Donors to Davis get coastal permits aka PAY TO PLAY coastal citizen!

Sunday, October 20, 2002
(SF Chronicle)

Donors to Davis get coastal permits/State agency smiles on governor's contributors Lance Williams, Chronicle Staff Writer David Geffen, a billionaire music mogul and world-class fund-raiser for Gov. Gray Davis, wanted a seawall on the beach in front of his Malibu estate. Children's television tycoon Haim Saban, a $642,000 Davis donor, hoped to build a palatial Malibu beachfront compound. And investment banker Gary Winnick, whose firms have pumped $525,000 into Davis' campaigns, was backing a huge housing development in a West Los Angeles wetland, as well as a bold plan to lay fiber optic cables across the Pacific Ocean floor. In the end, these three wealthy, politically connected donors overcame controversy and environmental concerns to obtain the permits they needed from the California Coastal Commission, a powerful agency charged with controlling development along the state's spectacular 840-mile coastline. So did almost everyone else on a long list of heavyweight Davis donors who sought permits from the commission during the governor's first term, a Chronicle analysis of state records shows. Davis spokesman Roger Salazar said the Democratic governor has a firewall between campaign cash and official action. Davis "in no way, shape or form" allows political donations to influence policy decisions, he said. But the records of contested and controversial seaside developments raise serious questions about whether Davis, who was elected on a save-the-coast platform, has put the coast itself in play when it comes to political money. He has obtained $8.3 million from donors with business before the Coastal Commission. That's nearly 9 percent of all campaign money ($93.67 million) this most aggressive political fund-raiser in the history of California state politics has obtained in two gubernatorial campaigns. Half the time, donors gave to Davis within three months of their permits appearing on a commission agenda, records show. In a handful of cases, critics say, Davis pushed hard to ensure that a donor got a permit. Top members of his administration have lobbied the commission, they say, and a pro-development alternate commissioner appointed by Davis has appeared to cast votes for controversial projects. Environmentalists complain that politically connected permit seekers enjoy a fast track to favorable commission rulings -- sometimes at the expense of protecting the coast. More than a dozen environmentalists, representing diverse organizations concerned about coastal development, were interviewed for this story. Commission decisions have "become a pay-to-play kind of situation," said Ellen Stern Harris, co-author of the 1972 voter initiative that created the agency, and herself a coastal commissioner for four years in the 1970s. "The donors and those who pay campaign money get to play and the rest of us are frozen out," said Harris, director of the nonprofit Fund for the Environment. The result, she said, has been "a progressive destruction of the coast -- the private interests over the public interests, just the opposite of the intent of the voters." Sierra Club lawyer Mark Massara complained in his "Coast Watcher" newsletter that when it came to coastal issues, "Governor Davis' administration refuses to meet with or consider environmentalists' concerns while breathlessly courting development and pollution dollars to the extreme." DAVIS DEFENDS HIS RECORD Davis' supporters say this critique is nonsense. Salazar, his spokesman, said the governor has an excellent record on coastal protection: That's one reason the Sierra Club endorsed his re-election, Salazar said. Besides, he said, Davis is scrupulous about keeping political donations separate from his governmental decisions. "The governor doesn't base any of his actions on contributions," he said. State Secretary for Resources Mary Nichols said the governor has never leaned on the commission in regard to any permit. "I guarantee you, he doesn't call on behalf of those people," she said of Davis and his donors. She called it "extreme paranoia to think that whenever a decision has been made it's because that person made a donation." But Jim Knox, executive director of the good-government group Common Cause, said Davis has established a "pay to play" dynamic throughout state government. He said donors with a stake in governmental decisions believe that "you need to grease the permit process with campaign contributions." The pattern of donations found by The Chronicle "certainly suggests that applicants are trying to use campaign contributions to influence the process," Knox said, "and that (Davis) is willing to use the Coastal Commission as a fund-raising