Is David Crane just another Kochhead?

David Crane: Public sector enemy No. 1?

This week the Chronicle majorly attacked State Sen. Leland Yee, claiming Yee tried “to distort the words” of billionaire investment banker and UC Regent David Crane on collective bargaining.

The Chron’s attack came on the heels of Yee’s attempt to block Crane’s UC Regents confirmation. And Yee’s attempt to block Crane came in response to an op-ed Crane wrote for the Chron titled “Should public employees have collective bargaining rights?”

In its counter-counter attack editorial this week, the Chronicle accused Yee of falsely claiming that Crane had “called for an end to collective bargaining rights for California teachers, nurses, firefighters, university employees and other public sector worker.”

“What the former adviser to Gov.Arnold Schwarzenegger did was present a history of collective bargaining in California and explain how a 1977 law had changed the balance of power by giving public employees power over their compensation and benefits,” the Chronicle stated. “Crane did assert that extending collective bargaining to employees who already have civil service protections ‘serves to reduce benefits for citizens and to raise costs for taxpayers. Anyone who would argue with that fact has not been paying attention to what is happening with state and local budgets lately.”

The Chronicle finished by praising Crane, who is currently a lecturer on Public Policy at Stanford University and is reportedly working with former Fed Chairman Paul Volcker to form a task force to examine current state budget practices. Crane, the Chron asserted, has “long been widely respected as a teller of inconvenient truths about the rising costs of public-employee pensions and benefits. He should not be silenced - or misquoted by opportunistic politicians. The Senate should vote to confirm him as regent.”

Now, when Schwarzenegger appointed Crane as a UC Regent in December 2010 as one of his last acts as Governor, the Sacramento Bee described Crane as Schwarzenegger’s “chief public employee pension critic.” But here in San Francisco, the Chron didn’t bother to flesh out Crane’s history of employment, campaign contributions, prior statements on collective bargaining, and financial investments.

Maybe it was because these public records reveal Crane to be less a dyed-in-the-wool Democrat and more of a Bushocrat, an ultra-rich investor who supported G.W. Bush through two elections, and repeatedly frames the collective bargaining rights of government employees as an obstacle standing in the way of pension reform and budget balancing.

Campaign finance records show that in March 1999, when Democrats were trying to hang onto the White House in the wake of Clinton’s sex scandals, Crane gave $1,000 to Bush. And in June 2003, just three months after Bush invaded Iraq on a false pretext, Crane saw fit to give Bush another $2,000.

The good news? Crane didn’t support Sarah Palin and John McCain in 2008. But he did donate $7,200 to Republican Tom Campbell’s unsuccessful 2010 bid for US Sen. Barbara Boxer’s seat. And here in San Francisco, Crane was one of several billionaires who wrote big fat checks last fall in support of Measure B, which sought to curb the pension and health benefits of city workers, most of whom will make a fraction in their lifetime of what Crane rakes in each year from his widely diversified financial portfolio.

Crane’s 2009 statement of economic interest shows he has over $1 million invested in Farallon Capital Partners, one of the world’s largest hedge funds, many of whose investors include top university endowments.

Crane also has over $1 million invested in Acacia Partners, over $1 million in Bislett Partners, over $1 million in Kensico Partners, over $1 million in Semper Vic Partners, over $1 million in Berkshire Hathaway, whose CEO is Warren Buffet, over $1 million in the HCP Absolute Return Fund, whose Board includes Warren Hellman, and up to $1 million in Hall Capital Management, whose Board includes Hellman and Gap heir John Fisher. Crane also owns several million dollars stake in real estate investments, and has sizeable stock in Wells Fargo, Chesapeake Energy, Microsoft, Google, Pangloss Oil, Whole Foods Market, M&T Bank Corp., IBM, American Express, WalMart and Exxon.

And he gets income from Acacia Partners and Babcock & Brown, where he was a former partner from 1979 to 2003. While at Babcock, Crane reportedly brokered a controversial jet-lease deal between Arnold Schwarzenegger and Singapore Airlines that allowed Schwarzenegger to defer taxes on millions of dollars. And in 2004, Crane went to work for then Republican Gov. Schwarzenegger as special advisor for Jobs and Economic Growth. The Terminator returned the favor by appointing Crane to the California Commission in Economic Development and the California High Speed Rail Authority. But Crane was rejected in Senate confirmation proceedings for a position on the board of California State Teachers Retirement System.

