CALIFORNIA POLITICS

The inside story of how power struggles doomed Jerry Brown's top priority

One of Gov. Jerry Brown's most ambitious environmental goals was hanging in the balance when two powerful California lawmakers met for dinner near the Capitol.

Pushing the governor's proposal to slash gasoline use on state roads was Senate leader Kevin de León, a Democrat from Los Angeles. Sitting across from him was Assemblyman Henry Perea, the Fresno leader of business-friendly Democrats fighting the plan.

If the two could make a deal, the controversial legislation might be saved despite fierce opposition from the oil industry. They hit on a potential compromise that would limit new state regulations, ending dinner with an agreement to keep working.

"I thought there was a real possibility," De León said.

But the next day, things fell apart, and the bid to cut gas consumption was stripped from the bill. At a time when Brown likes to say the eyes of the world are on California, the leaders conceded a major environmental fight a few months before they will attend the United Nations conference on climate change in Paris.

Brown and De León blamed the oil companies, describing their warnings about gas rationing and high pump prices as a "smoke screen." That was far from the only hurdle, however, according to lawmakers and staff members.

The measure's supporters were also unable to counter industry assertions that the bill would hand too much authority to state regulators — a message that resonated with a new generation of lawmakers eager to shift more Capitol power in their direction. Meanwhile, the governor carefully guarded his administration's wide authority to pursue aggressive climate-related goals without interference from the Legislature.

In the end, it wasn't doubts about the global dangers of climate change that scuttled the gasoline target, but questions of who would get to pull the strings in Sacramento.

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De León drew the idea for his legislation directly from Brown's January inaugural address, which kicked off the governor's historic fourth and final term.

Brown laid out three goals: doubling energy efficiency, generating half of California's electricity from renewable sources and cutting petroleum consumption in half, all within 15 years.

The senator included all three in his bill. But the Brown administration had mixed feelings about the move, according to participants in private conversations who declined to speak publicly.

In fact, administration officials believed they could push the state toward the gas-reduction goal without new legislation. The California Air Resources Board, a regulatory agency led by longtime Brown ally Mary Nichols, says it already has programs in place to do exactly that.

But De León, whose district suffers from poverty and pollution and who has sought to put his stamp on environmental policies, wanted the target in law. Whereas the governor is likely to discuss climate change in global terms, De León pitched the bill as a chance to improve public health and spark economic development with green jobs.

The measure, SB 350, sailed through the Senate in June. But it quickly met a hostile reception in the much larger Assembly, where many members elected under relatively new term limits were eager to assert themselves, emboldened by the longer service they are allowed. In addition, business interests hold more sway in the lower house, and oil companies spent significantly to help elect candidates last year.

Perea is a top beneficiary of oil largesse; he has received nearly $100,000 in campaign contributions from the oil and gas industry since his first Assembly campaign in 2010, according to the National Institute for Money in State Politics.

Others include Assemblyman Adam Gray (D-Merced), with $80,000, and Assemblyman Rudy Salas (D-Bakersfield), with more than $65,000.

Perea, who became De León's main foil, and his allies said they feared aggressive policies from regulators. Such stringency could harm low-income communities like Perea's with higher costs for fuel and electricity, they said.

To De León, that sounded like talking points from the oil companies. But the message stuck even with lawmakers who weren't industry backers, and Perea brushed off accusations that he was doing oil's bidding.

"Who gets to wear the white hat and who gets to wear the black hat … oversimplifies the issue," he said, "and allows you not to listen to the other side, who may actually have a point."

As lawmakers returned from summer recess in August, the oil companies' campaign was in full swing, with television ads, radio spots, social media graphics and fliers in the mail warning that rationing would leave families pushing their out-of-gas minivans down the road.

Environmental activists responded by going door to door in undecided lawmakers' neighborhoods. National Democratic figures backed the bill; President Obama mentioned it in a Las Vegas speech.

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But the rallying cry was falling flat. The debate was grating on lawmakers. Some Democrats, including Perea and Assemblyman Sebastian Ridley-Thomas of Los Angeles, began blocking activists on Twitter.

Administration officials ramped up their involvement as the deadline for bills neared, but it was clear that the atmosphere surrounding the issue had already become poisonous.

Some proposed concessions — making the gas target more flexible, for example — didn't appease opponents, who felt their concerns about oversight were not being adequately addressed.

With only three days to go until the Legislature adjourned, "we're still not happy," said Assemblyman Jose Medina (D-Riverside).

That night De León dined with Perea. Their idea was simple: If administration officials felt they could reach the gas target with existing policies, why not bar regulators from adopting additional rules?

But the next day, De León reconsidered. He and Brown feared the change would be a Trojan horse: Rather than simply bar new regulations, it would allow oil companies to re-litigate policies already in place.

For the governor, it was critical that regulators kept a free hand to pursue his climate-related goals. His meetings with oil representatives suggested they would settle for nothing less than a neutered air board.

"He was given a Hobson's choice. There was no good solution," said Timothy O'Connor, director of the California Climate Initiative at the Environmental Defense Fund. "In the end, he wanted to preserve his world-class agency."

Now the end of the legislative session was just two days away. Brown and De León needed to decide their next move. They huddled in the senator's office with Assembly Speaker Toni Atkins (D-San Diego) while reporters stood outside.

De León wanted a vote on the Assembly floor. He believed his bill could pass with a few tolerable concessions if environmental and labor groups could be rallied to tip undecided lawmakers to their side.

But after more than two hours, the trio agreed there was no path forward that included the gas goal. Dropping it was the only way to get a vote on the rest of the bill, which still included important mandates for renewable energy and energy efficiency.

They decided to cut their losses, but they stayed mum. Opponents of the bill began lining up votes for a floor fight, not knowing they had already won.

At a hastily arranged news conference, Brown, De León and Atkins told reporters the measure — which the Legislature ultimately passed on Friday night — would no longer be the "triple crown."

Asked if the defeat would weaken California's message at the Paris summit, Brown said, "We have to keep working here at home."

He thanked De León and Atkins for their work.

"This was a tough battle," he said gravely, "and they're going to have a few scars to show for it."

chris.megerian@latimes.com

melanie.mason@latimes.com

Twitter: @chrismegerian and @melmason

For more on California politics, go to www.latimes.com/politics.

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