Reprint Paradise Lost? Part One of Ten "Paradise Lost"

This is a series of 10 blog posts at El Dorado Magazine from 2009 that outlined the premise of Paradise Lost?  The purpose of this re-post is to educate or remind people of California political shenanigans that began in earnest in 1981 with High Speed Rail, again in 1997 with the Bay Bridge Design fiasco.  A prelude to the current Twin Tunnels and High Speed Rail boondoggles?

In addition, these posts show how conflicts of interest, cronyism in its defining form, and corruption have come together in its perfected form by way of the 2009 historic water legislation which the enabling of the Delta Stewardship Council and its on-the-rise cohort the Delta Conservancy.

This series of blog posts also reveal just how high and deep the ethical violations and well, cover-ups truly go. (As of 2/6/14, I more clearly state, this is how perfecting collusion to perpetuate fraud is done.)

Original link:  http://eldoradomagazine.com/ 

(As of 2/6/14 this link is no longer valid.)

Paradise Lost

Part One

Beginning in 1981 and continuing through 2008, an interconnected series of transportation and land use bills were introduced and passed in the California State Legislature. These bills benefited politically-powerful insiders with billions of dollars in profits that were achieved through ethically and legally prohibited means.

There are at least eight transportation and/or land use legislative processes that these actions include. Among them are the first bullet train bill in 1982, followed by the Bay Bridge selection process in 1997. They also include the Catellus Development-Mission Bay project in San Francisco in 1997, the Headwaters Forest acquisition in 1999, the Desert Wildlands Act of 2000, and back to the new high-speed rail project of 2001-2002.

These political processes all had many elements in common. The players who put these corrupt political practices in action were all part of the same group based in San Francisco, and operating from Washington, D.C., the State Capitol in Sacramento, and  San Francisco City Hall.

The methodology this political machine has employed to produce multi-billion-dollar profits through a corrupt political practice has been refined almost to an art form by the insiders of this group.

Usually, the process begins with a news story that floats the idea: whether it’s a train or a bridge or an airport expansion. Both the first bullet train and the Bay Bridge processes were born with front-page stories boosting the idea. On the bullet train it was a front-page story in the New York Times, published on April Fools Day, 1981.  The Bay Bridge deal began with a front-page story published in the San Francisco Chronicle on January 9, 1997.

What both stories essentially did was to “float” these ideas (a high-speed train, a new Bay Bridge) in front of the public partly as a way to gauge the political support for each project. Both “floats” had the requisite effect; both projects gained sufficient public support to proceed, and both produced huge stock profits.

Both projects were empowered by the language of the bills that produced them. On the bullet train and Bay Bridge bills, each was a so-called “spot” or “space-saver” bill. What this means is that both bills were largely empty shells when they were introduced until a deal had been made to fill the “spot” or “place.” Neither bill had to do with trains or bridges until they were amended during the course of their legislative process.

When the bills were amended it was with language that either directly named the corporation about to receive the multi-billion dollar contracts, or seemed tailor-made for that corporation to do so.

Most of these bills were written by Mehdi Morshed, the former legislative transportation consultant who is now the executive director of the California High-Speed Rail Authority. Morshed began his career as a transportation committee consultant in the legislature, as did Morshed’s wife Linda. Mehdi Morshed also wrote the new piece of legislation for high-speed trains in California (a bill sponsored by then-State Senator Jim Costa in 2002) which produced a hefty profit for insiders at URS Greiner and Lockheed-Martin in 2001-2002, and he has also participated in drafting language for other transportation and land use projects, some of them directly related to the Bay Bridge or high-speed rail.

It is supposedly illegal to write legislation targeting a specific corporation, but this has never been enforced on these projects.

What we seem to have here is almost a form of political gangsterism practiced by a very effective and methodical political machine. The main players from this machine are U. S. Senator Dianne Feinstein, her husband, multi-millionaire investment banker Richard C. Blum, and former San Francisco Mayor Willie L. Brown Jr.

The FeinBlum/Brown Machine was also aided by the lobbying firm of Nossaman, Guthrie, Knox and Elliott, and Nossman’s main transportation lobbyist, former California State Senator John Foran. This group led by Foran handled the lobbying on five of these bills. Another key player was Morshed, the former legislative staffer who is now the executive director of the California High-Speed Rail Authority.

All of the aforementioned politically corrupt processes can be illustrated with charts analogous to the two attached charts that document the Bay Bridge and the second bullet train bill. The figures derived for these charts are all a matter of public record. The documents from which they were acquired include listings of political campaign contributions, political lobbying reports, legislative bill histories, and stock issuance and stock sales that were supplied by the principals to the Securities Exchange Commission.

The prime beneficiary of the Transcam and Landscam acts is Senator Feinstein’s husband, investment banker Richard C. Blum.

On the Bay Bridge selection process, URS Greiner, a company that was then owned by Blum, was first in line for the contract. URS turned a billion dollar profit from a near threefold increase in stock prices of URS shares during the Bay Bridge selection process.

Insiders at URS, including Blum, also made significant profits from the stock options they issued themselves during this process. Nearly 3 million shares of URS penny stock was issued to four companies held by Blum that became worth almost $74 million. Another 1.1 million shares of URS penny stock were issued to Blum’s fellow board members at URS. These stocks grew in value to almost $25 million during the Bay Bridge selection process of 1997-98.

The Catellus Development/Mission Bay project, which proceeded through the legislature at the same time the Bay Bridge deal got underway, also benefited the corporation who sponsored the bill. This bill allowed development to proceed along San Francisco’s waterfront through a land swap between the State of California and the City of San Francisco. The Mission Bay project proved to be a billion dollar windfall for Catellus, and much of the $4 billion project has now been finished.

Not long after the Mission Bay project was passed, the Headwaters Forest deal went through. This effort, negotiated by Senator Dianne Feinstein at the behest of the Clinton Administration, proved another windfall bonanza for the sponsoring corporation, in this case timber company Maxxam Corporation. The day the deal went through, on March 1, 1999, Maxxam’s stock price per share increased by $9.89, and insiders at Maxxam made a fortune by cashing out over 1.32 million shares of stock.

