Labor juggernaut’s takedown roils SacramentoOctober 14, 2021
Presented by United Healthcare
THE BUZZ — SEIU SHOCKER: Allegations against one of the state’s biggest power players — the leader of a major labor union — stunned Sacramento Wednesday.
California Attorney General Rob Bonta’s office announced a 13-count complaint alleging that Alma Hernandez, the executive director of the powerhouse 700,000-member Service Employees International Union California and her husband, Jose Moscoso, are guilty of perjury, tax fraud, embezzlement and failure to pay unemployment insurance taxes.
The Sac Bee’s Jeong Park scooped the story. Hernandez, who had held the post since 2016 and was the first Latino to hold the job, resigned immediately.
Bonta’s office charged the union leader and her husband on Oct. 4 in the Sacramento County Superior Court. Also among an eye-opening 49-page litany of charges: grand theft, filing false income tax returns and failing to file them at all and aggravated white-collar crime with a loss greater than $100,000.
WHY IT MATTERS: Hernandez was a regular on the Capitol Weekly’s Top 100 list of biggest influencers. More recently, she was a frontline soldier for SEIU in the fight against Gov. Gavin Newsom’s recall. Unions put up $10 million to fight the recall, and SEIU led the charge with a hefty $6 million check. By vocally backing Newsom, she broke with the SEIU’s new president-elect, Richard Louis Brown, who vowed that Newsom “will not get any help from us” and was “on his own” in beating back the recall. She’s also been a major backer of Insurance Commissioner Ricardo Lara, and was this year honored as a “Badass in Green” by EnviroVoters.
Hernandez had been the focus of an investigation since June 2019, after the state’s Fair Political Practices Commission spotted questionable payments made to her husband, according to the timeline laid out in the court documents. Search warrants were served on their home, businesses and tax preparers’ offices in October 2020, the documents show. Nevertheless, despite the gathering clouds, Hernandez chose not to step down — or even warn of the coming storm, Sacramento insiders note. Wednesday’s news left labor leaders feeling completely blindsided, sources told POLITICO: “Nobody knew this was coming,’’ said one person familiar with the case.
ISN’T IT IRONIC? According to court documents, the investigation was assisted by the Tax Recovery in the Underground Economy task force to “determine if there was any additional fraud” conducted by the couple. They found Moscoso “did not disclose to EDD that he employed multiple individuals to work in his air duct cleaning business, resulting in more than $300,000 in unreported wages.
“The irony — that they got done by the underground economy task force that organized labor pushed for — is rich,” one labor leader told POLITICO. Unions “fight every single day” to “protect workers from that underground economy,” they added. “That was her job. It’s crazy.”
The investigation was years in the making, but Bonta’s bombshell came more than a month after the Sept. 14 recall election. That’s noteworthy because, given Hernandez’s high-profile and generous support of Newsom, these allegations would have been a national story — had they been in the headlines prior to the recall election.
WHAT HAPPENS NOW? The couple, who have two young kids, allegedly owe the state more than $140,000 and could face state prison. Stay tuned.
NO COMMENT: Hernandez’ sister Mari issued a statement Wednesday saying that Hernandez “doesn’t wish to comment” on the case. But she defended her sister as one who has “devoted her entire working life to the cause of justice and dignity” for working people. “In the end, we know their family will clear their name, and they will both return to raising their children and fighting for the future of our family and community,’’ she said.
BUENOS DÍAS, good Thursday morning. Speaker Nancy Pelosi will hold a press event in San Francisco Thursday “highlighting critical provisions in the Build Back Better Act that tackle the climate crisis, address environmental justice and invest in America’s clean energy future.” 10:30 a.m. P.T./1:30 p.m. E.T. on the Living Roof at the California Academy of Sciences.
Also participating: Sen. Alex Padilla (D-Calif.); Eddie Ahn, executive director of Brightline Defense; Daniel Kammen, professor of Energy at University of California, Berkeley; and Rev. Sally Bingham, president emeritus of the Regeneration Project.
Got a tip or story idea for California Playbook? Hit [email protected] or [email protected] or follow us on Twitter @cmarinucci and @jeremybwhite.
