Follow The Money

Posted on February 27, 2012

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February 25, 2012

Dear Members and Others:

In 2008, a bill was pending in the Senate–AB 730–which would have required increased disclosure and taxpayer protections whenever IT companies with a specified litigation history bid on public IT contracts.  According to the press, the bill was “aimed squarely at Deloitte (Consulting)” due to allegations that it had developed a faulty IT system for the Los Angeles Unified School District.  Deloitte lobbied against the bill, which died in the Senate.

Deloitte is back, joining the AOC’s taxpayer-funded lobbyist in trying to kill another piece of reform legislation currently in the Senate–AB 1208.  Deloitte paid a lobbyist more than $124,000 last year, in large part to advocate for continued CCMS funding and, specifically, to lobby against AB 1208.  We include for your consideration Friday’s excellent article on the matter by Maria Dinzeo of the Courthouse News Service.

Deloitte’s payments to lobbyists are detailed on the Secretary of State’s website.  If you have the patience to follow the money, you will find that Deloitte has paid more than $358,000 over the last five years to California lobbyists.  That total includes $52,000 to kill AB 730, $119,000 directly related to CCMS, and just under $150,000 to oppose AB 1208 and to promote “IT Projects” including CCMS.

Deloitte has struggled with the reporting requirements for lobbyists–they paid $8,000 to resolve charges with the Fair Political Practices Commission over a failure by one of their lobbyists to timely report efforts on behalf of the company to defeat AB 730 and to support CCMS in 2008-2009.  We have included last year’s story from the Recorder newspaper as as recap of that matter.

Is there any wonder why Deloitte opposes AB 1208?  The bill threatens to replace unaccountable bureaucrats at the AOC with trial court judges who are accountable to the taxpayer.  AB 1208 would prevent the Judicial Council from spending hundreds of millions of trial court dollars on projects that lack the support of the judges and staff of the very courts those projects are supposed to serve.  It is an important first step toward putting judges back in charge of the important decisions affecting their courts.  To find those with the most to lose if it passes, just follow the money.

Thank you for your continued support.

Directors,
Alliance of California Judges

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Main Private Beneficiary of Court IT Project Lobbied Against Reform Bill

By MARIA DINZEO

SAN FRANCISCO (CN) — A bill that would limit the power of California’s court bureaucracy in spending hundreds of millions on an IT project has an enemy behind the lines in the form of Deloitte Consulting.

The principal private beneficiary of the big IT project spent $124,000 last year lobbying against the reform bill, AB 1208. Deloitte’s lobbying report includes a $2,827 bill for an event at Sacramento’s exclusive Sutter Club, for a select list of legislators and Assembly staff members.

AB 1208 passed California’s Assembly in January and is now pending in the state Senate. Deloitte’s interest in the bill correlates with its extensive invoicing of California as the developer of a $1.9 billion software system for the courts.

As passed last month by the Assembly, the bill requires that any technology projects receive written consent from 2/3 of the trial courts with voting power apportioned based on population. That provision puts a check on the ability of the Administrative Office of the Courts to embark on projects like the Court Case Management System, a nine-year-old project with Deloitte as the principal consultant.

In its report to California’s Secretary State, Deloitte lists the law firm of Ochoa & Moore in Sacramento as the lobbyist paid to oppose AB 1208. But the report was filed by attorney Steven Lucas of Nielsen Merksamer in San Rafael. Partner Steve Merksamer was chief of staff for Republican Governor George Deukmejian in the 1980s.

Neither Lucas nor Ochoa & Moore answered a request for comment.

Deloitte’s media contact dealing with state government issues said he was unsure how to address Deloitte’s lobbying activities in California, because he is based in Virginia. He then said he did not know the appropriate public relations person to talk to. Inquiries subsequently directed to Deloitte’s Sacramento office were not immediately answered.

No one in the Judicial Council’s Office of Governmental Affairs was immediately available for comment.

