We told you yesterday that the California Legislature quietly tried to block an 18 percent cut to its pay and perks (even as the state budget was hemorrhaging) by raising questions about the legality of such cuts. Legislators appealed to the Attorney Generalfor an opinion on whether the citizens commission that ordered the cuts had the authority to do so - and the AG said yes, yes, most certainly yes!

Those cuts were originally to take effect in December 2010, at the start of a brand new term. But the AG said, essentially, “Why wait?” The cuts can legally take effect midstream in an elected’s term, in his opinion, and so they will - beginning next month. That will save the state some $2.8 million. (A very small drop in the $21 billion bucket, but every little bit helps. See chart of officials’ salaries below.)

“In hindsight, it might have been better to let sleeping dogs lie,” said Chuck Murray, chairman of the  California Citizens Compensation Commission, which ordered the cuts, to the San Francisco Chronicle. 

Of course, this doesn’t mean the game is over. The Legislators could take the issue to court. But it might look mighty bad for them to be whining about their own suffering, while nearly 200,000 state employees are forced to take three furlough days a month to save money.

It’s probably important to put all this in political context. The AG who drafted said salary-slicing opinion is Jerry Brown, a leading Democratic candidate for governor. Brown’s own salary will be sliced thanks to his own opinion - from $184,301 to $151,127 - but it might also propel him on a populist wave to the Big Job now held by one Arnold Schwarzenegger. The gov’s salary has gone from $212,179 to $173,987.

 Salaries of elected officials

Source: California Citizens Compensation Commission

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Post from: OC Watchdog

These three are interesting exceptions to the emerging rules. In general, the most well-paid retirees have been public safety types - police and fire chiefs - and they have been men.

But two of today’s agencies are water districts - so no expensive benefits for public safety employees; and the other is a city that contracts with the Sheriff’s Department for police services, thus keeping high public safety pension expenses off its own books.

And two of the three most well-paid retirees at these agencies are women. The agencies are:

• Mesa Consolidated Water District in Costa Mesa, which has two (the top dog being Diana Leach, former general manager, $145,393.56),
• Mission Viejo, which has one (former planning diretor Clinton Sherrod, $107,241.12)
• and the Moulton Niguel Water District, which as two (the top dog being former administrator Carol Sanders, $130,674.36).

This brings total membership in the local CalPERS $100,000-plus pension club to a round 200, from 15 different public agencies. We still have a dozen to go. See full lists, links to previous stories and standard disclaimer below.

Entities surveyed thus far:

• Anaheim, 59
• Brea, 13
• Buena Park, 11
• Costa Mesa, 27
• Fountain Valley, 11
• CSU Fullerton, 1
• Garden Grove, 14
• Huntington Beach, 35
• Irvine, 16
• La Habra, 4
• Laguna Beach, 2
• Los Alamitos, 2

And so here now, without further ado:

•  MESA CONSOLIDATED WATER DISTRICT
  • DIANA LEACH $145,393.56
  • KENTON KEMP $120,796.68
• MISSION VIEJO
  • CLINTON SHERROD $107,241.12
• MOULTON NIGUEL WATER DISTRICT
  • CAROL SANDERS $130,674.36
  • DAVID HAWLEY $122,293.20 

For the record, Mesa Consolidated provides water to Costa Mesa, Newport Beach and John Wayne Airport. Moulton Niguel provides water to Aliso Viejo, Laguna Hills, Lagune Niguel, Mission Viejo and Dana Point.

And here are our regular disclaimers:

• We know that the number of public retirees in the $100,000-plus club — 6,133— is just a tiny fraction of those in CalPERS.
• We know that the average CalPERS pensioner collects just $15,948 a year.
• We know that many public employees pay into their retirement funds — but that many cities and special districts pay the employee contribution, as well as the employer contribution.
• But we also know that some public agencies still want to increase retirement  benefits — and thus, the number of people in the $100,000-plus club — at the very time that CalPERS’ investments are tanking, and when CalPERS’ own eggheads say that the system is unsustainable.
• Who will be on the hook to pay those generous pensions if the money’s not there? The taxpayers.
• Once those generous pension benefits are granted, undoing them is virtually impossible — as Orange County’s $2 million legal battle to do just that illustrates.

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Post from: OC Watchdog

Orange County’s head lawyer Nicholas Chrisos last month complained about the fair board to the state Attorney General, who declined to look at the case. See, the AG also represents the fair board on legal matters, so it would be a conflict. Plus, the county’s District Attorney should investigate crimes in OC, the attorney general said.

