Ethical Questions Raised : When Legislators Speak, People Are Willing to Pay

SACRAMENTO —  State Sen. Joseph Montoya does not count himself among the Legislature’s select corps of spellbinding orators.

But since being named to head a powerful committee that oversees licensing of doctors, contractors and other professionals, Montoya has found himself in great demand on the speechmaking circuit, commanding large fees from groups he has a hand in regulating.

“All of a sudden people are in love with the chairman of a powerful committee,” the Whittier Democrat said. “All of a sudden I’ve become a great speechmaker.”

When the Legislature speaks, people listen. Now more than ever, Montoya and his Capitol colleagues are finding that people are willing to pay as well.

Last year, members of the Senate and Assembly were paid more than $350,000 for giving speeches to groups ranging from political action committees and trade associations to giant firms, and most of those have important matters pending before the Legislature.

Most lawmakers see the practice as a legal method of supplementing their $33,732 yearly salaries. Their sponsors say that it is a legitimate way of learning about what goes on in the Capital.

But it also raises some thorny ethical questions, particularly among critics who believe it is becoming a way to reward friendly legislators and lobby important bills by putting money directly into the pockets of key committee members and the Legislature’s leadership.

“They really don’t expect a speech,” said Tom Houston, former chairman of the state’s Fair Political Practices Commission and now chief aide to Mayor Tom Bradley. “Groups are finding it very conducive to, in effect, buy time with an elected official by offering an honorarium.

“Whether it’s a five-minute speech in which they say nothing or a 15-minute speech, they get that time with them. It’s the time and the overall influence they are after.”

Dan Stanford, the FPPC’s current chairman, put it this way: “I’ve never heard a legislator’s speech that was worth $2,000.”

In some cases, $2,000 is a minimum fee.

Assembly Speaker Willie Brown (D-San Francisco), known as much for his sharp wit as for his appetite for expensive clothes and exotic cars, has received as much as $5,000 for a single speech.

Brown was the Legislature’s most active speechmaker last year, collecting $56,450, most of it from influential trade groups such as the California Manufacturer’s Assn. and firms such as Philip Morris, all of which have more than a passing interest in bills moving through the Assembly.

Sen. William Campbell (R-Hacienda Heights), former minority leader, led the way in the upper house with $29,150 in speaking fees.

Considered Able Speakers

Brown and Campbell also are considered among the Legislature’s most able speakers. But it is not speaking ability alone that brings in the money.

Consider the case of Montoya. Since his appointment in 1983 as chairman of the Senate Business and Professions Committee, he has seen his speaking invitations edge steadily up to the point where he now earns an average of $1,000 a month from speeches.

The increase came as no surprise to Montoya, who said that he was tipped off to the pattern by studying the disclosure reports filed by his colleagues.

“You start asking yourself, ‘If they gave to this guy or gal, why didn’t they give to me?’ ” he said. “I like people to give to me, and they know it will be recorded and I will live with the political flak that ensues.

“I’m not a lawyer, and I don’t have an insurance company on the side. All I do is legislative stuff, and I find it an attractive supplemental income which I would not turn down in any circumstance.”

Asked if he felt compromised by accepting money from groups with matters pending before him, Montoya said: “You probably have 120 different sets of ethical standards. For me that doesn’t mean I will change my mind one iota on whether I vote aye or nay. Although from what I read in the press, it does make a difference to some people.”

Similarly, Brown’s speaking income rose to more than $20,000 the year he was named Assembly Speaker, from only $1,000 the previous year. It has since increased almost threefold.

It is the rapid increase in speaking fees and the source of the money that is raising much of the concern.

Overall, speechmaking fees have increased sevenfold since 1979, when members of the Legislature reported honorariums totaling $52,000. Much of the increase came since the passage in 1981 of a law preventing legislators from converting campaign money to personal use.

Lawmakers Pocket Fees

Unlike political contributions, speechmaking fees go directly into the lawmakers’ pockets and can be spent without restriction.

The FPPC’s Stanford said that paid speeches represent one way legislators can make up for the personal income they lost as a result of the 1981 law, tapping the same sources that traditionally provided campaign contributions. “It’s just a shift on the political balance sheet of life,” he said.

In fact, while lawmakers once limited most of their outside speaking to service clubs and nonprofit organizations in their districts, the field has largely been taken over by the same huge companies and lobbyists that pour hundreds of thousands of dollars into campaign coffers.

