BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 450 N Street, Room 121 Sacramento, California REPORTER'S TRANSCRIPT APRIL 26, 2011 ITEMS M2 and M3 OTHER CHIEF COUNSEL MATTERS OUTREACH PARTNERSHIPS AND STATEMENTS OF ECONOMIC INTEREST AND TRAVEL CLAIM SCHEDULES Reported by: Beverly D. Toms No. CSR 1662 1 1 2 P R E S E N T 3 4 For the Board Jerome E. Horton of Equalization: Chairman 5 Michelle Steel 6 Vice-Chairwoman 7 Betty T. Yee Member 8 George Runner 9 Member 10 Marcy Jo Mandel Appearing for John Chiang 11 State Controller (per Government Code 12 Section 7.9) 13 Diane Olson, Chief Board Proceedings Division 14 Board of Equalization 15 staff: Anita Gore Deputy Director 16 External Affairs 17 Deborah Cooke Attorney 18 Legal Department 19 --oOo--- 20 21 22 23 24 25 26 27 28 2 1 2 INDEX 3 Page 4 INTRODUCTION 4 5 M2, OUTREACH PARTNERSHIPS 10 6 M3, STATEMENTS OF ECONOMIC INTEREST 7 AND TRAVEL CLAIM SCHEDULES 40 8 ---oOo--- 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 1 INTRODUCTION 2 Sacramento, California 3 April 26, 2011 4 ---oOO--- 5 MS. OLSON: Our next item is M2, Outreach 6 Partnerships. 7 MR. HORTON: Thank you. Members, this -- this 8 matter is brought before us by our Controller who 9 requests that we discuss these particular items. 10 Ms. Cooke is here to make a brief presentation 11 because there's so -- there's so many different areas of 12 the law that this could involve and hopefully all the 13 Members were able to receive their staff presentation 14 and then possibly we can hear from Ms. Mandel -- 15 MS. MANDEL: Sure. 16 MR. HORTON: -- as to what the concerns are. 17 MS. MANDEL: Sure. 18 MS. YEE: May I ask a question on the 19 presentation that we were I guess provided last night, 20 or in the materials? I guess I -- 21 MR. HORTON: Ms. Yee, if you look -- how about 22 staff making a quick presentation or -- 23 MS. YEE: Okay, could they answer the question 24 maybe that I'm going to pose, and that is why is the 25 outlined marked "confidential"? 26 MR. HORTON: Oh. I don't -- yeah. 27 MS. COOKE: It was primarily a timing thing. 28 And so it's still in draft format and so it's still 4 1 considered a deliberative document at this point. And 2 so that's why it's marked "confidential." 3 MR. HORTON: Oh. 4 MS. COOKE: It was draft. 5 MS. YEE: Okay. 6 MR. HORTON: Well, once it's -- once it's 7 provided to us as the Board at that point doesn't it 8 become a -- doesn't it lose that -- 9 MS. COOKE: Well, if it's -- if it's a final 10 document, yes, but at this point because it was an 11 attorney-client privilege document and it's still in 12 draft format, it wasn't finalized based on timing issues 13 and so forth, so we -- 14 MR. HORTON: Okay. 15 MS. COOKE: -- we marked it as a draft document 16 so that if we could make any changes or updates and so 17 forth we can do that and finalize it. 18 MR. RUNNER: Okay. 19 MS. COOKE: Because certainly it would become a 20 public document at that time. 21 MR. RUNNER: Okay. Just -- just -- just a 22 quick question, is it close to the outline to which 23 you're going to take us through? 24 MS. COOKE: Yeah, it's just a summary. 25 MR. RUNNER: Okay. 26 MS. COOKE: And -- and yes, I'm just going to 27 provide a summary of what you were provided in writing 28 yesterday. 5 1 MR. RUNNER: Okay. 2 MR. HORTON: Okay, very good. Please continue. 3 MS. COOKE: Good afternoon, Chairman Horton and 4 Members of the Board. My name is Deborah Cooke and I'm 5 an attorney with the Legal Department. With me today is 6 Ms. Anita Gore, who's the Deputy Director of the 7 External Affairs Department. 8 Before you today are agenda item M2 regarding 9 outreach partnerships and agenda item M3 regarding the 10 posting of statements of economic interest, otherwise 11 known as Form 700s, and travel claim schedules on the 12 Board's website. 13 Regarding the outreach partnerships, at the 14 January 27, 2011 Board meeting Ms. Gore presented the 15 Board's Outreach Services Division plan for 2011 and 16 also provided you with a review of the outreach events 17 held in 2010. 18 The Members were also recently provided a draft 19 outline designed to inform the Members of the history 20 and current Board policies and procedures on each of 21 these agenda items. 22 Regarding M2, outreach partnerships, the 23 outline briefly describes both formal and informal 24 policies and procedures in place for approving the 25 Board's participation in various outreach activities and 26 events. 27 All events and activities in which the Board 28 participates, whether Board-sponsored, non-Board 6 1 sponsored or co-sponsored must have a governmental 2 purpose and must be reviewed and approved by the Legal 3 Department and External Affairs Department prior to BOE 4 participation. 5 The Legal Department and External Affairs 6 Department are responsible for making that determination 7 regarding the governmental purpose. And the Legal 8 Department provides guidance on various legal issues 9 associated with outreach activities such as mass 10 mailings, behested payments and potential conflicts of 11 interest. 12 The Executive Director reviews and approves all 13 non-Board-sponsored or co-sponsored events. As 14 discussed more fully in the 2011 Outreach Services 15 Division plan in the April 25th draft confidential 16 outline you were provided there are different levels of 17 Board participation in outreach activities and events. 18 We've kind of just divided them up in about -- 19 in three different categories. BOE-sponsored events, 20 those are those events that are initiated by a BOE 21 program or Board Member. They're coordinated and funded 22 in whole or part by BOE and include only government 23 entities or non-profit organizations as co-sponsors or 24 exhibitors. 25 Then there are non-BOE-sponsored events, and 26 those are those events which are sponsored and 27 coordinated by a government entity, a non-profit or 28 community-based organization. 7 1 Typically BOE's participation includes 2 providing a speaker and/or staffing and exhibit table at 3 those events. 4 And then finally the non-BOE-sponsored events, 5 which are also oftentimes co-sponsored by an individual 6 Board Member, those are considered to be events that are 7 sponsored and coordinated by a governmental entity, a 8 non-profit or community-based organization. 9 And the external non-profit or governmental 10 entities may request a Board Member to co-sponsor a 11 not-for-profit event that is being coordinated and 12 funded by the external entity. 13 Before you today for purposes of discussion is 14 the request to develop guidelines for acceptable 15 practices for all aspects of outreach activities. 16 Regarding item M3, that relates to the 17 requirements for Board Members and designated employees 18 to complete the form 700 and travel claim -- and submit 19 travel claim schedules. 20 Form 700s are public records open to inspection 21 by the public at any time. Form 700s for the Board 22 Members are currently available on the FPP -- PCs 23 website. That's the Fair Political Practices 24 Commission. And they're also available by Public 25 Records Act request to -- to this agency. 26 The travel expense schedules are also available 27 to the public upon request pursuant to a Public Records 28 Act request. However, personal information may be 8 1 redacted to avoid an unwarranted invasion of security or 2 privacy pursuant to exemptions to disclosure that are 3 enumerated in the Public Records Act in Section 6254 and 4 6255 of the Government Code. 5 So for the Board's discussion today with 6 respect to the M3 is whether the existing Board policy 7 should be extended beyond what's required by the law to 8 post the statements of economic interest and travel 9 claim schedules for the Board Members, their staff and 10 Executive staff members on the BOE's website. 11 Thank you. 12 MR. HORTON: Thank you very much for that 13 presentation. Ms. Mandel. 14 MS. MANDEL: Sure. And -- and I kind of have 15 these up separately in my notes, so -- 16 MR. HORTON: Sure. 17 MS. MANDEL: And the Controller really 18 appreciates this item having been put on the agenda. 19 You have a copy of the letter that he sent requesting 20 it. 21 ---oOo--- 22 23 24 25 26 27 28 9 1 OUTREACH PARTNERSHIPS. 2 MS. MANDEL: And on the first one, which I 3 guess is M2, the outreach partnerships, let me start by 4 saying kind of what we're looking for at this point. 5 And what we're looking for -- and then I'll sort of back 6 up and -- and give some background and -- and 7 explanation, but what we're looking for at this point is 8 for staff to draft some proposed guidelines for 9 consideration/adoption by the Board. 10 And we know we couldn't, you know, get that 11 done by this meeting so we wanted to -- to have the 12 discussion. And, you know, what -- what will that 13 cover? Well, the Controller's phrasing in the letter is 14 intentionally -- intentionally very broad. You know, 15 this -- this agency, we're a tax administration agency. 