Thursday, May 31, 2012





Less than two weeks after this column exposed a situation where tens of millions of state tax dollars were given to billion-dollar corporations – but only with approval from other billion-dollar corporations – the California Energy Commission suddenly ended that practice.

In a message sent late May 25, the commission said it “is cancelling its grant solicitation for hydrogen fueling stations in order to revise solicitation protocols. The commission will issue a new solicitation at a future date.”

          The grants, funded by vehicle license fees under a 2007 law authored by former Democratic Assembly Speaker Fabian Nunez and signed by ex-Gov. Arnold Schwarzenegger, amounted to $16 million in 2010, with another $12 million winning tentative approval in April. The April grants have now been canceled.

The grants are designed to encourage construction of refueling stations for hydrogen fuel cell cars that are due to hit showrooms by 2017. These will be built by eight automaking companies including Nissan, Toyota, Honda, GM, Chrysler, Volkswagen, Daimler Benz and Hyundai.

The Energy Commission’s Schwarzenegger-era policy was to require that at least one automaker approve any refueling location before a grant application could even be considered.

All the $16 million in grants going to private companies in 2010 were awarded to two large corporations, the German-based Linde Group and Pennsylvania-based Air Products & Chemicals Inc. Both are members of the the semi-private California Fuel Cell Partnership, along with the eight carmakers and the Energy Commission. The partnership promotes fuel cell cars.

Suspicions of collusion in the grant approvals arose because Linde and Air Products executives interact at many meetings and because the carmakers approved only one refueling location not belonging to either of those companies.

Current Gov. Jerry Brown refused comment on the Energy Commission’s flawed grant policy, but its cancellation came only days after Brown became aware of problems with it. Commission Chairman Robert Weisenmiller also refused comment before his agency sent an official message to this column announcing the grant cancellations.

This makes it hard to trace the decision-making process of the Brown administration on the grants.

“It was a ridiculous boondoggle,” said Jamie Court, president of the Consumer Watchdog advocacy group. “The cancellation of the protocols and the latest grants under them is a start to rolling back the kind of back-door deals Schwarzenegger frequently made with big donors to his political causes. It’s a big victory for taxpayers.”

          The bizarre scene of the Energy Commission giving private companies the power to authorize giveaways of tax dollars was unprecedented in the memories of many experts. “I have never heard of such an arrangement anytime, anywhere,” said Court, who added that the cancelled arrangement essentially “opened the state treasury to big corporations.”

          The Energy Commission said it will not end its program of funding hydrogen refueling stations because “a robust hydrogen fuel station infrastructure is necessary to support automakers’ rollout of fuel cell vehicles to comply with the state Air Resources Board’s Zero Emission Vehicle program. Carmakers will meet that mandate with a combination of electric cars and fuel cell vehicles.”

Even under the promised new protocols, private companies and not the state will own stations built with taxpayer dollars.

Both the Energy Commission and Ed Heydorn, business development manager for Air Products’ hydrogen energy systems, deny any collusion ever occurred. But both outfits concede they attend Fuel Cell Partnership meetings and have other encounters with automaker executives regularly, conversing freely with them. Most of those meetings are not open to companies that cannot pay the Fuel Cell Partnership’s annual dues of at least $87,800.

      One major justification for continuing the grants at all is that hydrogen fuel cell cars will run on “green” energy. But much of the fuel Linde and Air Products will sell is to come from natural gas, not a renewable energy source. Because the state will require at least one-third of its power to come from renewable sources like wind or solar by 2020, Air Products executive Heydorn says one-third of gas to be sold in company stations funded by grants it received in 2010 will be biogas taken from landfills, which is classed as a renewable resource.

          Meanwhile, no state money went, for example, to 15 prime-location stations where the much smaller California-based HyGen Industries proposes pumps that would sell hydrogen made from on-site electrolysis of water, considered a purely renewable source.

