Wednesday, March 25, 2015

BEST BUDGET IDEA? LETTING SICK, ELDERLY CONVICTS GO

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, APRIL 10, 2015, OR THEREAFTER

BY THOMAS D. ELIAS
    “BEST BUDGET IDEA? LETTING SICK, ELDERLY CONVICTS GO”


          Sometimes it can take more than a decade for a completely sensible idea to catch on. So it is with what may be the single best money-saving idea in last year’s state budget, one that is just now beginning fully to take hold.


          The idea, part of a plan by Gov. Jerry Brown to appease a panel of federal judges demanding ever more releases of state prison inmates, calls for the possible parole of several hundred convicts who are chronically sick or mentally impaired, plus a new parole program that could affect thousands of the elderly, defined as over 60.


          It’s an idea first proposed to this column in 2002 by reader Ray Procunier, then a Grass Valley resident. Procunier, who died two years ago at age 86, was director of corrections in California under Gov. Ronald Reagan and during part of Brown’s first term in the 1970s. He also headed prison systems in Texas and Utah.


          “When Reagan was governor, we cut the prison population by one-third and there was no increase in crime, not even a blip,” he wrote 11 years ago, in response to a column. “I guarantee I could cut down today’s prison population by 100,000 or more and not hurt a soul in the process.”


          Among his chief suggestions was the wholesale parole of prisoners over age 55, regardless of the Three-Strikes-and-You’re-Out law or their specific sentences. He would have kept murderers, rapists and other serious sex offenders behind bars unless they had major chronic illnesses. These tactics alone, Procunier said, would cut prison costs by more than $4 billion – equivalent to at least $5 billion in today’s dollars.


          Brown made something very similar a central point of his plan to comply with the federal court’s ruling on prison-overcrowding. The big question: What took so long for this idea to percolate to the top?


    The most likely answer is inertia, along with a fear component, as no politician ever wants to appear soft on crime. This proclivity helped produce Three-Strikes and to increase the state’s prison populace from about 25,000 in 1980 to 170,000-plus in 2008. It’s taken the court order to cut that down a bit.


          So far, as Procunier predicted, the early paroles have caused no significant statewide crime increase. As of mid-March, California had set loose 74 elderly convicts, with thousands more waiting their turn. Releasing the chronically ill will likely have a similar negligible impact on crime, although just 76 such paroles had so far been approved.


          This is true because national crime statistics show most violent crimes are committed by persons in their teens, 20s and 30s, and very few by persons aged 55 or above. At the same time, the cost of maintaining hospitalized inmates ranges between $68,000 and $125,000 per year apiece, depending on where they are treated. That’s significantly more than the average $47,000 annual cost for maintaining the typical healthy convict.


          So far, 15 other states acting on this kind of information have begun expediting releases of elderly prisoners, who can use pensions, savings, Social Security, welfare or the resources of relatives to cover their expenses outside custody. Most ill inmates released early can be covered almost immediately by Medi-Cal under Obamacare, while the state gains not only prison space, but also can stop posting two guards in each of their hospital rooms around the clock, as required for prisoners hospitalized outside the prison system.


          All this explains why the current Brown plan makes sense, both as a means of helping comply with the court order and saving many millions, perhaps billions, of prison dollars. Too bad Brown and other governors didn’t have the good sense to do this many years ago, after Procunier first suggested it.


    -30-

    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

HOW CALIFORNIA WON BY LOSING TESLA BATTERY PLANT

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, APRIL 7, 2015, OR THEREAFTER

BY THOMAS D. ELIAS
    “HOW CALIFORNIA WON BY LOSING TESLA BATTERY PLANT”


    It was supposed to be a $5 billion project, creating 6,500 jobs. That was the hype when Tesla Motors last summer orchestrated a five-state battle to host a huge “gigafactory” where it plans to build batteries for its next generation of electric cars.


          Anyone who’s driven one knows the Tesla Model S seems to take off like a bullet from a standing start, pushing driver and passengers back into their seats with strong G-forces.


          But the only bullet involved with the luxury electric car company’s battery plant – to be built in association with Japan’s Panasonic Corp. – is the one California dodged by losing the plant to a location near Reno, Nev.


          For construction of this plant is not exactly moving like a speeding bullet. Rather, it’s plodding along, at best.


