins. In an August 2003 letter to then-UC Treasurer David Russ (who's now gone to the private sector), Sequoia's Michael Moritz told UC that a Public Records Act case against UC had "impelled us to end our relationship." In other words, Moritz said, he wouldn't take UC's money any more. "We are utterly resolute in our belief that it is not in the interests of Sequoia Capital's other clients that we be hounded, badgered and stalked by entities wishing to either profit from or publicize our private and confidential information." Most people receicing tens of millions of dollars from the government would be happy, but Mr. Moritz felt "hounded, badgered and stalked" if anyone wanted to know how the investment of taxpayer money had performed.

Moritz and Sequoia got over their hurt feelings, however, when the Great Recession of 2008 dried up sources of venture capital. Sequoia solicitied UC to invest in several funds in 2009, and UC responded by -- you guessed it -- giving more millions of dollars to Sequoia. But it won't tell taxpayers how the latest Sequoia investments have performed.

The Regents say their investments in venture capital firms like Kleiner Perkins and Sequoia have been good for retirees and students. But without disclosing how individual venture capital funds have performed, there's no way to test the Regents' assertions. That was the ruling of a superior court in 2003, and the California Legislature followed by requiring, in 2005, that certain information about venture capital investments must be disclosed. The Regents are now trying to circumvent that law by refusing to obtain from Kleiner Perkins and Sequoia fund performance information that those venture firms don't want to disclose. (Other venture firms are, as of this writing, still disclosing fund-by-fund performance information.)

The Regents' position is bad public policy and bad business. A comprehensive 2012 report by the Ewing Marion Kauffman Foundation -- itself an investor or limited partner in many venture firms -- showed that the average venture capital firm fails to return investor capital after fees. The Kauffman Foundation study blasted the "complete lack of oversight and accountability" exercised by limited partner investors like the California Regents, called for increasing transparency and requiring firms like Kleiner Perkins and Sequoia to have more "skin in the game," and said, "Eliminating the black box of VC firm economics is required if limited partners seek to make prudent and aligned VC investments. Limited partners have historically failed to secure even miminal information rights on issues that foster transparency and are material to aligning limited partner and general partner interests."

California's Regents would do well to heed those words, to insist on a modicum of transparency, and to stop spending taxpayer money defending the hurt feelings and protecting the egos of billionaires. Asking for transparency, and questioning whether venture capitalists are getting special treatment, isn't Nazism. It's democracy.

January 4, 2012

Final Shot Fired in California Pension Transparency Battle?

A Los Angeles judge has issued what may be the last ruling in a years-long battle for pension transparency in California.

Superior Court Judge James Chalfant held on November 15 that the Los Angeles Times is entitled to know not just the names and pensions of retired Los Angeles County employees, but also their start date, years of service at retirement, service years they "purchased," benefit payment options, the formula used to calculate the benefits, and their gross medical benefits. His ruling became final on December 13.

The Los Angeles County Employees Retirement Association ("LACERA") had, for two years, resisted turning over even the names of pension recipients. Finally, after three separate 2011 Court of Appeal decisions held that names and pension amounts must be disclosed, LACERA agreed to disclose the names of its pension recipients, but still balked at disclosing other information like years of service, pension formula and medical benefits received.

Judge Chalfant's 14-page, single-spaced decision interpreted the three Court of Appeal decisions and found that the public had a right to know not only how much a public employee's pension is, but also how it's calculated. He agreed with newspaper reporters and taxpayer advocates who testified that without knowing how a pension is calculated, the public is unable to determine whether a pension has been "spiked" by adding perks to a last year's salary, or "purchasing" service time. "A retiree member's election of retirement options is a necessary component in the calculation of his or her retirement benefits in which the public has a legitimate interest," Judge Chalfant ruled. "A retiree's years of service at retirement, service years purchased, benefit payment options, and the formula used to calculate the benefit all must be disclosed...LACERA's calculation of retirement benefits cannot be evaluated without this information."

LACERA has stated it will not appeal Judge Chalfant's ruling and that it will turn over the records by February 15.

Many of LACERA's tens of thousands of retirees receive six-figure pensions, and at the state level California Governor Jerry Brown has called for raising the retirement age and trimming pension formulas to help the cash-strapped state balance its budget and avoid ever-deepening cuts to education and other services.

Judge Chalfant also ruled in a companion case brought by law enforcement unions that only two of the roughly 7,000 retired sheriff's department employees represented by the unions were entitled to have their names withheld because of security concerns. The unions had brought their own lawsuit against the Times and LACERA, arguing that some of their members had safety reasons justifying withholding of their names. Judge Chalfant gave their lawsuit short shrift, issuing a tentative ruling rejecting all claims to withhold names, and eventually allowing one name to be withheld. The Times agreed that one other name could be withheld after the officer filed a declaration saying he is now in jail and other inmates might harm him if they saw his name in the Times.