A year later, in southern California, Catellus Development reaped an even richer harvest than Maxxam when it traded a huge tract of mostly worthless desert property for valuable state lands within urban centers. This massive land exchange bill, authored by Senator Feinstein, resulted in a net gain to Catellus of $11 to $15 billion, due mostly to the fact that the desert lands were revalued prior to the exchange; so the property values increased dramatically, some by over 300%. A forthcoming part of this series will describe exactly how this process occurred.

Copies of all these documents have been presented by the author to the following investigative agencies in charge of prosecuting political corruption: the FBI, the SEC, the IRS, the U.S. Attorney General’s office, the U.S. Attorney’s office in Sacramento, CA, California Governor Arnold Schwarzenegger, the California State Attorney General’s office, and to Jerry Brown personally, the Fair Political Practices Commission (FPPC), the California Auditor General’s office, the San Francisco County Grand Jury’s office, the Sacramento County District Attorney’s office and the Sacramento Police Department. Not one of these agencies has taken any action against anyone involved in these schemes.

A series of whistle-blower claims were filed with the Internal Revenue Service and the State Auditor General’s office by this author and other citizens regarding the way these processes have been used to benefit insiders. A subsequent story published on this blog will detail how these agencies responded to whistle-blower claims and calls for investigations; another blog installment details the lack of action by a number of public citizen watchdog associations, who have likewise declined to move against this powerful insider band.

In an email to the public interest law firm Judicial Watch, the author laid out the possible law and ethics violations that these eight separate acts have comprised. They include violations of the Securities Exchange Act of 1933 prohibiting insider trading, violations of conflict-of-interest prohibitions as applied to legislators and lobbyists, at both the state and federal level, possible income tax evasion or code violations,  business and political codes-of-ethics violations, and more, bringing up the possibility that these acts could be litigated under the RICO (organized crime) statutes, in that they involve many of the same political players in each case.

In a series of articles that will be published on this blog, we will examine all these political processes chronologically and see how this intricate game of multi-billion-dollar profiteering has progressed over the past three decades.

This reporter witnessed and reported these acts while they were occurring, and had his documentation vetted by legal counsel. This counsel verified the documents’ authenticity and said he believed these acts could be litigated under the fair Political Practices Act of 1974, specifically the section that prohibits lawmakers from taking part in a political process that benefits them financially.

The author stands by his figures and his sources, and none of the published work on these subjects has ever been criticized for inaccuracy. All the principal characters named herein were given ample time to respond to the allegations after being apprised by the author of what he intended to publish. None of them have offered comment.

Western Delta Intake Concept Synopsis, June 19, 2014

The following is a reprint from the hand-out provided last Thursday
 CARES Action Committee on June 19, 2014:

Western Delta Intake Concept (WDIC)

By Dr. Robert Pyke

Dr. Pyke's WDIC will have the following benefits at it pertains to the Sacramento-San Joaquin Delta and water transfers.

1. The WDIC would be located on Sherman Island on the south end of Sacramento County. Sherman Island is now mostly owned by the state of California.
2. All waters (rivers, streams, island pump-outs, run-off, etc.) must pass through the Delta to the WDIC site.
3. Due to all of the water passing through the Delta, monies for Delta infrastructure will remain in the Delta.
4. WDIC is half the distance to the State and Federal pumping stations. Thus a huge reduction in construction and mitigation costs.
5. WDIC permeable embankments are far more efficient and effective than other fish screen proposals, which are ineffective or unproven.
6. Due to all waters passing through the Delta and the inclusion of additional storage which allows true Big-Gulp-Little Gulp operation, Southern water users would receive more water over the long haul versus BDCP's proposal.
7. WDIC is self-regulating: meaning over pumping of water at any time will result in too much brackish (salt) water. The pumps must be turned down or shut off as a result of too much brackish water.

These advantages over the BDCP's proposal are significant. It is in our best interests to investigate the WDIC proposal.

Dr. Robert Pyke is an individual consultant on geotechnical, earthquake and water resource engineering. He was one of the principal authors of the Economic Sustainability Plan of the Delta Protection Commission. He has served as a consultant on numerous high profile projects including dam safety evaluations for both East Bay Municipal Utility District and the Santa Clara Valley Water District. Dr. Pyke can be reached at:

Dr. Robert Pyke

1310 Alma Avenue, W201

Walnut Creek, CA 94596

(925) 323-7338

bobpyke@attglobal.net

www.FixCAWater.com

In addition the following was included:

Two Keys: 

1. Recognition that man-made alteration of the Delta in combination with larger export flows has turned the Delta from an estuarine environment into a more lacustrine environment which favors invasive species over native species, and
2. Recognition that precipitation in California is extremely variable and that past and future variability, which many clinate scientists predict might be greater, must be addressed in any sustainable water management plan.

Four Principles:

1. That natural flows through the Delta should be restored to the maximum practical extent;
2. That much more water should be extracted at periods of high flow and much less, or zero, water should be extracted at periods of low flows;
3. Scheme should be self-regulating and not rely upon complicated agreements;
4. Scheme should be simple to design, permit and operate.

Six Physical Elements:

1. Restoration of floodplains on the Sacramento and San Joaquin Rivers and their tributaries in order to provide flood storage and stretch out the flood hydrograph in addition to providing significant flood management benefits;
2. New intake facilities somewhere in the West Delta to allow flows to pass through the Delta in a natural way before surplus flows are extracted;
3. One or more tunnels that can move the extracted water to additional storage facilities that would likely be located adjacent to the existing Clifton Court Forebay;
4. Additional south-of Delta storage, much of it likely as groundwater but also perhaps including Westside surface storage;
5. During periods of very high flow, the new intakes and the existing South Bay intakes, with fish screens along the Old River, could be used simultaneously;
6. To maintain South Delta wate quality, construct lined canal to recirculate water from the aqueducts to the San Joaquin River as necessary

Unaccounted Fresh Water Flow From the Delta...Where did $3.5 Billion in Water Go?

Data compiled by N. Suard, Esq. and Managing Partner Snug Harbor Resorts, LLC.

Here's the link to the full size PDF which is easier to read.

http://www.snugharbor.net/images-2014/bdcp/unaccounted_diversions.pdf

Very interesting question with some back-up number crunching of DWR's own numbers from 1998-2010...