DA spokeswoman Susan Schroeder said earlier this week that the attorney general was forwarding the complaint to her office, and they’d look into it. This morning she clarified: The AG responded to the county, and did not forward the case to the district attorney. So her office is waiting on the county to file a complaint before they can investigate, she says.

That might not happen. When asked today whether the county plans to pursue the allegations further, a spokeswoman would only cryptically say: “County counsel is reviewing its options.”

Chrisos’ complaint alleges that the fair board misused public money when they hired former state Sen. Dick Ackerman and a consulting firm to influence the state’s sale of the fair grounds. Fair board members also have formed a nonprofit that’s looking into buying the 150-acre fairgrounds and if they do, could get perks such as free parking, Chrisos wrote. So, Chrisos argues, the fair board used the public money to pay for contracts that could personally benefit them financially.

Fair board members also are quiet on the complaint and referred calls to board chairwoman Kristina Dodge. A secretary for Dodge said she would not be available until Friday.

Post from: OC Watchdog

By Teri Sforza and Lindsey Ambrose

Pity the poor California senators and Assembly members! Not only are they presiding over a state that seems to be spiraling down the toilet – they’re going down (some) with the ship as well.

Just one day after the Legislative Analyst’s Office announced that California is staring a new $21 billion budget deficit in the face, legislators got the really bad news: Their pay and perks can, and apparently will, be sliced 18 percent to help deal with the shortfall. (That means a drop from $116,208 to $95,291 for legislators, and from $133,639 to $109,584 for legislative leaders.)

In May, a heavy-hearted citizens’ commission ordered up the cuts (despite the incredibly good job the Legislature is doing). Then, in September, the Legislature quietly asked the attorney general whether that citizens’ commission had the legal authority to order those cuts, and offered pages of legal arguments as to why it did not. (Some cynical types interpreted that as an attempt to dodge the bullet.)

Today, though, Attorney General Jerry Brown dashed those hopes.

“Gentlemen,” Brown wrote in a letter to legislative leaders. “In response to your question as to whether the California Citizens Compensation Commission can reduce the salaries of Legislators during their terms of office, the short answer is yes it can.”

Brown goes on to cite chapter and verse on laws that he admits are conflicting — but which he concludes clearly point to the commission’s ability to cut pay and perks midstream. You can read Brown’s legal reasoning below.

The challenge by the Legislature could leave a bad taste in the mouths of other state employees, who are taking cuts and being forced to enjoy three unpaid furlough days monthly, sans question of legality. We presume struggling taxpayers might not be too sympathetic for the deprived lawmakers, either.

This comes, of course, after a brutal year of budget shortfalls in Sacramento. Just four months ago, the Legislature and Gov. Arnold Schwarzenegger agreed on a budget that closed a roughly $26 billion deficit. And that was just five months after they had closed a $42 billion deficit.

This recession thing is tough on California. And, apparently, the folks who run it.

____________________________________________

News Release
November 19, 2009
For Immediate Release
Contact: (916) 324-5500
Contact: Christine Gasparac or Evan Westrup, (510) 622-4500
Christine.Gasparac@doj.ca.gov or Evan.Westrup@doj.ca.gov
Print Version

Brown Delivers Opinion on Legislative Pay Cuts
In response to a request from legislative leaders, Attorney General Edmund G Brown Jr. today concluded that the state Constitution allows the California Citizens Compensation Commission to reduce the salaries of legislators and other elected officials in the middle of their terms. Legislative leaders questioned the Commission’s authority after it voted earlier this year to reduce the salaries of elected officials by 18 percent.

Brown pointed to the voters’ 1990 approval of Proposition 112, which requires the Commission to “adjust the annual salaries of state officers” each year, in confirming the Commission’s authority to reduce salaries. According to Brown, Proposition 112 contradicts and supercedes a ballot measure adopted in 1972 that prohibited mid-term salary reductions.

Brown stated that “any other interpretation would require assuming against all evidence that the voters in 1990 intended mid-term annual adjustments to only go up and never down, even in the face of a faltering economy and huge budget deficits.”

The full text of the letter follows:

Greg Schmidt
Chief Executive Officer
Senate Rules Committee

Jon Waldie
Chief Administrative Officer
Assembly Rules Committee

Re: Mid-term Reduction of Legislative Salaries

Gentlemen:

In response to your question as to whether the California Citizens Compensation Commission can reduce the salaries of Legislators during their terms of office, the short answer is yes it can. This is because in 1990 the voters approved Proposition 112, which requires the Commission to “adjust the annual salaries of state officers . . . [which] shall be effective on or after the first Monday of the next December.” This provision supersedes and contradicts a previously adopted proposition that prohibited mid-term salary reductions. Any other interpretation would require assuming against all evidence that the voters in 1990 intended mid-term annual adjustments to go only up but never down, even in the face of a failing economy or huge budget deficits.