16 Whether you want to call it a taxing agency, a 17 compliance agency, we do administer the tax laws. 18 We've all had discussions before about 19 education and outreach as being an important component 20 of that on -- the front end. If taxpayers get it right 21 on the front end we won't see them here so much on 22 the -- on the back end of -- of audits. 23 And we think that -- this is always paramount, 24 but particularly in these times where -- where we're all 25 dealing with limited resources, we think it's a 26 particularly apt time to focus on the kind of issues 27 that the Controller was concerned about so that we, you 28 know, know -- decide where we want the lines to fall. 10 1 On sort of far deep background, again as an 2 agency that administers the tax law, twice a year Mr. 3 Gilman sits here and talks to us about the Harris-Katz 4 Taxpayer Bill of Rights and the Morgan Taxpayer -- 5 Property Taxpayer's Bill of Rights, and in both of those 6 and with respect to all taxes, business taxes, the 7 income taxes and the property taxes, the Legislature has 8 found and declared that taxes -- well, in the one case, 9 Harris-Katz, taxes are the most sensitive point of 10 contact between citizens and their government. 11 And I guess a few years later in the Property 12 Taxpayer Bill of Rights they -- they got a little more 13 subtle and they said that taxes are a sensitive point of 14 contact between citizens and their government. But 15 nevertheless it's a -- it's a -- it's kind of a singular 16 relationship with the tax agencies that people have and 17 entities have. And we often think of the Board, I think 18 when we're out and about and we're thinking about, you 19 know, potential conflicts and things like that -- we 20 often think of the Board in terms of its adjudicatory 21 function. But that's not the only way in which the 22 Board interacts with taxpayers or -- you know, they're 23 not -- not everybody comes here. We may feel like 24 everybody comes here on a hearing but not everybody 25 comes here. 26 So what we're kind of focused on is making sure 27 that we avoid even, you know, the appearance of 28 impropriety, making sure that in everything we do, which 11 1 I know is what we all -- we all strive to do all of 2 these things. Every day we strive to do all of these 3 things. You know, to promote public confidence in the 4 Board as an agency and an institution, and we all -- and 5 we don't want to do anything that would create the 6 impression in any persons in a special position to 7 influence or -- or receive any kind of preferential 8 treatment. 9 So, you know, what do these things mean in 10 practice and how should we go about sort of making sure 11 that in -- in practice all of these things that -- that 12 definitely we want happen. 13 The particular concern I think is with the 14 partnerships -- partnerships with for-profit entities, a 15 sort of co-branding that might occur that might suggest 16 that BOE somehow endorses an entity or that the entity 17 has, you know, some different relationship with the 18 Board as a agency than -- than somebody else might. You 19 know, issues about use of BOE resources, particularly 20 things like placement -- I think this can arise -- and 21 I'm not saying that this is -- this is why it's done, 22 this is -- again it's a perception issue. If there's 23 private logos or names placed next to the BOE seal or 24 logo on materials, whether they're produced here for a 25 BOE event or produced somewhere else for an event 26 that -- that BOE participates, I mean we should just be 27 very mindful of -- of what that can convey to -- to the 28 outside world. And how that -- what a BOE event is in 12 1 terms of how the broader public might understand that. 2 So, we would ask staff to explore all types of 3 events, all types of events that BOE works with and 4 holds and, you know, interpret broadly kind of what 5 we're looking at in terms of the outreach-related 6 events. 7 Fundamentally, I think for the Controller, the 8 legal base sign -- you know, I guess you call it the 9 standard, you know, whatever winds up in the memo when 10 it's final as to what exactly the -- how exactly the law 11 might apply to particular situations and -- and what 12 that legal standard is. We kind of think of that as the 13 base line. We think as the -- that it's really the 14 ceiling -- I'm sorry, I'm sorry, it's really -- I mix up 15 ceiling and floor sometimes. Maybe it's because I'm 16 short. It's not the ceiling, but it's really the floor 17 for a standard that we think should -- should be set up. 18 We think that as a tax administrator, 19 particularly as a tax administrator, that BOE should set 20 a high ethical standard as to whether and how BOE 21 partners with entities and people who might have 22 business before the Board. 23 And so, that's kind of where we're coming from 24 and what we would be looking for and would -- would be 25 moving for is that staff prepare draft guidelines for 26 Board's consideration at an upcoming meeting. I don't 27 know that they can -- they certainly might not be able 28 to do something like that for May, but maybe they can do 13 1 it for July because I think that's the next Sacramento. 2 That would incorporate these kinds of concerns and as I 3 said kind of broadly interpret the phrasing that the 4 Controller used so as to best protect the agency as a 5 tax administrative agency that can have the full 6 confidence of the public in everything that we do. I'm 7 not saying we don't have it now, but just to ensure it 8 as we go forward as best we can. 9 MS. YEE: Member Yee. I had to -- 10 MS. YEE: Thank -- 11 MR. HORTON: -- clarify questions, but I don't 12 want to -- 13 MS. YEE: Yeah. That's okay. 14 MR. HORTON: -- go there yet. 15 MS. YEE: Thank you very much, Mr. Chairman. I 16 want to thank Ms. Mandel for elaborating on the 17 Controller's request more extensively and I want to 18 applaud the Controller for making the request. 19 I think -- and I think much of this is 20 inadvertent. As we are continuing to operate under a 21 climate of limited resources I think this organization 22 needs to be ever more vigilant about the appropriate use 23 of staff resources and certainly our desire to I 24 think -- with the goal of doing outreach and education 25 for taxpayers being mindful of the types of partnerships 26 that we enter into to accomplish that goal. 27 I think one of the other fundamental questions 28 that probably needs to be flushed out in terms of the 14 1 policies or guidelines is the question of what 2 constitutes a governmental purpose. 3 I -- I think there are numerous goals that this 4 organization has tried to accomplish through outreach 5 and education and through our external affairs 6 activities. Certainly outreach to taxpayers, whether 7 it's about the Use Tax, as Mr. Runner has alluded to we 8 need to do more of, education about new procedures or -- 9 or information that we expect taxpayers to comply with, 10 that certainly I think falls right into what constitutes 11 a governmental purpose within the Board's jurisdiction. 12 But there are also other things that I think are maybe 13 sub-benefits of these types of activities and I want 14 those to be culled out, as well, because I'm not so sure 15 that if we place priority on some of these 16 sub-activities that that necessarily constitutes a 17 governmental purpose, and the one area I'm thinking 18 about is networking. 19 Networking is very valuable, but is it a 20 priority with respect to how we ought to be utilizing 21 governmental resources? I just want to kind of have 22 some address of that, as we enter into partnerships with 23 other entities, whether they are other public entities, 24 non-profit entities or for-profit private entities. 25 I also want to think about this question about 26 what constitutes a governmental purpose. Obviously if 27 we're entering into a partnership with a private 28 for-profit entity and we're showcasing, you know, some 15 1 new product I think that kind of is questionable. But 2 we have on occasion showcased, whether it's in the realm 3 of -- of, you know, e-filing options or -- or other 4 things like that that help taxpayers. Generally we do 5 work with other public entities, but to the extent 6 there's a private firm that has got a product there -- I 7 mean these are things that are -- hypothetically could 8 come up that I think raise questions about, you know, 9 what -- what are the appropriate guidelines that 10 certainly guide this Board to enter into those 11 partnerships with these different types of entities. 