Special Interests a Large Source of Brown’s Income

Assembly Speaker Willie Brown (D-San Francisco) received at least $124,000 in income and gifts last year from special interests that had business before the Legislature, according to official documents and interviews.

One company, the Santa Fe Southern Pacific Corp., paid $58,000 to Brown’s San Francisco law firm--in which he is the sole attorney and 100% owner--at the same time that the company reported lobbying the Legislature on 29 bills.

In addition to the legal fees, an examination of records filed with the secretary of state and the state Fair Political Practices Commission showed that the Speaker accepted $56,425 in lecture fees, free trips and other gifts from 33 companies or organizations that reported lobbying lawmakers on specific issues last year.

Brown insisted in an interview that he had no conflict of interest in accepting any of the payments or gifts from organizations that had business before the Legislature.

‘No Way to Ask Everybody’

“I did not know of any business my clients had before the Legislature,” Brown said. “When I do, I disqualify myself. There is no way to ask everybody.”

The Political Reform Act approved by the voters in 1974 prohibits public officials from participating in decisions that affect their own financial interests. A financial interest is defined as a payment or gift worth $250 or more or an investment of $1,000 or more. But no conflict of interest would exist if the governmental decision would affect the lawmaker in the same way it would affect the general public.

At the same time, the law specifically exempts legislators and other elected state officials from any punishment for violations, and it does not give any agency responsibility to investigate cases involving them.

Lawmakers can avoid a conflict of interest by disqualifying themselves from voting or taking part in decisions that affect their sources of income. Brown said he did not abstain from participating in decisions on any legislation last year.

As Speaker of the Assembly, Brown is the most powerful member of the Legislature. He can strongly influence whether a bill lives or dies, is shelved in committee or is substantially amended before it is passed. Brown’s vote on the Assembly floor represents only a fraction of his power and often is cast for him by the day’s presiding officer.

Brown and other public officials are required to report each year the precise amount of each speaking fee and gift they receive that is worth more than $50. But they are required to report only in general terms how much they receive in outside income and investments. For example, legislators merely must report whether their income from a given source ranges between $250 and $1,000, between $1,001 and $10,000, or is over $10,000. In the case of income from a law firm or other business, public officials are only required to provide a list of clients who paid them $10,000 or more a year.

Thus, it is impossible to tell exactly how much Brown received in outside income. The Speaker, in official reports and comments to reporters, said that in 1986 he and his law firm took in at least $270,000 in income and gifts. The latest report filed March 3 with the Fair Political Practices Commission does not say--nor is it required to--how much of this came from special interests that had dealings with the Legislature.

Brown reported officially that 11 clients each paid his law firm $10,000 or more. The Speaker later told reporters that his law firm grossed between $140,000 and $150,000.

Brown said he is the sole owner of his firm and has no partners. Several lawyers share his office and pay him rent, according to his disclosure statement. And at times, the Speaker said, he hires other lawyers to perform tasks for his clients.

In addition to income from his law firm, the Speaker officially reported that he received $90,250 in speaking fees and $40,378 in gifts.

The Speaker was quick to point out that accepting such payments and gifts is a widespread practice in the Legislature. “By no means should Mr. Brown be held up as the only one,” he said.

Unlike the many thousands of dollars lawmakers receive in campaign contributions, all of the speaking fees, other outside income and gifts they accept can go directly into their own pockets.

Brown has come under pressure to improve the Assembly’s image following the conviction last month of former Assemblyman Bruce Young (D-Norwalk) in the bribery scandal surrounding fireworks manufacturer W. Patrick Moriarty.

The Speaker recently told reporters: “I would hope that my standard of conduct would be something that others may wish to emulate, but I don’t wish to be put in the position of being the keeper of the morals of other members.”

While Brown has been receiving considerable outside income, he has also become a leading advocate of forbidding lawmakers from receiving any outside income. He said he will sponsor a bill that would ban outside income for legislators while raising their annual salaries from $37,105 to as much as $85,000 a year.

The bill would also eliminate the $75-a-day, tax-free living allowance that lawmakers receive while the Legislature is in session. And, importantly, the bill would also add teeth to the state’s conflict-of-interest law by subjecting legislators to the same enforcement and penalties that apply to local government officials.

‘Perception . . . of Conflict’

“I want to remove any perception, whether reasonable or unreasonable, of conflict among legislators. . . .,” he said. “The only way to avoid it is not to have any private income or not to be a legislator.”