          Meanwhile, Nevada has already okayed spending at least $70 million on roads to service the plant, not to mention an unknown amount in property taxes lost to the exemption given the plant as one incentive to build there. Iron workers had erected $15 million worth of steel framing on the site by early winter. Then came an apparent slowdown.


          An early March Reno newspaper report quoted a post on the national union job board of the International Brotherhood of Electrical Workers saying “Project Tiger” – the Tesla plant’s code name – “has been cut back by 80 percent at this time. This is all subject to change.” In short, Tesla is hiring far fewer electricians than previously planned.


          This could be because of reported problems finding and/or keeping competent project managers on the job -- or not.


          The development came almost simultaneously with the company downsizing its China production facility, cutting 180 of 600 employees there, or 30 percent of its workforce.


          Was there a link? Possibly not, but Tesla wasn’t saying, insisting both that the Nevada plant is right on schedule and that there’s nothing to worry about in China. But if Tesla’s sales of its high-end Model S – which can cost about $120,000 – have slowed, might that affect the pace for rolling out its promised mid-price, mid-size car, due to get its batteries from the Nevada plant?


          Company kingpin Elon Musk isn’t saying. The firm sold only 120 cars in China in January, behind its projected pace and one reason Tesla stock has traded lately at more than $40 below its 2014 peak. Musk maintains this was because many urban Chinese don’t have access to garages, where American Tesla owners most frequently recharge their cars.


          He insists this is a very temporary glitch, because Tesla is fast building a large chain of recharging stations across much of China, with nearly 700 slots now open in 70 cities.


          This all appears to mean great uncertainty for Tesla, and for the state of Nevada, which eventually will pony up $1.3 billion under promises made when it landed the battery plant. No one knows the pace with which the plant will be built. No one knows if it will produce the thousands of expected jobs, for which Nevada will pay well over $100,000 each if all 6,500 materialize – more for each if the plant hires fewer workers.


          Nevada has never paid anything like that to casinos or other big employers. Nor has California ever paid so much in corporate welfare. Plus Tesla will pay no local property taxes for years to come and no one knows who will build schools and hire teachers for children of the putative new workers.


          That’s what California “lost” when it didn’t get the opportunity to subsidize Tesla’s battery plant, which could have been sited near Stockton. Just now, it looks like this state dodged a significant bullet.


          A larger question, of course, is whether any government should make corporate handouts on so grand a scale. Whenever American companies encounter similar government subsidies to their foreign rivals, they gripe about unfair competition.


          And yet…Toyota, Nissan, Volkswagen and Mercedes Benz all have gotten similar packages from states like Texas, Tennessee, Alabama and Mississippi.


          The ultimate outcome of the Tesla deal is not yet known, but right now it looks like California will be far better off by losing the battery plant than if it had “won” the competition.

           

    -30-
    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, go to www.californiafocus.net

Tuesday, March 17, 2015

INTIMIDATION FACTOR COULD CAUSE A HARRIS CORONATION

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, APRIL 3, 2015, OR THEREAFTER


BY THOMAS D. ELIAS
    “INTIMIDATION FACTOR COULD CAUSE A HARRIS CORONATION”


          It’s now a certainty that Kamala Harris will have an opponent on the November 2016 ballot. But much less certain is whether that opponent will be any more threatening that Elizabeth Emken, an autism activist who placed second in California’s 2012 Senate primary election, was to incumbent Dianne Feinstein.


          For one by one, potentially formidable opponents to the election of Harris, now the state attorney general and previously district attorney of San Francisco, have fallen by the wayside since early January.


          Billionaire environmental activist Tom Steyer took himself out early. So did state Treasurer John Chiang, followed by former Los Angeles Mayor Antonio Villaraigosa and current Lt. Gov. Gavin Newsom, the former San Francisco mayor who opted instead to run for governor in 2018. Then former Secretary of State Condoleezza Rice took herself out, possibly because she would have had to face questions about her role in deceptions that led to the war in Iraq. Fresno Mayor Ashley Swearengin also nixed a run.


          Any one of those four fellow Democrats and two Republicans could have posed a threat for Harris’ bid to replace the retiring Sen. Barbara Boxer. Harris doesn’t look particularly intimidating, but she got to work very quickly on the Senate race, declaring for the job almost immediately after Boxer announced her impending retirement.