12 And then, secondly, is the particular activity 13 in which we're engaged with these various entities -- do 14 they constitute a governmental purpose? 15 I do think having some guidelines, particularly 16 during this time with respect to the use of resources, 17 staff and fiscal and otherwise, is an appropriate 18 discussion to have and probably an appropriate topic to 19 be addressed in some of the policies and guidelines. 20 We're going to be in this fiscal challenging environment 21 for numbers of years to come and I want to be mindful 22 and as Ms. Mandel stated, we are a tax administration 23 agency, a compliance organization and I think we really 24 should be the model of the highest ethical standard with 25 respect to the use of our -- our resources. And I 26 think the taxpayers expect that. 27 And then, finally, I think whatever does get 28 developed and -- and I -- and maybe this is a question 16 1 back to Ms. Mandel and -- or a recommendation from the 2 staff in terms of what form this ought to take. 3 I don't think this is an exercise, it's just 4 internal for all of us to be aware of with respect to 5 what guides us in the activities that we do conduct 6 relative to entering into partnerships and for whatever 7 governmental purpose it is they are to accomplish, but 8 certainly that we also put this out as an expectation 9 for the public and for taxpayers to understand, as well. 10 So I'll be curious to see what the staff comes 11 up with relative to the recommendation for how we 12 actually -- where we embody these policies and 13 guidelines so that they are well known and understood 14 by -- by not just the Board of Equalization as a 15 institution, by the Board Members, by the staff, but 16 also by taxpayers at large. 17 Thank you, Mr. Chairman. 18 MR. HORTON: Thank you. Members, there -- 19 there are existing policies relative to non-sponsored 20 events and -- that speak to partnering with private 21 entities. And the process in which the agency goes 22 through in making that determination, I too, you know, 23 applaud the Chairman for bringing it -- I mean, the -- 24 the Controller for bringing it forward for discussion 25 because it provides us an opportunity to deal with or to 26 discuss where we are in the existing policies that are 27 in place. 28 And I think as -- as you pointed out, Madam 17 1 Yee, is -- which is a good point, is that possibly the 2 existing law becomes the threshold or becomes the floor, 3 not necessarily the ceiling, but then we've got to take 4 in consideration there's a -- there's a -- a history as 5 it relates to all of these activities that the 6 culmination of opinions from FPPC that has dealt with 7 that. And so you got to look at those, as well, and to 8 say, okay, even though in 1979 or -- it was -- it was 9 deemed appropriate for the agency -- I don't know how 10 far back these opinions date, but appropriate for the 11 agency to enter into this type of arrangement, we should 12 give priority to other arrangements that seem to have a 13 higher degree of governmental involvement and then make 14 a decision whether or not we want to participate in the 15 others or whether or not it -- it -- it creates that 16 perception of providing greater access, if you will. 17 And I for one would -- would say although we 18 need a little more clarification on what partnering with 19 private entities are if we're talking about a behest or 20 a sponsorship or a clear partnership where this person 21 is part of the arrangement and facilitating of the 22 event. 23 But with that I just put that on the table for 24 discussion, Members, without any bias at this point. 25 Ms. Steel. 26 MS. STEEL: I totally understand about the 27 limited resources for the Department right now. But 28 those seminars that we go out and try to educate 18 1 taxpayers and reach out to the taxpayers and teaching 2 them that what's going on, I think that eventually 3 that's going to save our money that they don't have to 4 come up because they understand the law. 5 It's very, very complicated law out there and 6 every time after the seminars I get flood of e-mails 7 that they really appreciate what they learned from those 8 seminars. 9 But as Chairman Horton said, that clar -- 10 clarification of partnership with the private and public 11 sector that I think we should have a little more 12 specific guidelines that's going to help us that what we 13 can do and what we cannot do. That's totally 14 understandable. 15 Let's go to Form 700. 16 MS. MANDEL: Oh, yeah. 17 MR. RUNNER: You know, can we stay -- 18 MS. MANDEL: Yeah. 19 MR. RUNNER: -- on this topic? 20 MS. STEEL: We're gonna? 21 MR. HORTON: Yes, she asked that -- 22 MS. STEEL: Okay. 23 MS. MANDEL: I sort of had them separate, so -- 24 MR. HORTON: Yeah. All right. 25 MS. STEEL: Really -- I really want to talk 26 about that. 27 You deal with that. 28 MR. HORTON: Okay, I'm making a note, 19 1 Ms. Steel. I gotcha. 2 MR. RUNNER: You're down. 3 MR. HORTON: Mr. Runner. 4 MR. RUNNER: Yeah, just a couple comments. You 5 know, I think clearly that the discussion of being an 6 elected official, obviously always trying to deal with 7 and work with the concept of -- of conflict, of -- of -- 8 of transparency is of the utmost importance. 9 And I -- and I -- you know, as I was reading 10 through the Controller's letter here, particularly in 11 that second paragraph, you know, you can read all the 12 way through the -- to the -- to the last sentence and 13 say, yeah, yeah, yeah, that's right, the law says that 14 we need to be aware. 15 But what troubles me at times is when we get 16 to -- to the details. And so what troubles me is a 17 sentence that says, "Even remove the appearance that 18 some." I -- I don't -- see, I don't know how to create 19 a guideline that removes all appearances. And I think 20 that -- and I think that becomes the difficulty that you 21 have when you start actually then deciding what that 22 guideline is. 23 So I think my -- my opinion is that disclosure 24 is -- is -- is the key issue. And that if we find other 25 ways to disclose we need to do that. I always get 26 concerned when we start drawing the line of appearance 27 because -- I mean, I'll be -- we're elected officials. 28 We go out and have fundraisers. We go out and -- you 20 1 know, and have to report that. 2 Now, it seems to me somebody could actually 3 point to that as a pretty good appearance. And so I -- 4 I struggle with that kind of a -- how do you -- how do 5 you deal with that? 6 The other issue is, you know, I think it might 7 be easy for the Controller at that point to help 8 guide -- write guidelines to which then he -- and he 9 will then lead his Department in. 10 The challenge that we have -- and, for 11 instance, in the issue of trying to define what a non -- 12 what non-governmental pol -- programs are, I may have a 13 different definition as to what a government program is 14 than what Mr. Horton has. And so, if you're the 15 Controller you get to decide that for your Department. 16 But we're a Member of five people -- we're a 17 Board of five people. And so, all of a sudden who is 18 the -- who is -- who is -- see, I don't believe you can 19 actually create a guideline that's that clear; that you 20 can draw the line to say, oh, yeah, this is in, this is 21 out, this is in, this is out. There will always be some 22 new concept. 23 And so then my question is, who decides? Does 24 that become a staff decision? Does that become a whole 25 Board decision? Every time then there is a discussion 26 as to whether or not this is non-governmental or 27 governmental in purpose? 28 And so I -- I think those are the challenges 21 1 that we have when we try to cut down to -- to some more 2 clarity. 3 And, again, I think if there's -- you know, I 4 think there's lots of room for greater transparency, 5 whether it be in -- you know, I mean most of us all do 6 some kind of behested payment reporting and what not. 7 Maybe it's clarity in regards to those issues, some of 8 those issues that might find another way to disclose or 9 something. Those all make -- make sense. 10 But I'm concerned about the real detail that 11 you get down to, and whether or not -- at the end you're 12 really going to accomplish the goal. Because if the 13 goal is to remove all appearances I don't know what you 14 do with meetings that are in your office, in your 15 conference room. 16 You know, because that certainly could be an 17 appearance of a conflict, because you've actually sat 18 down and talked to somebody. 19 There are some agencies that don't allow that, 20 for that reason. And I hope that we wouldn't decide 21 that that's where we want to go. So I think those are 22 the challenges that we have when we actually come down 23 to the -- to the issue. 