Among the 11 law clients listed by Brown were at least two companies that also hired lobbyists last year to promote state legislation, according to documents they filed with the secretary of state.

One was Santa Fe Southern Pacific Co., which employed Brown’s firm as a consultant on a 200-acre development project in San Francisco, said Susan Salzer, a spokeswoman for the company.

Santa Fe Southern Pacific Corp. began officially reporting its payments to Brown’s law firm only last July following a change in state disclosure requirements. Its reports to the secretary of state showed that the company paid the Speaker’s firm $43,000 for the last nine months of 1986. Salzer said in an interview that the company also paid Brown’s firm $15,000 for the first three months of 1986, bringing the total to $58,000 for the year.

At the same time, Santa Fe Southern Pacific’s disclosure statement shows that the company and its subsidiaries lobbied lawmakers on 29 bills last year. The legislation dealt primarily with transportation and hazardous waste issues and included some of the most important toxic waste bills of the year.

A Santa Fe Southern Pacific subsidiary also owns at least eight acres of land near East Los Angeles that the Deukmejian Administration wants to acquire to build a prison. The railroad company opposes a bill that would allow the state to buy its property along with adjacent land known as the Crown Coach site.

Although Brown played a leading role in the prison issue last year, he told reporters last week he was “shocked” to learn recently that the company owned part of the controversial site. He said he will disqualify himself in the future from voting on a prison site bill if it includes the Eastside land.

Brown also said he was unaware of Santa Fe Southern Pacific’s interest in any of the 29 bills last year.

“I don’t even know of one piece of legislation that Santa Fe Southern Pacific is interested in,” he said. “No one has spoken to me about any of those bills as being something of interest to a client.”

And Salzer, the railroad company spokeswoman, said, “The issue with which the Speaker deals is a local issue that does not entail state legislation.”

Another company that employed Brown’s law firm, Tri-County Development Co. of Vacaville, reported in documents it filed with the secretary of state that it “explored” the possibility of introducing “waste-disposal legislation” last year.

Tri-County hired a lobbyist, John Knox, a former Assembly colleague of Brown. Knox said in an interview that the firm considered sponsoring a bill to help it develop a garbage dump in Solano County, but abandoned the idea. Knox insisted that he never approached Brown on the company’s behalf, and the Speaker also said he was not aware of his client’s interest in legislation.

Brown said he has worked for many years as an attorney for Tri-County, which is a company made up of the major San Francisco garbage haulers.

27 Worth More Than $250

Of the 33 gifts or lecture fees Brown received from groups with an interest in legislation, 27 were valued at more than $250, the threshold defined by the Political Reform Act in cases of potential conflict of interest.

Hospital owners, trial lawyers, insurance companies, banks, drug companies, apartment owners and a variety of other special-interest groups paid Brown fees ranging up to $5,000 for a single speech or provided him with travel, limousine service and gourmet meals. At the same time, Brown played a key role in deciding the fate of bills that affected their industries.

“There was no improper conduct. . .,” Brown said. “I don’t think that any of the honoraria or gifts have come to me from folks who have any interest before the Legislature (that legally would come under) the definitions of conflict of interest.”

Last Nov. 20, Brown, his two daughters, four of his aides and a group of Assembly members and their wives dined at the posh 21 Club in Manhattan as the guests of three New York banks--Chase Manhattan, Citicorp and Chemical. Altogether, the banks wined and dined a party of 21 people at a cost of more than $6,000. Brown reported that he received a $2,058 share of the dinner.

During the months before the banquet, Brown had helped the New York banks by backing legislation that will open California to outside banks over the next four years. All three of the Speakers’ dinner hosts had hired lobbyists to push for passage of the legislation.

On Dec. 1, 11 days after the New York dinner, Brown introduced a bill that would have allowed banks headquartered outside California to compete against First Interstate Bank in its bid to buy Bank of America. Brown subsequently dropped the bill when First Interstate abandoned its attempt to acquire the San Francisco-based financial institution.

“I don’t see anything in the world wrong with having dinner with people . . . who may be beneficiaries generally of legislation,” Brown said. “It is impossible for public officials anywhere not to be associated, in one manner or another, with individuals who are generally beneficiaries of legislation.”

Pfizer Pharmaceuticals’ Gifts

On the same trip to New York, Pfizer Pharmaceuticals paid $2,029.25 for limousine service for Brown, gave him $107 worth of theater tickets and paid $298.98 for dinner for the Speaker and a guest.