QUOTE OF THE DAY: “Absolutely.” — Jan. 6 committee member Rep. Adam Schiff (D-Calif.) on CNN whether House Minority Leader Kevin McCarthy is “an insurrectionist in a suit and tie.” Of the committee’s subpoenas, Schiff added, "We're not messing around. If people don't show up, if people don't provide the documents they're compelled to, we intend to take up criminal contempt."
BONUS QOTD: William “Captain Kirk” Shatner, 90, who teared up after becoming the oldest human ever to visit space on Wednesday’s Blue Origin flight: “I’m so filled with emotion about what just happened. … I hope I never recover from this. I hope I can maintain what I feel now, I don’t want to lose it. It’s so much larger than me and life. It hasn’t got anything to do with the little green men and the blue orb. It has to do with the enormity and the quickness and the suddenness of life and death.”
TWEET OF THE DAY: CalMatters’ Laurel Rosenhall @LaurelRosenhall: “Having major flashbacks to 2014 when California Democrats were getting popped for bribery & perjury like every other week”
VIDEO OF THE DAY: This mesmerizing nine-second clip of Padilla rolling a tortilla, via LA Taco.
PODCAST OF THE DAY: “Fifth and Mission,” via the SF Chronicle’s Dominic Fracassa: One Bay Area county wants to end family homelessness in a year. Here's the plan.
WHERE’S GAVIN? Nothing official announced.
SECOND BOMBSHELL DROPS — Former California state lawmaker indicted on federal bribery charges, by POLITICO’s Alexander Nieves: Federal prosecutors alleged in a 20-count indictment that Ridley-Thomas helped direct funding and contracts to USC’s school of social work while serving on the Los Angeles County Board of Supervisors. In exchange, his son, former state lawmaker Sebastian Ridley-Thomas, was guaranteed graduate school admission and a paid teaching position by the school's then-dean, Marilyn Louise Flynn.
THE SHOWDOWN — “Never-give-up Dodgers show longtime rival Giants they’re built for elimination games,” opines the LA Times’ Bill Plaschke: “C’mon, you really thought the Dodgers were going away quietly? You really thought baseball’s resilient defending champions were just going to lay down and let those maddening San Francisco Giants celebrate in their backyard?”
BATTING BIG — “The Giants might already be at a pitching disadvantage against the Dodgers for Game 5,” by SFGATE’s Gabe Fernandez: “Though the series between the San Francisco Giants and Los Angeles Dodgers is tied at two games apiece as it enters Game 5, San Francisco may already find themselves at a disadvantage against its visiting rivals on Thursday.”
NEIGHBORHOOD DRILLING — “California’s Dirty Little Secret: Oil Wells in the Backyard,” by Grist’s Alexandria Herr for Capital & Main: “Despite California’s reputation as an environmentally friendly state, neighborhood drilling is a distinctly Californian phenomenon. Most oil-producing states — including Colorado, IIlinois, Pennsylvania, Wyoming, and even Texas — have regulations dictating how close to homes, schools, and sometimes hospitals that oil wells are allowed to operate.”
RELAXED SENTENCING — “Newsom signs new laws to ease California's strict criminal sentencing system,” by the SF Chronicle’s Bob Egelko: “Starting in January, nonviolent drug offenders will no longer face mandatory prison or jail sentences and will instead be eligible for probation. Judges who now can impose any of three sentences for most felony crimes — three, four or six years for robbery, for example, or three, six or eight years for rape — will be discouraged from imposing the maximum term except in extreme cases.”
HOUSING VOUCHERS — “This Silicon Valley county is trying to end a 'hidden epidemic' of homeless families. Will it work?” by the SF Chronicle’s Lauren Hepler: “Santa Clara County officials last week launched a new effort to house 1,200 homeless families in the next year. By 2025, the “Heading Home” program seeks to functionally end family homelessness in the county, meaning that more families are entering housing than falling into homelessness.”
SHIPPING SOLUTION — “Port of Los Angeles going 24/7 to ease shipping backlog, White House says,” by KTVU’s Josh Boak: “The White House said Wednesday it has helped broker an agreement for the Port of Los Angeles to become a 24-hour, seven-days-a-week operation, part of an effort to relieve supply chain bottlenecks and move stranded container ships that are driving prices higher for U.S. consumers.”
