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California lawmakers’ stock disclosures are full of surprises

A photo illustration of a figure in a suit with windmills in the background and oil barrels in the pocket.
(Photo illustration by Jim Cooke / Los Angeles Times; Photos by Getty Images, Unsplash)
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Good morning. It’s Monday, December 18. Here’s what you need to know to start your day.

California lawmakers’ stock disclosures are full of surprises

Some California state legislators proudly tout strong records on environmental issues, social media regulation and workers’ rights. But they are not always putting their money where their mouths are.

People who vote green making money when oil companies’ profits increase, for example. Elected leaders have invested in fossil fuel companies despite calling themselves environmentalists; in tech giants that they seek to hold more accountable; and in big businesses they criticize for worker treatment. That’s according to recent data on lawmakers’ finances collected by the nonprofit news organization CalMatters and analyzed by The Times.

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The documents show that 40 of California’s 120 lawmakers reported at least $2,000 in investments last year, Times reporters Mackenzie Mays, Queenie Wong, Hanah Wiley and Sandhya Kambhampati found. About 30% of Democratic legislators and about 46% of Republicans are on the list. Collectively, those lawmakers reported at least $14 million worth of investments in 2022’s disclosures.

Lawmakers with the biggest investment portfolios

The five lawmakers reporting the most financial investments, with each noting minimum values of at least $1 million, are:

  • Sen. Roger W. Niello (R-Fair Oaks)
  • Assemblymember Gail Pellerin (D-Santa Cruz)
  • Sen. Bill Dodd (D-Napa)
  • Assemblymember Marc Berman (D-Menlo Park)
  • Assemblymember Jacqui Irwin (D-Thousand Oaks)

Niello previously voted against legislation meant to more tightly regulate oil and gas companies, even while he had invested tens of thousands of dollars in Chevron, ConocoPhillips and other companies, my colleagues noted. He reportedly sold most of his stock in individual companies last year and put most of his investments in professionally managed diverse portfolios — which do not require public disclosure.

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Pellerin owns stock in major oil, chemical and mining companies, and has a voting record as an environmentalist.

Irwin owns at least $1 million in Amazon stock and voted for new regulations for e-commerce warehouses.

“Lawmakers who spoke to The Times for this article said that their investments do not negate their calls for change, and that their holdings do not influence their work in any way,” my colleagues wrote.

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The fine line between awkward and a legal conflict of interest

It may give voters ill feelings, but the politicians’ actions are not illegal.

It is difficult to determine when a legal conflict of interest arises. The law defines it as a decision in which the financial impact of a vote or piece of legislation on the person with the investment “is foreseeable” and is “significant enough to be considered material.”

Several lawmakers on the national level have proposed legislation to ban members of Congress from trading stock in recent years, and some advocates say it erodes the public’s trust for even the appearance of a conflict of interest to be present.

“Individual stock holdings can absolutely, regardless of what level of government you’re in, cause those conflicts of interest that raise serious problems with the public’s trust in government,” Delaney Marsco, senior legal counsel for the Campaign Legal Center, which supports legislation to ban members of Congress from trading stocks, told my colleagues.

“In a perfect world, you’d practice what you preach with your own funds,” Democratic strategist Steve Maviglio told The Times. “But it’s not like they’re trying to hide the ball. They’re ripe for criticism — they know that when they fill out that form.”

You can read more of my colleagues’ reporting to learn more about which lawmakers own stock in which companies and what they have to say about that.

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Show us your favorite place in California! Send us photos you have taken of spots in California that are special — natural or human-made — and tell us why they’re important to you.

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Today’s great photo is from David Hayashida of Greenbrae, Calif. David writes: “On a clear fall day, you can see migrating whales as the sun sets to the west, miles of pristine coastline and Point Reyes to the north, historic Muir Beach and San Francisco to the south, and the rugged Mt. Tamalpais State Park to the east, all while peregrine falcons and other raptors soar overhead. It feels as if you are standing on the edge of the continent — and you are!”

Have a great day, from the Essential California team
Ryan Fonseca, reporter
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