The competition among these interest groups has become so intense that educational institutions and other nonprofit groups say that they can no longer attract key lawmakers unless they offer honorariums too.

Schools Paid Fees

Pepperdine University, for example, has paid lawmakers as much as $1,000 for a single lecture. The San Diego Community College District, which is tax-supported, paid nearly $7,000 last year to seven legislators.

“If we are going to get people in demand, we feel it’s very necessary to do this,” district Chancellor Garland Peed said, adding that attracting important speakers “helps our image in the community.”

The health industry was the largest consumer of oratory last year, spending $108,366. Others providing large fees included manufacturers, organizations with a stake in school financing, communications firms, public utility companies, insurance and financial institutions and construction and land development interests.

Most of the money went to lawmakers who are in positions to influence legislation important to the groups. In addition to Brown and Campbell, the largest honorariums were paid to Senate President Pro Tem David A. Roberti (D-Los Angeles), Assembly Majority Leader Mike Roos (D-Los Angeles), Senate Republican Caucus Chairman John Seymour (R-Anaheim) and to lawmakers who head committees that oversee the health industry, financial institutions, licensing of professionals and other major interests.

“In some respects (honorariums) create a much greater conflict than do campaign contributions, because it is going directly into the candidate’s pocket,” said Walter Zelman, who heads the California branch of Common Cause.

“If the insurance industry wants a legislator to speak to a convention,” he said, “they will not invite someone who knows nothing about insurance. Now the fact that the person also happens to cast 50 votes per year on their bills is just a coincidence, maybe, or more than a coincidence. The problem is, how does the public know?”

Roberti, who acknowledged that he received little speaking money until he assumed his leadership post, said he knows of no case in which a speechmaking fee influenced legislative business. “No one has ever asked for something (in return for a fee),” he said. “Almost invariably these are conventions or annual meetings where organizations want to impress their members with the quality of the speakers.”

Even critics of the practice concede that it is difficult to directly link the acceptance of honorariums to votes on a particular bill. It is only one part of a much larger system that mixes political loyalty, campaign contributions, personal favors and friendships.

Davis Cites Case

But Sen. Ed Davis (R-Valencia) said that a recent experience convinced him that some groups are looking for more than a speech or a shot of prestige.

The former Los Angeles police chief said that he always turns down honorariums unless the sponsor agrees to donate the money to charity. When a group recently offered him $2,000 and an expense-paid trip to Monterey, Davis made his wishes known but was taken aback by the response.

“They didn’t get back to me, so I had my staff call,” he said. “And what I found out was that they totally lost interest because, I presume, I could go there and feel no obligation to them whatsoever.

“If I was putting (the money) in my pocket. . . . “ His voice trailed off.

Davis declined to name the sponsor other than to characterize it as a group “that was very interested in legislation.” Since that incident, Davis said that he has noticed a “deadening effect” on the number of invitations he receives.

The one restriction on speechmaking fees, according to the FPPC, is that they be provided for something of value, not merely as a cash handout. Sometimes lawmakers find themselves walking a fine line.

In one instance last year, Assemblyman Jim Costa (D-Fresno), who was carrying major legislation to weaken rent controls statewide, was feted at a dinner put on by five firms with extensive real estate interests. Costa reported on his disclosure forms that the $3,000 he collected was for a speech.

However, Costa told The Times that it was not a formal speech at all but merely a discussion of his rent control measure over dinner with principals of the five firms. The dinner, he said, was arranged by Traweek Investment Co., a Marina del Rey development firm and a large campaign contributor. The firm figured in earlier controversies over attempts to gain legislative help in some San Francisco condominium conversions.

Costa, who earned most of his speaking fees last year from that single event, said: “I don’t see any conflict. I obviously wouldn’t be interested in taking an honorarium if I thought there was a quid pro quo for my speaking.”

Traweek officials failed to return calls from The Times. Michael Palmer, who attended the dinner, said that all of the participants “were friends and associates” and “were all interested in what affects their investments.”

Questions also have been raised about a series of round-table discussions staged by the California Cable Television Assn. last year. The association, which is becoming one of the state’s largest campaign contributors, invited 21 lawmakers to conventions in Las Vegas and Anaheim. Nearly all of those invited were in leadership positions or in charge of committees that regulate their industry.

In addition to hotel and entertainment expenses, each legislator was paid a $500 honorarium. Several reported that the fee was payment for a speech.

But association spokesman Al Pross said that the lawmakers gave no formal speeches. Instead, they were coupled with cable television operators from their districts for discussions and lobbying on issues important to the industry.