In the last two and a half years, eight different California Superior Court judges, in heavily populated Los Angeles, Orange, San Diego, Sacramento and Contra Costa counties, and in Stanislaus, Sonoma and Ventura counties as well, have ruled in favor of pension transparency. Courts of Appeal in Sacramento, San Diego and San Francisco upheld the trial court rulings in Sacramento, San Diego and Sonoma counties. With Judge Chalfant's ruling, it appears the transparency battle is over, and the advocates of openness have defeated the forces of secrecy.

(Full disclosure: the author of this blog, Karl Olson, represented the Times in the Los Angeles case, the Sacramento Bee in the Sacramento case, and newspapers in the Contra Costa and Stanislaus cases. He filed a friend-of-the-court brief in the San Diego appellate case.)

October 13, 2011

Transparency Not Always Convenient, But Important

There's an old saying: I may not agree with what you say, but I will defend to the death your right to say it.

Add to that: transparency may not always be convenient, but it's important to government.

This occurred to me recently in a case I am handling for the Los Angeles Times. The Times is suing the LA county retirement system for records of pensions paid to its tens of thousands of retirees. The system, LACERA, fought against disclosure for over a year and a half before finally relenting (in part) in the face of three court decisions ruling that the names and pension amounts of retirees must be disclosed.

Before anything was disclosed, a police union filed a lawsuit trying to block disclosure, claiming that some of its members might be "undercover retirees" who would be endangered by disclosure. Meanwhile, LACERA sent a letter to its members telling them it had to disclose their names and pension amounts. Its call center got jammed.

But not all retirees reflexively oppose disclosure, just as not all public employees oppose disclosure of their salaries. One LACERA retiree wrote a Times staffer saying that while she didn't like having her name and pension disclosed, she applauded the Times for fighting the battle. She said too many people in the media don't understand transparency laws like California's Brown Act and its Public Records Act.

There's a civics lesson here.

September 7, 2011

Third Victory for Pension Transparency

A San Francisco appellate court on August 26 handed a third victory to open government advocates wanting to know who's receiving county pensions.

The decision from California's First District Court of Appeal in Sonoma County Employees' Retirement Association v. Superior Court comes on the heels of earlier rulings from Courts of Appeal in Sacramento and San Diego and may signal the end of resistance from county pension organizations which have fought against the disclosure of pension amounts received by their members.

The San Francisco-based court held that state law shields retirees' birth date and age from disclosure, but not their name and the amount of their pension. Like the other appellate courts, the First District Court of Appeal relied upon the California Supreme Court's ruling (in a case I handled) that public employee salaries are public information, and said "the taxpaying public has substantially the same interest in [the retirement agency's] operations and payout levels as it does in the salaries of county employees."

Finally, the court tersely rejected the argument that retirees would be harmed by disclosure: "We find SCERA's claim that releasing information to the public about pension benefits will expose its retirees to annoyance and abuse too speculative to outweigh the public's interest in securing information about how public money is spent."

The latest decision should put to rest the issue of whether county retirees' pension amounts are disclosed. And it should shed light on pension payments which are draining the finances of state and local governments throughout the country, making it harder to balance budgets and provide services to residents. The three rulings won't balance budgets -- but they will enable taxpayers and open government advocates to know where public money is going.

August 25, 2011

California Pension Records Are Public, Courts Rule

Two California Courts of Appeal have shed light on a hot issue, ruling that county pension agencies must disclose the names and pension amounts of members receiving generous pension amounts.

Both courts, in rulings a month apart, rejected privacy arguments raised by by the agencies and the pension recipients, and both ruled that a state law providing for confidentiality of "individual records" did not allow the agencies to hide records of their payments to named pension recipients.

The rulings -- a May 11, 2011 decision from the Third District Court of Appeal in Sacramento (in a case I handled), and a June 28, 2011 decision from the Fourth District Court of Appeal in San Diego -- are welcome news for open government advocates and for taxpayers who foot the bill for the state's overly generous public pension benefits. In an era when private sector pensions have been eliminated or cut back, and public agencies are laying people off and cutting back services, many retired state and county employees are receiving six-figure annual pensions. Public safety employees in California generally are allowed to retire at age 50 with up to 90 percent of their last salary under a so-called "3 percent at 50" formula giving them 3 percent of their last salary for each year of service. To make matters worse, workers are often able to "spike" their pensions by working overtime in their last year or cashing out vacations and other perks just before they retire.