          So the cancelled the Energy Commission policy thwarted both small companies and greener energy, while providing tens of millions to billion-dollar corporations at a time when the state is pinching pennies on almost everything else.

          Politically, the cancellation is as wise a move as Brown could make. For it’s hard to see how Brown’s November tax increase initiative could pass if voters saw grants continuing to big corporations approved by other, even bigger corporations during these tough times.

Email Thomas Elias at 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

Saturday, May 26, 2012




          From the moment Gov. Jerry Brown announced his latest budget revision proposal, complaints poured in both from his political enemies and some interests that have usually supported him.

          Republicans griped that Brown’s plan depends on a November tax increase initiative to prevent several billion dollars more in cuts atop the more than $8 billion he proposes. In-home care workers complained that cuts to their program would eventually cost the state far more than any immediate savings, as illnesses among invalid senior citizens would go undetected until they’ve become cataclysmic.

          The same sort of complaint came from advocates of the Healthy Families program established more than 10 years ago by then-Gov. Gray Davis to provide health care for indigent children. There was also grousing from public employee unions, whose members’ hours will likely be cut.

          And there was the usual complaint from the right that Brown didn’t depend solely on cutbacks to make up a projected $16 billion deficit, instead pushing for his tax-increase proposition. An attack on job creators, several bloggers called the whole plan.

          The grousing from special interests across the political spectrum missed the forest for concentrating on their particular trees: This budget proposal does nothing to improve some of the conditions that keep California’s unemployment rate well above the national average.

          There’s nothing in this budget plan to make the state’s public universities more affordable, for instance. Yes, the poorest students will still be able to get Cal Grants, but overall grants would be cut by $38.4 million, essentially leaving out all but the very poor.

          Meanwhile, the small (relative to its costs) funding increase of $90 million for the University of California that was planned in the January version of the budget is cut by $38 million. This can only increase pressure for tuition and fee increases at a time when both UC and the larger, but less elite, California State University system have already raised student costs to levels where many candidates for admission find it cheaper to attend private colleges. Within days of Brown releasing his revised budget plan, UC Regents began discussing another 6 percent tuition increase, which would be added to the 24 percent rise of the last two years.

          The financial pressure on UC has caused it to admit more out-of-state students than ever, in part because they pay higher tuition. That’s one big reason a recent study concluded about half the California high school graduates who would ordinarily be considered qualified for UC admission are not going there.

          How does this translate to continued recession? CEO Magazine and others report that an educated workforce is one major factor in business decisions about where to put new facilities and their jobs. With most out-of-state UC students returning to their home states or countries after graduation, California will be left with far fewer highly educated prospective workers than it should have.

          Further exacerbating this problem are the constantly-rising fees and ever-smaller availability of classes at community colleges. Similarly, there is nothing in the latest budget proposal that takes aim at the state’s sky-high dropout rate, expected to come in at somewhere between 26 percent and 32 percent in the annual report of the Department of Education, which was due out in mid-May but has been delayed a bit, as usual.

          Nothing makes for an uneducated workforce more than high dropout rates, and this is one affliction California has had for more than a decade, without doing much about it. Now those chickens are coming home to roost, as older workers retire and many of the young people who should be replacing them are simply unqualified.

          Not that other places are much better; dropout rates in Texas, for example, are similar to California’s.

          Things would only get worse if Brown’s tax increase initiative fails in the fall, as the last three tax-increase propositions all have done. If that happens, $5.5 billion will be lopped from state support for public schools and community colleges, $250 million each cut from UC and the Cal States, not to mention more than $20 million in lowered support for law enforcement and fire protection.

          Police and fire protection are also among the basic public services businesses check on when deciding where to locate. They’re in for some cuts, too.

          Brown may have needed to make reductions like these, as he says. But in at least some cases, they will render California less and less able to pull out of the current economic slump and more likely to fall into new ones.