base. "Part of what makes it troubling is that by virtue of the type of projects the commission is involved in reviewing, this is a very lucrative constituency, because coastal projects by definition usually involve a lot of money," he said. "It goes back to the irrefutable point that donors wouldn't give if they didn't think that their contributions had an impact." Davis backers point out that the governor has only limited influence over the commission: Of its 12 members, he appoints four, while the others are named by the speaker of the Assembly and the state Senate Rules Committee. But critics say that understates the governor's real influence over commission decisions. For one thing, the governor is the boss of the state's entire natural resources bureaucracy, and three members of his administration, including Nichols, serve as nonvoting ex-officio members. Also, Davis controls the Coastal Commission's budget -- and at times has used that power to sway the commission on an issue. Harris, the coastal act co-author, said she has seen Nichols remind commissioners, "I control your budget," when the commission seemed poised to defy the administration on an issue. Nichols said she was making a fiscal point, not trying to intimidate the commission. The Davis donors who had business before the commission represent a cross- section of wealth and power in California: construction companies and telecommunications firms, entertainment moguls and executives of Fortune 500 corporations, oil and timber concerns and labor unions. Some have business before multiple state agencies, not just the Coastal Commission. Others just want to make improvements on their seaside lots. The donor list even includes the wife of a man who once was Davis' most feared political rival, former Los Angeles Mayor Richard Riordan. She gave while seeking permits for a Malibu mansion. Donors' projects ranged from the building of a single fence or swimming pool at a beachfront home to major housing developments and ambitious undersea excavations. Some resulted in highly charged environmental brawls, while others went unnoticed. At times, the commission seemingly bent its rules to grant a donors' permits. Some examples: THE MALIBU MOVIE-MAKER David Geffen, a co-founder of the DreamWorks SKG movie studio, has raised huge sums for California Democrats. He won the permit for his Malibu seawall even though the commission's own experts warned it might cause the beach to wash away. Since a 1996 study found that "armoring" the coast with seawalls worsened erosion, the commission rarely allowed them. Critics claimed Geffen merely wanted the structure to keep the public off the beach in front of his estate. But the governor applied "intense" pressure to ensure Geffen got the permit, according to Marcia Hanscom of Wetlands Action Network, who often attends commission meetings. This was manifested, she said, when Nichols, Davis' secretary of resources, urged the commission to overrule the staff and approve the seawall. Nichols said she thought the staff was wrong to oppose the seawall because many had been approved over the years. She reached her views on the merits, and Geffen's political donations to the governor had nothing to do with it, she said. Salazar said Davis expects commissioners to make good, independent decisions. Hanscom also accused Davis of dispatching a pro-development alternate commissioner, Los Angeles publicist Tom Soto, to the meeting to increase traction in favor of Geffen. Hanscom contends that "when the governor has something that he wants" at a commission meeting and Chris Desser, his most pro-environment commissioner, is absent, Soto shows up. "It's a little thing we see when Davis wants to (control) a vote," Hanscom said. Desser called her absence a coincidence. "I have never ducked a vote," she said. Nichols said the accusation about Soto was false. Soto didn't respond to requests for an interview with The Chronicle. In the end, the commission voted 7-3 to give Geffen his seawall. While the permit was pending, Geffen and his DreamWorks partners combined to donate $25, 000 to Davis, records show. "It was very, very clear that the governor's contributions were at work here," Hanscom said. Meanwhile, Geffen's efforts to keep people away from his beachfront home -- a topic of ridicule in recent "Doonesbury" comic strips -- also has drawn the governor's attention, an activist said. Nineteen years ago, the state obtained an easement for a beach-access pathway across Geffen's lot. But the path was never opened to the public. It's blocked by a locked gate, said Steve Hoye, co-founder of the group Access for All. Hoye said his group wrote to Geffen, offering to maintain the pathway and provide public parking and rest rooms. But Geffen complained to