| | | | |  | | By Lara Korte, Jeremy B. White, Matthew Brown and Ramon Castanos | THE BUZZ: So far, the extraordinary legislative session has only highlighted California's extraordinary blind spot when it comes to high gas prices. For the first time since Gov. Gavin Newsom announced a special session in October, lawmakers Wednesday sat down in a public forum to talk about a potential penalty for oil companies who rake in excessive profits. But members of the Senate Energy, Utilities and Communications seemed more interested in the transparency part of the governor’s proposal than necessarily penalizing Big Oil for conspiring against California drivers. "There is clearly a belief out there among many people that oil companies were profiting off the backs of Californians," said Sen. Dave Min (D-Irvine). "At the same time, we don't really have a smoking gun as far as I can see, that shows intentional collusion." No votes were taken, and critical details are still missing from the bill, but the hearing offered a glimpse into legislators’ thinking on an issue that, up until now, has only been discussed behind closed doors. POLITICO’s Wes Venteicher watched the five-hour hearing and has the full rundown. The penalty Newsom is proposing would claw back some of those excess profits to return to Californians and require companies to be more transparent about their market operations — something energy experts and state regulators have been grasping at for decades. Senators were eager to express their outrage for their constituents, but also noted that California has long tried to investigate oil companies’ market decisions to no avail. The companies claim antitrust laws prevent them from sharing too much. “What is different from every other attempt [at investigating]?” asked Sen. María Elena Durazo (D-Los Angeles). For months, Newsom has been publicly denouncing oil companies for “fleecing” Californians during last summer’s eye-popping gas price spike. The reception from the Capitol has been lukewarm. Legislative leaders have been cautiously supportive. But, behind closed doors, lawmakers, lobbyists and advocates acknowledge it’s going to be a hard sell, especially for moderate Democrats. The governor was able to strong-arm members last year to pass a sweeping set of climate change legislation. But even without calling it a “tax,” such a penalty is sure to be a test of Newsom’s ability to work with the Legislature. BUENOS DÍAS, good Thursday morning. California is getting hit with some unseasonably cold weather today, with wind, snow, and rain battering folks up and down the state. Many San Diegans were baffled Wednesday to see hail in their front yards. Got a tip or story idea for California Playbook? Hit us up at jwhite@politico.com and lkorte@politico.com or follow us on Twitter @JeremyBWhite and @Lara_Korte. QUOTE OF THE DAY: “Trust me, brother, you haven’t looked at my salary. … We had about the same net worth back then, 20 years ago.” Newsom riffing about the cost of buying a Tesla in 2007 with CEO Elon Musk, the world’s second-richest man. More on that friendly exchange (and Newsom’s salary) here. TWEET OF THE DAY:
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RobStutzman | WHERE’S GAVIN? Nothing official announced.
| | | | JOIN POLITICO ON 3/1 TO DISCUSS AMERICAN PRIVACY LAWS: Americans have fewer privacy rights than Europeans, and companies continue to face a minefield of competing state and foreign legislation. There is strong bipartisan support for a federal privacy bill, but it has yet to materialize. Join POLITICO on 3/1 to discuss what it will take to get a federal privacy law on the books, potential designs for how this type of legislation could protect consumers and innovators, and more. REGISTER HERE. | | | | | |  | TOP TALKERS | | BUDGET MOVES FOR BONTA — The budget subcommittee chaired by Assemblymember Mia Bonta (D-Oakland) will no longer oversee funding matters related to her husband's Department of Justice, Budget Chair Phil Ting (D-San Francisco) announced late Wednesday. The change comes after days of pressure from KCRA’s Ashley Zavala about whether it was ethical for Bonta to oversee funding for the department run by her husband, Attorney General Rob Bonta. Mia Bonta had initially rebuffed the suggestion of any conflict of interest before agreeing to recuse herself from matters related to the DOJ on Sunday. Ting’s decision goes one step further — taking the issue out of her committee completely. — “Nury Martinez is gone, but distrust remains high as Valley voters weigh a replacement,” by the Los Angeles Times’ Dakota Smith: “At forums, candidates running for the council seat vow to rebuild public trust and work with marginalized communities. They also offer solutions for Van Nuys Airport, where the noise and fumes from private jets torment neighbors, and pitch improvements to make Panorama City’s boulevards bike-friendly.” — “The growing push for major action on mental health and homelessness,” by Capitol Weekly’s Sigrid Bathen: “This may be the year that changes, as the Newsom administration, state legislators and local officials — pushed by escalating homelessness and the increasing clout of family members — propose major reforms in a broken system of care that many say is no care at all.”