Personally, I have a darn good idea where $3.5 billion, minimum value, of water went...ready for this??  I say it went into the Kern Water Bank on a separate set of books to miraculously become the SOURCE OF ALTERNATIVE FUNDING for BDCP...the original rob Peter to screw Paul!  And we, Californians, are Peter AND Paul. 

Seems to me there should be some investigations into not only where did the water go, but the correlations and connections between the same set of persons and entitiess calling the shots and directly profiting from theft of a public resource?  

Who authorized that diversion?  

Who is keeping the books?  

Who stands to profit the most from anything water related?  

Do we have Honest Services Fraud occurring??  

Federal Grand Jury, hello??  We're knocking on your door...

Appendix Two: Financial Dossiers of Regents to Watch Reprint Spot.us

Appendix Two: Financial Dossiers of Regents to Watch

http://www.spot.us/pitches/337-investors-club-how-the-uc-regents-spin-public-funds-into-private-profit/story

These dossiers were reported and written by Bernice Yeung and Randall Jensen.

Sherry Lansing

Dates of term:
First Term: March 11, 1999 to March 1, 2010
Second Term:  March 1, 2010 to March 1, 2022

UC Regents Health Services Committee Chair

Education:
Northwestern University

Profession:
Founder, Sherry Lansing Foundation
Former film executive

Potential Conflict alert
Since Sept. 2006, Regent Sherry Lansing has been a member of Qualcomm’s board of directors. She received $135,000 in director’s fees from Qualcomm in 2008, stock option awards valued at $256,443, and additional compensation of $50,000 for a total of $441,443. According to her UC Regents economic disclosure statement, Ms. Lansing owns “more than $1 million” in Qualcomm stock options (no upper limit is specified), but she has a less than 1 percent interest in the company.

Documents released by the treasurer show that, through its external investment managers, UC has quadrupled its investment in Qualcomm by putting $397 million into stock of the information technology firm since Ms. Lansing joined its board (while she also served as a regent).

Lansing has also served on the board of directors of Dole Food Company since the company went public in the fall of 2009.

Professional bio:
Lansing was the first woman to lead a major film studio in 1980 when she became president of production of 20th Century Fox. From 1984 to 1990, she ran independent production companies, working on films such as Fatal Attraction and Indecent Proposal. In 1992, she was hired as chairperson of Paramount Pictures; under her watch, the studio produced six of its 10 highest-grossing films, including Forest Gump and the Titanic. In 1996, she became the first female studio exec to receive a star on the Hollywood Walk of Fame. She remained at Paramount until 2005. Paramount also named the Sherry Lansing Theatre in her honor, which was at one point, the studio’s largest screening room.

After leaving Paramount, Lansing started the Sherry Lansing Foundation, a nonprofit that focuses on cancer research, education, art, and culture.

Prior to producing films, Lansing had a brief stint as an actress, during which time she also taught high school English and math in Los Angeles public schools.

Major investments:
According to public documents, Lansing has more than a 10 percent financial interest in Sherry Lansing Productions, which is valued between $100,000 and $1 million.

Corporate boards:
Qualcomm: According to SEC filings, Lansing received $133,500 in director’s fees from Qualcomm in 2009, as well as $301,752 worth of stock options and $50,000 in additional compensation for a total of $485,252.

Dole: According to SEC filings, Lansing received $14,413 in director’s fees in 2009, as well as $62,500 in stock awards, for a total of $76,913.

Estimated earnings (2008):
In 2008, Lansing earned a salary of more than $100,000 from Sherry Lansing Productions, and held between $100,001 and $1 million in Viacom stocks (Viacom is the parent company of Paramount Pictures).

She also received $135,000 in director’s fees from Qualcomm in 2008, as well as $256,443.00 in stock options, and an additional $50,000 for a total of $441,443.

Lansing does not draw a salary from the Sherry Lansing Foundation, and donated about $460,000 to the organization in 2008, according to tax filings.

Political ties/campaign contributions:
Lansing is a member of Governor Schwarzenegger's Committee on Education Excellence, as well as the California State Superintendent of Education's P-16 Advisory Council. In 2007, she helped create the EnCorps program, which encourages retired professionals to return to the classroom as teachers. Lansing was able to marshal the support of corporations ranging from IBM to Qualcomm.

In 2004, Lansing was one of 29 members appointed to the Independent Citizen's Oversight Committee, an oversight panel governing stem-cell research in California following the passage of Proposition 71.

Philanthropy and community service:
Lansing sits on several boards for organizations related to cancer research and education, including the Carter Center, Teach for America, the American Association for Cancer Research, Friends of Cancer Research, and the Lasker Foundation, which supports biomedical research.

She has also served on the board of trustees of Scripps College and the University of Chicago, as well as the board of Independent Colleges of Southern California, the board of the UCLA Foundation, and the executive committee of the Dean's advisory board of the UCLA School of Theatre, Film and Television.

Misc:
Lansing blogs for the Huffington Post on topics ranging from cancer prevention to the legacy of Sen. Ted Kennedy.

Russell Gould

Chairman of the board The University of California Regents..

Dates of term:
First Term: September 13, 2005 to March 1, 2017
Previously served as a Regent in 1998.

Education:
University of California at Berkeley

Profession:
President of Gould Financial Consulting

Potential Conflict alert:
Gould served as senior vice president at Wachovia Bank from 2004 until he retired in 2009.  Gould led business development and strategic partnerships in California as senior managing director of Wachovia Portfolio Services, formerly Metropolitan West Securities, which he joined in 1996. At Metropolitan West, Mr. Gould also served as executive vice president of the J. Paul Getty Trust where he was responsible for the investments of the Trust’s $5.5 billion in assets.

In 2005, the year Gould became a regent, UC’s endowment and retirement portfolio held about $28 million in Wachovia bonds. That amount gradually reduced, falling to about $2.4 million in 2009.

As part of his financial consulting practice, Gould in 2008 listed IBM as a client that generates income of more than $10,000. In 2009, UC listed $19.7 million in IBM investments.

Professional bio:
As president of Gould Financial Consulting, Gould provides fiscal policy advice to corporations, government and not-for-profit entities on issues related to the state budget, investment and tax policy.

Gould also worked as a financial management advisor to CRHMFA Homebuyers Fund (CHF), which is a government-sponsored Joint Powers Authority that issues tax-exempt and taxable bonds to create affordable single-family mortgage loan programs.