Now, clearly it’s not a crime to be a billionaire, even though the way some folks make their billions is criminal. But you have to wonder if UC really needs another ultra-rich Regent on its Board. You also have to wonder why the wealthy Crane sought reimbursements of $2,812 from UC in 2009, if he cares about saving the state money.

And Crane has made plenty of statements about collective bargaining rights and pension reform in recent months that seem to frame government employees as the bogey men, not just in California, but across the entire nation.

Take his April 2010 comments to the Los Angeles Times: “State legislators are afraid even to utter the words ‘pension reform’ for fear of alienating what has become -- since passage of the Dills Act in 1978, which endowed state public employees with collective bargaining rights on top of their civil service protections -- the single most politically influential constituency in our state: government employees,” Crane said.

Or what he said in August 2010 to the Fox Business Network: “Even if you took care of every one of these spiked above the iceberg level pensions in California, you would not take care of the pension problem in California, which is true of virtually every state in the country, at least those where, you know, government employees have collective bargaining rights,” Crane said

In December 2010, he told the L.A. Times that the year 1978, ”wasn't notable just because of Proposition 13. That was also the year public employees gained a power Franklin D. Roosevelt had warned against: collective bargaining rights.”

“California hasn't been the same since,” Crane continued. “Public workers have gained at the expense of private workers as government spending was redirected from infrastructure and education to higher salaries, pensions and other benefits.”

And in his Feb. 27 Chronicle op-ed, Crane claimed that, “The battle in Wisconsin is not over collective bargaining rights generally but rather the appropriateness of those rights in the public sector ”

“Collective bargaining is a good thing when it's needed to equalize power, but when public employees already have that equality because of civil service protections, collective bargaining in the public sector serves to reduce benefits for citizens and to raise costs for taxpayers,” Crane continued. “Citizens and taxpayers should consider this as they watch events unfold in Madison.”

As of today, letters are circulating in Sacramento opposing Crane’s confirmation. And Sen. Ted W. Lieu (D-Torrance), Chair of the Labor and Industrial Relations Committee in Sacramento, has already signaled his opposition.

“I cannot support someone for the powerful post of UC Regent who continues to perpetuate the myth that collective bargaining caused our state economic crisis and has a fundamental misunderstanding of how our state budget operates,” Lieu said in a statement. He noted that in the Chron op-ed Crane claimed that because of collective bargaining, "general fund spending on higher education, parks and environmental protection was flat or lower." 
“As a matter of historical fact, that is false,” Lieu countered. “ Our general fund spending generally declined because of a national economic recession.  The recession was not caused by collective bargaining or public sector unions, but by private sector, out of control Wall Street firms at the time.”

“The specific reason our general fund spending sharply declined was because the person Mr. Crane advised, former Gov. Arnold Schwarzenegger, reduced the Vehicle License Fee and replaced it with . . . nothing,” Lieu continued. “As a result, the state general fund lost over $5 to $6 billion in revenues per year for every year Mr. Schwarzenegger was in office.  The VLF reduction has resulted in a total loss of over $30 billion to the state, an amount in excess of the current California budgetary shortfall.  How conveniently Mr. Crane forgot to mention that critical fact when it doesn't suit his ideological assault on public sector unions.”

“Now that Mr. Crane senses his confirmation may be in jeopardy, he attempts to marginalize his own Op-Ed by releasing a new statement saying he really didn't mean to attack all public sector unions, just those who happen to have statutory civil service protections,” Lieu added. “For those in Ivory Towers that distinction may have some academic meaning, but for everyone else in the real world that is a distinction without a difference. Civil Service protections do not prevent employees from being terminated or laid off, they provide standards for government to follow when firing or disciplining employees. Such protections do not guarantee appropriate wages or benefits, nor address a plethora of other issues, such as workforce safety issues.”
“Mr. Crane's Op-Ed also discusses political spending by public sector unions, “Lieu concluded. “In his world view, political spending by the California Teachers Association is inappropriate, but the massive political spending by the Koch Brothers would presumably be acceptable. I cannot, and will not, support someone for the post of UC Regent who blames public sector employees, such as teachers, for somehow being responsible for our economic crisis or the resulting decline in general fund spending.  We need UC Regents who are interested in solving problems, not those who twist historical facts to suit an ideological agenda."