          Given Californians’ penchant for cutting taxes and public services, a trend dating back to the 1970s, it may be appropriate to recall what both Thomas Jefferson and Alexis de Tocqueville observed early in the 19th Century: In a democracy, the people get precisely the government they deserve.

Email Thomas Elias at 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




          There was never much doubt California voters were unhappy for many years with some parts of their electoral system before they finally did something about it in 2008 and 2010.

          By the time the polls close at 8 p.m. today, we will have some idea about the efficacy of those efforts to improve how we choose elected leaders. No need to pay much attention to the Republican presidential primary staged simultaneously with the state’s own non-partisan vote, as the outcome of that race was determined weeks before any Californian cast a ballot.

          Every change taking effect in this election came via a popular initiative that responded to some kind of public dissatisfaction, as the vast majority of politicians and virtually every political party opposed all that was done.

          The first change, passed by a large margin in 2008, gave the once-a-decade task of drawing new boundary lines for the state’s 120 legislative districts to a Citizens Redistricting Commission chosen by the state auditor from a large group of applicants, all of whom tried to prove they had no axes to grind. Republicans are still contesting one of the commission’s products – the map of state Senate districts. Their complaint will be decided by another initiative this November, but any shift this might produce can’t take effect until two years from now.

          Change No. 2, in 2010, expanded the citizen’s commission brief to include redrawing the 53 congressional districts, thus taking reapportionment completely away from politicians who previously used it to ensure their own longevity in office.

          That combines with another 2010 initiative which ended official party primaries in California except in presidential voting. Instead of separate primaries in each party, there will be just one in each district. The two top vote-getters in every district will face off in the November runoff, with minor party candidates who usually get less primary votes than unsuccessful hopefuls of the two big parties no longer cluttering the runoff ballot.

          This may produce some titanic intra-party clashes in the fall. Polls indicate longtime San Fernando Valley Democratic congressmen Brad Sherman and Howard Berman will both outpoll any Republican in their district, their fates to be determined in the fall. The same for Democratic Congresswomen Janice Hahn and Laura Richardson, who figure to face off this fall after being tossed into a new district stretching from the Los Angeles Harbor area north to Compton.

          Even before those clashes, the combination of new districts and a new system caused several longtime congressional grandees to simply abandon hopes for reelection. That list includes Ventura County Republican Elton Gallegly, San Bernardino County Republican Jerry Lewis, San Dimas Republican David Dreier and San Joaquin Valley Democrat Dennis Cardoza. Others departing, possibly in part because of the electoral changes, include Republican Wally Herger, who has served 13 terms from a mostly-rural Northern California district, and Democrat Lynn Woolsey, a 10-termer from a partially suburban area north of San Francisco.

          There is no assurance all their replacements will be either Democrats or Republicans. The best example of a candidate with current allegiance to neither party is Ventura County Supervisor Linda Parks, a former Republican now registered as an independent, who has a strong chance to succeed Gallegly.

          Minor parties don’t like the fact they no longer have guaranteed slots on the runoff ballot, even though they never had much chance to win even when they did have those spots. Previously, they were guaranteed ballot spots and official standing if they got 2 percent of any general election vote or had 1 percent of all registered voters. They will still have that second way to maintain their status as official parties, so there’s no assurance any of them will disappear.

          One major purpose of all the changes, as advertised by ex-Gov. Arnold Schwarzenegger and other sponsors, is to help end gridlock and ideological bloc voting in Sacramento and Washington, D.C. by spurring election of more moderate candidates.

          This primary marks the first phase in testing that promise. For once we have a race or two or three featuring two persons from the same party, they’ll be forced to reach out to voters in other parties in order to win a majority in their districts. If Democrats are forced to seek Republican votes, and the other way around, the presumption is that more moderation will follow.

          But the best laid plans of mice and men, as the great California author John Steinbeck often noted, do not always pan out. Which means this primary is only Step 1 in assessing whether all the electoral changes will actually lead to the changes they promised, in Congress and the Legislature.

      Email Thomas Elias at 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