Davis, Hoye said. "I was told, immediately after I wrote my letter to Mr. Geffen, that the governor's office wanted to know what the hell was going on," Hoye said. He declined to say how the message came to him. Andy Spahn, Geffen's spokesman, said donations had nothing to do with the seawall permit. By his account, commissioners properly overruled bogus objections raised by "fringe activists" who targeted Geffen because of his wealth and celebrity, and who had been egged on by the commission's staff. "The real question is why was (commission executive director) Peter Douglas spearheading opposition to such a benign request, and why are they coming after David Geffen on the issue of coastal access?" he said. Geffen has sued to block the opening of the easement, which he said he was forced to give the state in exchange for a building permit in 1983. Four years later, the U.S. Supreme Court barred the commission from insisting on easements in exchange for permits. WEALTHY WANT TO FENCE BEACHES Saban, creator of the "Mighty Morphin Power Rangers," bundled the permit for his oversize Malibu mansion with that of two wealthy neighbors: billionaire investor Eli Broad and Nancy Daly, wife of Los Angeles' former Mayor Riordan, a Republican. They won approval to build homes that block the public's view of the ocean even though commission policy requires open "view corridors." In an unusual transaction, the three neighbors bought a $1 million beachfront lot a mile away and gave it to the state in exchange for permits. In the three months preceding the commission's vote, the Riordans and Broad, Saban and their firms pumped $225,000 into Davis' campaigns; afterward, Saban hosted a Davis fund-raiser. The commission's vote provoked a lawsuit from other area homeowners who claimed the panel had no right to exempt the billionaires from complying with the rules -- even in exchange for a million-dollar property. A judge ruled the transaction was illegal, but the commission was upheld on appeal. Broad and Saban declined comment. Riordan said his donations didn't concern the coastal permit. His wife gave to Davis because she is a Democrat, and "I gave money to him because he twisted my arm when I was mayor of Los Angeles, and the city needed help in Sacramento," he said. DEVELOPERS AND WETLANDS Playa Capital, a development group including Davis fund-raiser Winnick, won a key commission vote to advance the firm's bitterly fought, 13,000-unit Playa Vista development around wetlands near the Los Angeles Airport. The Playa Vista permit was adopted after a stormy, three-day hearing at which environmentalists begged the commission not to go along. Soto, the governor's alternate commissioner, cast a vote for the permit. "I'm sure it interested the governor, or Tom Soto wouldn't have been there, " said Hanscom of the Playa Vista permit. Another Winnick venture, an affiliate of the now-bankrupt Global Crossing telecom, won fast-track permits to lay fiber optic cable in coastal waters off San Luis Obispo for trans-Pacific Internet service. Douglas, the commission's executive director, said the governor's office applied "a lot of pressure" on behalf of several telecoms that won cable permits because the permits were "important to the state's economic growth." Both the Playa Vista and cable votes were bracketed by donations to Davis from Winnick and his business associates. TV MOGUL EYES WETLANDS The Malibu Bay Co., owned by Spanish-language television magnate Jerrold Perenchio, got a huge boost for a controversial commercial development proposed on wetlands near famed Surfrider Beach. Overruling its staff, the commission last month refused to impose a two-year construction moratorium on the area. At $1.16 million, Perenchio is Davis' biggest single donor. One month before the meeting, he donated $200,000. If approved by the Malibu City Council, Perenchio's project could come back before the commission sometime after the election. Perenchio declined comment. Spokesman David Reznick told the commission last month that the project had been carefully planned to preserve Malibu's character and environment. A moratorium threatened the "basic viability" of the project, he argued. EASTWOOD AND PEBBLE BEACH Another project involving a high-profile Davis supporter is waiting in the wings. The Pebble Beach Co. is bent on a $100 million expansion that would include an eighth seaside golf course on the Pacific near Carmel. Voters gave the project the go-ahead, but some environmentalists oppose it, saying it would require logging thousands of Monterey pines and endanger wetlands. A principal in Pebble Beach Co. is actor Clint Eastwood, a friend of the governor who recently hosted a Davis fund-raiser. "His relationship with the governor is the scariest part," said