24 Again, I -- I always land on the issue of 25 disclosure. Let people see what it is. I don't think 26 you can ever convince people who if they have an opinion 27 in, you know, regards to conflict -- if they already 28 have decided there's conflict you'll never convince them 22 1 that there isn't. Because if they can't see it 2 they'll -- they'll -- they'll feel like it's done some 3 other way and hidden. 4 So I -- I -- I'm one who will always land on 5 disclosure and certainly there's lots of room for us to 6 discuss about that particular issue. 7 MR. HORTON: Yeah, if I -- if I may, then Ms. 8 Yee. 9 You know, this is an age old debate. I sort of 10 took this debate up when I was in the Legislature and 11 I -- I took a look at the Kopp Act and some of the other 12 FPPC rulings because there was a sentiment that an 13 adjudicating body should not -- should -- that the Board 14 of Equalization and other constitutional officers should 15 fall under the same provisions as local Judges. And -- 16 and that -- and that there should be no contributions, 17 whatsoever. 18 I mean by virtue that the Board of Equalization 19 is the only elected body that sort of presented somewhat 20 of a challenge for us as we went through that process. 21 The other thing that I took under consideration 22 was legislation that would deal with ex-parte 23 communication because therein of itself taxpayers are 24 commun -- even though all of us are extremely accessible 25 to our taxpayers I'm amazed at the e-mails that I get. 26 I just got one from a 15-year-old girl asking for 27 advice, but I'll leave that up to my wife. 28 But the ex-parte communication certainly 23 1 presents a challenge taxpayers and their representatives 2 not only do they contribute to our campaigns but they 3 also engage with us and -- and relationships are 4 developed over the years. 5 To his credit, the Controller has done a 6 yeoman's job. I mean, just in his first quarter alone 7 he did 63 different events with nonprofits, taxpayers, 8 to some degree some behesting and so forth. 9 So, it's -- it's a -- it's a measurement, and 10 as Mr. Runner sort of says is that, you know, the 11 appearance is a subjective sort of matter. But I -- 12 I -- I also found that might be helpful in this 13 discussion that there was guidelines as it relates to 14 advertising and whether or not it was appropriate for 15 the agency to -- to advertise or give the appearance of 16 advancing the financial situation of a company as 17 being -- having greater access -- access to the Board of 18 Equalization than -- than others. And certainly we 19 can -- and when I looked at BEAM and I looked at the -- 20 the existing guidelines I didn't really see anything 21 that sort of dealt with that other than the notion that 22 the Board has not and does not sanction at this point -- 23 appears not to be, any partnership with private 24 entities. But I think the Controller's not speaking -- 25 and I don't want to speak for the Controller, but of a 26 particular partnership but the appearance of a 27 relationship which to some degree I mean I would have 28 some concurrence in that area and -- and would like for 24 1 us to look at that. 2 But I think we have to start with the 3 guidelines that we do have that it cannot be for a 4 governmental purpose -- I mean, it has to be for a 5 governmental purpose, it has to go through our Legal 6 Department, and it has to go through our Outreach 7 Department and then reviewed by the Executive Director. 8 And so, where we might want to start, Members, 9 is just sharing with staff where we think the expansion 10 should take place. And if there's a way in which we can 11 increase disclosure of our participation by placing it 12 on our website that a Board Member is -- is seeking to 13 have this type of event and it's deemed to be within the 14 guidelines of a governmental purpose, it's consistent 15 with the FPPC rules and it's consistent with all the 16 other laws, and it's deemed acceptable. And then as a 17 body possibly a -- a budget that for the different types 18 of events that we can do. 19 As delineated you have Board-sponsored events 20 and they say, okay, maybe we should have a budget for 21 that. You have non-board-sponsored events, maybe we 22 should have a budget for that. And that establishing a 23 budget sort of at the same time codifies and expresses 24 the -- the Board's opinion of how significant or how 25 important it is for the Board to participate in these 26 activities. 27 Now, all of you know that I have always held 28 that the focus of the agency is on the -- in my opinion 25 1 is on the -- on the 48 to 53 billion dollars and how can 2 we increase that. And the acknowledgement that, you 3 know, humans are making human errors and so forth and we 4 certainly catch those human errors, which I think 5 amounts to somewhere around 650 -- 675 million dollars 6 worth of human errors, but the self-compliance is in the 7 billions. And that occurs as a result of education, as 8 a result of goodwill and a number of good things that -- 9 that occurs as this agency is currently doing. 10 So I guess in summary we start with looking at 11 the law and what the law says, and then we look at BEAM 12 and what our pot -- term policies are and make sure that 13 our policies reflect the concerns of the Controller, the 14 concerns of each Member, and then to the extent that -- 15 that there is a difference of opinion you bring it to 16 the body for some clarification because to -- to ask 17 staff to get into the area of -- subjective area of 18 perception, that's kind of incumbent upon the elected 19 officials to kind of -- kind of make that call. And 20 particularly given a general statement. Transparency; 21 yes. Disclosure; yes. Comply with the existing law; 22 yes. Shall we go beyond that; well the Legislature's 23 even said that we should as a body. That's why they 24 have Kopp Act, which limits us to the amount of 25 contributions that we can receive and then participate 26 in a vote. 27 But there are a number of other things that 28 quite frankly concerns me as it relates to the 26 1 appearance of a conflict of interest and that's why I 2 did legislation to deal with ex-parte communication and 3 when you can participate and you shouldn't participate 4 in -- in the process and the exposure that that causes 5 the State of California. 6 MS. MANDEL: Mr. Horton. 7 MR. HORTON: Ms. Mandel. 8 MS. MANDEL: Well, today we're here on -- what 9 did we call this? -- outreach partnerships at the Board 10 of Equalization. With respect to anything that elected 11 officials do on -- on their -- in their political 12 capacity, you know, that's -- 13 MR. HORTON: It's their own thing. 14 MS. MANDEL: Yeah, that's not -- that's not 15 something that's associated directly with this Board as 16 a -- as -- as -- as Board events or Board participation 17 in others -- outside events where, you know, one of our 18 resources is -- the name Board of Equalization is -- the 19 logo of the Board is the seal of the Board. And to have 20 that in close proximity with those of entities that we 21 do business with is kind of, you know, where we started 22 with this focus. 23 We do think we should set a standard for all 24 these kinds of events that is more than -- you know, 25 that the law again is -- is the floor. And that we 26 should take care to protect our -- you know, our -- 27 our -- our good name in -- in that regard. 28 With respect to seminars, oh, absolutely, as 27 1 everybody up here knows the Controller is supportive 2 of -- of outreach education. He's -- he was the -- 3 the -- the -- the father of it at -- at the Board of 4 Equalization. 5 MR. HORTON: Well -- 6 MS. MANDEL: Yeah, you -- 7 MR. HORTON: -- I was -- 8 MS. MANDEL: -- you fathered the -- fathered 9 the -- the midwife something. Yeah. 10 MR. HORTON: Only because I was working for him 11 that I was -- 12 MS. MANDEL: Yeah, but, you know, he was the -- 13 he was the Member, so -- 14 MR. HORTON: Yeah. 15 MR. RUNNER: (inaudible) he doesn't. 16 MR. HORTON: Better more often than most. 17 MS. MANDEL: So, now when you mentioned BEAM 18 this is actually an -- this is kind of a side note of 19 interest, BEAM is one eboe, is that correct? Okay. 20 This is one of my favorite things about being in the 21 Controller's office, we do not have access to eboe. So, 22 anything that's on eboe I don't know. You know, if -- 23 if it comes through in Board meeting materials I might 24 have seen it at one point. But -- but we do not have -- 25 that's an IT issue and we don't have access to eboe. 26 So, that, I guess, gets in with also what Ms. 27 Yee was talking about of -- you know, how would -- how 28 would people know, because also someone is going to 28 1 approach and -- and invite a Member to -- you know, 2 speak or to have staff at some event --- you know, if we 3 adopt guidelines that -- that have these types of 4 parameters in them, they shouldn't -- we shouldn't have 5 to -- I mean we -- we would bird-dog them but we 6 shouldn't have to bird-dog them as much if they knew 7 what was in there. 