/javascript" src="../static/js/analytics.js"> CalTrade Report - CTR COMMENTARY: Looking for Someone to Redeem CalTrade Report, California Technology Trade & Commerce Agency, Gray Davis, recall - CTR COMMENTARY: Looking for Someone to Redeem - Marley's Ghost visits Sacramento and is vexed to find virtually anyone with a sense of California'../">CalTrade Report Asia Quake Victims The sad sense of what might have been? echoes down the marble halls of the capitol building and in the empty offices of the Technology, Trade & Commerce Agency. - The sad sense of what might have been? echoes down the marble halls of the capitol building and in the empty offices of the Technology, Trade & Commerce Agency. - CTR COMMENTARY: Looking for Someone to Redeem CalTrade Report, California Technology Trade & Commerce Agency, Gray Davis, recall - CTR COMMENTARY: Looking for Someone to Redeem


Tuesday, June 13, 2006


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CTR COMMENTARY: Looking for Someone to Redeem

Marley's Ghost visits Sacramento and is vexed to find virtually anyone with a sense of California's past, present, or future.

If you listen carefully you can almost hear the chains rattling.

Marley's Ghost - the harbinger of what could have been - has returned, haunting the halls of the capitol in Sacramento, looking for someone with ears to hear who will listen to the truth.

But, alas, there's not a Scrooge in sight; no one, it seems, can be found who's worthy of redemption.

Not in the state legislature, where politicos deliberate, pontificate, and ...well, leave their messes for the electorate who expect better of them to deal with.

They just don't get it.

One has to?wonder how they amuse themselves and abuse the driver on the bus ride to work every morning. Looking for out-of-state license plates and?mooning passing vehicles, perhaps.

And on July 2, a Senate committee meeting was held in Sacramento, it seemed, just to prove how much fun could be had at the expense of the hardworking people of the world's fifth / sixth largest economy.

The meeting in question - let's call it that for the time being - was a special session of the Senate Committee on Banking, Commerce & International Trade. A special session called by the Senate to investigate allegations alleging mismanagement of California's overseas trade offices.

What is was in actuality was something completely unintended as the? entire day was given over to a dog-and-pony show; just another one of those interminable legislative committee meetings where a lot gets said with the people who should be listening either absent altogether, out in the corridors doing radio interviews, or performing pathetic attempts to learn on the job what they should have known coming in.

(The tone of the day was set when Senator Dean Florez (D-Shafter), chairman of the Committee,?off-handedly told the packed meeting room that efforts had been made to contact private companies across the state that had worked with the trade offices. No companies would be testifying, he said, because of the fear of "retribution.")??

The offices, it was said, "cooked their books," by falsifying reports and claiming credit for cementing trade deals that never happened, and inflating the dollar value of trade deals that did.

Eight of the state's trade offices were represented by their managers. From Shanghai and Singapore, they came; from Mexico City and London, from Seoul and Taipei, from Tokyo and Dusseldorf - eight public employees or contractors being called from around the world and asked, in essence to justify their existence and "answer," so to speak, for their crimes.

The jig was up, or so it seemed. But as is often the case, at least in Sacramento, outcomes sometimes deliciously outstrip intentions.

Intended as a way to cut expenses during a time of fiscal crisis, the issue on the table was the very future of the trade offices themselves.

To close or not to close, that was the question?

The answer, however, was a lot messier than even the most hardened political cynic could have imagined.

The simple fact is that the trade office managers had been hung out to dry, scapegoats for the politically-fueled mismanagement of their superiors at the California Technology, Trade & Commerce Agency in Sacramento.

The truth is the reports in question were "cooked" in Sacramento.

According to Technology, Trade & Commerce Secretary Lon Hatamiya, the reports were doodled-with by two staffers who he named and are, he said, "no longer with the Agency."

Case closed. The miscreants are gone, he asserted, thanking the Committee chairman for the opportunity to defend the hardworking members of his dedicated staff who had come to Sacramento from the far corners of the world to defend themselves against the scurrilous charges made against them.?