| | CAMPAIGN MODE | | WICKS WALKS — After demurring on the question earlier this week, Assemblymember Buffy Wicks (D-Oakland) said she is unequivocally not going to run for Rep. Barbara Lee’s seat in CA-12 now that the veteran Congresswoman is making a bid for the U.S. Senate. GARCIA GAUNTLET — Former Democratic NASA chief of staff and Virgin Galactic CEO George Whitesides announced he’ll challenge GOP Rep. Mike Garcia in the battleground CA-27. Notably, Whitesides announced an endorsement from former Assemblymember Christy Smith, who is 0-3 against Garcia since 2020. VALLADARES RETURNS — Former Republican Assemblymember Suzette Valladares, after losing one of 2022’s most competitive races, is jumping into one of 2024’s marquee contests: the race to succeed termed-out Sen. Scott Wilk in the D+10 23rd Senate District. Democratic attorney Kipp Mueller is seeking the seat again after losing to Wilk in 2020.
| | CALIFORNIA AND THE CAPITOL CORRIDOR | | — “IRS ‘asleep at the switch’ as California taxpayers search for answers, top watchdog says,” by The Sacramento Bee’s Brianna Taylor and David Lightman: “Both the California Franchise Tax Board, and later the Internal Revenue Service, said the California inflation relief — also known as the Middle Class Refund — is not taxable income and should not be reported on 2022 tax returns. The IRS guidance came weeks after both the filing season opened and several readers including McIntyre reached out to The Bee for answers.” — “California bill would reform ‘failing’ system serving adults and kids with disabilities,” by The Sacramento Bee’s Maggie Angst: “The measure follows a series of recent reports, a state audit and public hearings that revealed racial disparities, inadequate oversight and limited accountability at California’s regional centers — a network of 21 nonprofits that coordinate services for about 400,000 children and adults with developmental and intellectual disabilities.” FRIENDLY FIRE — “Dem-on-dem dirty tricks? Who is using Lee, Porter websites to link to Schiff?” by the Times of San Diego’s Ken Stone: “Website registration records don’t say who actually owns these sites. They all point to the registrant — Domain Protection Services Inc. of Denver, which hasn’t responded to requests for comment. (The business has been accused of scamming.) But the Schiff campaign is not amused.” VISITING HOURS — “Gavin Newsom visits San Quentin State Prison — for an interview with Jon Stewart,” by The Sacramento Bee’s Maggie Angst: “In June 2019, Newsom signed an executive order placing a moratorium on the death penalty in California. He called the death penalty ‘ineffective, irreversible and immoral.’ State officials are now in the process of working to transfer San Quentin’s nearly 700 death row inmates to other state prisons.” — “Bay Area storm: Tens of thousands still without power as winds calm,” by The Mercury News’ Austin Turner: “The way the storm is tracking is probably going to shift from southwest-to-northeast (Thursday) night, and that’s going to bring the rain and snow,” National Weather Service meteorologist Brian Garcia said Wednesday afternoon. “It’s an interesting system to track in terms of watching to see where it’s going to land or to see if it stalls out.” — “State signs off on Oakland’s plan to add 26,000 new homes,” by the East Bay Times’ Ethan Varian: “State regulators have signed off on Oakland’s plan to add at least 26,000 new homes over the next decade — meaning the Bay Area’s third-largest city is no longer at risk of missing out on crucial funding or losing control over local development rules.”