Before entering the private sector, Gould served under Gov. Pete Wilson as secretary of health and human services and as the director of finance. As director, he was responsible for preparing and managing the state budget as well as serving on the Governor's Council of Economic Advisors. Gould previously worked as assistant state treasurer with oversight over California's then-$20 billion investment portfolio.

Major investments:
According to public documents, Gould has holdings of more than $100,001 (the largest amount one may select) in The Gould Family Trust. He also owns The Gould Group, which counts IBM Corporation and National Homebuyers Fund as clients. In addition, he holds a stake in the Post Advisory Group Total Return Fund (between $100,001 and $ 1 million) and the same range of investment in the MetWest Small Cap Fund LLP Partnership.

Corporate boards:
Gould currently serves on The Irvine Company Board. He is also a member and past chair of the Board of Directors of the California Chamber of Commerce.

Estimated earnings (2008):
Gould earned more than $100,000 (the highest amount one may select) from his investments in the The Gould Family Trust and he claimed he also earned above $100,000 from his financial consulting business The Gould Group.

Political ties/campaign contributions:
Gould is a Republican appointed by Gov. Schwarzenegger to The Regents in 2005. Since leaving government, Gould was appointed by Gov. Schwarzenegger to serve on the California Constitution Revision and Performance Review Commission.

Philanthropy and community service:
Gould serves on the the College Access Foundation of California Board and the Sierra Health Foundation Board. He previously served on the Children's Hospital of Los Angeles Board.

_______

Hadi Makarechian

Dates of term:
October 24, 2008 to March 1, 2020

Education:
University at Buffalo, State University of New York

Profession:
Real estate developer

Potential conflict alert
Makarechian is the founder and chairman of Capital Pacific Holdings, which develops residential real estate in California and other Western states.

Since the early 1990s, Capital Pacific entered into numerous joint ventures with IHP Capital Partners, an investment firm that specializes in equity financing for residential development. IHP was founded in 1992 when CalPERS entered the real estate financing realm and it provided IHP with $75 million to develop homes in Northern California. IHP reports providing a 40 percent net return to CalPERS on its first deal, and the state retirement fund has continued to invest with IHP.

Another CalPERS real estate equity partner is an investment firm called Hearthstone. In 2008, CalPERS invested $185 million in Hearthstone and paid the company $1.8 million in fees. Capital Pacific has partnered with Hearthstone on various joint venture development deals for more than six years. Capital Pacific is currently working with Hearthstone on a residential project in Arizona.

Professional bio:
Hadi Makarechian is based in Newport Beach, and one of the local papers, the OC Weekly, has called the Makarechians the “closest thing Orange County has to the Rockefellers.”

For more 30 years, Makarechian has planned, built, developed and invested in luxury residential real estate through the company he founded, Capital Pacific, which is ranked the 65th largest home builder in the country in 2009 with $188 million in new residential revenue and $753,000 in other revenue, according to Professional Builder magazine’s “Annual Report of Housing’s Giants.”

Makarechian is credited with innovating the way that beachfront condos and hotels are developed by maximizing the number of units with ocean views. Additionally, the term “McMansions” was first used in a New Yorker article to describe Makarechian’s deluxe Palos Verdes, California, development. One of Capital Pacific’s largest ongoing projects is the development of Banning Lewis Ranch, a 21,000-acre development that could consist of 75,000 homes.

A subsidiary of Capital Pacific is Makar Properties, which primarily handles commercial real estate developments. Run by Makarechian’s sons, Paul (CEO) and Cyrus (executive vice president), the firm is primarily associated with developing luxury hotels. Its assets are located throughout Southern California, Texas, Florida, and Colorado, and it’s been reported that it has more than $10 billion in development projects.

Major investments:
Makarechian is the founder of Capital Pacific Holdings, and has served as its CEO and chairman. He is also the chairman of Makar Properties, a subsidiary of Capital Pacific.

According to public records, through the Hadi Makarechain Trust, Makarechian and his wife own a number of properties in Southern California valued at more than $5 million (no upper limit is specified).

Corporate boards:
Makarechian does not participate on publicly traded corporate boards.

Estimated earnings (2008):
In a 2008 story about its wealthiest residents, the Orange County Business Journal estimated that Makarechain has an estimated worth of $600 million—down from $1 billion the previous year because of the economic downturn. The newspaper also estimated that Capital Pacific and Makar Properties own several billions dollars’ worth of real estate, and the Makarechians’s stake in these holdings are worth hundreds of millions.

Philanthropy and community service:
Makarechian serves on the board of trustees of Chapman University and the State University of New York, University at Buffalo, where he is the 2005 recipient of the Distinguished Alumni Award.

Makarechian has also donated on an ongoing basis to organizations such as Habitat for Humanity, Boys and Girls Clubs, and the Boy Scouts of America.

Political ties/campaign contributions:
Makarechian was among the top 50 contributors to Gov. Arnold Schwarzenegger’s reelection campaign, and he also served as a national campaign finance co-chair for Mitt Romney’s 2008 presidential campaign.

--------------------------------------------------------------------

Leslie Tang Schilling

University of California Regent
Chair of the buildings and grounds committee

Dates of term:
First Term: Sept. 13, 2005 to March 1, 2013

Education:
University of California at Berkeley
American Graduate School of International Management

Profession:
Founder and Director of Union Square Investments Company

Potential conflict alert
In May 2006, mortgage-lender Golden West Financial was sold to Wachovia Bank for $25.5 billion while Schilling served on the board of the company and fellow Regent Russel Gould was involved in business development and partnerships for Wachovia in California. Both were Regents at the time.

Professional bio:
Schilling is founder of Union Square Investments, a commercial real estate investment and management firm, and is also founder and president of investment firms L.T.D.D. and Golden Bay Investments. Prior, she was assistant manager of the real estate department at the Chartered Bank of London worked at Wells Fargo’s private client division after college.

Major investments:
In 2008, Schilling’s had holdings in Golden Bay Investment Fund, with a limited partnership worth between $100,001 to $1 million and in Tangent Fund Management II, also with a limited partnership worth between $100,001 and $1 million, according to state disclosure forms. She also had an investment in the company Centerbeam, through her company Tangent Ventures, of between $100,001 and $1 million.