Your question requires resolving a conflict between two competing constitutional provisions. The first, Article III, section 4(a), which was added to the Constitution in 1972, states that “salaries of state elected state officers may not be reduced during their term of office.” The second, Article III, section 8(g), which was added to the Constitution by Proposition 112 in 1990, created the Commission and requires it to “adjust” the salaries of state elected officers (including legislators) before the end of each fiscal year. Those adjustments are effective on and after the first Monday of the December following the adjustment.

These two provisions conflict because an adjustment can be either an increase or a decrease. While Section 4(a) states that salaries cannot be reduced during a term of office, Section 8(g) states that salary adjustments (up or down) shall be made, and shall and be effective, annually. Requiring an annual adjustment in salaries is inconsistent with prohibiting salary reductions.

The rules of constitutional interpretation require harmonization of conflicting provisions if possible. If provisions cannot be reconciled, however, the later-adopted provision prevails. Because I believe that the two conflicting provisions cannot be reconciled, the later-adopted provision calling for adjustments up or down must prevail.

Having said that, I acknowledge that there are those who disagree, and I am aware of three legal opinions (including an informal opinion from an attorney in my Opinions Unit) that come to a contrary conclusion. However, the fundamental objective of statutory interpretation is to ascertain and effectuate the intent of the enacting body, which in this case is the voters. I believe that a careful review of the text of Proposition 112 and the accompanying ballot pamphlet makes clear that the voters intended in 1990 to create a new system of setting legislative compensation to include an annual up or down adjustment of salaries and benefits.

I. BACKGROUND

A. How Salaries Were Set Before the Adoption of Proposition 112 in 1990.

Before 1990 the salaries of elected state officers were set by statute. Two constitutional provisions also addressed the issue of salaries.

Former Article IV, section 4, dealt exclusively with the compensation of legislators. It required that salary adjustments be adopted by a two-thirds vote, not exceed five percent annually, and not go into effect until the next legislative session. Section 4(a) stated then, as it does now, “[e]xcept as provided in subdivision (b), salaries of elected state officers may not be reduced during their term of office.”

B. The 1990 Adoption of Proposition 112 and the Creation of the Compensation Commission.

Proposition 112, a legislative constitutional amendment, was adopted at the June 1990 primary election by a margin of 62% - 38%. Proposition 112 completely revised the procedure for setting the salaries of certain elected state officers. It created an appointed Commission to set the salaries of all elected state officers other than judges. The Commission was charged with the responsibility to set salaries annually:

[A]t or before the end of each fiscal year, the commission shall, by a single resolution adopted by a majority of the membership of the commission, adjust the annual salary and the medical, dental, insurance, and other similar benefits of state officers. The annual salary and benefits specified in the resolution shall be effective on and after the first Monday of the next December.

(Section 8(g) [as adopted by Proposition 112].)

Although the text of Proposition 112 repealed former Art. IV, § 4 concerning the setting of legislative salaries, it did not repeal Section 4(a), which states that the salaries of elected state officers “may not be reduced during their term of office.” The 1990 ballot pamphlet materials concerning Proposition 112 made no reference to Section 4(a).

C. The 2009 Adoption of Proposition 1F Modifying the Compensation Commission’s Procedures.

At the May 2009 special election, Proposition 1F was approved by a 74% - 26% margin. Proposition 1F amended Section 8(g) to prevent the Compensation Commission from raising the salaries of elected state officials in years where the General Fund is expected to end the year in a deficit. Section 8(g) was rewritten to put the language concerning the adjustment of salaries (as opposed to benefits) in a separate paragraph.

The new language concerning salary adjustments is identical to the old: It requires the Compensation Commission to adjust salaries annually and states that the adjustments “shall be effective” the following December. However, unlike the 1990 ballot pamphlet accompanying Proposition 112, the Analysis by the Legislative Analyst accompanying Proposition 1F noted the conflicting language of Section 4(a). The Analysis stated that “Proposition 6 - approved by voters in November 1972 - prohibits the reduction of elected state officials’ salaries during their terms of office.”

II. ANALYSIS

The rules of statutory and constitutional interpretation, while difficult to apply, are easy to state. “We begin with the fundamental premise that the objective of statutory interpretation is to ascertain and effectuate legislative intent.” “In the case of a constitutional provision adopted by the voters, their intent governs.” “The Court turns first to the words themselves for the answer[,]” and if the language is “clear and unambiguous” there is no need for construction or for resort to indicia of voters’ intent. “Words used in a constitutional provision should be given the meaning they bear in ordinary use.”

