The Infamous Napkin Deal

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    With the Napkin Deal sealing the peace pact, it fell to legislative leadership to finalize the tort-reform agreement by passing Senate Bill 241. In less than 48 hours, the bill’s language was updated to reflect the consensus reached at Fat’s. And on the very last day of session, the bill was pushed quickly through a joint hearing of the Senate and Assembly Judiciary committees and then through a specially called Committee of the Whole on the Assembly side and the floor on the Senate side.
    The process moved so quickly and was so tightly controlled there was no time for any opposition to the bill to coalesce, and only two members had the temerity to speak out against the bill. Speaker Brown quickly and firmly shut each of them down. SB 241 was rammed through with only one nay vote, and Gov. Deukmejian signed the bill shortly thereafter.
    Most people think legislation is decided by the 120 state officials elected for that purpose, and generally, it is. But this time the legislation was the result of intense negotiations by very few people. Except for Brown and Lockyer and their active leadership in negotiations and pushing the bill through the Legislature, its members were largely a rubber stamp for the deal.
    Consumer advocates were livid. “The bill was a sellout of consumers’ and California’s interests to moneyed special interests,” says Harry Snyder, who represented Consumers Union at the time. He says consumer advocates were only told about elements of the deal by the trial attorneys late in the afternoon the day before the last day of session, far too late for those advocates to have any say in the outcome.
    It was important for the attorneys, who considered themselves friends of consumer advocates, to be able to say that consumer groups were aware of the deal and that the attorneys were representing consumers’ interests in the complex negotiations. In reality, says Snyder, the trial attorneys turned out to be consumers’ enemies. “It was the first indication of elected officials not writing legislation but of affected groups writing it. It hurt consumers and helped special interests on both the policy level and the process level,” he says.

Name That Creek
Now, says Snyder, the Napkin Deal is the process model. Legislation is still being created by the same moneyed interests. The energy deregulation bill of 1996, passed unanimously by the Legislature, “was largely crafted by PG&E, Southern California Edison, independent energy operators and sellouts from the Natural Resources Defense Council,” Snyder says. “The legislature’s role now is largely to name creeks or one-mile stretches of freeway.”
    Merksamer, Deukmejian’s former chief of staff, echoes Snyder’s view that the tort-reform deal presaged a weakening of the Legislature and the rise of the initiative process as both a tool and a threat. “It would be better if the Legislature did its job, but it is institutionally incapable of solving the big issues of the day. Is it good for private interests to do this? No. But it was private interests on both sides who got the job done because the Legislature wouldn’t.” He points out that most significant policy changes have been made through the initiative process and cites numerous examples: “Prop. 13, Gann, Prop. 98, charter schools, Three Strikes, Prop. 187     and 189. Even the creation of the Coastal Commission and the Fair Political Practices Commission.”
    Most recently, says Merksamer, in Arnold Schwarze-negger’s first term as governor, workers’ compensation reform came about only because of the threat of an initiative.

Continued...

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