Pross acknowledged that invitations were targeted at “key policy makers who serve on committees that have jurisdiction over cable.” But he insisted that the fees are not intended to buy votes but merely serve as an inducement to get lawmakers to attend.

“I’m not aware of any legislator who assumes he or she is on cable’s payroll because we are providing an honorarium,” Pross said.

Assemblywoman Gwen Moore (D-Los Angeles), who chairs the Utilities and Commerce Committee, which oversees cable television bills, said she sees nothing improper about being paid for her time.

“It’s a lot of your time, and it’s a service that is certainly something that is not required,” said Moore, who attended both cable events.

Most sponsors expect formal speeches for their fees. But targeting invitations at those with influence over specific legislation is a widespread practice.

National Medical Enterprises--the nation’s second-largest owner of health care facilities and last year’s largest single provider of speaking fees--took careful aim in its speaking invitations. It divided more than $23,000 among 10 lawmakers, all but one of whom occupy top leadership posts, have carried health-related bills or are on committees that oversee health legislation.

According to disclosure forms on file with the secretary of state, the fees were paid at a time when the firm was actively lobbying more than a dozen bills.

Declines Comment

A top executive of the firm initially agreed to discuss the issue but later declined, saying through a spokesman that “there is not much to be gained.”

Criticism of a similar pattern of paid speaking invitations triggered a reform movement in Congress in the mid-1970s after it was revealed that 22 of the Senate’s 100 members each collected more than $15,000 a year in honorariums. The result was a law that raised congressional salaries but placed strict limits on income from honorariums.

Brown said that he is considering legislation to eliminate some forms of income altogether in exchange for raising lawmakers’ salaries to about $70,000 a year. The FPPC intends to push for a cap on outside income and no salary increase.

Few insiders give either effort much chance of passage, particularly in light of the defeat by voters last year of a major campaign reform initiative.

“Five or 10 years ago no one did it, because the public would be shocked at elected officials getting large donations from political action committees and trade associations,” said former FPPC Chairman Houston. “Now the problem is the public is so jaundiced from huge campaign costs and contributions that honorariums are getting lost in the mix.

“The public perception is that big money controls, and they are sort of growing accustomed to it.”

LEGISLATIVE SPEAKING FEES These are speaking fees reported by members of the Assembly and Senate for 1984: SENATE

Alfred E. Alquist (D-San Jose) $3,000 Ruben S. Ayala (D-Chico) NONE Marian Bergeson (R-Newport Beach) $1,550 Robert G. Beverly (R-Manhattan Beach) $2,000 Daniel E. Boatwright (D-Concord) $2,000 William Campbell (R-Hacienda Heights) $29,150 Paul B. Carpenter (D-Cypress) $2,650 William A. Craven (R-Oceanside) $700 Ed Davis (R-Valencia) NONE Wadie P. Deddeh (D-Chula Vista) $3,150 Ralph C. Dills (D-Gardena) $1,000 John Doolittle (R-Citrus Heights) $3,500 Jim Ellis (R-San Diego) NONE John F. Foran (D-San Francisco) $3,000 John Garamendi (D-Walnut Grove) $6,400 Bill Greene (D-Los Angeles) NONE Leroy Green (D-Carmichael) $2,400 Gary K. Hart (D-Santa Barbara) $5,992 Barry Keene (D-Benicia) $1,500 Bill Lockyer (D-Hayward) $2,350 Ken Maddy (R-Fresno) $3,750 Milton Marks (R-San Francisco) NONE Dan McCorquodale (D-San Jose) $500 Henry J. Mello (D-Watsonville) $250 Joseph B. Montoya (D-Whittier) $13,250 Becky Morgan (R-Los Altos Hills) NONE James W. Nielsen (R-Woodland) $5,075 Nicholas C. Petris (D-Oakland) NONE Robert Presley (D-Riverside) $4,549 H. L. Richardson (R-Glendora) $1,250 Alan Robbins (D-Van Nuys) $1,000 David A. Roberti (D-Los Angeles) $14,000 Herschel Rosenthal (D-Los Angeles) $3,800 Edward R. Royce (R-Anaheim) NONE Newton R. Russell (R-Glendale) $500 John Seymour (R-Anaheim) $9,049 Walter W. Stiern (D-Bakersfield) NONE Art Torres (D-South Pasadena) $7,905 Rose Ann Vuich (D-Dinuba) NONE Diane Watson (D-Los Angeles) $13,850