The language of Section 8(g), as adopted by Proposition 112 (1990) and amended by Proposition 1F (2009), makes clear that increases and decreases in salaries were meant to go into effect annually:

Thereafter, at or before the end of each fiscal year, the commission shall adjust the annual salary of state officers by a resolution adopted by a majority of the membership of the commission. The annual salary specified in the resolution shall be effective on and after the first Monday of the next December[.]

(Emphasis added.) When a salary is adjusted, it can go either up or down. (The American Heritage Dictionary defines “adjust” as “1. To change so as to match or fit; cause to correspond[.]“) An adjustment becomes effective when it becomes operative. (The American Heritage Dictionary defines “effective” as “3. Operative; in effect: The law is effective immediately.” [Emphasis in original].) Thus the constitutional dictate is that the Compensation Commission pass a salary resolution before the end of each fiscal year, and that the resolution become effective the following December.

While the language of Section 8(g) is clear, the inquiry does not end there. Section 8(g) must be read in the context of the entire Constitution, and particularly Section 4(a), which states that the salaries of elected state officers may not be reduced during their term of office. Proposition 112 - which added Section 8(g) to the Constitution - could have amended Section 4(a), but it did not. Section 8(g)’s silence regarding its effect on the pre-existing section 4(a) creates a latent ambiguity because “the law shuns repeals by implication[.]” Statutes “must be read together and so construed as to give effect, when possible, to all the provisions thereof.” However, where two enactments present an unavoidable conflict, the most recent expression of legislative will prevails. A later-adopted provision works an implied repeal of an earlier provision where “two acts are so inconsistent that there is no possibility of concurrent operation, or where the later provision gives undebatable evidence of an intent to supersede the earlier[.]“

Because Section 8(g) is ambiguous in context, it is appropriate to look to the ballot pamphlet for evidence of voters’ intent in adopting Proposition 112. The ballot pamphlet supports the conclusion that Section 8(g) was intended to completely revise the existing law concerning the setting of salaries of elected officials. The Title and Summary of Proposition 112 informed voters that the newly-created Compensation Commission would establish salaries annually and that previous law would be repealed:

Repeals current provisions setting salaries, benefits of legislators, elected statewide officials; establishes seven-member Commission, appointed by Governor, to annually establish salaries, benefits.

The Analysis of the Legislative Analyst stated:

Creates the California Citizens Compensation Commission with the exclusive authority to set the annual salaries, and the medical, dental, insurance, and other similar benefits of Members of the Legislature and [other elected state officials].

* * * * *

The commission would have until December 3, 1990, to set the salaries and benefits which would be effective for one year beginning on that date.

In the following years, the commission could adjust annually the salaries and benefits for elected state officers.

The Rebuttal to Argument Against Proposition 112 added that:

The Commission is NOT a guaranteed pay raise. The opponents didn’t tell you that the Commission has the power to lower salaries.

(Emphasis in original.) To summarize, voters were told that current law concerning the setting of salaries would be repealed, that the Commission created by Proposition 112 would have exclusive authority to set salaries, that the Commission’s initial determination would be effective for one year beginning December 3, 1990, that thereafter the Commission could adjust salaries annually, and that the Commission could raise or lower salaries.

Based on the language of Proposition 112 and the accompanying ballot pamphlet text, I am convinced that voters cannot be presumed to have created a one-way street up for salaries. Voters must have believed that the Commission would have the exclusive power to adjust salaries up or down, that salaries would be adjusted annually, and that those adjustments would be effective annually. As a result, I see no way that section 8(g) can be harmonized with section 4(a). Accordingly, section 8(g) must control because it is more recent.

Kennedy Wholesale, Inc. v. State Bd. of Equalization (1991) 53 Cal.3d 245 is probably the closest case on point. Kennedy Wholesale concerned the interpretation of Proposition 13, which amended the State Constitution to state that “any changes in State taxes enacted for the purpose of increasing revenues . . . must be imposed by an Act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature[.]” The issue was whether this language meant that only the Legislature could enact new taxes, so as to work an implied repeal of the voters’ power to raise taxes by statutory initiative. The Supreme Court concluded, for two reasons, that there was no implied repeal: First, a court must resolve any doubts in favor of the “precious right” of initiative. Second, “Nothing in the official ballot pamphlet supports the inference that voters intended to limit their power to raise taxes[.]” In the context of the present dispute over legislative salaries, both of these reasons support the conclusion that Section 8(g) does impliedly repeal Section 4(a). Section 8(g) does not restrict the right of initiative. And the ballot pamphlet clearly supports the conclusion that Section 8(g) was intended to supplant Section 4(a).