the Sierra Club's Massara. "There's no question that the coastal act doesn't allow yet another golf course at Pebble Beach . . . (but) Davis just appointed (Eastwood) to the state Parks Commission and heralded him as an environmentalist." Developer Alan Williams said Eastwood has insisted that the project be sensitive to environmental concerns, and he predicts it will win its coastal permit on the merits. "They're friends, they like each other, and they play golf," he said of Eastwood and Davis, ". . . but we have to go through an environmental process, and that happens whether the governor is his friend or not." DAVIS CAMPAIGNED FOR COAST Davis made coastal protection a centerpiece of his 1998 campaign for governor against Republican Attorney General Dan Lungren, whom Davis blamed for lax enforcement of coastal protection laws. Since taking office, Davis said, he kept his campaign promises to protect the coast, and some observers agree. Norbert Dall, a former Coastal Commission staffer who now represents permit applicants, said there have been no big oil spills on Davis' watch, and no significant loss of coastal wetlands. Environmentalists also praised Davis for vetoing an oil industry measure that might have delayed the cleanup of abandoned offshore oil rigs, and for signing legislation that makes it more difficult for a subsidiary of the Hearst Corp., owners of The Chronicle, to proceed with a golf resort proposed for the Central Coast near San Simeon. In 2000, two Hearst Corp. subsidiaries donated $7,899 to Davis, records show. Nevertheless, some coastal advocates have soured on Davis, in part because they believe he pressures the commission to approve problematic projects favored by his financial supporters. Most Davis donors got their permits approved. Of 96 permit applications involving the governor's donors that have come before the commission since Davis took office, 73 were approved, records show, while 18 were postponed. Only five were denied. The records show that most commission applicants don't donate, and experts say a vast majority of permits are approved, whether or not donors are involved. But that's because most permits are routine, said Santa Monica lawyer Frank Angel, who represents conservation groups before the commission. It's a different story when one looks at another universe of permit applications, he said. "The cases where there is controversy or an illegal condition, the big contributors get their way," Angel said, while applicants "who are not big corporations, who don't have the connections and don't have the lobbyists, they get denied." In general, commissioners "blink when connected applicants come before them, or at least take liberties at the way the coastal act is being enforced," Angel said. "But when the proverbial little guy comes before them, everything is rigidly and strictly enforced." Douglas, the commission's executive director, said he works hard to ensure that his staff treats every commission applicant equitably, whether they're connected or not. If commissioners choose to show "more generosity and flexibility" to one applicant than another, that's their right, he said. Stephen Enkeboll said he's one of the little guys. Starting in 1997, he sought to build a house on land left him by his late father. But the property, in an oak-studded Malibu canyon, was in the coastal zone. "It was a complete nightmare working with the Coastal Commission," Enkeboll said. "It took me a year to get a permit." Then, in a walk-through after construction, a commission official saw that the rear deck extended under the drip line, or perimeter, of a nearby oak tree -- near enough, he decided, to threaten the tree's long-term survival. Enkeboll said the deck was included in the house plans the commission approved. Nevertheless, in July 2000, "they made me pull half the deck out, so I've got this half-assed deck on the back of my house." He also was required to plant 30 oak trees. Enkeboll said he believes politically connected applicants get a break in their permit applications. "It's not fair -- it's just the power of the dollar, basically," he said. Politics plays in the process, said Ronald Zumbrun, a property rights lawyer with the conservative Pacific Legal Foundation who has repeatedly sued the commission on behalf of permit applicants. "There are strange events where staff makes a legitimate opposition to a permit, and all of a sudden it's granted," he said. Meanwhile there are "real tearjerker cases" involving ordinary property owners who proposed even minor projects that the commission doesn't like. Sometimes the commission simply stalls applicants for years, he said. "To take on the Coastal Commission requires resources, substantial resources, and while there may be rich people