The tails, it seemed, had been pinned on the right donkeys.

Or had they.

The two staffers, well-placed sources say, left the Agency after they were set-up as fall guys for the "cooked report" scandal. They weren't even asked to appear at the meeting to defend themselves.

They were hung out to dry like their counterparts, by a boss who, like the current occupant of the Governor's office, wants to assume credit for everything and responsibility for nothing no matter who gets stepped on or no matter what business of genuine import is left undone.

Reports dutifully sent in and doctored to make the Agency look good, because looking good in Sacramento means more money, more power, and the assurance that the right posteriors will be covered three-feet-deep in clover when, and if, the time comes for the pruning sheers to be wielded by the?enthusiastic dim-bulbs?in the Legislature.

One by one, the managers testified, explaining in clear, concise, and pointed language the shoddy conditions of their offices when they assumed their positions; no systems for filing or contact follow-up; no marketing strategies or plans in place; virtually no communication links with the head office; no direction; no leadership from Sacramento; nothing.

And who was responsible for all this? Not I, said Secretary Hatamiya to the Committee members. "The overseas trade offices don't report directly to me."?

(Later, another illuminating revelation by'the man-of-the-moment?brought down the house and left everyone slack-jawed.?At the close of his?"testimony,"??Hatamiya told all assembled that he "respectfully" disagreed with'the latest state audit of the Agency?- the latest of four unfavorable audits'since 1995 - which took?it'to task for?what'the Auditor concluded was the Agency's mismanagement and lack of direction vis-a-vis the overseas trade offices. In a move that would make Houdini blush, Hatamiya?ripped the sheet off his plans to "personally" commission an "independent" audit of the Agency and its operations by an "outside" company?at a cost of $5000. Voila!)?

But, let's be?frank.

What else can honestly be expected from the head of an Agency where?busy-work performed by people who make huge salaries doing clerical work because they, in effect, answer to no one but the political sugar daddy who padded their nest for them, the Governor.?

Known as "Exempts," their employment isn't subject to the same?Civil Service rules that apply to thousands of other state workers. Given their positions, the law says, "to increase the Governor's managerial flexibility without increasing cost," they were named to their positions as political payoffs for campaign contributions to the Governor or their slavish devotion to an administration that has smeared the reputation of a state that was once an economic powerhouse envied and emulated around the world.

In October of 2001 a "hiring freeze" was put into place that was supposed to, effectively, reduce the bloat at the Technology, Trade & Commerce Agency.

It appears a thaw opened a crack in the ice just wide enough to slip a political contribution through.

Within a few months of the "freeze," Governor Gray Davis gifted 11 friends with posts at the Agency dripping with such garlands as, for example, a Deputy Director of the Office of Export Development; a Strategic Communications Coordinator; an Assistant Secretary of International Trade; an innocuous Special Assistant; and a pair of matching Staff Assistants.

All to the tune of about $793,740 per year in salaries, without benefits factored in.

Also on the list was a Deputy Director of the California Film Commission, an ambiguous office of questionable value that supposedly expedites state-mandated documentation and assists with site selections for film companies shooting on location throughout California - work that is, in fact, already done by virtually every county and city government in the state.

Work crucial to the future of the state scripted-out in a Hollywood office that, a well-placed source in the Agency says, is managed by someone who knows virtually nothing about the film industry, with a second-in-command who spends most of his time behind closed doors watching golf videos or doing course work for his graduate studies.

Oh, and let's not forget the three high-ranking Agency samurai - an Undersecretary, a Legal Counsel, and the Director of the now-closed Los Angeles regional office - who are "working" in Governor Davis' office on matters that have nothing whatsoever to do with trade, yet are still drawing their salaries from the Technology, Trade & Commerce Agency budget.

Three salaries adding up to about $315,000 annually, again without the benefits tacked on.