The court rulings relied in large part on a 2007 California Supreme Court decision holding that public employees' salaries are public. The Court of Appeal in Sacramento County Employees' Retirement Association v. Superior Court (2011) 195 Cal. App. 4th 440 remarked, "we do not view the fact of an individual's public retirement to be a personal matter or one likely to generate obloquy. The records will reveal that an individual was a county employee (whose salary amount was public record) and now is a retiree (whose pension amount is public record). SCERS's claim of severe unwelcome attention to retirees in particular is not compelling."

Likewise, the court in San Diego County Employees Retirement Association v. Superior Court observed that there was no evidence of adverse consequences from disclosure of public employee salaries, and no evidence of harm from prior disclosure of public employee pensions, even though the state's largest pension system, the California Public Employee Retirement System (CalPERS) has disclosed pensioners' names since 1985.

The rulings are welcome news and come at a time when many counties are grappling with how to pay for mounting pension expenses. San Francisco, for example, has two rival ballot measures on its November ballot which would tweak with the city's pension system and require workers to pay more toward their pensions. These court decisions won't affect existing pensions, but at least they will shed welcome light for citizens on where their tax dollars are going.

July 20, 2009

Sunlight Must Shine on Pensions

California is broke.

There's plenty of blame to go around, but one of the prime culprits is a lack of transparency. If people don't know how public money is being spent, it's hard to ensure that public money is being spent wisely.

One especially troublesome area is public employee pensions, especially for police and firefighters. Legislators who are wary of offending the powerful public safety lobbies, and voters deluged with glossy brochures of burning buildings and police in uniform, have handed public employee retirees pensions which far exceed those in the private sector. In San Francisco alone 709 retirees get pensions of over $100,000 a year. Most private sector workers don't earn that kind of money while still on the job. Other local agencies in the Golden State also have hundreds of workers in the six-figure pension club, and the state's pension fund, CalPERS, has nearly 5,000. This is happening while the state is trying to close a deficit of more than $20 billion.

Making matters worse, some public employee retirees recently fought a legal battle aimed at keeping the public from knowing the amount of their pensions. They unsuccessfully argued that the public which funds their lucrative pensions has no right to know how much they receive.

Several newspapers and a taxpayer group intervened in that case and convinced a judge that the pension payments are public information. Good thing: as public agencies across the country scratch and claw for money and cut services, it's more important than ever to know how public money is spent.

April 6, 2009

Obama's Welcome Change on FOIA

In a welcome shift from its predecessor, President Obama's administration has issued new guidelines favoring disclosure and transparency in handling Freeom of Information Act guidelines.

Obama first signaled a shift on his first day in office when he issued a presidential memorandum calling on agencies to "usher in a new era of open government." Attorney General Eric Holder followed up on March 19 with new FOIA guidelines directing all executive branch departments and agencies to apply a presumption of openness when administering FOIA.

The devil will be in the details, of course, but the high-level endorsement of openness -- and the explicit reversal of the so-called Ashcroft Memorandum issued in President Bush's first year in office -- is important. Holder's memo tells federal bureaucrats that FOIA is the responsibility of everyone, and directs Chief FOIA Officers in each agency to report each year to the Department of Justice on their progress in improving FOIA administration.

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January 22, 2009

OBAMA: RECORDS PRESUMED OPEN

OBAMA: RECORDS PRESUMED OPEN

President Obama didn't waste any time in breaking with the secrecy-first policies of his predecessor.

On his first full day in office, Obama issued a memorandum reversing the policy of the Bush Administration toward Freedom of Information Act requests. The so-called "Ashcroft Memorandum" issued early in the Bush Administration directed federal agencies to deny FOIA requests if there was any defensible argument against disclosing records. Obama's new policy shifts the presumption in favor of disclosing records. The new President made clear that records might still be withheld for reasons of, say, national security, but the new Memorandum is still an important policy shift.

The Bush Administration's penchant for secrecy was revealed early on -- even before the 9/11 attacks gave it a reason for full-throated defense of secrecy -- when former Vice President Cheney refused to reveal the names of oil company executives and others with whom he met to formulate energy policy. Cheney fought a lawsuit designed to pry those records loose all the way to the Supreme Court. Obama's new policy is a welcome change and indicates the new President won't routinely use government money to hide information from citizens.

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August 7, 2008

California Ruling Allowing Disclosure of Public Employee Salaries Keeps on Giving

Last year's California Supreme Court ruling mandating disclosure of public employee salaries is the gift that keeps on giving to the public.