— “Port truckers win $30 million in wage theft settlements,” by the LA Times’ Margot Roosevelt: “One of the world’s largest trucking companies, XPO Logistics, agreed Tuesday to pay $30 million to settle class-action lawsuits filed by hundreds of drivers who said they earned less than minimum wage delivering goods for major retailers from the ports of Los Angeles and Long Beach.”
OFFSHORE JAMS — “Investigators examine role of unprecedented port gridlock in O.C. oil spill,” by the LA Times’ Hannah Fry and Richard Winton: “Investigators are probing possible issues with the way ships are anchoring or drifting off the coast in long lines caused by skyrocketing consumer demand and disrupted supply chains during the pandemic.”
LIFELINE LUNGS — “COVID lungs: Transplants are last resort for many California patients,” by CalMatters’ Ana B. Ibarra: “Ten percent of people who have undergone transplants this year in California had their lungs wrecked by COVID-19. Doctors worry there are more transplants to come, and that non-COVID patients will be waiting longer for new lungs.”
— "In California’s battle against COVID, Gov. Gavin Newsom is still leading from behind," via The Sac Bee editorial board: "Three weeks after Gov. Gavin Newsom celebrated his resounding defeat of a recall attempt led by pandemic deniers, declaring that “science was on the ballot” and had emerged victorious, California got the sort of tough vaccine mandate the science recommends. Unfortunately for those of us who don’t live in Southern California, it came from the Los Angeles City Council."
— "Covid: Judge blocks vaccination mandate for California prison employees," via the AP for East Bay Times: "A judge on Wednesday blocked an order due to take effect this week that required California prison employees to be vaccinated against COVID-19."
FUTURE CITYSCAPE — “San Francisco is at a tipping point. The revolts of the past must show us the path forward,” opines Roll Over Easy’s Luke Spray for SFGATE: “COVID has led to San Francisco’s biggest streetscape changes in decades, as Slow Streets, Shared Spaces, and new pedestrian promenades along JFK Drive and the Great Highway have all revealed what tomorrow’s streets might look like.”
ALISAL FIRE ADVANCES — “Wildfire rages in Southern California coastal mountains,” via the AP: “A wildfire raging through Southern California coastal mountains threatened ranches and rural homes and kept a major highway shut down Wednesday as the fire-scarred state faced a new round of dry winds that raise the risk of infernos.”
— “California experiences its driest summer since 1895,” by The Hill’s Lexi Lonas.
— “Are immigrants getting left out of California’s rent relief?” by CalMatters’ Manuela Tobias: “Non-English speaking immigrants face some of the biggest hurdles to receiving California rent relief. Advocates say informal leases, lack of technology access and language barriers are getting in the way.”
TRAIN STALLED — “California bullet train funds stalemated,” opines CalMatters’ Dan Walters: “Costs are rising for California’s much-troubled bullet train project and Gov. Gavin Newsom is having trouble getting more construction money from the Legislature.”
— “Unlike LA, San Diego won’t issue an indoor COVID-19 vaccine mandate, county says,” by The San Diego Union-Tribune’s Jonathan Wosen: “It’s not the first time San Diego and Los Angeles have taken different approaches to control the spread of the coronavirus.”
— “Richmond chief on leave after family member accuses her of violence, death threats in investigation that has ensnared three Bay Area police chiefs,” by the Mercury News’ Nate Gartrell.
— “Biden will announce expanded operations at Port of Los Angeles as supply chain crunch continues,” by the LA Times’ Chris Megerian and Don Lee: “The Port of Los Angeles will begin operating around the clock as the White House pushes to clear supply chain bottlenecks threatening the holiday shopping season and slowing the country’s economic recovery from the global pandemic, senior Biden administration officials said.”