One other statutory-interpretation issue merits mention. Section 8(g) was amended by Proposition 1F (May 2009). The accompanying ballot pamphlet included a statement from the Legislative Analyst that “Proposition 6 - approved by voters in November 1972 - prohibits the reduction of elected state officials’ salaries during their terms of office.” Thus, voters in the 2009 May special election were informed of the conflict between Section 8(g) and Section 4(a). This does not change my conclusion that the voters in 1990 intended to permit the Commission to reduce Legislators’ salaries during legislative terms because Proposition 1F did not in any way purport to amend the relevant text of section 8(g) instructing the Commission to “adjust” salaries annually and makes those adjustments “effective on or after the first Monday of the next December[.]“

III. CONCLUSION

In my opinion, there is an unavoidable conflict between Section 8(g) (1990) and Section 4(a) (1972). Because Section 8(g) was adopted most recently, I believe that it controls and gives the Commission authority to reduce salaries mid-term.

# # #
You may view the full account of this posting, including possible attachments, in the News & Alerts section of our website at: http://ag.ca.gov/newsalerts/release.php?id=1835

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Post from: OC Watchdog

Earlier this month, the Orange Juice Blog asked “Who is Sue Perez and why is she challenging Senator Correa?” Red County.com revealed that Perez had hired veteran political consultant Dave Gilliard, who told the blog that Perez “has 12 years of broadcast experience as host of a highly popular syndicated talk show, ‘Our Town’, watched by millions of viewers on the TBN network” and “holds a Doctorate of Ministry Degree, as well as an undergraduate degree in Criminal Justice.”

In fact, Perez, a former employee of the Heritage Family Fellowship church, officially filed with the California secretary of state her intent to run for election in Correa’s 34th District in 2010.

Bloggers have wondered aloud who she is and what she hopes to accomplish. But one thing they haven’t asked is whether she actually meets the basic requirements of candidacy.

There aren’t much, but the state does require that you live in the district you want to represent. And Perez doesn’t live in the 34th District. She and her husband, Ed, live in the 33rd, which is represented by Mimi Walters.The Watchdog spoke with Perez this morning and she freely acknowledges that she needs to move. And, according to the law, her residency doesn’t become an issue until the official nominating period, which runs Feb. 15 to March 12.

Before that, candidates can file their intent to run for multiple offices in multiple jurisdictions. But during the nomination period, you have to pick the one race you’re going to enter — and to do that, you have to be registered to vote there.

So, in other words, Perez hasn’t done anything wrong. But it looks funny to announce to the world you’re running for office and you don’t yet meet one of the basic requirements to do it.

Perez, for her part, said she didn’t think it was a big deal.

“It’s not like I’m moving from another county or from 50 miles away,” the Anaheim resident said. “It’s, like, three miles away.”

So when will she move?

“As soon as possible.”

Betcha she moves pretty quick now.

Post from: OC Watchdog

The inciting incident came during a bitter tussle between federal air marshals and management - when the government required air marshals to have buzz cuts and wear business suits and hustle past lines at airport security checkpoints. (This essentially screamed to would-be terrorists: AIR MARSHAL! AIM HERE! many air marshals felt.)

It was in the thick of such management-employee conflict that OC air marshal Robert MacLean appeared on NBC news in 2005, in his role as vice president of the air marshals’ professional organization (it’s not a union). That appearance, the agency soon concluded, required prior approval. It launched an investigation. And in the course of that investigation, it asked MacLean if he was a source for an NBC story a few years back, about how air marshals’ overnight missions were to be cancelled to save money on hotel bills (even in the midst of an unprecedented suicide hijacking alert).

It’s, er, a crime to lie to federal investigators.

MacLean was axed from his cop-in-the-sky job and has been fighting to get it back ever since. This big-picture context is part of the closing arguments that have been filed by the federal government (government-closing-arguments) and MacLean (maclean-closing-arguments), nicely summarizing each side’s stance. The judge is expected to make a decision in the coming weeks.

The government’s last word: MacLean’s 14 years of solid service as a Border Patrol agent and air marshal didn’t matter in the end. MacLean knew, or should have known, that information he disclosed to the media in 2003 was sensitive security information, and MacLean’s protestation that he did not know “is not believable,” the Homeland Security Administration says.

