The Forgotten Years


Brown’s Wins the Governor’s Nomination In 1974

Jerry Brown’s first election to public office as a member of the Los Angeles Junior College Board of Trustees was primarily a name ID race and which Brown won on his father’s name running as Edmund G. (Jerry) Brown which he repeated in his Secretary of State’s race.

In his race for governor, Brown had to beat a field of candidates including San Francisco Mayor Joe Alioto whose candidacy was geared to organized labor.

President Nixon resigned in the Watergate scandal in 1974, so the Democrat nominee for governor was expect to walk into the governor’s office.  Brown wanted to be the one to make that walk.

Alioto’s campaign was fatally damaged when he was not endorsed by the California AFL-CIO.  The AFL-CIO chose to endorse all four of the Democrats, Brown, Alioto, Assembly Speaker Bob Moretti,  and Rep. Jerome Waldie.  The Los Angeles Times reported Alioto to be furious that “Alioto Loses Bitter Fight to Win AFL-CIO’s Unqualified Support”.

According to the Times, “The mayor (Alioto), who had been basing most of his campaign on support from organized labor” and accused Ed Hanley, the President of the Hotel and Restaurant Workers Union of defeating him.  Alioto charged that Hanley “met in a hotel room with (former Gov. Edmund G.) Pat Brown, Jerry’s father, and Herman Leavitt (a union Vice President) and worked out the whole deal” according to the Times quote of Alioto.  “Hanley sent out an edict, ordering members of his union to vote against an endorsement for me, and either directly or indirectly threatened them with loss of their jobs if they refused” Alioto is quoted as saying at a press conference.

Alioto’s assertions were labeled “an absolute lie” by Leavitt.

But, the Times said that Alioto’s friends in labor supported the mayor’s story quoting Joe Mazzolo of the San Francisco Plumbers Union as saying “What you saw here today was a situation where delegates pledged to Alioto were denied the right to vote fro the man of their choice because of an order from the president of their union.”  (See Los Angeles Times, Friday April 12, 1974)

The Times went on to report that the effect of the AFL-CIO action, according to Alioto’s opponents, was to end Alioto’s prospects of winning the Democrat nomination.

Brown And Criminal Rights

“The one thing that may stick to Brown from his first eight-year tour on the State Capitol governor’s office is his expansion of prisoner rights.  More specifically Brown virtually led the charge to allow prisoners conjugal visits.”

The newspaper article asked “how you’d feel if your daughter or son’s killer was allowed to have conjugal visits in prison” and he fathered children that ended up being on welfare.

“Brown has voiced regret over the years for large chunks of his prisoner rights agenda” which he promoted when he was governor (1975 to 1983).  Brown’s embracing of conjugal visits for inmates was one of the prisoner rights that he now regrets.

The quotes come from the Manteca Bulletin, April 14, 2010, entitled “Inmate conjugal visits may come back to haunt Jerry Brown”.

The Family Business

When Governor Pat Brown left the Governor’s Office in 1967, he met with the Indonesia military generals who had overthrown Sukarno, the country’s dictator.  Pat Brown put together a group of banks who lent $12 Billion in loans to the junta.  (The banks were interested in the business opportunities related to the Royal Dutch Shell Petroleum assets that Sukarno had nationalized and the generals controlled.)

The generals set up two trading firms: in California and Hong Kong.  Pat Brown owned 100% of the California firm and 50% of the Hong Kong firm and earned money on each barrel of oil sold.

“The deal was a very lucrative one because California’s early clean-air standards set a sulfur limit for the fuel burned in power plants – a limit only the clean, low-sulfur oil from Indonesia could meet.”   (Washington Times, Friday, April 16, 2010 by Laer Pearce: Jerry Brown, oil baron Little-known foreign oil holdings might taint decisions.)

Chevron had just finished building a new refinery in California to process the new north slope Alaskan oil fields oil into gasoline for California drivers.  This would have made America more energy independent of foreign oil. It would have also given Indonesia a competitor in the marketplace for crude oil which could have reduced the prices that the California refineries had to pay for oil, in turn reducing the price of gasoline to California drivers.  Brown’s former campaign manager who served as the head of the California Air Resources Board promulgated a new sulfur standard that prevented Chevron from using the Alaskan oil before they had refined a single barrel.  According to the Washington Times: “That cemented the Indonesian monopoly, and the Brown family, as the only oil provider to the California power industry.  (A government enforced monopoly.)

Not surprisingly, when Jerry Brown left the governorship, Pat Brown finally gave him his own cut of the family oil business.”

Public Employee Unions

Governor Brown signed the bill to allow the unionization of the State of California’s workforce which, many argue, led to today’s role of public employee unions as special interests who give vast sums of money to candidates who will increase their pay and benefits.  California employee pensions (CalPers) are underfunded by over a hundred billion dollars and the health benefit fund for retired public employees is underfunded by more than that.  While estimates very, an underfunded debt of $300 billion is in the ballpark.