But perhaps the saddest story of the lot is the gangland-style execution of the California Export Finance Office.

This operation could have been great, if it had been kept in the hands of people who know and appreciate'the difference between an irrevocable?letter of credit and an invitation to a campaign fund-raising bash at the nearest trendy nightspot, and know which of the two should wind up in the trash.

Once upon a time, the CEFO, as it was known, was one of the most effective operations of its kind in the country, guaranteeing loans for small and medium-sized California businesses that wanted to take their companies global and were given short-shrift by large institutional lenders. The office guaranteed hundreds of loans and was responsible for scores and scores of international success stories.

It was a model for similar programs across the country and was used as a template for the US Small Business Administration's successful export loan guarantee program.

But that's all past tense now.

Just ask the people at the Del Norte Economic Development Office, who approached the CEFO for help when the bottom dropped out of the market for the fish that were a staple of the local industry a couple of years ago. Heavily dependent on the fishing industry, the only hope for the small Northern California county's economy was to look for potential buyers overseas.

Salvation seemed on the horizon when an order for albacore tuna came in from an importer in Spain. The order was for $1 million worth of fish, a sale that could mean a huge boon to the local economy.

The Del Norte people approached the CEFO and were initially helped in getting the loan guarantee needed to get the funds needed to ratchet up production to meet the order. But along came the current head of the CEFO - yes, a moribund office has a head-man who draws a salary of more than $85,000 per year - who pulled the office's support from the project for reasons that were never clearly defined.

A million dollar deal that could have meant a huge boost to the economy of a small industrious county, squashed on a whim.

The CEFO is dead, despite the claims from Sacramento to the contrary. It was written out of the budget last year and, like Marley, is as dead as a doornail.

But, perhaps, there is hope. Perhaps, redemption is at hand. Perhaps, our specter is looking in the wrong places.

Maybe he needs to go to the Inland Empire where the City of Ontario has put international trade at the top of its economic development "to do" list;

Or to Santa Cruz, where the Monterey Bay International Trade Association has just reached an agreement with the Song do Techno Park in Seoul, South Korea, to promote trade between California and businesses in the Korean capital;

Or maybe Marley could float down to Los Angeles where plans are afoot to exploit the recently enacted US-Chile Free Trade Agreement by creating long-term links between Southland companies and Chile;

Silicon Valley, where high-tech is on the rebound after a long period in the doldrums, would be a good place to visit, as well as the San Joaquin Valley to see what global relationships have been planted in the fertile soil of the nation's most productive agricultural region.

He needs to see the great revolving doors for two-way trade that are the ports of Oakland, Long, Beach, San Diego, Hueneme, Stockton, and Redwood City.

He should also take some time and visit Del Norte County. You see, the people there got their $1 million fish deal in the can anyway, despite the fact that they had the rug pulled out from under them by the top guy at the CEFO.

They worked a deal with a Spanish bank that guaranteed the loan and the sale went through; two years ago, the local industry replicated the deal; last year, the sales of Del Norte-processed tuna and salmon to both Spain and South Africa totaled $2.5 million; and this year, sales are expected to double again.

All accomplished not because of the California Technology, Trade & Commerce Agency, but in spite of it.

Marley needs to travel outside of the fetid environment of Sacramento. He needs to get out of town and get some fresh air.

He needs to see California for what it really is - a dynamic nation-state that produces a unique form of energy that, if properly channeled and directed, can move mountains if need be and achieve, once again, the greatness its hard-working people deserve.

So should every member of the California legislature and so should anyone in the public sector who lays claim to a position having anything whatsoever to do with positioning California as a major competitor in a dynamic global economy.

Thank heaven the measure of California, at least in the minds of those that really matter, isn't gauged by the pettiness, indolence, and cupidity of its politicians, but by the industry, determination, and entrepreneurial spirit of its people.

Close your eyes and listen.

The next sound you hear may be the chains finally dropping off.

Your comments are welcome,


Michael White, Editor
CalTrade Report




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