    Before anyone else had done much of anything, she staged high-profile fund-raisers in Bel Air, Long Beach, San Francisco and Washington D.C. At the same time, she quickly got endorsements from dozens of prominent Democrats. Harris, who handily won reelection as attorney general last fall before starting this run, also was helped when her investigators raided the home of the disgraced Michael Peevey, former head of the state Public Utilities Commission.


          Investigating Peevey, who drew praise from Gov. Jerry Brown and other major Democrats even as his alleged corruption became more and more evident, has made Harris seem politically independent and a tough backer of consumer interests.


          Put all this together and she’s a pretty intimidating candidate.


          Yes, there’s still the possibility of someone else substantial getting in against Harris, whose name was recognized by only 40 percent of likely voters in one late-winter poll. But so far, the only declared opponent is Republican Assemblyman Rocky Chavez of San Diego County.


          Several Democratic congressional veterans, realizing that gerrymandering in other states has made it very difficult for their party to regain control of the House of Representatives, also might risk making this run.


          While Harris’ early entrance, bully pulpit as attorney general and her early endorsements strengthen her, she lacks the huge war chest used so often by senatorial candidates like Feinstein, Alan Cranston and Pete Wilson to scare off significant opposition. Newsom, who quickly raised $800,000 this winter to run for governor atop the $3 million left in his campaign kitty after last year’s run for reelection, will plainly try to employ financial intimidation against all but billionaires when his campaign gets serious two years from now.


          But Harris didn’t have that kind of money before she began raising new funds and has not made a formal financial report. She had just $1.3 million in her campaign account when her reelection run ended last fall, and it’s unclear how much of that is transferable to a federal campaign.


    By contrast, Burbank Democratic Rep. Adam Schiff had $2.1 million in his war chest at last report, and all of it could be used for a Senate run if he opts for that over reelection. Schiff has also said he thinks it’s time a credible Southern California candidate challenged the state’s San Francisco-based Democratic power elite, including Sen. Dianne Feinstein, Newsom, Harris, party chairman John Burton and Gov. Jerry Brown, with his base across the Bay in nearby Oakland.


    Villaraigosa, with strong appeal among Latino voters,  had appeared poised to be that kind of candidate before pulling out. Another Latino might yet emerge as a Harris challenger, with Orange County Congresswoman Loretta Sanchez and Xavier Becerra of East Los Angeles, part of the House Democratic leadership, still possibilities.


          But right now Harris dominates this race, in part because she got in early and acted fast. Unless someone else acts soon, it figures to be more coronation than contest.

         
    -30-

    Elias is author of the current book "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It," now available in an updated second edition. His email address is tdelias@aol.com

WILL LAWYER HIRING LEAD TO LOWER UTILITY RATES?

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MARCH 31, 2015, OR THEREAFTER


BY THOMAS D. ELIAS
    “WILL LAWYER HIRING LEAD TO LOWER UTILITY RATES?”


          It’s now possible that mid-February will be remembered in years to come as a fateful time in the century-long history of the California Public Utilities Commission. That’s when, without offering any legal justification, the five commissioners spent public money to hire a criminal lawyer.


    If courts find this move was as blatantly illegal as it looks to some, they may soon cease treating this powerful but disgraced body that sets power and natural prices for most Californians with the extreme deference they traditionally have evinced.


    Should judges reverse this possibly illegal PUC decision, how long before they begin looking askance at some of the commission’s other dicey rulings favoring giant utility companies over their customers.


          Right now, state and federal authorities are investigating the commission and its immediate past president Michael Peevey. Among tens of thousands of released emails are some showing inappropriate, potentially illegal, contacts between Peevey, at least one present commissioner, and high officials of regulated companies like Pacific Gas & Electric Co. and Southern California Edison Co.


          This was predictable from the moment Peevey joined the commission more than 12 years ago, first appointed by then-Gov. Gray Davis and later reappointed by ex-Gov. Arnold Schwarzenegger. No one could reasonably expect Peevey, a former Edison president, to deal objectively with his friends and former colleagues. It was a classic case, first noted here in 2004, of putting the fox in charge of the henhouse.


    The lawyer-hiring decision shows that despite pious declarations from Peevey successor Michael Picker about how “decisions should be based on the record developed in public,” things may not have changed much since Peevey departed as 2014 ended.


          With criminal investigations in full swing, commissioners signed a $49,000 contract with the Los Angeles law firm Sheppard Mullin, defense attorney Raymond C. Marshall of the firm’s San Francisco office in the lead role. Marshall is charging a “discounted” rate of $882 per hour. The $49,000 won’t go far at that rate.


