Four in 10 California Lawmakers Get Outside Income

Last year, state Sen. Ed Hernandez authored a series of bills making it possible for California optometrists, pharmacists and nurse-practitioners to expand the range of medical services they provide. It would have allowed them to administer vaccines, among other things.

"We have a huge capacity issue in the state of California,” the Los Angeles-area Democrat said.  “And this is even pre-Affordable Care Act -- only one-third of the counties meet the national average of primary-care physician-to-patient ratio.” He argued that giving more authority to optometrists and other professions would help more people get the treatment they need.

Hernandez would know — he’s a practicing optometrist.

He said there’s nothing wrong with putting forward a bill that would expand the scope of his business. And according to California’s conflict-of-interest laws, he’s absolutely right. The way the regulations are written, California lawmakers are free to vote on, or even write, measures that affect the fields in which they work.

Hernandez pointed out that he’s taken votes that hurt his practice, like a 2011 measure cutting Medi-Cal payments to providers.  “My wife, when I told her about it, she said, ‘Well, why’d you do that? You just cut our pay by 10 percent.’ I said, 'Well, we had to. We had to balance the budget.' ”

No One's Declaring Conflicts

Hernandez and his optometry practice are just one example of a broad trend within California’s Legislature. The Assembly and Senate are filled with practicing lawyers, real estate agents and business executives of various sorts. Four in 10 legislators bring in some sort of outside income, according to disclosure forms.

And California’s law says they have a conflict of interest only if they vote on a measure that directly affects their own company or firm. There’s no problem if the bill helps, say, every other optometrist, too. That being the case, it’s been years since a legislator followed the ethics law’s protocols and formally declared a conflict. The Assembly clerk and Senate secretary’s offices can’t remember the last time it happened.

In the weeks since three Democrats were suspended from the Senate for legal problems, ethics have been front and center in Sacramento. Scores of new bills are being proposed, and legislative staffers have even been going through extra ethics training. But reining in outside income doesn’t appear to be on the reform agenda.

That’s mostly because California’s conflict-of-interest guidelines are on par with other states. Other full-time legislatures allow outside income, too. And California lawmakers need to disclose all their outside income each year, in more detail than many states require.

Bob Stern co-authored California’s Political Reform Act and worked as the top lawyer at the Fair Political Practices Commission. He said there’s a reason why the state requires officials to provide that information. “Public officials are making decisions affecting millions — and sometimes billions — of dollars. And we want to make sure that they don’t have a personal stake different from the stake of the public in making these decisions.”

Stern said he’s satisfied with California’s current laws, but he'd like to see the state go a step further. He said the Legislature should follow the lead of Congress and the Los Angeles City Council, and ban members from holding any outside jobs. “Basically raise the pay to a pay that is commensurate to what they’re doing in office. And say, 'That’s it,' ” he said. “You have to be working full time for the public, and you cannot have any outside earned income.”

These second jobs have led to questions before.

In the early 1990s, Assembly Speaker Willie Brown was criticized for earning millions of dollars in private law practice and sometimes appointing clients to state boards.

The top Democrat in the Senate today has worked for law firms, too. But President pro Tem Darrell Steinberg said he has bent over backwards to avoid conflicts, to the detriment of his practice. “It was very, very difficult because of the time demands on the job that I have. And also, you know, I’m very sensitive to conflicts. And the notion of marketing and that sort of thing, when you’re an elected official, is just very difficult to do.”

The issue of potential conflicts goes beyond legislators.

Gov. Arnold Schwarzenegger came under fire for accepting a magazine consulting gig in 2005. That led to a bill to end these side jobs for statewide officeholders, but the legislation never went anywhere. In fact, Treasurer Bill Lockyer has done outside legal work for years.

Reform Groups Have Other Priorities

So how much of a problem is this? Most elected officials aren’t actually clocking in at second jobs — they’re earning income from businesses in which they have longtime ownership stakes. And lawmakers argue their outside jobs give them valuable perspective.

There isn’t exactly a groundswell to change the current set-up. Although Bob Stern wants to eliminate outside jobs, he pointed out there are larger problems to fix first.

“There are only a handful, or small percentage, of legislators who earn outside income that could be conflicts,” said Stern. “Almost every legislator earns campaign money from someone who wants something from government. And that, in my mind, is the bigger conflict.”

So even if recent scandals do lead to ethics reforms in state government, don’t expect this issue to be on the agenda.