8 And if it's only on eboe then, you know, not 9 only do -- does the Controller's office not able to look 10 on eboe from our Controller computers but, you know, 11 other people don't, either. But that's just kind of a 12 side note on my favorite IT refrain, that access to 13 eboe. 14 So, do you want me to redo my motion? Or -- 15 MR. HORTON: No, I -- I think it was clear. 16 And I think your discussion has been very helpful, 17 because -- and I think we all should get copies of BEAM. 18 I mean, I didn't know it wasn't available. And the 19 existing policies as a point of beginning our discussion 20 about this. We may look at the existing policies and we 21 may say the existing policies certainly -- in -- in my 22 estimation they certainly go above and -- and as far as 23 clarification and ensuring disclosure and that having a 24 check and balance. The only other check and balance 25 that we could possibly put in place would be to require 26 every -- every event to come before -- the Board. 27 But I certainly think we ought to have that. 28 I -- I appreciate the discussion relative to the 29 1 clarification issue -- well, private entities going 2 beyond a partnership but the -- the appearance and where 3 in fact in any documents the Board's logo may be in 4 relationship to a sponsor, that the sponsor possibly -- 5 and then maybe we go one step further which BEAM does 6 not require to date, is that any document where that 7 exists, that there's a disclaimer in there that clearly 8 disclaims the Board is not in any way intending to 9 promote or provide any advantage. 10 But I mean access, I've always held in -- in my 11 opinion that the greatest access to me, as an elected 12 official, is my constituents. They have access in the 13 supermarket. They have access without asking. They all 14 know exactly where I live and they drive by and they 15 wave. I mean, it is just -- it's a wonderful 16 experience, as -- as well except for when the little old 17 lady starts adopting you as her son and starts pulling 18 you on the ear and giving you all kind of advice and so 19 forth. 20 But access is a good thing. 21 MS. MANDEL: That -- that's your mother, right? 22 MR. HORTON: No, no, no, that's -- that's like 23 every block club leader. Out of the 8.5 million people, 24 the number grew so that the -- the surrogate parents. 25 But that's -- it's a good thing. 26 And we're all over the place. And so, the -- 27 the contributions and the ex-parte communication and our 28 inactions and so forth, you know -- if -- 30 1 MS. MANDEL: That -- you know, that -- 2 MR. HORTON: I don't -- 3 MS. MANDEL: -- I think that's a whole 4 different -- 5 MR. HORTON: Okay. 6 MS. MANDEL: -- thing. 7 MR. HORTON: All right. So then (inaudible). 8 MS. YEE: Mr. Chairman. 9 MR. HORTON: Member Yee. 10 MS. YEE: Thank you. I wanted to see if the 11 staff also could -- and I know much of how we've 12 developed BEAM over the years has been in consultation 13 with the State Administrative Manual, but there might be 14 some examples or illustrations with respect to some of 15 these provisions in SAM that might be -- that might 16 inform how we might want to incorporate our own policies 17 and guidelines or -- that could be incorporated in our 18 own policies and guidelines. 19 I guess in response to Mr. Runner's point, and 20 I would agree, I think there's a lot of room left with 21 respect to disclosure and greater transparency. And as 22 we're focused on outreach and education activities here 23 I guess one of the things I'd like to do or I'd like -- 24 I'd like to suggest to kind of model kind of a high 25 standard, is to be more transparent about the cost of 26 how we do our business. We're not very good at that. 27 And I think sometimes the perceived impropriety 28 is the fact that we don't disclose just basic 31 1 information about the cost of our outreach program. And 2 it's nothing to be ashamed of, it's helping taxpayers. 3 I think it's -- and if we're actually accomplishing a 4 lot with reaching, you know, hundreds of taxpayers at 5 a -- at a single event, that's a good thing and we ought 6 to showcase that. 7 But I think we're so shy and reluctant to just 8 kind of talk about costs, and that would include fiscal 9 staffing, you know, like venue, whatever, costs I think 10 I would agree with the Chair, we're not in the 11 business -- I'm not -- I don't want to be in the 12 business of approving what types of events to put on, 13 but I do think we have a responsibility to at least 14 disclose, you know, what -- what we're -- how much we're 15 paying for them. 16 MR. HORTON: Okay. 17 MS. YEE: Oh, and then one last thing, with 18 respect to the behest payment reports, I would venture a 19 guess that I don't think anybody outside of this room 20 knows what those are. 21 MR. HORTON: Believe me, they do. 22 MS. YEE: Well, no, the people who are -- the 23 people who are interested do, but your average citizen 24 and member of the public does not. 25 MR. HORTON: Okay. 26 MS. YEE: And that's what I'm talking about 27 when I say these policies and guidelines need to be made 28 more broadly available so that as we're holding 32 1 ourselves to the high standard the public understands 2 what that standard is. 3 MR. HORTON: Makes sense. 4 MR. RUNNER: So I was unclear, was there a 5 mo -- specific motion already done? 6 MR. HORTON: No, I think we're in the mode of 7 just giving direction to staff to take the 8 considerations of the Members up and -- and then for us 9 to -- for them to present a -- a -- some policies for 10 our consideration and then we'll set a time line based 11 on their input as to how long they think that might very 12 well take in order to accomplish that. 13 And I might add as a -- as a caveat, Members, 14 that we -- we might want to discuss the -- which we've 15 discussed before -- I mean we've actually looked at the 16 2011 plan of outreach activities and I -- and I don't 17 know if there's -- if there's a method in which you can 18 deviate from that or you have to stay consistent with 19 that once the Board has looked at it and signed off on 20 it. We can certainly do that again, I think. And add 21 dollar figures to it or some kind of projection or 22 estimate to it. 23 And -- but the first discussion might very well 24 be about the importance and significance of outreach. 25 And from a purely numerical perspective a one percent 26 increase in compliance at 53 billion is a lot more than 27 a one percent increase at the audit level or the 28 administration level of a 700 million. I mean, it's 33 1 just a huge difference. Whenever you can -- whenever 2 you can do that you avoid penalties, you avoid interest 3 and so forth. 4 So I would -- you know, I would just put that 5 as a caveat. So does that work or, Ms. Mandel, would 6 you like to make a -- 7 MS. MANDEL: Well, I think what -- what I -- 8 MR. HORTON: -- motion? 9 MS. MANDEL: -- what I had was for staff to 10 prepare draft guidelines for the Board's consideration 11 at an upcoming meeting. I thought Sacramento probably 12 made more sense. I don't -- you know, May is on its 13 heels right now, so July is the next meeting that would 14 incorporate these concerns and broadly interpret our 15 phrasing so as to -- 16 MR. HORTON: But I -- I need some advice 17 from -- from Legal counsel but I'm going to make this 18 recommendation. Somehow we have got to give them input 19 because I'm hearing various -- various degrees or 20 varying degrees of what the Members think needs to 21 happen. And so we've got to give them some -- some 22 specific or -- 23 MS. MANDEL: Well -- 24 MR. HORTON: Or -- or -- 25 MS. MANDEL: -- well, I think we -- 26 MR. HORTON: -- have further discussion or -- 27 MS. MANDEL: I think we -- 28 MR. HORTON: -- you think this is adequate? 34 1 MS. MANDEL: I think we have been -- 2 MR. HORTON: Okay. 3 MS. MANDEL: -- giving input. I just -- I want 4 to see it come back with some draft guidelines. It 5 doesn't -- you know, there's a lot of -- there's stuff 6 that they bring back on a variety of items the staff 7 will bring back and it's like, oh, yeah, that looks 8 good. But -- 9 MR. HORTON: Okay. 10 MS. MANDEL: But sometimes, you know, you -- 11 you need to tweak -- tweak it a little bit. But I -- I 12 had a sense that people were -- there was, you know, 13 some -- 14 MS. YEE: Yeah, I -- 15 MR. HORTON: Okay, that -- 16 MR. RUNNER: Well, I -- I don't have any 17 difficulty with that as -- as a direction as long as -- 18 as the staff is comfortable on what they've heard. 