    The commission has also used Walnut Creek lawyer Katherine Alberts to stonewall requests for records of PUC communications about a 2014 settlement forcing customers to pay $3.3 billion of the $4.7 billion cost for retiring the San Onofre Nuclear Power Station, owned by Edison and the San Diego Gas & Electric Co.


          But California Government Code section 995.8 says that a “public entity is not required to provide for the defense of a criminal action…” It adds that before hiring defense lawyers, an agency like the PUC must formally determine such a defense “would be in the best interests of the public entity and that (employees involved) acted...in good faith…and in the apparent interests of the public entity.”


          The PUC made no such determination and held no public hearings on hiring attorneys. Nor has it said who its criminal lawyers will defend.


          This spurred a lawsuit from former San Diego City Attorney Mike Aguirre and his partner Maria Severson. They want the commission to reveal who its new lawyer will defend and hold hearings on whether that’s in the public interest.


          Aguirre said other commission decisions may have been made improperly, even criminally, including the San Onofre settlement. Another he cited was a ruling last November assessing a measly $1 million fine against multi-billion-dollar PG&E, also cutting its natural gas rates by $400 million a year as penalties for its conduct around the aftermath of the 2010 San Bruno gas pipeline explosion that killed eight persons. Even new commission president Picker, who voted for those penalties, now says the company should pay much more.


    Aguirre also questioned a $14 million settlement with SDG&E after a 2007 fire ignited by power lines downed because of poor maintenance. That blaze destroyed 1,500 homes in northern San Diego County.


          The courts' traditional deference to the utilities commission has never before encountered criminality in commission conduct of its business. Meanwhile, the commission refuses to answer questions about its legal authority for hiring outside criminal lawyers.


          All of which means utility regulation in California has moved into a state of high flux. Who knows? It might soon be open season on those other questionable decisions and more and that could lead to rolling back some of California’s sky-high utility rates, which are at just as onerous and compulsory as high taxes.

                   
     -30-

     Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

Tuesday, March 10, 2015

A CALIFORNIA COMEBACK FOR GERRYMANDERING?

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MARCH 27, 2015, 2014, OR THEREAFTER


BY THOMAS D. ELIAS
   “A CALIFORNIA COMEBACK FOR GERRYMANDERING?”


          Way back in 1811, almost 40 years before California became a state, then Massachusetts Gov. Elbridge Gerry okayed a congressional redistricting plan guaranteed to let his Democratic-Republican Party control his state’s congressional delegation.


          The plan – motivated by Gerry’s loss of a seat in Congress after opponents set up a district he could not possibly win – contained a district shaped like a lot like a salamander. This led to use of the term “gerrymander” to describe the process by which legislatures draw districts to ensure outcomes they like.


          Fast forward 197 years to when California voters short-circuited that process by approving the 2008 Proposition 11, which set up an independent citizens’ commission to draw state legislative district lines starting in 2011. Two years later, passage of Proposition 20 added congressional districts to the commission’s task.


          Now, after two election cycles featuring many more close and competitive races than California had seen in decades, the citizens commission’s work may be thrown out by the U.S. Supreme Court via a case brought by leaders of the Arizona Legislature.


          Ironically, the plaintiff Arizona politicians are Republicans fearing a weakening in their control of that desert state. But if the Republican-dominated high court rules for them, it will be at the same time be increasing Democratic hegemony in California, where almost 80 percent of Congress members already are Democrats.


          But that would not be inconsistent for this Supreme Court, which has shown for almost 20 years that it cares little about increasing voter turnout or letting voters make their own choices.


          The current justices have gutted the Voting Rights Act. Most were on the court that in 2000 threw out California’s former “blanket primary” system, adopted by voters in 1996. Under that system, challenged by both major political parties, anyone could vote for any candidate on the primary ballot, regardless of party registration. The leading vote-getter in each party then made the November runoff election. Most current justices also were on the court that – also in 2000 – called a halt to recounting votes in Florida, thus assuring the presidency for Republican George W. Bush, who tallied about half a million fewer votes than Democrat Al Gore. In all those cases, so much for what the majority of voters wanted or for helping more Americans exercise their right to vote.


          So it was hardly surprising that several justices appeared in a court hearing this month to favor the arguments of the Arizona Legislature’s Republicans, who argued that the Constitution gives the right to redraw congressional districts each decade exclusively to legislators.