She stated in documents that she held a partnership in Tanama Ltd., which owned real property worth between $100,001 to $1 million. In addition, Schilling was listed as a vice president of Windy Hill Inc., which held an investment in GDW Holdings LP that was worth between $100,001 and $1 million.

Schilling also had a limited partnership in Lemana Ltd, a real estate investment company, worth between $2,001 and $10,000.

Corporate boards:
Schilling served as director of Tristate Holdings Ltd. and KOA Holdings Ltd.

She formerly served on the board of The Pacific Bank and Golden West Financial Corp., a mortgage lender acquired by Wachovia in 2006.

She has also served as a director on the boards of the San Francisco Chamber of Commerce, and the Small Business and Agriculture Advisory Board to the Federal Reserve 12th District. She is currently on the Board of the Bay Area Council.

She served as Vice Chairman of San Francisco Economic Development Corp.

Estimated earnings (2008):
As founder of Union Square Investment Co., which was valued between $100,001 and $1 million, Schilling said in 2008 she received a salary of more than $100,000. And she received between $10,001 and $100,000 in income from L.T.D.D., according to 2008 disclosure forms.

Schilling also listed several companies from which she received a salary of more than $10,000: Pacific Irrev. Trust, Golden Bay Investment Fund LLC, Bligh Ltd., Atlantic Irrev. Trust, Tangent Fund Management II LLC, Tanama, Ten Mason Associates, Lemana and the Tang and Smith Fund.

Schilling also said she received a director’s fee from KOA Holdings of between $1,001 and $10,000, as well as the same amount for being a board member for Hong Kong-based Tristate Holdings Ltd.

Political ties/campaign contributions:
Appointed to The Regents in 2005 by Gov. Schwarzenegger.

Philanthropy and community service:
Ms. Schilling has served as a member of the San Francisco Foundation and Women's Forum West, and as a commissioner of the Asian Art Museum.

She has also been a board member for MIT, KQED, the San Francisco Zoological Society, the UCSF Foundation and Give2Asia.

She is also co-founder of Toys for the Tenderloin and is a director for the Committee of 100.

In addition, she founded the Tang Foundation, which supports youth programs such as summer school academic enrichment for low-income students around the Bay Area.

------------------------------------------------------------------------------------------------

Norman Pattiz

Regent, University of California
Chair of the laboratories committee

Dates of term:
Mr. Pattiz was appointed by Governor Davis to fill the remainder of a 12-year term, which expired March 1, 2004. In September 2003, he was appointed by Governor Davis to fill the remainder of a 12-year term which expires March 1, 2014.

Education:
Honorary doctorate from Southern Illinois University

Profession:
Founder and chairman of radio-giant Westwood One

Potential Conflict Alert
As head of the regents’ committee with oversight over the Department of Energy laboratories run by the UC, Pattiz has large investments in energy and scientific-related public companies including between $10,001 to $100,000 in Southwest Energy, the same amount in Exxon Mobil and same relative investment in a large energy fund.

The laboratories deal with much more than just energy and Pattiz has his hand in other large investments, such as biotechnology, pharmaceutical and medical related stocks.

Professional bio:
Pattiz started his radio syndication company in 1976 in a one-room office on the westside of Los Angeles. He is now the founder and chairman of Westwood One, America's largest radio network company and the nation's largest producer of news, sports, talk and entertainment programming. His company owns, manages or distributes NBC Radio Network, CBS Radio Network, the Metro Networks, CNN Radio.

President Clinton appointed Pattiz in 2000 to serve on the Broadcasting Board of Governors of the United States of America. He was reappointed to that post by President Bush in 2002, serving through 2006. The BBG oversees all U.S. non-military international broadcasting including Voice of America, Radio Free Europe/Radio Liberty, Radio Free Asia, Worldnet Television, Radio and TV Marti and the Middle East Broadcasting Network. As chairman of the Middle East committee, Mr. Pattiz was responsible for conceiving and launching Radio Sawa and Alhurra Television.

Norman Pattiz was inducted into the Radio Hall of Fame in 2009.

Major investments:
In 2008, Pattiz had several major investment holdings of between $100,001 and $1 million: Ishares TR S&P, municipal bond fund, managed asset funds GPS Income Fund, GPS New Equity Fund LP, GPS High Yield Equity Fund; and corporate bonds in ESC Conseco.

He also held an unlisted amount in world stock fund Nuveen Tradewinds Global and mutual fund IVA Worldwide Fund.

Pattiz also held position of between $10,001 and $100,000 in numerous public companies.

Estimated earnings (2008):
Pattiz received more than $100,000 in salary (the highest choice available) from his company. And as a trustee of the Norman Pattiz 1996 Charitable Trust he received a salary of between $10,001 and $100,000.

Political ties/campaign contributions:
Pattiz has been a member of the Council on Foreign Relations and Pacific Council on International Policy, director of the Office of Foreign Relations of the Los Angeles Sheriff’s Department, and served on the Region 1, Homeland Security Advisory Council.

Philanthropy and community service:
Pattiz serves as a member of the Board of Councilors of the Annenberg School for Communication at USC, as well as the Communications Board of UCLA and the Dean's Advisory Board of the California State University, Fullerton.

He is also past president and executive board member of Broadcast Education Association and a trustee of the Museum of Television & Radio and the Hollywood Radio & Television Society. He is the primary benefactor of the Hamilton High Academy of Music and the Norman J. Pattiz Concert Hall.

------------------------------------------------------------------------------------------------

Mark Yudof

President of the University of California

Dates of term:
Appointed president on March 27, 2008, and took office June 16, 2008.

Education:
University of Pennsylvania
University of Pennsylvania Law School

Profession:
President of University of California

Potential conflict alert
Yudof served as president on the board of the public medical device company HealthTronics in 2008 until he resigned in 2009, making between $10,001 and $100,000. As UC president, Yudof oversees five medical centers and three affiliated laboratories.

After his appointment as president, Yudof accepted a more than $11,000  two-week trip in July 2008 to Israel from the American Jewish Committee, a Jewish advocacy group.

The university president also in 2008 received between $10,001 and $100,000 in consulting fees, including travel, from Saudi Arabia’s King Abdullha University of Science and Technology.

