Crypto comes for Katie Porter

Your afternoon must-read briefing on politics and government in the Golden State

Feb 13, 2024 View in browser   By Christopher Cadelago Adam Schiff (left) and Katie Porter (right) at the California Senate debate, Feb. 12, 2024. | Inside California Politics TELL US WHAT YOU THINK: We want to hear from California Playbook PM readers about the issues that matter to them. Please take a few minutes and fill out this survey and help us shape our coverage. ENEMIES WITH MONEY: Never argue with folks who buy ink by the barrel, as the old saying goes. Katie Porter is going to war with people who literally manufacture digital currency. The Democratic Senate candidate’s rivals are a clique of crypto financiers, organized under the super PAC called Fairshake. And they’re spending millions trying to sandbag Porter and keep her (and her little whiteboard) out of the November runoff against fellow Rep. Adam Schiff. Fairshake’s new TV ad campaign — predicted with Nostradamus-like precision by Playbook PM on Monday — tries to portray the Orange County congressmember as a corporate crusader, but one who has accepted campaign contributions from powerful industry executives. “Katie Porter says one thing and does another,” the group said in a statement. Porter used Fairshake’s first ad to, what else, raise money! She called the ad “flat-out-false” and “misleading.” “Special interests and their ultra-wealthy backers have made crystal clear which candidate they prefer,” Porter wrote in the fundraising text. Her allies at the Progressive Change Campaign Committee also weighed in on Porter’s behalf: “These dishonest attack ads from Big Crypto demonstrate how far billionaire special interests are willing to go to prevent a pro-consumer champion like Katie Porter from becoming senator.” Porter, a protege of Sen. Elizabeth Warren (we’re going to spare you restating who her daughter is named after!), has been outspoken about regulating the industry. Fairshake is made up of several wealthy investors and crypto major players who have grown on the national scene after Sam Bankman-Fried’s once-emergent apparatus imploded. The group includes Andreessen Horowitz, Coinbase, Ripple Labs, Ron Conway and Blockchain Capital. The super PAC has amassed tens of millions of dollars and is spending some of it on House races in addition to California’s Senate race. It’s the first outside group that’s not affiliated with any of the candidates, and the spending barrage comes just as Schiff and his own super PAC are airing TV ads trying to power longshot Republican Steve Garvey into the top two in the March 5 election. All the spending is tying up Porter’s hands. She’s running positive ads of her own, but she can’t stay close with her counter-programming, let alone keep up with the carpet-bombing. It’s white-knuckle time in Irvine. IT’S TUESDAY AFTERNOON. This is California Playbook PM, a POLITICO newsletter that serves as an afternoon temperature check of California politics and a look at what our policy reporters are watching. Got tips or suggestions? Shoot an email to ccadelago@politico.com or send a shout on X. DMs are open. WHAT YOU NEED TO KNOW TODAY DEFENDING PROP 47: Supporters of Proposition 47 are pushing back on growing pressure to amend or even repeal the 2014 ballot initiative that eased drug and theft penalties. Criminal justice reform advocates came out today with a report asserting that California is spending more than ever on law enforcement. The report by Mike Males, a senior research fellow at the Center of Juvenile and Criminal Justice, notes that major offenses, including homicide, have fallen 57 percent since the early 1990s, though the percent of cases solved has fallen. The report is part of an effort by advocates to turn down outrage over retail theft and auto break-ins. “I would push back on the notion that public safety is the No. 1 issue on people's minds. It's not,” Assemblymember Isaac Bryan said at a Capitol news conference to release the report. Instead, the Los Angeles Democrat argues, people are far more concerned with affordable housing and the economic issues that help drive increased homelessness. “If we provide economic opportunity and the resources for people to thrive and live their lives, we wouldn't see rampant theft.” He also pointed out, echoing a point made repeatedly by Gov. Gavin Newsom, that California’s threshold for charging a theft as a felony, $950, is 10th lowest in the nation — despite Prop 47. “I promise you if 