          They noted that the Constitution says “the times, places and manner of holding elections for Senators and Representatives shall be prescribed in each state by the Legislature thereof.” Of course, choice of U.S. senators was taken out of legislative hands in 1913 by the 17th Amendment, but even before then, many states were electing senators by popular vote regardless of the fact that Article 1 of the Constitution still said senators from each state were to be “chosen by the Legislature thereof…”


          So there’s plenty of precedent for deviating from strict constitutional construction, even without an amendment.


          But, as cynics might say, tell that to the justices.


          Justice Antonin Scalia, leader of the court’s usually controlling conservatives, claimed in the early March hearing on the Arizona appeal that when the Constitution says “Legislature,” it means only elected lawmakers and not the mass of voters who often pass state law via ballot propositions. Never mind that initiatives didn’t exist in 1787.


          Letting a commission draw districts, Scalia said, “is giving this power to an unelected body…”


          Californians deliberately did just that. And the work of the first citizens’ commission, vetted by the state’s non-partisan auditor, has gotten generally good marks.


          Chances are if the court – due to rule on this case before July 1 – rules for the Arizona legislators, the decision would quickly be applied to California via lawsuits in lower federal courts. That makes it possible new congressional districts could be in place by the 2016 primary, drawn by Democratic legislators to favor election of even more Democrats to Congress. Voters would be lucky if lines look no more convoluted than salamanders.


          But there’s one large comfort here: Any such ruling would apply only to congressional districts and not state legislative lines. So the citizens commission will be back in 2021 no matter what, even if its work is not as broad as it was four years ago.


          -30-

    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

CONFUSION SETS IN OVER GROUND WATER LAW

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MARCH 24, 2015, OR THEREAFTER


BY THOMAS D. ELIAS
    “CONFUSION SETS IN OVER GROUND WATER LAW”


          It’s beginning to look like the hosannas that greeted California’s first-ever groundwater regulation law were a tad premature when it passed late last summer.


          For after a tantalizing winter of heavy rains but insufficient snowfall to dent the state’s four-year drought, confusion over the groundwater rules has begun to set in.


          One thing for sure: The rain and snow of the just-concluding winter have not been nearly enough to begin recharging California’s more than 100 significant aquifers. These have been pumped without regulation for many decades, to the point where land subsidence has become highly visible in the San Joaquin Valley and some other areas.


          The new law’s rules sounded just fine – until someone happened to look at the time limits. The rules are set up to force water agencies to design local regulations preventing further overdrafts, an overdraft defined as pumping more water from underground than percolates down to replace it. The state will review all such plans and take over regulation if locals don’t enforce their new restrictions.


          Sounds great, and it might improve matters 25 years from now if there’s anything left in those aquifers. There had better be: California gets almost 40 percent of its current water supply from underground, and a California with little groundwater would have to cuts its population considerably.


          But there are no guarantees, partly because local water authorities have until the end of next year merely to decide who controls ground water in each area – this could be county supervisors or irrigation district officers or just about anyone. Whoever gets jurisdiction will have five to seven more years to design plans creating sustainability – a balance between pumping and replenishment. After that, they’ll have 20 years to put the plans into action.


          So it might be about 30 years before the rules have any detectable effect, and at current pumping rates, there would be little or no groundwater left by then. Which means this law has never had teeth. Nor, after lobbyists for ground water users got through with the Legislature, was it intended to.


          It’s all been happy talk all along.


          But even that is now dissipating. While the choice of agency to control ground water has been easy and obvious in some areas like the Coachella Valley of Riverside County, which sits atop a gigantic underground lake, disputes are rising elsewhere.


          Canal districts want control in some areas, but so do nearby irrigation districts. In some places, county supervisors want control, even though aquifers never conform to political boundaries or property lines. In some cases, more than one water agency’s boundaries cover parts of a single aquifer. In others, water agency lines cover more than one source of underground water.


          So power struggles are now in nascent phases, with some officials nonplussed. “I expect we’ll coordinate to share basins with other districts,” says one water manager. “But we’re unsure how to do that.” And the new law doesn’t spell out patterns to follow, another of its multiple flaws.


          None of this, of course, prevented farm area lawmakers from opposing the weak new law while it was under consideration. Their shortsighted obstructionism has made that law practically unworkable even before it’s supposed to get started.