on the coast, they are not all rich people." HISTORY OF CONTROVERSY The Coastal Commission is an unusual land-use agency -- part big-picture planning board, part enforcer of complex zoning rules. It regulates construction in a narrow, scenic strip of California that extends from the sands of Del Norte County to the surf beaches of Los Angeles and San Diego. Voters created the commission out of concern that local governments lacked the will and the muscle to prevent the state's coast from being despoiled. Some experts say it is doing its job: helping check coastal development, subjecting projects to more rigorous planning, encouraging greater public access to the state's beaches. But for many years the commission has been roiled by allegations of political backroom dealings in the permit process, and it has been whipsawed by criticism from both ends of the political spectrum. Property rights advocates have repeatedly sued the commission, charging that landowners are forced to run a grueling, arbitrary bureaucratic gantlet to get permits for such simple projects as remodeling a single cottage. Judges have sympathized. In 1987, the U.S. Supreme Court ordered the commission to stop forcing property owners to deed over land for public access pathways in exchange for building permits. Last year, a Sacramento judge ordered a wholesale restructuring of the commission, calling the agency "answerable to no one." The decision is on appeal. Environmentalists complain that, for 16 years, Republican governors packed the commission with pro-development officials who rubber-stamped the very sort of massive coastal projects the commission was set up to stop. Its failure to control development has been "tragic," says Ellen Stern Harris, the initiative co-author. In 1992, after years of reports of backroom machinations, the commission was hit with a full-scale corruption scandal. Mark L. Nathanson, a Hollywood entertainment consultant named to the panel by then-Assembly Speaker Willie Brown, confessed to shaking down permit applicants for hundreds of thousands of dollars. In an effort to avoid prison, sources familiar with his case say, Nathanson offered to testify against Davis, then the state controller, claiming Davis had obtained campaign cash via the shakedown scheme. But the prosecutors thought Nathanson was lying, and he served more than three years in prison. CONTROVERSY ON THE COAST Many environmentalists have raised concerns about whether certain well- connected people seeking to develop properties along the coast have gotten special treatment from the California Coastal Commission in return for political donations. Here are some examples of major coastal projects that have led to these concerns. . MALIBU . Dreamworks Beach -- Project: A seawall for a music mogul's Malibu estate. -- Proponent: David Geffen, billionaire music producer and co-founder of the DreamWorks SKG Hollywood studio. -- Background: In 2000, Geffen applied for a Coastal Commission permit to build a 48-foot-long sea wall at his estate on exclusive Carbon Beach. He said it was needed to shield his home in a severe storm, but the commission staff said seawalls cause beach erosion. -- Donations: $116,130: from Geffen to Gov. Gray Davis since 1997. $300,000-plus: from Geffen to Democratic soft money committees. $240,889: from other DreamWorks SKG partners and employees to Davis. $25,000: from Geffen and DreamWorks partners Steven Spielberg and Jeffrey Katzenberg to Davis two months before commission vote. -- Result: Commission allowed Geffen to build the wall. . Billionaires' Beach -- Project: Adjoining beachfront mansions for three wealthy Los Angeles residents with connections. -- Proponents: Children's television tycoon Haim Saban; financier Eli Broad, founder of home building giant Kaufman & Broad; and Nancy Daly, wife of Richard Riordan, the former Los Angeles mayor and failed Republican gubernatorial candidate. -- Background: In 2000, the three billionaires sought permits to demolish six homes along Malibu's Carbon Beach and replace them with three mansions that would block the public's view of the ocean. Commission policy requires property owners to provide "view corridors" to the beach. The three paid $1 million for an 80-foot beachfront lot a mile away and offered it to the state in exchange for permits. -- Donations: $931,369: Total from Saban, Broad and Riordan to Davis. $225,000: amount given in the three months before the commission's vote. $642,869: From Saban to Davis. $210,000: From Broad to Davis. $78,500: >From Riordans to Davis. -- Result: Commission accepted the lot and issued the permit. Neighbors sued, but an appeals court approved the deal. Two months later, Saban spent $11,000 on fund-raiser for Davis where $146,250 was raised. . Malibu