10 teenagers walk into a Gucci store and start stealing stuff, it is already a felony,” Bryan said. It’s a tough argument in this political climate, however. A proposed ballot measure that would increase penalties for some drug offenses and thefts has been gathering endorsements and thousands of new signatures per week — and appears likely to make the November ballot. — Ben Fox CAMPAIGN TRAIL Freshman state Sen. Melissa Hurtado, D-Sanger, center, holds her hand over her heart as she says the Pledge of Allegiance, at the start of the state Senate session on Dec. 3, 2018, in Sacramento, Calif. | Rich Pedroncelli/AP KNIVES OUT: Former California Assemblymember Rudy Salas is launching attacks on fellow Democrat Melissa Hurtado with less than three weeks until the primary. Salas is going after her record on abortion rights as Democratic groups scramble to avoid being locked out of the November election for the swing House seat. Salas, who came within 3,000 votes of knocking out Republican incumbent Rep. David Valadao in 2022, is hoping for a rematch for the Central Valley district. But a challenge from Hurtado, a sitting state senator, has put unexpected pressure on the primary — forcing party leaders to spend hundreds of thousands of dollars in the last month to elevate Salas. The new ad, which first appeared on Bakersfield televisions early Tuesday, is the first direct shot at Hurtado and highlights a poor rating given to her by NARAL Pro-Choice California. In 2022, the group gave Hurtado a “D” for not voting nine times on legislation that would’ve expanded abortion access. Hurtado received an “A-” rating from the same group in 2023. — Lara Korte FRIES WITH THAT PAYBACK? McDonald’s operators are flexing their muscles as a monumental fast food fight carries over into 2024 campaigns. Democratic candidates are absorbing attacks from franchise owners’ newly launched committee, the California Alliance of Family Owned Businesses. Among the targets: Democratic Assemblymember Chris Holden, who is running for Los Angeles supervisor after carrying landmark bills to give fast food workers better pay and more bargaining power. Holden campaign hand Danielle Cendejas framed the attacks as corporate payback. “They’re dropping these McNuggets at Holden because he stood up for thousands of Californians to make sure they’re paid a fair wage,” she said. Unions backers and corporate foes struck a truce last year that defused a ballot clash, thanks in part to pressure from Holden’s followup bill. But disenchanted franchisees spurned the deal and launched their PAC with a pledge to spend at least $1.5 million this cycle. They’re also opposing Assemblymember Kevin McCarty in his Sacramento mayoral bid and backing Assemblymember Tim Grayson over fellow Democrat Marisol Rubio in SD-9. — Jeremy B. White SPOTTED Former House Speaker Kevin McCarthy was back on Capitol Hill today for the Medal of Freedom award ceremony for House Clerk Cheryl L. Johnson. Former Democratic Speaker Nancy Pelosi was also in attendance. So what’s the former speaker and fundraising powerhouse doing to help Assemblymember Vince Fong get elected in his seat? “Everything I can,” he told POLITICO. McCarthy endorsed Fong back in December before resigning from his seat. “I've known him since he was in high school,” McCarthy said. “When he gets here, you'll notice who he is. He’ll hit the ground running.” He didn’t say whether he would join Fong on the campaign trail any time soon, but he did say he would be joining candidates who need some help. — Mia McCarthy WHAT WE'RE READING TODAY THAT HURTS: A poll found that nearly half of Republicans say California “is not really American,” and 40 percent said the state isn’t even a good place to visit. Half of adults overall said California is in decline. (Los Angeles Times) TRUCE CALLED: Two Bay Area oil refineries agreed to cut air pollution and drop lawsuits against regulators. (San Francisco Chronicle) SHATTERED GLASS: The Oakland A’s hired Jenny Cavnar as the first female primary play-by-play announcer in MLB history. (The Athletic)   Follow us on Twitter POLITICO California @politicoca   Subscribe to the POLITICO Playbook family Playbook  |  Playbook PM  |  California Playbook  |  Florida Playbook  |  Illinois Playbook  |  Massachusetts Playbook  |  New Jersey Playbook  |  New York Playbook  |  Ottawa Playbook  |  Brussels Playbook  |  London Playbook View all our political and policy newsletters Follow us

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