So, as I wait for Crane to return my call, I’ll leave you with something reporter Peter Byrne, who authored the award-winning investigative series ‘Investor’s Club” How the Regents of the University of California spin public funds into private profit,” said to me yesterday when I asked him about the wisdom of putting investment bankers on the UC Regents Board. “Putting investment bankers in front of a plate of $63 billion is like putting a pound of hamburger in front of a bunch of feral cats. They are going to eat it. It’s in their nature.”

So, would confirming Crane be like adding another feral cat to the mix? Is he just another Kochhead? Or is he just maligned and misunderstood, as the Chron vehemently implies?


Wisconsin Senate leader admits union-busting bill is about defeating Obama

Posted by Guest on Mar. 09, 2011 @ 10:14 pm

Your publication is obsessed with this guy. The implication is that his message has traction and you need to defray it, I suppose.

The article is pretty weak, though. You list his investments that don't come close to a billion then conclude he's a billionaire--where is the nexus?

The part at the end about feral cats eating hamburger is weird. It's kind of like saying if you put a pile of billionaires in front of Tim Redmond, he'd eat them and try and spit out tax revenue.

Posted by The Commish on Mar. 09, 2011 @ 10:37 pm

"The article is pretty weak, though. You list his investments that don't come close to a billion then conclude he's a billionaire--where is the nexus?"

We've learned that math is not a SFBG staff strong suit.

Doth protest too much. Yes, Crane has mastered the facts on the public employee benefit issue. He simply annihilated the frauds at Calpers.

Posted by Guest on Mar. 09, 2011 @ 11:27 pm

is just not a word.....

Posted by Guest on Mar. 10, 2011 @ 9:05 am
Posted by marcos on Mar. 10, 2011 @ 11:01 am

I stand majorly corrected.

Posted by Guest on Mar. 13, 2011 @ 11:16 am

Watch Tim/Sarah/Steven respond to Nevius' piece in the Chron today casting doubt on RCV. If there's one thing you can set your watch by it's the Guardian's reactionary response to every Nevius column, within hours of it being printed.

Posted by Lucretia Snapples on Mar. 10, 2011 @ 9:52 am

The voters passed RCV as a progressive reform to the old system that favored money, and Nevus is agitating to overturn it. Who's the reactionary here?

Posted by Greg on Oct. 14, 2011 @ 10:33 am

It developed much faster than the right's Soros meme.

I wish I wasn't so brainwashed by the corporate media so I could fully enjoy this new meme.

Posted by meatlock on Mar. 10, 2011 @ 11:36 am

So Sarah,

You like to have columns, "fleshed out"? Why don't you 'flesh out' your column by mentioning that you're a non-union employee of a newspaper that crushed a union 30 years back so that your boss can make more money? Go on, Sarah, flesh that one out.

Also, note that you feel like a hypocrite to attack others as non-union when your own employment requires you kiss butt for the biggest journalistic union-buster in town?

You have 50 employees on your roster who would benefit from union affiliation.

And, that includes you.

Fight for your rights.

Or, put on your knee pads and back up on your paycheck.

Go Giants!


Posted by Guest h. brown on Mar. 10, 2011 @ 12:22 pm

Hey h.,Steve addressed your "SFBG's lack of union" comments yesterday by noting there are only two reporters at the paper currently, and I'm one of them.

And while it would be great if reporters got together instead of slinging mud at each other, I'm not holding my breath.

In the meantime, have you checked out any of the companies I listed above, like the ones that Crane, Hellmann, Fisher and the rest of the billionaires clun, invest in? When you do, maybe we can have a meaningful dialogue.

Posted by sarah on Mar. 10, 2011 @ 12:32 pm

Hey Sarah,

What about the other 50 Guardian employees who could benefit from union representation? Do you honestly feel that you and Jones are the only two employees who matter?

And, FYI, an evasive half-assed answer from Steven does not address the issue of Bruce's history of union busting. Fact is ... you don't have a union and yet you like to pretend that you're pro-union. Until, it affects Bruce's pocketbook.

What about the other 50 employees, Sarah? Answer that question and perhaps we can have a meaningful talk.

What about the other 50 emplyees, Sarah?

Would you support a union organizing effort at the Guardian?

And, don't try and make believe that I'm a friend of billionaires. I'd like to confiscate all of their wealth and lock them in deep dungeons. ALL of them who don't immediately give up their wealth.