Bay -- Project: Hotel, office buildings, a shopping center and luxury housing in Malibu, proposed by Gov. Davis' biggest donor. -- Proponent: Jerrold Perenchio, billionaire CEO of Univision, the Spanish- language TV network, and USA network. -- Background: Perenchio owns about 100 acres in the wealthy beach town, including a mansion. His Malibu Bay Co. proposes building 285,000 square feet of commercial, retail and office space near the civic center, plus 20 new homes, a 10-acre sports field and an 11-acre area for sewage treatment. Preservationists say the project would spoil the character of the town. Environmentalists worry about destruction of wetlands and water pollution. -- Donations: $1.16 million: From Perenchio to Davis. -- Result: In September, the commission rejected a staff-recommended two- year building moratorium that would have derailed Perenchio's project. . -- CENTRAL COAST . Pacific Crossings -- Project: Undersea fiber-optic cables, for telecommunication and Internet links between California and the Far East. -- Proponents: Global Crossing, now bankrupt, run by Democratic Party money man Gary Winnick; MCI Worldcom, also bankrupt; AT&T; and other firms. -- Background: Telecoms wanted to lay high-speed cables on the floor of the Pacific Ocean between the United States and Asia. One firm wanted to run a cable across the floor of the Monterey Bay National Marine Sanctuary. At first the telecoms wanted to ban fishing along much of the Central Coast lest their cables be snagged and damaged by trawlers. Commercial fishermen opposed the projects. Environmentalists worried that the projects would harm marine life. The Center for Marine Conservation urged Davis to order a major study of the combined impact of the projects. -- Donations: $1.06 million: from the firms, which are heavily regulated by multiple state agencies, to Davis. Big donations from AT&T, Worldcom and Winnick closely followed commission votes. -- Result: Firms agreed to bury cables in coastal waters and dropped request for fishing ban. Commission approved all permits. Marine sanctuary project was abandoned. Davis didn't order environmental study. . -- LOS ANGELES . Playa Vista -- Project: A $7 billion development for 29,000 people on a coastal tract. -- Proponent: Playa Capital LLC, a real estate partnership owned in part by Pacific Capital Group, whose CEO, Gary Winnick, is a fund-raiser and confidant of the governor. He's also CEO of the bankrupt Global Crossing telecom firm. Other principals in Playa Vista are Union Labor Life Insurance Co. and the Morgan Stanley and Goldman Sachs investment firms. -- Background: For 25 years environmentalists and developers have battled over the 1,000-acre tract near Los Angeles International Airport. It contains the Ballona Wetlands, home to rare plants and birds and largest undeveloped area in the city. Playa Capital wanted a permit to widen and realign roads across a proposed wetlands park. -- Donations: $525,000: from firms connected to Winnick, to Davis. $3 million-plus: from Winnick and his firms in unregulated soft money, mostly to the Democratic Party, in recent years. -- Result: Playa Capital got its permit. Tom Soto, the alternate commissioner appointed by Davis, attended and voted for the project. Environmentalists protested, saying Soto was a former Playa Vista consultant, but Soto said he had no conflict. One month after the vote, Winnick donated $25,000 to Davis. . PEBBLE BEACH . The Forest Course -- Project: $100 million golf links at world-famous Pebble Beach. -- Proponent: Pebble Beach Co. Principals include golf legend Arnold Palmer, former baseball Commissioner Peter Ueberroth and actor Clint Eastwood, a Davis appointee on state parks board. -- Background: The company's original plan for an eighth golf course at the resort was criticized because it called for logging 33,000 Monterey pines. In 2000, local voters approved a project that reduced logging some environmentalists still opposed. No date for review by Coastal Commission. -- Donations: $340,000: raised for Davis at Eastwood's golf club via golf tournament sponsored by the union for police officers. $356,000: raised for Davis at "Governor's Cup" tournament, twice hosted by the prison guards' union at Pebble Beach. $5,000: from Pebble Beach Co. to Davis. $1,000: from Arnold Palmer Golf to Davis. 4,000: from Eastwood to host reception for Davis at his Tehama Golf Club in Carmel Valley. .

Sources: Records of California Coastal Commission, California secretary of state, Federal Elections Commission, Chronicle interviews E-mail Lance Williams at @lmwilliams@sfchronicle.com. ---------------------------------------------------------------------- Copyright 2002 SF Chronicle

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