ASSEMBLY

Art Agnos (D-San Francisco) $1,000 Richard Alatorre (D-Los Angeles) $4,700 Doris Allen (R-Cypress) $250 Rusty Areias (D-Los Banos) $450 Charles Bader (R-Pomona) $1,500 William P. Baker (R-Danville) $750 Tom Bane (D-Tarzana) $1,150 Tom Bates (D-Oakland) $100 Bill Bradley (R-San Marcos) $500 Bruce Bronzan (D-Fresno) $3,325 Dennis Brown (R-Signal Hill) NONE Willie Brown (D-San Francisco) $56,450 Charles M. Calderon (D-Alhambra) $1,250 Robert J. Campbell (D-Richmond) NONE Pete Chacon (D-San Diego) $1,750 Steve Clute (D-Riverside) NONE Gary A. Condit (D-Ceres) NONE Lloyd G. Connelly (D-Sacramento) NONE Dominic L. Cortese (D-San Jose) $800 Jim Costa (D-Fresno) $4,000 Gray Davis (D-Los Angeles) NONE Jean M. Duffy (D-Citrus Heights) $10,972 Gerald R. Eaves (D-Rialto) $801 Dave Elder (D-Long Beach) $8,850 Sam Farr (D-Carmel) $1,000 Gerald N. Felando (R-San Pedro) $1,500 Gil Ferguson (R-Newport Beach) NONE William J. Filante (R-Greenbrae) $2,288 Richard E. Floyd (D-Hawthorne) $2,500 Robert C. Frazee (R-Carlsbad) NONE Nolan Frizzelle (R-Huntington Beach) $2,250 Wayne Grisham (R-Norwalk) $500 Thomas M. Hannigan (D-Fairfield) NONE Elihu M. Harris (D-Oakland) $1,000 Dan Hauser (D-Arcata) NONE Tom Hayden (D-Santa Monica) $3,100 Wally Herger (R-Rio Oso) NONE Frank Hill (R-Whittier) $2,300 Teresa P. Hughes (D-Los Angeles) $1,050 Phillip Isenberg (D-Sacramento) $700 Ross Johnson (R-La Habra) NONE Patrick Johnston (D-Stockton) $1,700 Bill Jones (R-Fresno) NONE Richard Katz (D-Sepulveda) $2,000 David G. Kelley (R-Hemet) NONE Lucy Killea (D-San Diego) NONE Johan Klehs (D-San Leandro) $600 Ernest Konnyu (R-Saratoga) $150 Marian W. LaFollette (R-Northridge) NONE William H. Lancaster (R-Covina) $500 Bill Leonard (R-Redlands) $1,313 John R. Lewis (R-Orange) NONE Burt Margolin (D-Los Angeles) $1,000 Alister McAlister (D-Fremont) $7,000 Thomas McClintock (R-Thousand Oaks) NONE Sunny Mojonnier (R-Encinitas) $1,500 Gloria Molina (D-Los Angeles) $4,294 Gwen Moore (D-Los Angeles) $4,000 Richard L. Mountjoy (R-Monrovia) NONE Robert W. Naylor (R-Menlo Park) $5,950 Pat Nolan (R-Glendale) $2,000 Jack O’Connell (D-Carpenteria) NONE Louis J. Papan (D-Millbrae) $5,350 Steve Peace (D-Chula Vista) $1,000 Richard Robinson (D-Garden Grove) $4,000 Donald Rogers (R-Bakersfield) NONE Mike Roos (D-Los Angeles) $26,392 Eric Seastrand (R-Salinas) NONE Don A. Sebastiani (R-Sonoma) NONE Byron D. Sher (D-Palo Alto) NONE Stan Statham (R-Oak Run) $1,100 Larry Stirling (R-San Diego) $1,592 Sally Tanner (D-El Monte) $1,500 Curtis R. Tucker (D-Inglewood) $8,850 John Vasconcellos (D-Santa Clara) $2,695 Frank Vicencia (D-Bellflower) $4,500 Maxine Waters (D-Los Angeles) $9,040 Norm Waters (D-Plymouth) NONE Cathie Wright (R-Simi Valley) $1,500 Phillip D. Wyman (R-Tehachapi) $500

INDUSTRIES PAYING THE MOST IN LEGISLATIVE SPEAKING FEES

Health $108,366 Education $49,675 Utilities and Communications $20,600 Insurance and Finance $20,400 Housing and Land Development $14,800 Manufacturing $11,450