Go Giants!


Posted by Guest h. brown on Mar. 10, 2011 @ 1:06 pm

I think it's insulting to post a comment that has nothing to do with the topic at hand, but is solely designed to bait Sarah and other BG reporters. Why should we be forced to read this dreck? I think the Guardian would be within its rights to delete your comments and ban you from the site. I don't expect they will, but this is obvious troll behavior. You trying to stir something up, little man? Why don't you ask David Crane and Adachi about their transparent attempt at unionbusting? Can you say hypocrite?

Posted by Alex on Mar. 10, 2011 @ 2:24 pm

h. brown has 'special needs' and is in receipt of Supplemental Security Income payments....'wink , wink'.

Posted by Guest on Mar. 15, 2011 @ 2:27 pm

Dear h, I have nothing against unions.


Posted by sarah on Mar. 10, 2011 @ 1:38 pm


I didn't think you did have anything against unions. I know that Jones doesn't either. Nor, Redmond. That leaves Bruce and none of you have a vote.

It is what it is.

The number one voice of SF's Left is a money grubbing selfish capitalist.

On a brighter note, Giants up 7-0!


Posted by Guest h. brown on Mar. 10, 2011 @ 2:36 pm

To the reader who questioned that Crane is a billionaire, may I suggest that his economic interest statement merely gives an idea of his actual worth. To invest 10 or 20 million, you need to have a whole lot more on hand.

Posted by sarah on Mar. 10, 2011 @ 3:34 pm

I don't know this Crane fellow, so I don't really give a shit what you write about him, but your argument is a sophistry. He has $10-20 million invested, therefore he must actually have 50 or 100 times that, and is therefore a billionaire? Under your reasoning, that means if a person with lesser means discloses she has $20,000 invested, she is actually a millionaire.

Posted by The Commish on Mar. 10, 2011 @ 5:05 pm

Hey Alex,

I haven't said anything that isn't true. Find a flaw in my work and I'll retract and apologize. Who are you anyway? I consider most of the people I criticize on the SF political scene to be friends and they feel the same way. They'd no more muzzle my free speech than I would theirs. Although some of them really dress weird.

Giants win 7-0!


Posted by Guest h. brown on Mar. 10, 2011 @ 4:36 pm

Thank you for the great reportage! If any of your readers are members of the UC community, I encourage them to sign the petition to stop David Crane's appointment to the UC regents~

Posted by Lisa Pelletier on Mar. 10, 2011 @ 6:12 pm

I am wondering why your article omitted key facts such as Crane's large contributions to Jerry Brown's 2010 campaign for governor and Barack Obama's 2008 campaign for president, and his service on progressive-cause boards such as Legal Services for Children and the Environmental Defense Fund.

Posted by L. Jenkins on Mar. 22, 2011 @ 8:13 am

I really hope this isn't the type of math that goes for sophisticated reported at the Guardian.

"To the reader who questioned that Crane is a billionaire, may I suggest that his economic interest statement merely gives an idea of his actual worth. To invest 10 or 20 million, you need to have a whole lot more on hand."

With that logic, its no suprise that Steven/Sarah/SFBG et al. aren't concerned with the liabilities inherent in our city/state public employee benefit/pension plans overtime as more thoughftul (and at least a tick more quantitative...) public servants like Crane and others understandably are.

Posted by Mike Schor on Apr. 19, 2011 @ 3:01 pm

Collective bargaining regards wages, hours and working conditions. The Civil Service is an anti-corruption system which places government employment on a merit basis and prevents current employees from being arbitrarily removed to make room the elected officials' relatives. I fail to see how having a Civil Service system fulfills the role of collective bargaining.

Posted by Guest on Oct. 14, 2011 @ 9:42 am

The UC is an educational and research institution (and a major employer). So how 'bout we appoint as UC Regents some students, professors, scientists, artists, writers, and ordinary working people to represent the staff... you know, people who actually work for a living and create things and have something to do with education, instead of just making money off of money?

One thing that the UC is not, and should never be, is a profit-making business. So why do we keep appointing millionaire businessmen?

Crane is a useless parasite who has probably never created anything real in his life. All he and his ilk know how to do is to game the system to accumulate capital for themselves.

Kudos to the Guardian for shining light on this story, and kudos to Sen. Yee for opposing this guy.

Posted by Greg on Oct. 14, 2011 @ 10:51 am