Professional bio:
Before becoming president of UC, Yudof served as chancellor of the University of Texas system from 2002 to 2008. He also was president of the University of Minnesota from 1997 to 2002.  Prior, he was a faculty member and administrator at the University of Texas at Austin for 26 years, during which he served as dean of the law school from 1984 to 1994 and as the university’s executive vice president and provost from 1994 to 1997. He began his career in 1971 in Austin as an assistant law professor.  While a member of the law faculty, he spent time as a visiting professor at University of Michigan and UC Berkeley law schools, and did research as a visiting fellow at the University of Warwick in England.

Yudof is a member of the American Academy of Arts and Sciences and a the American Law Institute.

He has also been widely published with a majority of the books related to education or law.

Major investments:
Before becoming president, Yudof disposed of his position of between $10,001 to $100,000 in stock in health and productivity management company I-Trax, according to disclosure forms.

As of 2008, he continues held between $10,001 and $100,000 in stock of Cattlemen’s Restaurant Group, which runs chains of restaurants in Texas. A founding partner of the restaurant group is Mark Adams who is the president and CEO of Advocate, MD Financial Group Inc., a medical liability insurance company.

Corporate boards:
Yudof served on the board of directors of the public medical device company HealthTronics from 2005 to 2009. He also was a board member for test-maker Educational Testing Service from 2000 to 2002.

Estimated earnings (2008):
In 2008, Yudof made between $10,001 and $100,000 as a director on the board of the public company HealthTronics.

Yudof told the New York Times his 2008 salary was $540,000, after he cut his own pay by $60,000. He said he had a $10,000 housing allowance.

It was reported by the Daily Californian in 2008 that he would receive $591,084 in salary, plus $228,000 for his first presidential year in pension contributions beyond the UC Retirement Plan and $743 per month in car allowance. He had received $742,209 serving as the University of Texas' chancellor from 2006 to 2007.

Political ties/campaign contributions:
President George W. Bush appointed Yudof to the President’s Council on Service and Civic Participation from 2006 to 2009. Bush also put him on the advisory board of the National Institute for Literacy from 2002 to 2005.

Philanthropy and community service:
Yudof serves on the board of directors for the Lumina Foundation for Education, the American Council on Education and is a member of the Business-Higher Education Forum. He also served as chair of the Texas Council of Public University Presidents and Chancellors from 2007 to 2008.

The UC president has been presented with numerous awards during his career, including the Higher Education Advocate of the Year in 2010, by Counselors to Higher Education.


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Monica Lozano

University of California Regent
Chair of finance committee
Chair of the governance committee

Dates of term:
First Term: Sept. 21, 2001 to March 1, 2013

Education:
University of Oregon (did not graduate)
City College of San Francisco

Profession:
Publisher and chief executive officer of La Opinion, the largest Spanish-language newspaper in the United States. Senior vice president of its parent company, ImpreMedia LLC.

Potential Conflict alert:
In 2008, while Lozano served on the board of Bank of America and Walt Disney, the UC General Endowment Pool owned about $5 million in Bank of America bonds and $530,000 in Walt Disney bonds; while the UC Retirement Plan held $99 million in Bank of America bond investments and $8.5 million in Walt Disney bonds.

Also In 2008, Lozano served on the board of the California Healthcare Foundation, a philanthropic organization, which gave hundreds of thousands of dollars solely to The Regents. The foundation also granted tens of millions of dollars to other university programs. It also supports private universities, private research and community programs.

Professional bio:
Lozano has worked since 1985 at the La Opinion, which was started by her family in 1926. From 1999 to 2001, she was a member of the California State Board of Education, serving as its president for its from 2000 to 2001. She was also a member of the California Postsecondary Education Commission. Lozano has served on a number of corporate and non-profit boards, and is a trustee at University of Southern California.

Major investments:
Lozano has more than $1 million of partnership shares in Impremedia LLC, parent company of La Opinion, according to disclosure forms. She also states she has more than $1 million of stock in the Kayne Anderson Capital Income Fund and between $100,001 to $1 million of shares in the Kayne Anderson REIT Fund.

She also has two trusts: the Monica Lozano Centanino Trust and the Monica C. Lozano Living Trust.

Corporate boards:
Lozano serves as a director on the boards of Walt Disney Co. and Bank of America Co. She is also on the board at UnionBanCal Corporation, a bank holding company and a member of the Misubishi UFJ Financial Group.

From 2002 to 2005, she was also a director for the Tenet Healthcare Corp.

Estimated earnings (2008):
In 2008, Lozano made more than $100,000 as publisher of La Opinion, according to disclosure documents. She also stated she earned between $10,001 to $100,000 in income from Walt Disney, and an unlisted amount of deferred compensation. She earned between $10,001 and $100,000 as a board member at Bank of America.

However, according to Forbes, Lozano made a total of $127,376, which includes $47,376 in stock awards, as a director for Bank of America in 2008. And she apparently earned a total of $234,842, including $71,909 in stock awards, $52,090 in options and $17,093 in other compensation, as a member of Walt Disney’s board during the same year.

In addition, Lozano said she earned between $1,001 and $100,000 as a director on the board of the Weingart Foundation and between $10,001 to $100,000 as a director for the California Healthcare Foundation. 

Political ties/campaign contributions:
Lozano was appointed to The Regents in 2001 by Gov. Davis to a 12-year term.
She is a member of President Obama's Economic Recovery Advisory Board.

Philanthropy and community service:
Lozano serves as a board member for The Weingart Foundation, a non-profit philanthropic institution in Southern California., and the National Council of La Raza. She is also a trustee for the University of Southern California. Also, she served on the California Healthcare Foundation board.

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Bonnie Reiss

Dates of term:
March 10, 2008 to March 1, 2020

Education:
University of Miami
Antioch School of Law

Profession:
Operating Adviser, Pegasus Capital

Potential Conflict alert
Reiss serves on the environmental advisory board of NetJets, the Berkshire Hathaway subsidiary that sells fractional jet ownership, and which is popular among celebrities and politicians like Gov. Arnold Schwarzenegger. In 2008, NetJets donated $20,000 to UC Davis’ Institute for Transportation Studies as a corporate affiliate, and it served as a corporate sponsor of the 12th Biennial Asilomar Conference on Transportation and Climate Policy conference.