19 Again, I'll go back to the Controller's letter and that 20 is I can't -- I will not be supportive of asking the 21 staff to come back wiht a report that removes even the 22 appearance, because I don't know how to do that. And I 23 don't know if they know how to do that. 24 MS. YEE: I -- I -- I'm going to take a shot at 25 this. I think we're getting to a level of discussion 26 that's going to hurt us. I -- all of this is to try to 27 remove any perceived impropriety and I don't know that 28 that can be defined. I don't know that can be put in a 35 1 box. We're going to do the best that we can but it is 2 about establishing a standard of conduct and activity. 3 And I think there's enough -- as the Chair 4 mentioned I think we've had enough guidance with respect 5 to whether it's, you know, legal opinions or, you know, 6 other decisions that -- that have been rendered in the 7 past, that certainly has informed the staff up until 8 this point. And I think anything that we do to kind of 9 move towards, you know, removing any perceived sense of 10 impropriety is a good thing to do. 11 I think the how to do it is the fruitless 12 discussion. 13 MR. RUNNER: But that's what we're going to. 14 That's -- that's -- 15 MS. YEE: No, I don't believe that's true -- 16 MR. HORTON: Members -- 17 MS. YEE: -- Mr. Runner. I -- I -- it is -- I 18 think if we don't embrace this and know that we are 19 expected to conduct ourselves and this body with the 20 highest degree of ethical standard -- if we don't 21 embrace that I think then we perpetuate this 22 perception -- 23 MR. RUNNER: Well, let -- let me just add to 24 that. I mean, first of all the discussion phrased that 25 way makes it sound like my discussion was not embracing 26 that. And I certainly am not saying that at all. We 27 must embrace it. 28 What I said was disclosure, I believe, is the 36 1 best way for us to get there. 2 MS. YEE: That's an approach, yes, I agree. 3 MR. RUNNER: That's a -- to me the best way to 4 do that. 5 MS. YEE: Okay. And -- 6 MR. RUNNER: And I think that that is the 7 important issue here. So my concern is -- again, I 8 think it's great to give direction to staff but then 9 let's really give them direction. 10 MS. YEE: I -- I -- 11 MR. HORTON: Here, maybe I can be helpful, 12 Members. Why don't we direct staff to take a look at 13 best practices within the State of California as it 14 relates to the Legislature, the Executive Branch, 15 branches that share the same commonalities that this 16 agency as the -- one of the only elected agencies in the 17 State. Why don't we also take a look at existing 18 policies and make sure that all of the members have 19 copies of existing policies. Therefore, if they want to 20 augment that or provide some input that's certainly up 21 to the discretion. 22 It seems to me that the budget of this is up 23 for consideration and why don't we discuss a 24 presentation that includes a budget, a cost factor 25 and -- and all of -- everyone here has indicated that 26 they're one hundred percent supportive of disclosure, 27 transparency and so forth, and that this agency 28 currently probably has standards and procedures above 37 1 many of the other agencies out there, but we ought to 2 look at it. 3 So let's take a look at it and see if that can 4 come back. Hopefully I codified all the -- 5 MR. RUNNER: If that's a motion? 6 MR. HORTON: -- concerns. That -- that would 7 be a -- a friendly amendment to the existing motion on 8 the floor, I guess. 9 MS. YEE: Can I -- can I comment? 10 MR. HORTON: Yes. 11 MS. YEE: I -- I guess with respect to 12 direction to the staff -- and, Mr. Runner, I agree with 13 you, I think disclosure is a very, very key element of 14 this, but it may be that when staff goes back and looks 15 at all of these issues and take into consideration the 16 discussion that we've had today that some of the 17 components of the guidelines and policies are express 18 limitations or express prohibitions on certain things. 19 And I just don't want it to be narrow. I mean, 20 I want the staff to take a more expansive view and I 21 think, you know, Mr. Horton, your approach with respect 22 to having staff look more broadly as far as, you know, 23 what provisions are out there that affect, you know, 24 other bodies of, you know, our State government makes 25 sense. 26 But I think it goes beyond disclosure is all 27 I'm saying. But that -- and then we have the ability to 28 kind of look at it more broadly and to say, okay, this 38 1 is limitation, makes sense; this is prohibition, makes 2 sense; do we need more disclosure here? 3 I mean, I don't -- I think that -- I want more 4 expansive kind of thinking on the part of the staff. 5 MR. HORTON: Okay. Fine. 6 MS. MANDEL: Expansive. 7 MR. HORTON: Any other discussion, Members? 8 Let me just -- there's -- there's a motion, 9 there's a -- an amendment to the motion, and then 10 there's discussion of the motion. 11 I would -- if you would accept that friendly 12 amendment I would second it. And -- and I want to -- 13 want to point out that the existing process is for the 14 Board's Legal Department to determine if there's a 15 governmental purpose and whether or not this meets all 16 the existing laws, including all of the FPPC rulings, 17 all of the interpretations by -- that are out there 18 relative to any agency that we are in compliance with 19 that. 20 Currently, the -- the policy as I read it 21 prohibits the Board of Equalization from participating 22 with private organizations as partners, sole partners, 23 and when -- and particularly when it gives an 24 appearance. 25 But there are other issues that I think we can 26 consider and get there. With that, if there's no 27 objections -- hearing none, such will be the order. 28 ---oOo--- 39 1 STATEMENTS OF ECONOMIC INTEREST AND 2 TRAVEL CLAIM SCHEDULES 3 MR. HORTON: We've got another little piece 4 here, huh? 5 MS. MANDEL: Okay, we got another little 6 piece -- 7 MR. HORTON: -- kind of (inaudible) -- 8 MS. MANDEL: -- which maybe -- maybe won't -- I 9 don't know, we'll see. 10 Okay, so the second piece is the posting of the 11 Forms 700 and travel claim schedules. And, again, what 12 we'd really be asking for is for staff to prepare a 13 draft policy for the Board's consideration again at a -- 14 a soon upcoming meeting. 15 The -- I think the Controller mentioned the 16 Board Members, their staff and executive staff members, 17 and in preparing the draft guidelines we would expect 18 that staff would do some analysis as to the scope of 19 employees that ought to be covered by that. You know, 20 it might not be -- there are a number of agencies that 21 do post these things. It might not be a one size fits 22 all that -- you know, that -- as everybody knows I think 23 the Controller's office posts the Controller's and all 24 of the senior staff. The A. G.'s office posts quite a 25 number of Form 700s. CalPERS posts. CIRM posts. The 26 Administration posts. Although because the 27 Administration consists of a lot of departments they 28 have an entirely separate website for government 40 1 transparency where they post everything on their 2 government transparency. 3 But, for example, if we had -- just a very 4 extensive discussion about outreach and there was some 5 commenting on cost, and so, you know, one thing to 6 consider is whether the general outreach staff, you 7 know, falls under this or not. 8 But again, that -- that -- we would be looking 9 for a draft policy to come formed and this is a -- this 10 is -- this is another one of those more than the law 11 requires. These are public documents. But the 12 Controller and others have within their realm, you know, 13 put them up on their websites for easier acc -- easier, 14 I guess, accessibility or further transparency. 15 And so that's what we'd be asking for on this 16 item. 17 MR. HORTON: Thank you. Member Steel. 18 MS. STEEL: Oh. 19 MR. RUNNER: You're already one of us. We're 20 talking about this one. 21 MS. STEEL: Thank you. 22 I totally understand and I totally agree with 23 Controller Chiang regarding government transparency, but 24 FPPC has a public record and if we can just connect from 25 our website to there's anything that you can just punch 26 the one button, they can go out there, they you know 27 look at what we did the -- how we filled out Form 700. 28 And then on the top of it for travel expenses, 41 1 I am not really open to that because it's a public 2 record and they can ask for the record, then I think 3 they can get it because I -- last couple months I've 4 been getting kind of threatening e-mails from the 5 taxpayers that -- regarding Use Tax. Actually, it was 6 not really pleasant experiences out there and I don't 7 want the trigger anything that people just look at and 8 then they start following or they start looking at it. 9 I just saw the only numbers there of the total expenses 10 but I'm not really comfortable doing that. 11 It's a public record that I saw the first 12 couple of years of my term that actually people asked 13 for my travel expenses and we provided to those people. 