MacLean’s last word:  It was a good-faith mistake. He has a history of respect throughout his law enforcement career for confidential treatment of information that could undercut government security. But the message that arrived on his non-secure cell phone - not his secure PDA; was not labeled “SSI” at the top and bottom, as sensitive security information must be; and was not sent on a secure, password-protected, encoded transmission, as sensitive security information must be. It just showed up on his Nokia cellphone, the same type of phone that most of America was using in 2003.

“Based on his training and practice among FAMs, appellant testified that his personal view of the difference between SSI and unrestricted information centered on disclosure of particular information. He thought SSI would be a date and particular flight number or seating assignment. He viewed temporary cancellation of an entire program differently,” MacLean’s closing arguments say.

“In his disclosure to MSNBC Washington DC Bureau Chief Correspondent, Brock Meeks, the appellant testified that he tried to operate within those boundaries. He did not share the text message or read from it. He protested cancellation of all RON (remain over night) coverage two days after a terrorist suicide hijacking alert from the Saudi Arabia government (Exhibit 21), Federal Bureau of Investigation (FBI) (Exhibits 16 & 17), the State Department (Exhibit 17), and the Department of Homeland Security (Exhibit 18 at Page 3), and just after he and his entire FAMS Las Vegas Field Office were mandated to attend unprecedented supervisory person-to-person emergency threat briefings inside a secure area inside the FAMS Las Vegas Field Office’s Operations Branch concerning these alerts. (Exhibit 37)

“The July 26, 2003 DHS suicide hijacking warning titled, “Potential AI-Qaeda Hijacking Plot in the U.S. and Abroad” detailed a very specific plan. “Attack venues may include the United Kingdom, Italy, Australia, or the East coast of the United States due to the relatively high concentration of government, military, and economic targets. ” “Al-Qaeda is looking for new ways to circumvent enhancements in aviation security screening and tightening immigration requirements,” in which “five-man teams”. . .”would attempt to seize control of a commercial aircraft either shortly after take off or shortly before landing at a chosen airport. This type of operation would preclude the need for flight-trained hijackers[]” (emphasis added) for suicide missions. “The hijackers may attempt to use common items carried by travelers, such as cameras, modified as weapons.” (Exhibit 18 at Page 3)

There was a huge outcry; the plan was scrapped; and missions went on as per usual. But MacLean was fired, and denied whistleblower status.

Even if the judge rules against MacLean - and he seemed pretty sympathetic at the Nov. 5 hearing - the truly final arbiters of whether MacLean is hero or villain, of whether he endangered the flying public or helped protect it, are no longer Bush appointees. They are, instead, newly-installed, and more whistleblower-friendly, Obama appointees.

We’ll let you know as soon as there’s a decision.

Post from: OC Watchdog

(Read the latest here)

Robert MacLean of Ladera Ranch was axed from his cop-in-the-sky job after letting the world know about an ill-conceived plan to remove federal air marshals from long distance flights in 2003 - just days after a terrifying suicide hijacking alert. (This to save money on hotel bills.)

There was a huge outcry; the plan was scrapped; and missions went on as per usual. But MacLean was fired for disclosing “sensitive security information” (even though the message wasn’t marked as such, and went to his non-secure cell phone, rather than his secure PDA). Then he was denied whistleblower status. 

His appeal is now pending before a federal administrative law judge. What do you think?

Post from: OC Watchdog

You type in your credit card information, click the “purchase” button, and enjoy your flight/movie/pizza. But a few months later, mystery charges of $10 to $20 a month appear on your bank statement, for membership in a club you have no  memory of joining.

Surprise! You’ve been a victim of consumer fraud - thanks to that web site you trusted.

The practice is pervasive, and has cost unsuspecting consumers $1.4 billion, according to “Aggressive Sales Tactics on the Internet and Their Impact on American Consumers,” an investigative report released Tuesday by the  U.S. Senate Committee on Commerce, Science, and Transportation. (You can read the full report here: online-ripoffs; and can find supporting documents here.)

Companies named in the report - and apparently profiting on the scam - include 1-800-Flowers.com, Inc.; AirTran Holdings, Inc.; Classmates.com, Inc.; Continental Airlines, Inc.; FTD, Inc.; Fandango, Inc.; Hotwire, Inc.; Intelius, Inc.; MovieTickets.com, Inc.; Orbitz Worldwide, Inc.; Pizza Hut, Inc.; Priceline.com, Inc.; Redcats USA, Inc.; Shutterfly, Inc.; US Airways Group, Inc.; and VistaPrint USA, Inc. (But that’s not all of them; there are many, many, many more.)

How does the scam work? Consider the experience of Chris Steffen of Los Angeles, who bought movie tickets through Movietickets.com in April 2007.

