Smoke and mirrors

Oct 13, 2011

The presidential election cycle is under way and the federal government's thoughts are turning -- again -- to California's medical marijuana market. This time, federal prosecutors are going after the media.


From Michael Montgomery at California Watch: "This month, U.S. attorneys representing four districts in California announced that the government would single out landlords and property owners who rent buildings or land where dispensaries sell or cultivators grow marijuana. Now, newspapers and other media outlets could be next."


"U.S. Attorney Laura E. Duffy, whose district includes Imperial and San Diego counties, said marijuana advertising is the next area she's "going to be moving onto as part of the enforcement efforts in Southern California." Duffy said she could not speak for the three other U.S. attorneys covering the state but noted their efforts have been coordinated so far..."


"Federal law prohibits people from placing ads for illegal drugs, including marijuana, in "any newspaper, magazine, handbill or other publication." The law could conceivably extend to online ads; the U.S. Department of Justice recently extracted a $500 million settlement from Google for selling illegal ads linking to online Canadian pharmacies."

Sacramento State University had been pledged $10 million from billionaire Alex Spanos, but only $1 million ever arrived. The school, years after the pledge was widely reported in the media, is still hoping for the balance.

From Capitol Weekly's Malcolm Maclachlan: "Sources said Gonzalez and other top officials became increasingly worried about the missing pledge money as the years passed and Spanos’ health declined. The wealthy owner of the San Diego Chargers NFL franchise turned 88 on Sept. 28.  At the end of 2008, there was a flurry of media reports after the Spanos family confirmed that he was suffering from dementia."

"The university declined to release a copy of the original agreement between Gonzalez and Spanos. Sources told Capitol Weekly it consisted of a single line that said, in effect: “I pledge $10 million to go to the Spanos Sports Complex at Sacramento State over 10 years.”

"The 2009 letter from Gonzalez and the university’s public acknowledgement that most of the pledge has not come in, suggests that the original agreement lacked legally-binding language."


It was the state's political watchdog, the Fair Political Practices Commission, that got the ball rolling on the Kinde Durkee investigation. The FPPC may not be the friend of many lawmakers, but it migfht turn out that the FPPC's move saved candidates lots of money. Capitol Weekly's John Howard has the story.


"FPPC investigators found something suspicious in the finances of a campaign involving Durkee during routine checks in 2009 and began a detailed inquiry. The FPPC alerted the FBI, which triggered a federal probe that culminated Sept. 2 in the arrest of Durkee in Southern California for investigation of mail fraud stemming from the alleged looting of $677,000 from the campaign account of Assemblyman Jose Solorio, an Orange County Democrat."

"She is scheduled to appear in federal court in Sacramento on Oct. 19. "

"By one count, Durkee has had connections to nearly 400 state, federal and local campaigns over the years. Early on, U.S. Sen. Dianne Feinstein filed a fraud and breach-of-contract lawsuit against Durkee and First California Bank, which handled Feinstein’s campaign funds, and other court actions are likely."


California's congressional Democrats are taking a swing at the Obama administration's handling of the home foreclosure crisis, saying the housing issue should be at the top of the president's agenda.


From the Chronicle's Carolyn Lochhead: "Led by Rep. Zoe Lofgren of San Jose, who chairs the state's Democratic House delegation, nearly all the state's 32 Democrats signed a letter to President Obama urging him to take immediate administrative actions to make it easier for homeowners to take advantage of rock-bottom interest rates, among other measures."


"Delegation members said the administration should push banks to reduce the principal owed by people whose homes are worth less than the value of their mortgages, create a "homeowners' bill of rights" to streamline mortgage modifications and end a requirement that homeowners become delinquent before they qualify for a loan modification, among other things."


"Lofgren said the mortgage crisis is "crippling" California, which has the second-highest foreclosure rate in the nation, behind Nevada. Oakland and the San Joaquin Valley have been hit especially hard by the collapse in housing prices, which has eviscerated consumer wealth and spending power. Economists of all stripes pin much of the blame for the current economic stagnation on the continuing depression in the housing market."


Oakland Police Chief Anthony Batts stepped down after a highly critical report  from a court-appointed monitor tracking the deparftment's activities, the Chronicle reported.


From Demian Bulwa and Matthai Kuruvila: "The monitor found that the Police Department was backsliding in implementing changes that a federal judge mandated to prevent a repeat of the scandal in which the officers, who called themselves the "Riders," were accused of imposing vigilante justice in West Oakland."


"A draft of the report, examining the department's performance under Batts from April to June, was delivered to city officials and other parties in the court case this week. The Chronicle obtained a copy Wednesday."


"We are seriously concerned with the department's stagnation - and now, reversal - in achieving compliance," wrote the court-appointed monitor, Robert Warshaw, a former police chief of Rochester, N.Y., and deputy drug czar under President Bill Clinton. "It is ultimately the leadership of the department that must be the impetus for reform and public confidence."

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