14 So I don't think that's really necessary to do it, but 15 if we can put the website there so a little button that 16 if you want to contact our office for travel expenses 17 then put -- punch the button, it goes to e-mail and 18 somebody is going to send us e-mail. 19 I think that's much better way to do it because 20 I don't want people to look at, you know, my record. 21 There is -- there's some people out there that they just 22 kind of like go around, you know, just stroll -- scroll 23 around the computers and then they try to cause some 24 trouble. And I really don't feel like to -- you know, 25 get into that because, you know, when you start getting 26 these e-mails you don't feel very comfortable. 27 MS. MANDEL: Yeah, I -- I -- I appreciate what 28 you're saying and I think that -- I mean, I don't know 42 1 how your -- what your travel claims look like when they 2 get printed up. I know what ours look like and they're 3 on a website, and they don't -- they are non -- they are 4 printed off of the CalATER system and aside from the 5 title that you give, which is the -- you know, the date 6 of the trip and maybe the location, there's noth -- 7 it's -- it's amounts of money spent. There's nothing in 8 that that would enable someone to determine a -- a 9 pattern of travel, for example. It doesn't say what -- 10 you know, what time you left and -- and what flight, you 11 know, you fly, what airline or -- you know, it 12 doesn't -- doesn't say where you stayed. 13 So it's -- it's -- it's really -- it's -- it's 14 a -- it's truly the expense for trips taken on 15 particular days. And I think that that gets to what the 16 exception is really about in the -- in the public record 17 about protecting the individual from harassment or -- I 18 forget, you said the words very early in the thing. 19 MS. GORE: Right. 20 MS. COOKE: I mean, if there's some concern 21 about someone's safety -- 22 MS. MANDEL: Right. 23 MS. COOKE: -- or privacy there are some 24 exceptions in the Public Records Act -- 25 MS. MANDEL: Right. 26 MS. COOKE: -- that allow some discretion -- 27 MS. MANDEL: Right. 28 MS. COOKE: -- to make that determination. 43 1 MS. MANDEL: And we show -- we show no 2 signatures and no home addresses and no -- you know, 3 none of that stuff. 4 In fact, on the -- 5 MS. STEEL: But everything's -- everything is 6 the public record, whatever we do. And especially 7 schedules, too. I remember when I was working for the 8 other Board Member and they were actually asking for 9 the -- all the schedules that with the travel expenses. 10 So I still don't feel really comfortable that 11 if they can ask they can get it. Why we have to put it 12 on the website and trigger some of the -- maybe we can 13 say trouble-makers or somebody who has so much time 14 that, you know, who try to cause the problem, why we 15 have to do that? 16 It's a public record. When they request it 17 they going to get it. But why we have to put there and 18 try to get into trouble. You know -- 19 MS. MANDEL: Yeah, cert -- certainly I think 20 all of that would be probably something for staff to 21 consider in -- in drafting up the guidelines, but we 22 do -- we do post them. The Controller is interested in 23 posting them, and these other agencies I know do post 24 them; the Administration, CIRM and CalPERS. 25 MR. HORTON: Uh -- 26 MS. MANDEL: There may be others. Those are 27 the ones are I'm aware of. 28 MR. HORTON: Mr. -- Mr. Runner. 44 1 MR. RUNNER: Yeah, just quick -- a couple quick 2 questions on -- on -- on that in terms of the -- the -- 3 the process. I -- and I spent 12 years in the 4 Legislature and I dealt with the NU article about how 5 many tickets I got for what in the BEE and every other 6 newspaper. So, you know, I'm -- it's not an issue of 7 disclosure that bothers me at that point. And I'll be 8 glad to go ahead and put that on and, again, that's what 9 I believe, you have to then defend as to whatever it is 10 that you did. And I'm -- I'm fine with that. 11 My question is more of a practical one, and 12 that is when -- when -- the recommenda -- or when the 13 request is like all the staff members, you know, I have 14 a receptionist. I -- I mean, so I just want to know how 15 deep the intention was and so when -- when the 16 Controller does this, let me -- help me understand how 17 deep into his staff goes in -- in order to make purpose 18 for this. 19 MS. MANDEL: Sure. The Controller's -- on the 20 Controller's website it is the -- let's see if he has 21 magic words on that site. It's the Controller and the 22 top managers. So it's the Controller, the Chief of 23 Staff, Deputy Chief of Staff, Chief Administrative 24 Officer, Chief Operations Officer or Chief Counsel, 25 Deputy for Communications, Deputy Environmental Housing 26 that somebody represents on other boards and 27 commissions, Deputy -- it's boards and com -- there's 28 like four or five of us who have different boards and 45 1 commission responsibility. 2 MR. RUNNER: Yeah. 3 MS. MANDEL: There's a Policy Director and 4 the -- 5 MR. RUNNER: Are these -- are these like all 6 exempt? 7 MS. MANDEL: No, they're not all exempt. 8 MR. RUNNER: The aides. 9 MS. MANDEL: Well, some -- some are -- some are 10 exempt, as I understand -- I don't know everybody's 11 exact position. Some are exempt. I know people by 12 title. 13 MR. RUNNER: Right. 14 MS. MANDEL: Some are in CEA positions. But 15 that's why we said that part of what -- you know, 16 it's -- I'm not familiar with every single, you know, 17 position that everybody has here. 18 MR. RUNNER: Right. 19 MS. MANDEL: And so part of what we would ask 20 staff in developing the guidelines, it may be that you 21 have people -- you know, this is -- these are the people 22 the Controller considers his executive staff. 23 MR. RUNNER: Right. 24 MS. MANDEL: Of course on the 18th floor across 25 the street, you know, we have secretary -- 26 MR. RUNNER: Yeah. 27 MS. MANDEL: -- administrative assistants, as 28 well. 46 1 MR. RUNNER: So I guess it's a question, I 2 guess, is -- 3 MS. MANDEL: So that would be part of -- part 4 of the development. It's not necessarily that every -- 5 MR. RUNNER: And -- and I guess that's what 6 would be my concern -- 7 MS. MANDEL: -- every single person. 8 MR. RUNNER: -- in my personal staff -- 9 MS. MANDEL: Yeah. 10 MR. RUNNER: -- that we deal with what we would 11 think of as executives. 12 You know, because certainly if we were to go as 13 deep into as -- in terms of some -- some of the levels 14 to which I have individuals for you'd be dealing with 15 literally, you know, probably hundreds of people in the 16 Controller's office. 17 MS. MANDEL: Yeah. 18 MR. RUNNER: If you went down as you would to 19 get into some of my personnel that are in my pri -- in 20 my -- in my staff. 21 So, clearly the Controller has made a decision 22 in regards to the level of -- of individual. 23 MS. MANDEL: Right. Right, and -- 24 MR. RUNNER: And I -- I think -- I think that 25 that level of individual is a lot different than every 26 staff member that a BOE member has. 27 MS. MANDEL: Right. And that's -- that's why I 28 said -- one of the things that I said was that we would 47 1 want staff in preparing the -- what I call -- whatever I 2 called it, a pol -- a draft policy would be, you know, 3 looking at the scope -- 4 MR. RUNNER: Yeah. 5 MS. MANDEL: -- of people that -- 6 MR. RUNNER: And I think as long as -- 7 MS. MANDEL: Yeah. 8 MR. RUNNER: The idea would be as long as it 9 reflects the level of disclosure that -- that the -- 10 that the Controller is -- is asking in terms of the 11 personnel. That makes a little more sense to me than 12 every staff member. So that we at least are consistent 13 in terms of a philosophy as to who we're asking to go 14 ahead and make their dis -- disclosures as -- as -- as 15 available is this concern. 16 The other issue is, I guess I want -- in 17 regards to travel. Not all travel is equal, you know. 18 And so I -- I -- for instance, you know, because I did 19 review some of these that came out of the Controller's 20 office, and I see no car rental for the Controller. Yet 21 when we fly somewhere we have to do a car rental. 22 Now, that's because the car -- because I 23 believe the Controller has a driver and car. 24 So I just feel like at some time we need to 25 kind of level the playing field then, if we're going to 26 do that. You know what I mean? It just seems -- seems 27 like if we're going to go ahead and -- if the -- if the 28 idea is disclosure and show everything, then -- then it 48 1 seems to me we want to be even-handed in that process. 