AB 1208 was born out of long-simmering anger at the administrative bureaucracy that sits atop California’s court system.

Trial judges are fed up with the IT project in particular, saying it has drained enormous amounts from funds intended to keep the state’s trial courts open and operating. California’s two-year budget crisis has only increased their opposition.

“To date, over $200 million dollars has been siphoned from local courts to fund this technological boondoggle,” said Sacramento Superior Court Judge Maryanne Gilliard, one of the directors of the Alliance of California Judges, a group sponsoring AB 1208. “The Alliance of California Judges is not surprised to learn that Deloitte paid a lobbying firm over $120,000 to try and kill AB 1208.”

A May 2011 report to the Legislature shows that in addition to spending from other parts of the court budget, fully $200 million has been drawn from the Trial Court Trust Fund to keep the IT project going. Those draws were recommended by the bureaucracy and approved by the Judicial Council, a body of judges and court officials headed by Chief Justice Tani Cantil-Sakauye.

“Deloitte has a vested interest in keeping Trial Court Trust Fund dollars flowing to the troubled CCMS project,” Gilliard said. “Deloitte wants the Judicial Council and the AOC to maintain their unfettered access to these funds.”

The event at the Sutter Club took place on February 27th of last year, on the eve of a report from the state Auditor slamming the IT project. “In addition to planning inadequately for the state case management project, the AOC has consistently failed to develop accurate cost estimates,” said the Auditor.

The Sutter Club event was attended by Assembly members Joan Buchanan plus three staff members, Steven Bradford, Susan Bonilla plus one staff member, Paul Fong plus one staff member, Jerry Hill, Jeff Miller, Nancy Skinner, Jose Solorio, Das Williams, as well as Gillian Eppinette, the executive secretary for Assembly member Jim Beall and Victoria Stewart, the senior assistant for Assembly member Curt Hagman.

“The participation by Deloitte, in trying to defeat this modest budget reform,” Judge Gilliard concluded, “should concern every judge in the state.”

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April 04, 2011

CCMS Developer Fined for Not Disclosing Lobbying Activities

[Cheryl Miller]

The company that is developing the controversial Court Case Management System has agreed to pay the state $8,000 to settle charges that it failed to properly report two years of lobbying activities.

Deloitte Consulting paid lobbyist Frank Molina $122,500 between Jan. 1, 2008 and Dec. 31, 2009. Deloitte’s contract with Molina called on the lobbyist to file quarterly reporting statements as required by law, according to the Fair Political Practices Commission. But Molina never did and Deloitte never confirmed that he had, the FPPC said.

“The lobbyist had assured Deloitte Consulting that the reports had been timely filed,” Deloitte spokesman Jonathan Gandal said in prepared statement. “Once Deloitte Consulting learned that the reports had not been filed, it filed the reports and terminated its contract with the lobbyist.  We regret that this situation occurred and have instituted rigorous new steps to verify proper future reporting.”

The reports for those two years reflect Deloitte’s efforts to advance the CCMS project as public scrutiny intensified. Disclosures show Molina lobbied state lawmakers, the Administrative Office of the Courts and the Legislature’s Joint Legislative Audit Committee on the benefits of CCMS. JLAC voted in February 2010 to audit the CCMS program; that audit, released in February, raised troubling questions about the project’s management.

In 2008, the company also worked to defeat Assembly Bill 730, legislation that would have barred IT firms found liable for breach of contract from bidding on new public contracts for five years. The bill was aimed squarely at Deloitte, which had developed an allegedly faulty payroll system for the Los Angeles Unified School District. AB 730 died in the state Senate.

The FPPC has proposed fines for three other Molina clients who did not ensure that the lobbyist filed the proper forms with the state. The full commission must still approve the penalties at its April 11 meeting.

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A note from JCW: This is follow the money week. As Jacobs and the AOC go to trial in what we believe is simulated litigation, we’re working on our own follow the money article.