The State of California has been running annual deficits of $20 billion dollars a year for all of this Governor’s current term in office.

Most assume that to balance the state’s budget, there will have to be a 20% cut in state spending (cutting one in five dollars) or an increase in taxes of $20 Billion.  However, the tax increase passed in the Spring of 1999 did not bring in the expected new revenue as taxes cut the money in the hands of people and businesses, and more jobs were lost which reduced revenue and increased state spending for welfare and unemployment along with other state services.

People concerned about the state budget deficit question where the money will come from to fund state employees pensions and health care in retirement.

All observers wonder how any reforms can be achieved because of the huge campaign spending of the public employee unions like SEIU.

Brown’s Bullet Train

Governor Brown had wanted a bullet train for California.   In 1976, Brown’s head of Caltrans, Adriana Gianturco began pushing for Brown’s dream.  In 1978, she paid for a study of a high speed rail line from Los Angeles to San Diego.

However, State Senator  Alfred Alquist who Chaired the Senate Appropriations Committee didn’t like the idea of a bulett train and didn’t like Gianturco.  At one point told her in a committee hearing that “if he ever heard the words bullet train come out of her mouth again, he’d cut off all of Caltrans’ funding.”  After that, Gianturco gave up.  But, Governor Brown got a new Chief of Staff when Gray Davis stepped down in 1981.  Richard Silberman (a Jack-in-thBox billionaire) became Chief of Staff  and the Japanese-funded bullet train got on track.

On April 1, 1981, the New York Times Business Section carried a key articles.

The article was about plans for a new bullet train in California.  It would run between Los Angeles and San Diego.  The article mentioned that the plan had the backing of a Japanese billionaire named Ryoichi Sasagawa who had provided $5 million for some preliminary marketing studies.  The entity that was promoting the bullet train was the American High-Speed Rail Corporation.

In Washington, D. C.,  AMTRAK President Alan Boyd and Vice-President Larry Gilson lent themselves $750,000 in AMTRAK (US government) money to start their new corporation, American High-Speed Corporation which came into existence on December 18, 1981.  They used most of their AMTRAK money to fund a marketing study for the California bullet train.

Sasagawa  and an entity called Californians for Economic and Environmental Balance (CEEB), founded by Jerry’s dad, Pat Brown, began to fund trips to Japan to see Japan’s high speed train.  Key legislators like the two legislative chairs of the Assembly and State Senate transportation committees, Assemblyman Bruce Young and Senator John Foran, together with Assemblyman Mike Roos, Assembly Majority Leader and Speaker Willie Brown’s leader in the Assembly, and Roos’ key staffer, Phil Angelides.

“…Sasagawa’s money was largely derived from his interests in speedboat racing, which was then a known Yakuza organized crime enterprise.”  (Paradise Lost? page 30)

Allegedly, the Center for Investigative Reporting substantiated this and had files that alleged that Sasagawa was a suspected World War II war criminal and the U. S. State Department had recommended that he be tried for war crimes and he was believed to be tied to the 1936 assassination of Takeshi Inuki, the Prime Minister of Japan.

Larry Gilson and Alan Boyd hosted a reception for Sasagawa at the Sanwa Bank in Sacramento in early 1982 and appear to have worked closely together on the bullet train project.

Assemblyman Bruce Young introduced a “spot” bill AB 3647 that was limited to some dry regulatory language and completely unrelated to the bullet train.  The bill moved through the committee process in the legislature until August of 1982 when it was gutted and included language that all but named the Japanese companies that would provide the trains.  When the bill passed, the stocks of several effected companies soared.

The one page bill now provided $1.25 billion in tax exempt California state revenue bonds for “a Shinkansen-type (Japanese) bullet train” virtually naming the company that would provide the trains.  It also called for the train to be operated by a for profit company.

Brown’s Caltrans found itself cut out of the process despite having been assured that they would have a role.

The train itself lived on until the following year, 1983, when a hearing was held on February 12.  A critic, Jonathan Richmond, came forward and demolished the marketing study and showed that the train would not carry enough passengers to pay the bills.  The previously “secret” marketing study by Arthur D. Little was torn to shreds.

The bullet train contained in AB 3647 and signed into law by Governor Brown fell apart after he left office.

This information is from Richard Trainor’s book Paradise Lost?

Trainor argues that it is irrelevant if certain state sponsored construction projects ever take place.  He theorizes that various  construction projects created by California state law were actually bump (the price) and dump (the stock) ventures that made key insiders fortunes.  Without California legislation, such schemes could not work.

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    This is the definitive independent site covering Governor Jerry Brown's time in public office and legacy. His appointments and staff, judicial appointments, statements, and policies and their impact on the State of California jobs, the State's economy and its people.
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