2 MS. MANDEL: Well, you know, the -- the 3 administration -- former administration and the others 4 who have posted it's about travel expense claims, and so 5 that's -- you know, that -- that's what's posted and 6 that's what we're asking here is travel expense claims. 7 So, you know, I can't -- I'm not -- I'm not 8 here to tell him what to do in his office but we do post 9 the travel expense claims and that's what we're asking 10 for here. 11 MR. RUNNER: Okay. So -- 12 MS. MANDEL: I have to rent a car, too. 13 MR. RUNNER: Yeah, I know. 14 MR. HORTON: You didn't -- 15 MR. RUNNER: I saw yours; you do. 16 MS. MANDEL: Sometimes I see those Legislators 17 on the plane and I think like maybe I should ask them 18 for a ride. 19 MR. HORTON: Yeah. There -- there is a -- 20 there is a distinction and -- where we, as elected 21 officials, and our staff that -- that we appoint as -- 22 as exempt employees that it has to be approved by the 23 Govern -- Governor, there's a distinction between that 24 class of employees and then employees who are just 25 working. This is just a job to them. This is what they 26 do. You know, this is not something that they decided 27 to get into or signed on when they took the first 28 contract and so forth. 49 1 And certainly even that information is 2 available pursuant to the Public Records Act. And I'm 3 extremely supportive of making whatever -- as much 4 information as possible available, but we got to weigh 5 that with the employees' rights, as well. 6 And -- and I concur with Mi -- Michelle's -- 7 Ms. Steel's concern about the safety, and particularly 8 the safety of our employees. 9 I looked at the information on the Controller's 10 site and indicating flights and where you flew can -- 11 you can establish a paren -- a -- a practice if that is 12 consistent. And certainly you can establish a practice 13 for us as Members because we fly to Sacramento; some of 14 us fly in earlier. Myself, you can just about tell 15 every Tuesday on such and such 30 I'm going to be on a 16 certain airplane and I'm going to arrive at a certain 17 time. So it is trackable and we just have to be, I 18 think, sensitive to that. 19 The -- the genesis of this was Governor 20 Schwarzenegger -- there was a question about a member of 21 his staff, if my memory serves me right, and he just 22 decided, well, we'll just put everything on the web. 23 And then everyone else just sort of followed suit. Even 24 though the information is available to the general 25 public. 26 The other benefits I think of the Public 27 Records Act is that you -- to the extent that -- that 28 you can define a purpose -- a person in that process, 50 1 which is always complicated, but -- you will know who's 2 asking the question. And in an environment where 3 America is under attack, two of the -- several of the 4 Board members have been threatened, their lives have 5 been threatened, our employees' lives have been 6 threatened. 7 When I worked for the Board of Equalization I 8 must have received numerous threats just as an employee, 9 and certainly would not want my expense report unless I 10 know exactly who was asking for it as an employee. 11 As an elected official the public's entitled to 12 know where I am and what expenses and so forth, and I'm 13 certainly -- however we make that information available. 14 There is some distinction between us as 15 Constitutional officers and the Constitutional officers 16 who has the -- who have decided to follow the Governor's 17 lead in response to one or two inquiries about one or 18 two employees and to say let's just put it all on the 19 website because I'm good with transparency. 20 I mean they all have armed security. So 21 they're protected. We don't -- we're not -- we don't 22 have that benefit as elected officials. We don't have 23 an armed Highway Patrolman that drives us around 24 wherever we go. We are traveling the same way the 25 public travels. And we are accessible to the public to 26 a greater degree. And so therein is some of the 27 challenges. 28 But with that said there may be a way that we 51 1 can redact certain information and yet still get at the 2 cost factor. What does it cost for travel and -- and -- 3 but the differences here on the Board, I mean you take 4 Mr. Runner's district, in order for him to travel his 5 district, it's much larger than mine. 6 MR. RUNNER: Thank you. 7 MR. HORTON: So, I mean, he's -- he's got to 8 travel over half of the State in order to just be 9 responsive to his constituencies. But when you're 10 looking at just a number, that number may be the 11 catalyst for a whole lot of actions, but whatever that 12 action is, whether it's further inquiry or so forth, it 13 would be nice to know pursuant to a Public Records Act 14 that we know who's asking that question. 15 We're not living in the same world that -- that 16 our parents grew up in. Members of this Board have been 17 threatened. Individuals have said that they intend to 18 kill Members of this Board, and have sought to carry 19 that out. And the police have intervened. And so for 20 the same reason that many of our Constitutional officers 21 have armed security guards, there's a reason for that. 22 There's a reason that now that the Senators -- United 23 States Senators and Congress persons no longer disclose 24 their travel. They will not post in advance where 25 they're going to be because a member of their body 26 that -- because of the attempted assassinations on the 27 lives of the members of their body. 28 This is a different world that we're living in. 52 1 And so, we just should be conscious of that. 2 Transparency, a hundred percent. Access, a hundred 3 percent. But maybe it should go both ways. Maybe the 4 person asking we should know and the person providing 5 the information we should know. 6 So, at a minimum that's certainly not going to 7 stop individuals who would seek to exploit this 8 information for whatever reason. And we all know it 9 happens but, you know, for whatever reason. 10 MS. MANDEL: Mr. Horton, can I just make a 11 correction? 12 MR. HORTON: As soon as I -- as soon as I 13 finish. 14 MS. MANDEL: Okay. Thank you. 15 MR. HORTON: For -- for whatever reason. 16 But -- and I'm only asking that when staff comes back 17 maybe you can figure out a way. I think what the 18 Controller does is -- almost gets us there. I haven't 19 looked at who exactly discloses the information, is not 20 required to disclose the information. And I'm certainly 21 not at a point despite the -- the threats to a couple of 22 our Members, the -- the -- the attempted assassination 23 of a Senator and -- and all the other threats that we 24 all receive as elected officials -- I'm not prepared to 25 say that I need an armed security guard to -- to -- to 26 transport me around but I am -- I do want to be a little 27 conscious of how I expose my family, my children, 28 because they're often with me when I'm out and about. 53 1 Ms. Mandel. 2 MS. MANDEL: Sure. I -- this is just a 3 correction on myself. I -- I may have misspoke in terms 4 of who's posting Form 700s. If I said the Attorney 5 General, I haven't checked the Attorney General. I 6 meant the Treasurer. He was the Attorney General for a 7 long time and so his name popped in my head and I think 8 "Attorney General" came out of my mouth, but I meant the 9 Treasurer. 10 Thank you. 11 MR. HORTON: Yeah, the other thing I might 12 point out is that we -- we have even gone as far as to 13 say in our -- in the offices, the -- of the Board of 14 Equalization, the district office, we're looking at 15 security measures there because of the number of threats 16 that our employees have received. We're putting up 17 bulletproof windows in some of these offices and 18 proposing all types of security measures. 19 And so let's -- let's be conscious of that 20 and -- and -- and God's sake, let's certainly be 21 conscious of the employees who just took a job. That's 22 all they really did. They didn't get elected. They 23 didn't decide to be a public official. And certainly 24 didn't decide to put their life -- expose their life the 25 same way that we have to as elected officials 26 So, is that enough direction, with that? 27 Okay. With -- I don't think we need a motion, 28 Members. Staff, I think you have some direction. 54 1 ---oOo--- 2 REPORTER'S CERTIFICATE 3 4 State of California ) 5 ) ss 6 County of Sacramento ) 7 8 I, BEVERLY D. TOMS, Hearing Reporter for the 9 California State Board of Equalization certify that on 10 April 26, 2011 I recorded verbatim, in shorthand, to the 11 best of my ability, the proceedings in the 12 above-entitled hearing; that I transcribed the shorthand 13 writing into typewriting; and that the preceding 54 14 pages constitute a complete and accurate transcription 15 of the shorthand writing. 16 17 Dated: May 19, 2011. 18 19 20 21 ____________________________ 22 BEVERLY D. TOMS 23 Hearing Reporter 24 25 26 27 28 55