“I‘m not sure how or when this happened and I‘m sure part of it is oversight or my own fault,” Steffen wrote in a complaint. ”But somehow through the purchasing of movie tickets through your site I was signed up for Reservation Rewards and charged 10 dollars a month membership for multiple months. This means that when I ordered tickets through your service, the cost to me was not only the price of the tickets, but the inadvertent cost of being enrolled in a service plan I was not aware of.”

Reservation Rewards, it turns out, is operated by a company called Webloyalty. In his hurry to buy the tickets, he clicked on a pop-up box that sealed his fate.

In a follow-up complaint to Webloyalty, Steffen wrote, “Imagine yourself…getting on a computer to book movie tickets for the next big show and you‘re in a hurry because you and your friends decided to go at the last minute. You want to make sure you order your seats in time so you can go have dinner before the show. Then, at first glance you get what looks like a coupon for 10 bucks off your next purchase of tickets. You don‘t read the fine print because you‘re in a hurry and next thing you know you‘re signed up for some worthless service.”

And that’s how  it happens, folks.

Three Internet companies are behind the worthless club memberships - Affinion, Vertrue, and Webloyalty-and exploit consumers’ expectations about online shopping to trick them into joining their membership clubs, the report says.

The report found that:

• Consumers often do not know these companies have their credit card numbers until they start seeing charges on their bank statements.
• Affinion, Vertrue, and Webloyalty and their e-commerce partners have earned more than $1.4 billion in revenue with their misleading tactics.
• There have been more than 30 million consumer enrollments in these clubs and several million people are unknowingly enrolled in these clubs at any one time (4 million in June).
• More than 450 e-commerce websites and retailers have partnered with Affinion, Vertrue, and Webloyalty to employ aggressive sales tactics against their online customers splitting the revenue about 50-50.
• Eighty-eight companies have made more than $1 million by partnering with Affinion, Vertrue, and Webloyalty, including Classmates.com, which made more than $70 million.
• Almost no one receives the “cash back award” that Affinion, Vertrue, and Webloyalty offer to online consumers at the time of enrollment.

Other consumers complained of being enrolled in clubs like LiveWell  after buying gifts at 1-800-Flowers.com and clicking on the ”Click here to claim $15.00Cash Back on this purchase!” button. Another wound up paying for membership in Shopping Essentials after buying a gift certificate at Restaurants.com.

Online shoppers think they must enter their credit card numbers again to be charged for something else. But, thanks to the ”data pass process,” that’s not the case, the report says. The trusted retailer you just bought from passes your information on to the third party, who rips you off.

“Affinion, Vertrue and Webloyalty use aggressive sales tactics intentionally designed to mislead online shoppers,” the report concludes. “These three companies exploit shoppers‘ expectations about the online purchasing process to charge millions of consumers each year for services the consumers do not want and do not understand they have purchased. Hundreds of e-commerce merchants - including many of the best-known, respected websites and retailers on the Internet - allow these three companies to use aggressive sales tactics against their customers, and share in the revenues generated by these misleading tactics. While Congress and the Federal Trade Commission have taken steps to curb similar abusive practices in telemarketing, there has not yet been any action to protect consumers while they are shopping online.”

More than half of all American adults have either made an online purchase or an online travel reservation, the report says. In the first half of 2009, e-commerce revenue accounted for more than $60 billion of U.S. retail sales.

The Senate committee held a hearing on the report Tuesday, and promises  action.

“America is a country of businessmen and businesswomen,” said Sen. John D. (Jay) Rockefeller IV, chairman of the committee, in a prepared statement. “We all have a great deal of respect for enterprising people who develop good products and sell them in our competitive marketplace. But we are here today because we want to highlight the very important point that tricking consumers into buying goods and services they do not want is not okay - not even close. It’s not ethical, it’s not right, and it’s not the way business should be done in America. American consumers shouldn’t have to worry that their favorite websites are ripping them off during the checkout process.

“We haven’t completed this investigation yet, but what I’ve learned about these business practices so far is very troubling. And, starting with this hearing today, I think this Committee needs to start thinking about the legislative steps we can take to end these practices.”

In the meantime, the wise consumer will pore over his credit card bills and bank statements in search of mysterious charges.

More on consumer stuff:

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Post from: OC Watchdog

That’s how much the feds are spending on asphalt improvements on the 73 — along a 12.3-mile section of the road where you can’t take your car unless you pony up lots of pocket change.