Additionally, as a UC Regent, Reiss is a member of the Committee on Oversight of the Department of Energy Laboratories, which serves as the interface between the U.S. Department of Energy (DOE) and its UC-run laboratories: Los Alamos, Lawrence Livermore and Lawrence Berkeley. According to the UC bylaws, as a member of the committee, Reiss is also charged with recommending leadership appointments to the labs, and reviewing reports related to various aspects of lab management, including the “scientific and technical quality of all work undertaken at the Laboratories.”

In recent years, the DOE has expanded its research in solid-state lighting—such as LED lighting—which is a more efficient and less expensive form of illumination.

LED lighting is an area in which Reiss has a particular vested interest, and where her role as a UC Regent overseeing UC-run DOE labs could benefit her or her employer financially.

Until March 24, 2010, Reiss served on the board of directors of Lighting Science Group, a company that, according to its SEC filings, is engaged in the “research, design, develop, manufacture and market a range of lighting devices and systems that use light emitting diodes (LEDs) as the light source.”

According to documents filed with the SEC in March 2010, Pegasus Capital, Reiss’ employer, is an affiliate of two shareholders that collectively own 83 percent of Lighting Science Group. Approximately 15 percent of Lighting Science is owned by Philips Electronics, which is engaged in several research partnerships with the University of California. In the next five years, for example, Sandia National Laboratories in Livermore, California (not a UC-run DOE lab), will receive $18 million in federal funds to research solid-state lighting. Philips Lumileds Lighting, a subsidiary of Philips Electronics, is cited as a research partner. Another partner in this research is Los Alamos National Laboratory, which is overseen by the UC Regents.

Philips Lighting is also engaged in a joint research program that will explore energy-efficiency for buildings using LED lighting with Lawrence Berkeley National Laboratory, which is overseen by the UC Regents.

In addition, UC Santa Barbara’s Institute for Energy Efficiency was selected as one of 46 federally funded Energy Frontier Research Centers in 2009, and it will receive $19 million over five years for research. A portion of these funds will go toward LED research, and UCSB plans to partner with Los Alamos National Laboratory and UC Santa Cruz on these studies.

Professional bio:
After graduating from the University of Miami in 1976 with a degree in accounting and finance, Reiss worked at an accounting firm where she audited and did systems analysis for major corporations. After law school and a stint as a staffer for Sen. Edward Kennedy, Reiss moved to Los Angeles to work as an entertainment lawyer.

In 1980, she co-founded the Hollywood Women’s Political Committee, and as she became increasingly involved in environmental activism, she founded the Earth Communications Office (ECO), which worked with celebrities to raise awareness of environmental problems. One of the first people to join the organization was Arnold Schwarzenegger, who made trailers and commercials with ECO.

From 2003 to 2007, Reiss served as a senior advisor to California Governor Arnold Schwarzenegger, and one Sacramento Bee columnist called her, along with Paul Wachter and Maria Shriver, “Schwarzenegger’s anchors, the people who were with him before politics and will be with him after.” During her tenure, Reiss became the Governor’s point person on issues such as education, environment, women’s issues, and children's health. Reiss also acted as the liaison to the Governor’s Council on Physical Fitness and Sports.

Currently, as an Operating Advisor to Pegasus Capital Advisors, Reiss focuses on investments to cleantech innovation. She also serves as a senior advisor to Natural Strategies, a research and investment company based in Washington, D.C., that focuses on energy and environment, public safety and homeland security, technology, health, finance, transportation and education.

Gov.Schwarzenegger appointed Reiss as the California Secretary of Education in February 2010.

Major investments:

None known.

Corporate boards:
Reiss serves on the U.S. Environmental Advisory Board of NetJets, for which she was paid between $1,000 and $10,000 in 2008, not including $20,000 in travel reimbursements.

Until March 24, 2010, she was also a member of the board of directors of Lighting Science Group. In 2009, she was awarded $80,000 in stock awards as part of her compensation for serving on the board of directors. According to SEC filings, as of November 2009, Reiss owned about $400,000 worth of the company’s stock. Reiss’s public disclosure statements note that she received travel reimbursements from Lighting Science Group in 2008, but she did not reveal the amount.

Estimated earnings (2008):
In 2008, Reiss reported an income of between $10,001 and $100,000 from Natural Strategies, between $1,000 and $10,000 from NetJets, and more than $100,000 from Pegasus Capital.

Reiss also invests in a variety of stocks, according to 2008 public disclosure filings. Her investments range from the real estate firm CB Richard Ellis Group (controlled by Regent Richard C. Blum), Ralph Polo Lauren and the publishing company Meredith Corp. In total, the fair market value of the stocks she owned was between $320,022 and $3.2 million.

Including board of director’s fees and the stocks, Reiss’s estimated net worth, as determined from public documents in 2008 was between $413,023 and $3.4 million.

Philanthropy and community service:
Reiss has served as the president of Schwarzenegger’s afterschool education program, Afterschool All Stars. She currently sits on its board or directors, along with Gov. Schwarzenegger, Maria Shriver and UC Regent Paul Wachter.

Reiss also serves on the board of the Women’s Conference, purportedly the “the largest one-day conference for women in the nation,” and which is hosted by Maria Shriver.

__________________________

George Marcus

Dates of term:

December 22, 2000 to March 1, 2012

Education:

San Francisco State University

Profession:

Real estate developer

Marcus is the founder and Chairman of Essex Property Corporation, a Palo Alto-based Real Estate Investment Trust (REIT) that primarily deals in apartment communities on the West Coast. According to public records, Marcus owns $1 million in stocks and options in Essex, which owns 133 apartment communities, as well as five office buildings and four development projects. It planned to make $300 million in property acquisitions in 2010.

Public pension funds CalPERS and CalSTRS, as well as the University of California, have invested millions—and in the case of CalPERS, billions—of dollars in Essex Property Corp.

Professional bio:

In 1971, Marcus founded both Essex Property Trust, Inc. (now Essex Property Corp.) and The Marcus & Millichap Company (TMMC), which specializes in real estate investment sales and financing. TMMC has eight subsidiaries that deal in real estate development, investment and service, including SummerHill Homes and Pacific Property Company. In 2009, the company’s 1,300 brokers closed 3,441 investment transactions for investors.

Marcus was also one of the original founders of Greater Bay Bancorp, and served on its board of directors until the company was bought by Wells Fargo in 2007.