— SCOOP via Steven Tavares @eastbaycitizen: “Former Oakland Councilman Ignacio De La Fuente is running for mayor. He raised the idea during our East Bay Insiders podcast a few months back. The current and projected field of 2022 Oakland mayoral candidates look inexperienced. Maybe there’s a niche for him? #oakmayor”
DIVIDED FRONT — “Spot on or unfair? Facebook employees split on whistleblower Frances Haugen’s critique,” by The Guardian’s Carly Olson: “Facebook is known for ironclad NDAs and a history of retaliating against workers who speak out. Even when the company faced sharp condemnation in the past, including after the Cambridge Analytica scandal, public airing of internal criticism has been muted.”
— “Tesla Wouldn’t Be Where It Is Today Without California,” by Bloomberg’s Dana Hull: “Tesla is not pulling up stakes from California, shuttering its Palo Alto offices or forcing engineers and their families to move. … But California’s bragging rights as home to Tesla’s corporate headquarters go away. That hurts: the state sees itself as the epicenter of innovation, and Texas is its political nemesis.”
— “Elon Musk slashes more than $5 million from price of historic Silicon Valley mansion,” by Mansion Global’s V.L. Hendrickson for Fox Business: “The listing of the European-style residence for $37.5 million in Hillsborough, California, was first announced in a June tweet from the CEO of Tesla Motorsand SpaceX, Mansion Global reported. Mr. Musk said he’d ‘decided to sell my last remaining house. Just needs to go to a large family who will live there.’”
— “Mark Zuckerberg spent $419M on nonprofits ahead of 2020 election — and got out the Dem vote,” by the New York Post’s William Doyle: “During the 2020 election, Facebook CEO Mark Zuckerberg spent hundreds of millions of dollars to turn out likely Democratic voters. But this wasn’t traditional political spending. He funded a targeted, private takeover of government election operations by nominally nonpartisan — but demonstrably ideological — nonprofit organizations.”
STRIKE LOOMS LARGE — “Film TV workers union says strike to start next week,” by the AP’s Andrew Dalton and Lindsey Bahr: “The union representing film and television crews says its 60,000 members will begin a nationwide strike on Monday if it does not reach a deal that satisfies demands for fair and safe working conditions.”
— “In Hollywood Hills, Justin Timberlake and Jessica Biel aim for $35 million,” by the LA Times’ Jack Flemming: “The Spanish-style stunner covers 13,530 square feet and sits on more than 10 acres, making it the largest home on the largest lot currently up for grabs in an area where land comes at a premium.”
MARY JANE IN MAINE — “Calif. cannabis 'disruptor' new to Maine plans further expansion,” by Mainebiz’s Renee Cordes: “Erik Murray, founder of Rose Mary Jane, said the Oakland-based company chose to open its first East Coast dispensary in Maine to make a bigger impact in a smaller market.”
ROAD CLOSED INDEFINITELY — “This Bay Area city plans to ban cars, expand outdoor dining for good along its ‘crown jewel,’” by The Mercury News’ Maggie Angst.
BIRDD BEHIND BARS — “Resentencing Due for Convicted Pimp in Child Sex Trafficking Case,” via KFI.
ESCAPE FROM HOME AFLAME — “California plane crash: Dramatic video shows bystanders rescuing woman from burning home,” by Fox News’ David Aaro.
MYSTERY — “Employee’s death at winery near Healdsburg spurs workplace investigation,” by the Press Democrat’s Matt Pera and Bill Swindell.
NOPE — “92 rattlesnakes retrieved from under Santa Rosa home,” by the SF Chronicle’s Lauren Hernández.
— “Longtime A’s broadcaster, former player Ray Fosse dies at age 74,” by The Mercury News’ Shayna Rubin: “Ray Fosse covered the Oakland Athletics for the last 36 years on radio, 33 on TV.”
AFTER THE RECALL: On the one-month anniversary of the recall attempt, join California Humanities today for "After the Vote: Recall Elections in California," a free online panel discussion as part of the group’s ongoing electoral engagement discussion series, California on the Ballot. Panelists: POLITICO’s Carla Marinucci and LA Times’ Seema Mehta, moderator Dan Schnur, political strategist and professor at the USC Annenberg School of Communications and UC Berkeley Institute of Governmental Studies. Thursday, 4-5 p.m. free. Register here.
Correction: An earlier version of this newsletter misstated the target of Attorney General Rob Bonta‘s 13-count complaint against Alma Hernandez and her husband, Jose Moscoso.
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