California didn't want to open its books, so we did it for them
The last time Californians heard about their government's annual spending, state Controller Betty Yee was keeping some $300 billion a secret. Her office had successfully fought against releasing line-by-line payments made by the state to outside entities, which would allow taxpayers to scrutinize how their money was spent, whether there was any self-dealing, and whether it effectively advanced the public interest.
Now, we've had a major victory. Payments to 210,000 state vendors are available online for the first time in history. The results, though, show California is still the “wild west” when it comes to recordkeeping, transparency, and rulemaking around these public-private relationships. Policy changes are needed to address some troubling patterns.
This all began back in 2013 when my organization, OpenTheBooks.com, made our first sunshine request for the records. It's a request all 49 other states are able to fulfill. It was ignored and then rejected, touching off a decade-long fight for the information, through the terms of two different state controllers. Our most recent request, in 2020, met the same fate, leaving little choice but to sue for the information. In the midst of the COVID-19 pandemic, the case took two years to make its way through Sacramento Superior Court.
Somehow, Yee successfully argued that the burden of providing the information outweighed the public interest in reviewing it. In doing so, though, she made an outrageous claim: that her office would have to review 50 million expenditures, one-by-one, because different agencies keep the records in different formats. In a given year, Yee's team also said some 200,000 records were on paper, their justifications attached by string. That's right, in the home of Silicon Valley, public officials were admitting they could not get their arms
around their own spending and post it digitally.
Hon. Judge Steven M. Gercever ruled in Yee's favor, leaving Californians to remain in the dark. By springtime, OpenTheBooks.com had resolved that if the state would not open its books, we would force them open. If they could not compile the data, we would do it for them.
Today, we can say California's State Checkbook is posted online for anyone to review. In just four months, we accomplished what Governor Newsom, Controller Yee, attorneys general, bureaucrats and lawmakers had all refused to do. We submitted 442 public records requests to every single state agency in California, and nearly all of them responded. Then we got to work piecing the state checkbook together like a puzzle.
Twenty-seven requests are still being ignored, all of them in the education space. These were sent to community colleges, the University of California at Irvine, and the State Board of Regents. We are determined to keep up the pressure for answers.
Nevertheless, our auditors found that 201,684 state vendors received $87.2 billion in payments last year. Of those, 979 vendors also donated to Governor Newsom during either the 2010, 2018 and 2022 cycles and the recall election. Many of them have quasi-monopolies in their sectors of the state economy: they are huge public utilities like PG&E and Edison International; major healthcare companies like Anthem Blue Cross and UnitedHealth Care; top telecoms like Verizon and Comcast; and leading law firms like Perkins Coie and Nixon Peabody.
The nearly 1,000 state vendors donated $10.6 million to Newsom's campaign and in fiscal year 2021 alone, they received $6.2 billion from the state.
We are not accusing the parties of engaging in payto-play practices, and the fact of the matter is that's legal in California anyway. Folks across the political spectrum will likely see it as unethical though.
Newsom has yet to defend his fundraising practices, but there's a policy fix that could go a long way. Since 1940, entities that hold or are negotiating federal contracts cannot donate to federal candidates, parties or committees. Even in Illinois, infamous for corruption, those with state contracts greater than $50,000 cannot donate in the gubernatorial election. Since its enactment, no governor has been indicted in The Prairie State.
That is a commonsense reform that lawmakers in Sacramento should act on immediately. As it stands, major companies are simply recycling their earnings back into the political establishment. Incumbents like Newsom are fortified with those donations, and major players in the state economy are more deeply entrenched in state business.
Looking ahead, November will see a new controller elected, and we will urge them to embrace the transparency revolution and fulfill our next sunshine request comprehensively. It is patently ridiculous that taxpayers or a nonprofit like us would need to file 442 individual requests to get these answers.
We've forced open the books; with a continued commitment, the hope is they stay open permanently. Californians can use the information to hold elected officials accountable for good outcomes; they deserve that ability.