Major investments:

In 2008, the entities for which Marcus has more than 10 percent ownership were real estate entities owned by TMMC or one of its subsidiaries. Public records show that Marcus made at least $8 million in gross income from these properties in 2008.

Corporate boards:

Marcus is the chairman of the board of both Essex Property Corp. and TMMC. Essex provided Marcus with $34,000 in director’s fees and $45,195 in stock awards in 2008, for a total of $79,195.

Essex Property Corp. and TMMC sometimes enter into business transactions together. For example, Essex has purchased land from TMMC. In 2008, Essex paid $200,000 in brokerage commissions to a subsidiary of TMMC for purchases and sales of real estate; in 2007, Essex paid $1.3 million in commissions to TMMC.

Federal filings note that Marcus has agreed not to divulge any information that he receives as the Essex chairman to TMMC, and that he’d abstain from voting on any business before the board of directors where it appears that there may be a conflict of interest.

Estimated earnings (2008):

In 2008, Marcus owned stocks or participated in partnerships in a variety of companies such as Wells Fargo and Dolby, in which his ownership interest was less than 10 percent. The fair market value of these myriad stocks and partnerships was about $11 million.

In addition to the $8 million gross income from various real estate investments, Marcus earned $34,000 in director’s fees from Essex in 2008. Additionally, Marcus earned between $21,000 and $210,000 via partnership distributions through three real estate partnerships named Western Blossom Hill, Western Riviera, and Western Seven Trees.

Political ties/campaign contributions:

Marcus is a major democratic donor and receives personal thank-you calls and is referenced in speeches by the likes of former Vice President Al Gore and Speaker Nancy Pelosi.

Philanthropy and community service:

Marcus has donated more than $40,000 to San Francisco State University (SFSU) for its Center for Modern Greek Studies, Cinema department, and for student scholarships. Marcus also served on the board and as chairman of the Modern Greek Studies Foundation, which was formed to support the Nikos Kazantzakis Chair for Modern Greek Studies. In 2005, Marcus and his wife, Judy, donated $3 million to start the International Center for the Arts at SFSU.

Marcus serves on the boards of, or has been involved with, a number of professional and business groups, including the Urban Land Institute, a nonprofit dedicated to real estate development and land use research; the Bay Area Council, a pro-business policy organization; and the Policy Advisory Board for UC Berkeley’s Fisher Center for Real Estate and Urban Economics. He also served as a member of the board of trustees of the California State University System from 1981 to 1989, and as a trustee for the Fine Arts Museums of San Francisco.

http://www.spot.us/pitches/337-investors-club-how-the-uc-regents-spin-public-funds-into-private-profit/story

Posted by Peter Byrne on 09/22/10

Appendix One: Research Methodology Reprint UC Regents Spot.us

Appendix One: Research Methodology

http://www.spot.us/pitches/337-investors-club-how-the-uc-regents-spin-public-funds-into-private-profit/story

This investigation primarily focuses on the intersection between the official duties and the business interests of Richard C. Blum, Paul Wachter, and Gov. Arnold Schwarzenegger. All three men have been members of the regents’ investment committee since 2003 (although Schwarzenegger does not attend meetings).

Due to the size of UC’s investment portfolio, as well as the complexity and often subterranean nature of the regents’ personal business interests, it was necessary to design a computer-based method for tracking down possible conflicts of interest.

To find correlations between the regents’ personal business pursuits and UC investments, we reviewed documents available on the web sites of the U.S. Securities and Exchange Commission (SEC), the University of California, and other government agencies. We also used commercial databases that aggregate SEC information, and we custom-designed databases from public records to enable keyword searching. For instance, we digitized the regents’ financial disclosure statements and compared that data with digital lists of UC investments made by both the UC Treasurer’s in-house staff and UC’s external managers.

Using the same methods, we also created dossiers on the investments and financial ties of several regents who, due to their business interests, appear to have the greatest potential for conflicts: Sherry L. Lansing, George M. Marcus, Bonnie Reiss, Russell Gould, Bruce D. Varner, Monica Loranzo, Hadi Makarechian, Mark Yudof, and Leslie Tang Schilling.

Methodology for investigating Blum Capital Partners

Founded in San Francisco in 1974, the activities of Blum Capital Partners span the globe, with several of its private investor partnerships residing in income-tax havens, such as the Cayman Islands. The $2 billion plus firm’s public and private equity holdings include higher education, information technology, medical technology, air transport, casinos, real estate, banking, and, until December 2005, military construction and weapons manufacturing.

Since private equity deals are mostly unregulated by government bodies, the identities of Blum Capital Partners’ investors are cloaked. But public institutions are required to disclose the amount and the rate of return of their investment in private equity firms. For example, CalPERS has reported large investments in Blum Capital Partners, as has the Carpenters Pension Trust of Southern California, the Alaska Teachers Retirement System, the New York State Common Retirement Fund, and the Regents of the University of Michigan.

As a regent, Mr. Blum is also required to file annual economic disclosure statements related to his business interests based in California (but not those outside the state). For a more comprehensive accounting of his business interests and income, we turned to the economic disclosure statements filed annually by Mr. Blum’s spouse, Sen. Dianne Feinstein (D-California), whose wealth is estimated to be as high as $100 million, and whose 200-plus page disclosure statements are almost exclusively dedicated to tracking the labyrinthine activities of Blum Capital Partners. These documents are packed with eye-boggling acronyms for investment funds (e.g., TPG OFF VI SPV, L.P.), which are buried inside complexly nested financial relationships. But in conjunction with SEC filings and other data, these disclosure statements expose the lineaments of Mr. Blum’s vast and intricately balanced holdings, many of which are financed with public funds.

          

We also examined reports in the financial trade press, investor newsletters, and corporate press releases that pertained to Blum Capital Partners and its business associates. Ultimately, we gathered and sorted and perused more than 12,000 pages of documents. Approximately 1,000 pages were scanned or engineered into a searchable format. These records, however, are only the tip of the proverbial iceberg: Mr. Blum’s business dealings have planetary reach and go back in time nearly a half-century.

http://www.spot.us/pitches/337-investors-club-how-the-uc-regents-spin-public-funds-into-private-profit/story

Posted by Peter Byrne on 09/22/10