Schwarzenegger cabinet member resigns after accepting speaking fees

A member of Gov. Arnold Schwarzenegger's cabinet resigned Thursday after questions about income she received for giving speeches to private companies, including some that were doing business with her agency.

In a letter to the governor resigning her $175,000 a year position, Rosario Marin, head of the State and Consumer Services Agency, said she had "decided to pursue other opportunities."

The resignation came after The Times inquired about her outside income, which included thousands of dollars in fees for speeches to pharmaceutical companies within months of her agency's push last year to reduce oversight of prescription drugs.

State law bars officials from accepting speaking fees except in certain situations, such as when the income is related to the speaker's "bona fide" business, trade or profession.

Among the fees Marin took was $15,000 from Pfizer Inc. for a speech in 2007 at a time when the company was lobbying the Board of Pharmacy, a regulatory panel Marin oversaw. Bristol-Myers Squibb paid $13,500 for Marin's speaking services last year within weeks of lobbying her agency.

"I don't know how you could justify that," said Assemblyman Hector De La Torre (D-South Gate), chairman of a legislative committee on accountability and oversight. "The conflict is so clear, in my mind."

Aaron McLear, Schwarzenegger's spokesman, said Marin's actions were "incompatible" with her high-ranking position and that administration policy does not permit the governor's appointees to receive income for making speeches.

In her resignation letter, Marin, 50, who was formerly the mayor of Huntington Park, said she was "proud of the work we have done and the accomplishments we have achieved."

A replacement has not been named.

Before she resigned, Marin was already under investigation by the California Fair Political Practices Commission, the state's ethics watchdog, in connection with her income from speeches, according to the commission's executive director, Roman Porter.

After The Times asked questions about that income, Marin, who had not been informed by the commission that it was examining her activities, said Wednesday that she was requesting the ethics agency to conduct such a review.

Disclosures

Marin has reported in annual financial disclosures that she earned at least $50,000 for appearances between April 2004 and the end of 2007. She may have earned substantially more. The exact amount cannot be determined because the state requires only that officials disclose that they have earned $10,000 a year or more from each source of income.

She continued receiving money for speeches last year but is not required to disclose that income until next month. "I cannot tell you how much money I got, because that would be going beyond what I am legally required to disclose," she said in a recent interview.

Marin generally did not disclose in her filings the names of the clients who paid for her services, or whether they had dealings with state government. Instead, she listed the source of income as her speaking agent, the American Program Bureau in Massachusetts, which collected the money.

She disclosed the names of some of the companies that paid for her speeches in response to questions from The Times about her travel expenses. Marin was one of 10 officials featured in a Times story Sunday about frequent taxpayer-financed travel by members of the Schwarzenegger administration.

Most of her speeches were inspirational, Marin said -- encouraging her audiences to "achieve the unimaginable" -- a theme based on her own rise from poverty in Mexico to become the treasurer of the United States under President George W. Bush.

She said she had provided information on her activities to the governor's office and the state Senate since Schwarzenegger appointed her to a previous post, the California Integrated Waste Management board, nearly five years ago.

"I have always followed the spirit and the intent of the law," Marin said in a statement before she resigned.

Ban on fees

The ban on speaking fees was imposed nearly two decades ago, after an FBI investigation of corruption among lawmakers who took payments from companies interested in legislation. Officials can be fined up to $5,000 per violation.

Neither Marin nor the American Program Bureau would disclose how much of the speaking fees she retained and how much went to the bureau as commission.

Marin was mayor and a City Council member in Huntington Park, and served in various capacities in Gov. Pete Wilson's administration before becoming U.S. treasurer in 2001. She was appointed by Schwarzenegger to the waste board in 2004 after she lost a Republican primary election for U.S. Senate. The governor named her to her current post in early 2006.

In October 2007, Jafra Cosmetics, based in Westlake Village, flew Marin to Mexico and paid her to speak to saleswomen in her native country. She reported earning more than $10,000 from Jafra that year, but neither she nor the company would reveal the exact amount.

The Woodrow Wilson International Center for Scholars in Washington, D.C., paid Marin $1,000 for participating in a conference last summer. Marin contends that was not income, because the fee covered only her travel expenses.

On Oct. 12, 2007, Marin gave a speech to Pfizer employees in New York. A company spokesman, Chris Loder, said she talked about "the Hispanic experience in the United States" during the company's Latino Leadership Conference.

Pfizer's activities are regulated by the Board of Pharmacy, a division of Marin's agency.

In June of last year, Marin's deputy at the State and Consumer Services Agency, Greg Hurner, sent state lawmakers a proposal to exempt drug manufacturers from a program, which had not yet begun, to electronically track prescription drugs. The program, called e-Pedigree, was meant to protect consumers from counterfeit medicines, and locate those that have been recalled.

Pfizer, Bristol-Myers Squibb and other drug companies called the law too costly and lobbied the pharmacy board to delay it. Marin's aide told the board members to go along with his plan to eliminate the tracking requirement for drug makers, said Bill Powers, the former chairman.

"The board was put under a lot of pressure by the agency," Powers said.

The agency's effort failed, but lawmakers ultimately delayed the start of the program from 2011 until 2015.

On Oct. 16, 2008, less than three weeks after Schwarzenegger approved a bill that delayed the tracking program, Marin gave a speech to employees at Bristol-Myers Squibb's Plainsboro, N.J., campus. The company hired her "to share her inspiring story," Rebecca Goldsmith, a spokeswoman for the drug company, said in a statement. She said the event had no connection to state legislation.

Marin took action on another issue important to the pharmaceutical companies in her role as chairwoman of the Building Standards Commission. On Sept. 11, 2008, she took part in a unanimous vote to allow companies to build laboratories above the third floor of buildings, mirroring what public universities could do.

The change, proposed by the state fire marshal, was important to the companies -- including Pfizer, which wrote to Marin to support it -- because it would provide more options for laboratory sites and enhance recruitment of scientists.

"She was definitely a positive force," said Reinhard Hanselka, a former Palo Alto fire chief who helped write the new code.

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michael.rothfeld@latimes.com

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