          So this law is both ludicrous and worthy of satire, except that the continuing depletion of aquifers is no laughing matter.


          Which means it’s time for the Legislature to get back to work, if lawmakers are capable of that.


          The timetable needs to be cut from 30 years down to no more than five. There must be a mechanism to create new groundwater agencies if existing districts can’t resolve disputes.


          And there needs to be far more reliable information on the exact amount of water in each basin. Failure to do any of these things will surely produce a far more severe disaster than the current drought – unless Mother Nature intervenes with several years of much heavier rain and snow than California has seen in decades.

   

    -30-       
    Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It,” now available in an updated third edition. His email address is tdelias@aol.com 

Wednesday, March 4, 2015

BLEEDING STOPS ON ONE SCHWARZENEGGER BLUNDER

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MARCH 20, 2015, 2014 OR THEREAFTER


BY THOMAS D. ELIAS
    “BLEEDING STOPS ON ONE SCHWARZENEGGER BLUNDER”


          California has bled many millions of dollars because of the myriad blunders by former Gov. Arnold Schwarzenegger, who probably should have remained a muscleman actor and never ventured into politics.


          Spending has barely begun on the high speed rail project he enthusiastically backed without worrying about troublesome details like its precise route or whether it can ever attain the ultra-high speeds he promised. Many dozens more millions of dollars have been doled out – with lots more to come – to build refueling stations for hydrogen fuel cell vehicles long before anyone knows whether consumers will buy them.


          The $15 billion deficit-payment bond issue Schwarzenegger pushed on California voters ended up costing the state almost twice that, when interest was counted.


          But at least the disastrous real estate deal the fading movie star pushed is at last dead. True, it has now cost the state more than $24 million without producing even one job or one dime, but at least it is gone.


          This deal began as a high-stakes auction in 2009, when Schwarzenegger cast about desperately for solutions to the state’s seemingly perpetual budget shortfalls. As he looked for revenue sources, Schwarzenegger pounced on 11of the state’s trademark buildings, including the Public Utilities Commission building in San Francisco, the Justice Department in Sacramento, the Supreme Court building in San Francisco and the pink granite Ronald Reagan State Building in Los Angeles.


          The top bid deemed credible in Arnold’s auction amounted to $2.3 billion (just $600 million in immediate cash) for the emblematic structures. The rest of the money was to come in the form of savings on things like janitorial services and power and gas bills.


     Schwarzenegger-appointed spokesmen for the state Department of General Services pronounced the deal “fantastic,” to use one of the ex-governor’s favorite hollow expressions, saying it would help get the state out of its financial hole without costing much. But other state economists at the same time estimated the deal would cost taxpayers $2.8 billion over 30 years as the state rented back its own buildings.


          It was never clear how $600 million could do much against a cash shortage variously estimated between $27 billion and $45 billion. So, like his 2004 bond issue that bought nothing, this was another of the many short-cuts Schwarzenegger tried to use to solve problems without making sacrifices.


          Realizing that incoming Gov. Jerry Brown had pegged the real estate deal as a disaster during his 2010 campaign, Schwarzenegger tried to sign documents cementing it during his term’s final hours. But he missed a line or two, allowing Brown to cancel the deal within his first few weeks in office.


          This rankled the private real estate firms that had combined on the winning bid and expected to milk big profits from the state. The firms, through a partnership called California First, headed by the Irvine-based ACRE LLC and Hines Inc. of Houston, TX, sued to keep the sale alive, and it festered on for four years.


          A court date arrived at last in December, but the judge wanted no part of any testimony. Instead, he ordered the sides into negotiations, producing a $24 million settlement last month.


          So the state escaped from this one with a loss of less than 1 percent of what was projected if the deal had gone through, plus legal fees. Meanwhile, it continues to operate the buildings, which remain prominent symbols of state government.


          At the same time, Brown’s tactics over the last four years, including the Proposition 30 tax increases he pushed successfully, have eliminated the annual budget shortage despite constant pressure from the Legislature for more spending. There’s also been some help from the recovering economy.


          One lesson here is age-old: It’s generally far better to make some momentary sacrifices than to sell off a birthright, and it’s especially bad to sell off anything important just when the market for it is bottoming out.


    No one has explained how even the shallow-minded Schwarzenegger could miss this salient point.


    The pity is that even as this Arnold-era blunder ends at last, others keep right on losing money.

                   

-30-
    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net