So the Watchdog called Jennifer Seaton, a spokeswoman for the Toll Road Agencies, to ask the next obvious question: If my tax dollars are paying for new asphalt on the road, then why do I have to pay again to drive on it?

(TCA is the government agency that operates the 73, 241, 261 and 133 toll roads in Orange County.)

Seaton explained that our tax dollars pay for more than just the asphalt improvements. The state actually owns the roads and also pays to maintain them. Caltrans spends about $1.6 million per year on those roads, spokeswoman Tracey Lavelle said.

AND, since they’re all part of the state highway system, they also qualify for federal cash.

Confusing? Here’s the back story: The toll roads were originally planned to be free public roadways. But in the 1980s, government cash to build them was scarce, Seaton said, so local elected officials and transportation planners started looking at other, more creative ways to pay for building them.

Their solution: Make the drivers who use the roads share the cost of construction. TCA was born in 1987, and — backed by future tolls and developer fees — started issuing bonds to build the roads.

On opening day, they handed over ownership to the state. The idea is that the toll fees will pay off the construction bonds, at which point the roads will be free for all.

In the meantime, since the state owns the roads, Caltrans is responsible for maintaining them at the state’s expense, Seaton says.

“I think it’s one of those things that people try to craft as (being) inflammatory,” Seaton said. “By building the roads, the toll roads has given the state $3 billion worth of infrastructure for free. It’s $3 billion worth of roads that the state didn’t have to build.”

Caltrans also maintains other toll roads, but taxpayers aren’t on the hook for the expense.

For example, the Orange County Transportation Authority, which owns the 91 Express Lanes, pays Caltrans about $250,000 a year for maintenance. The South Bay Expressway in San Diego also repays Caltrans for the agency’s work, Lavelle said.

So when will those of us who can’t afford $5 a trip every day get to enjoy that public infrastructure? Not till 2040. And maybe later if TCA can get a lower interest rate by refinancing the debt.

TCA still owes $2,047,516,000 for the San Joaquin Hills (73) Toll Road, and $2,268,136,000 for the Foothill/Eastern, which includes the 241, 261 and 133.

Hopefully the Watchdog will still be driving by the time all that debt is paid off.

Post from: OC Watchdog

Orange County’s head attorney believes it has. In an Oct. 30 letter to the state attorney general asking for an investigation into possible illegal activity, county counsel Nicholas Chrisos raises questions about whether the fair board illegally used public money to pay for lobbyists charged with influencing the state’s sale of the fair grounds.

Board members also have formed a nonprofit foundation that could buy and operate the fairgrounds, and Chrisos says the public contracts were aimed at ensuring their foundation would be qualified to bid — essentially using public money for personal gain. Here’s how he figures:

“If past practice holds, members of the Foundation Board would enjoy some (even if minimal) perquisites, such as free tickets to the fair, parking passes,” the letter says. “Those are financial interests.”

Incidentally, the attorney general’s office serves as the fair board’s legal counsel and wrote in a Nov. 13 letter that because of that role, it would be “inappropriate” to investigate. Gary Schons, a senior assistant attorney general, wrote that the district attorney is responsible for investigating crimes within the county.

“We just received the letter from the Attorney General’s Office yesterday
and have not filed anything with the District Attorney’s Office at this
time,” county spokeswoman Brooke De Baca said.

Members of the fair board formed the nonprofit Orange County Fair and Event Center Foundation July 21 to potentially purchase and preserve the 150-acre fairgrounds. Using private money, the foundation hired former state Sen. Dick Ackerman and the lawfirm of Nossaman, Guthner, Knox and Eliot (now just Nossaman LLP) to create an early draft of the foundation’s organization and form the articles of incorporation.

The county’s complaint centers around a action the fair board took eight days later, on July 29, approving a contract with Ackerman and the same law firm. The contract, according to the county letter, was “designed to lobby the governor’s office in formulating the terms of the RFP to be issued by the state.”

Members of the fair board who also were on the foundation could directly benefit from the contract, which makes it illegal and ineligible for public funds, Chrisos wrote. OC Weekly first reported about the letter online Monday evening.

(The Watchdog has requested the actual contracts, but has not heard back yet from the fair board. Members of the fair board could not immediately be reached for comment. We’ll update as soon as we hear from them.)

The letter also says that the public wasn’t adequately noticed that the board was considering the consulting agreements — a violation of open meeting laws.

It’s not the first time the fair board has been dinged for meeting illegally.

District Attorney Tony Rackauckas last year accused the Orange County Fair Board of violating state’s Bagley-Keene Open Meeting Act when boardmembers changed their policy for giving themselves free concert tickets without allowing public comment.

Post from: OC Watchdog