Every day, some newspaper throughout the state does a story reporting on some city which can't manage its budget, or some public employee who appears to be making more money than they should because of nepotism or cronyism. Transparency is vital to allow the public to at least see what's happening and agitate for change.

Some (but not all) powerful public employee unions, including those representing police and prison guards, waged a long fight recently to keep named public employee salaries under wraps. That fight ended last August when the California Supreme Court, in a lawsuit brought by the Contra Costa Times, held that public employee salaries are public records. The court held that disclosure of public employee salaries is necessary to guard against instances of nepotism, cronyism and inefficiency. The Court also brushed aside claims by police that their salaries couldn't be disclosed because of separate laws governing disclosure of police records.

The Court's ruling (full disclosure: I represented the Contra Costa Times in the case) pays daily dividends to the public. California has a multi-billion dollar deficit, and one of its cities, Vallejo, recently faced bankruptcy because of police and fire pay. There are many hard-working aunderpaid public employees out there, but there are also many instances of nepotism and out-of-control overtime. In the words of the U.S. Supreme Court, people in an open society don't demand infallibility from their government, but it's difficult for them to accept what they can't observe. Last year's public employee salary ruling from California's high court at least lets the public see who earns what.

July 14, 2008

San Bernardino County Assessor Bill Postmus Fights Public Records Disclosure

Postmus gives public the mushroom treatment


Some government officials view members of the public as mushrooms, to be kept in the dark and covered with manure.

San Bernardino County Assessor Bill Postmus is surely one of those officials. Postmus waged a pitched battle, at county expense, last year to resist turning over calendars and e-mails from his time on the San Bernardino County Board of Supervisors in 2006. Now, in a stunning development, his aide Adam Aleman has been criminally charged with destruction of public records. The District Attorney’s office says Aleman deep-sixed the hard-drive of a laptop computer which belonged to his boss Postmus when Postmus was on the Board of Supervisors. Postmus has not been charged with a crime.

Aleman’s alleged criminality isn’t the only questionable conduct to take place on Postmus’ watch. The same day Aleman was arrested, June 30, the county Grand Jury issued a scathing report saying that the Assessor’s office had been widely used for political purposes, with staffers engaging in Republican party activities at county expense.

The Grand Jury found that when Postmus took office in January 2007 he hired an “executive support staff” which “lacked experience or training directly associated with assessor work.” Most of the “executive support staff” had been with Postmus when he was on the Board of Supervisors and/or was Republican Central Committee Chairman. While dedicated career employees who’d been on the job before Postmus was elected did the day-to-day work, Postmus’ people did “public image” work and “engaged in political activities for various national, state, and local political candidates during normal working hours.” In other words, Bill Postmus harnessed your tax dollars to the service of his own large political ambitions, whether you liked it or not. That’s called taxation without representation, or maybe even Tammany Hall corruption.

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July 9, 2008

Public Records Act: government officials should not destroy public records

Playing Hide and Seek With Public Records

It’s not unusual for newspapers, or lawyers in Public Records Act or Freedom of Information Act cases, to accuse the government of trying to “hide” things. Now a San Bernardino County case has revealed what may be a criminal attempt at hiding public records, just in time for a Fourth of July reminder about the importance of access to information about government.

San Bernardino County officials June 30 arrested Adam Aleman, a 25-year-old assistant assessor in that county. Aleman was charged with six felony counts – among them a count for destruction of public records. That count alleges that he destroyed the hard drive of a laptop computer that had been issued by the county to Assessor Bill Postmus during Postmus’ tenure on the Board of Supervisors.

The link to Postmus is significant. He was the central figure in a Public Records Act lawsuit brought by the California First Amendment Coalition and the San Bernardino Sun claiming that Postmus should have disclosed calendars and e-mails relating to a two-week period in the summer of 2006 when fires raged in San Bernardino County and Postmus, then the chairman of the Board of Supervisors, was mysteriously absent.

A San Bernardino County judge ordered a few calendar entries and e-mails released but upheld the county’s decision to withhold many calendar entries based upon the county’s claim of “deliberative process.” But during the case, the judge ordered the county to prepare a “privilege log,” an inventory of withheld records and the county’s reasons for withholding them. The log revealed a gap in the summer of 2006 during which Postmus seemed to have been cut off from e-mail. His spokesmen offered conflicting accounts about where Postmus was and whether he had email access.

The DA’s office has not linked Aleman’s indictment to the mysterious events surrounding Postmus (and Postmus himself has not been charged with any crime). However, the hard drive may have been destroyed in June or July of 2006 – the same summer Postmus was absent during the raging fires in his home county.

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