| | BIDEN, HARRIS AND THE HILL | | GUSTS OF GIGAWATTS — “Biden considers 1st offshore wind auction in Gulf of Mexico," by The Associated Press’ Jennifer McDermott: “The proposed sale, which could take place as soon as this summer, includes areas offshore Lake Charles, Louisiana and Galveston, Texas, for roughly 3.6 gigawatts of electricity, enough to power about 1.3 million homes. The Bureau of Ocean Energy Management plans to open a 60-day public comment period on Friday.” — “Biden shores up Western allies as Putin digs in on Ukraine,” by The Associated Press’ Aamer Madhani and Zeke Miller: “President Joe Biden closed out his wartime visit to Europe on Wednesday, working to shore up partnerships with allies on NATO’s perilous eastern flank — even as Russia’s Vladimir Putin was drawing closer to China for help as his invasion of Ukraine neared the one-year mark.”
| | SILICON VALLEYLAND | | — “Meta could cut thousands of jobs, after CEO predicted no more layoffs,” by The Washington Post's Naomi Nix: “Meta plans to push some leaders into lower-level roles without direct reports, flattening the layers of management between Meta CEO Mark Zuckerberg and the company’s interns, according to a person familiar with the matter who spoke on the condition of anonymity because they were not authorized to speak about internal matters.” — “Hundreds more tech, life science layoffs jolt East Bay, San Francisco,” by The Mercury News’ George Avalos: “Affirm, Zendesk, Bayer U.S. and two subsidiaries of Johnson & Johnson have revealed reductions that are affecting well over 300 jobs in the Bay Area, according to several WARN notices that have been filed with the state Employment Development Department (EDD). The fresh disclosure reveals the layoffs are hitting tech and life science jobs in Berkeley, Fremont and San Francisco.” — “Despite Elon Musk's California criticism, Tesla says its second HQ will reside in Palo Alto,” by the San Francisco Chronicle’s Roland Li: “In 2020, Musk cited the Bay Area’s high housing costs and “limit to how big you can scale” as reasons for Tesla’s headquarters move to Texas. But Tesla never left Palo Alto and signed the 325,000-square-foot lease for what would become the new headquarters in 2021.”
| | MIXTAPE | | — “He's in hospice care now. But Jimmy Carter is still changing the world,” opines Nicholas Goldberg in the Los Angeles Times. — “Crips gang member sentenced to 60 years in prison in murder of Nipsey Hussle,” by the Los Angeles Times’ James Queally.
| | TRANSITIONS | | — Rep. Adam Schiff (D-Calif.) adds two new staffers: Maryam Ahmed, who was previously a national press secretary at Senate Majority PAC, will be press secretary with a focus on California media. Rohith Murali, a House Democratic Caucus alum, will be a press and digital assistant. — Ravi Doshi is now senior counsel to the general counsel of the Commerce Department. He was counsel for Sen. Alex Padilla (D-Calif.).
| | BIRTHDAYS | | — Derek Khanna… POLITICO California Editor Katy Murphy CALIFORNIA POLICY IS ALWAYS CHANGING: Know your next move. From Sacramento to Silicon Valley, POLITICO California Pro provides policy professionals with the in-depth reporting and tools they need to get ahead of policy trends and political developments shaping the Golden State. To learn more about the exclusive insight and analysis this subscriber-only service offers, click here. Want to make an impact? POLITICO California has a variety of solutions available for partners looking to reach and activate the most influential people in the Golden State. Have a petition you want signed? A cause you’re promoting? Seeking to increase brand awareness amongst this key audience? Share your message with our influential readers to foster engagement and drive action. Contact Jesse Shapiro to find out how: jshapiro@politico.com.
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