According to a lobbying disclosure statement filed by the drug company, Pfizer lobbied state lawmakers on drug regulation and budget issues. Pfizer, a supplier of drugs through Medi-Cal, has a stake in the state budget and the list of drugs approved for Medi-Cal. Both can be affected by the Legislature.

Last March, the Assn. of California Insurance Cos. flew Brown to London and paid for his hotel, meals transportation and theater tickets. In all, Brown reported that the association spent $4,795.82 on him. The insurance group also reported that it was interested in more than 150 pieces of legislation last year.

The California Public Securities Assn., which reported lobbying legislators on seven bills affecting state bonds and investments, paid Brown $5,000 for a single speech.

Similarly, National Medical Enterprises Inc., which reported that it had an interest in 44 health-care bills last year, paid Brown $5,000 for one speech.

Brown reported that he received another $5,000 from the Apartment Assn. The association, which reported an interest in rent control and other landlord-tenant issues, did not report the payment.

The California Applicant Attorneys Assn., which said it lobbied legislators on two bills to change the workers’ compensation system, gave Brown $5,000 for two speeches. The California Trial Lawyers Assn., which reported it had an interest in more than 240 specific bills last year, paid Brown $3,500 for three speeches.

PAYMENTS TO SPEAKER WILLIE BROWN Speaker Willie Brown has reported accepting more than $270,000 last year in legal fees, gifts and honorariums. Records show some of this money came from entities that had dealings with the state. Here is a partial listing: DONOR: Santa Fe Southern Pacific Corp. CONTRIBUTION: Paid Brown $58,000 in legal fees. WHAT WAS REPORTED: Reported lobbying legislators on 29 bills on transportation and toxic waste issues. The company also opposed state plans to build a prison near East Los Angeles on land it owns. DONOR: The Assn. of California Insurance Cos. CONTRIBUTION: Gave Brown a $4,795.82 trip to London, including air fare, hotel, meals, theater tickets and ground transportation. WHAT WAS REPORTED: Reported lobbying legislators on more than 150 bills affecting the insurance industry. DONOR: Apartment Assn. CONTRIBUTION: Paid Brown $5,000 for a speech in November. (This was reported by Brown but not by the Apartment Assn.) WHAT WAS REPORTED: Reported lobbying legislators on rent control and other landlord-tenant issues. DONOR: Pfizer Pharmaceuticals CONTRIBUTION: Paid $2,435.23 for Brown’s limousine service, dinner and theater tickets in New York. WHAT WAS REPORTED: Reported lobbying state officials on drug regulation and budget issues. DONOR: Tri-County Development CONTRIBUTION: Hired Brown as attorney. Paid him at least $10,000 in fees. WHAT WAS REPORTED: Explored the possibility of introducing legislation to locate a landfill in Solano County. DONOR: California Trial Lawyers Assn. CONTRIBUTION: Paid Brown $3,500 for three speeches. WHAT WAS REPORTED: Reported lobbying legislators on more than 240 bills affecting the legal profession. DONOR: California Applicant Attorneys Assn. CONTRIBUTION: Paid Brown $5,000 for two speeches. WHAT WAS REPORTED: Reported lobbying legislators on two bills to change the workers’ compensation system. DONOR: National Medical Enterprises Inc. CONTRIBUTION: Paid Brown $5,000 for one speech. WHAT WAS REPORTED: Reported lobbying legislators on 44 bills affecting health care in 1986. DONOR: California Public Securities Assn. CONTRIBUTION: Paid Brown $5,000 for one speech. WHAT WAS REPORTED: Reported lobbying legislators on seven bills affecting state bonds and investments. DONOR: Chase Manhattan, Citicorp and Chemical banks CONTRIBUTION: Paid $2,058 for dinner for Brown, his daughters and aides in New York. WHAT WAS REPORTED: Reported lobbying legislators on interstate banking legislation. DONOR: Southern California Edison CONTRIBUTION: Paid Brown $3,000 for one speech. WHAT WAS REPORTED: Reported lobbying legislators on more than 240 bills that could affect the utility company. DONOR: California Assn. of Tobacco & Candy Distributors CONTRIBUTION: Paid Brown $3,500 for one speech. WHAT WAS REPORTED: Reported an interest in 10 bills affecting tobacco products and sales taxes. DONOR: California Assn. of Public Hospitals CONTRIBUTION: Paid Brown $2,750 for one speech. (This was reported by Brown but not by the Hospital Assn.) WHAT WAS REPORTED: Reported lobbying legislators on 29 bills affecting hospitals.