Over the past month, the Sloat Higgins Jensen & Associates lobbying firm — which represents the city of San Diego in Sacramento — has lost some of its biggest clients after the state's Fair Political Practices Committee slapped it with a $133,500 fine, the largest in the agency's history.
The Orange County Transportation Authority on Monday became the most recent client to cancel its contract, after Verizon Communications (NYSE: VZ), Accenture (NYSE: ACN) and the San Francisco 49ers.
“Their violation goes to the very essence of what they do for us here, which is lobbying,” said Jeff Lalloway, who heads the transportation authority. "I think dealing with a firm like this right now, it just sends the wrong message to the public.”
But on Monday afternoon, Mayor Kevin Faulconer said that Sloat Higgins remains on contract while City Hall continues to work on a request for a proposal seeking bids from other lobbyists.
Sloat Higgins, which was abruptly fired by former Mayor Bob Filner shortly after he took office last year, was rehired by Interim Mayor Todd Gloria, under a contract that was scheduled to run through June, by which time Gloria hoped bids would be underway for a more permanent lobbyist.
Other clients that remain with Sloat Higgins at this point include Pacific Gas & Electric, the Metropolitan Water District of Southern California and Anheuser-Busch Cos. (NYSE: BUD).
The Fair Political Practices Commission fined Sloat Higgins on Feb. 20 for making improper gifts to legislators, mostly through lavish campaign fundraisers held at the house of Kevin Sloat, which featured gourmet foods, wines, liquors and cigars. California law prohibits lobbyists from hosting fundraisers if the total cost of the event is above $500.
Sloat was also accused of giving high-priced sports tickets to former Republican assemblymen Jeff Miller, R-Corona, and Jim Nielsen, R-Gerber, along with Debra Gravert, chief of staff for Rep. Jim Frazier, D-Oakley. The tickets, some of which cost more than $300, easily exceeded the $10 limit for gifts from lobbyists.
Sloat accepted responsibility, which he blamed partly on misunderstanding the law. For instance, he said he thought his fundraising events would be legal as long as he kept his own spending below $500.
Although Sloat is a longtime Republican who once served on former Gov. Pete Wilson's staff, his fundraisers were held for Republicans and Democrats alike, ranging from a 2010 bash for Republican Meg Whitman's unsuccessful gubernatorial campaign to a dinner in 2012 for the Democrat who defeated her, Gov. Jerry Brown.
Local politicians who received contributions from his fundraising bashes included then-Assemblyman Marty Block in August 2009, then-state Sen. Juan Vargas in September 2010, then-Assemblyman Ben Hueso in March 2010 and then-Assemblywoman Toni Atkins in April 2012.
Except for the hiccup last year, Sloat Higgins has been San Diego's lobbyist in Sacramento since 1999, working environmental regulations, pension law, water rights and bond issues.
In 2012 alone, the city paid the firm $154,000. But late that year, some city councilmembers — including Marti Emerald and David Alvarez — began questioning how effectively the firm was working in Sacramento and whether it had the same priorities as the City Council.
When Filner took office in December 2012, one of his first acts was to let the lobbying contract expire, saying that he saw no evidence showing how Sloat Higgins was spending its time in the capital or whether its activities reflected the council's priorities.
But during his stormy nine-month term in office, Filner never found a replacement for the firm, which — city officials said — put the city at a disadvantage in Sacramento.
"There's a great line in politics that says 'If you're not at the table, you're on the menu,'" City Council President Todd Gloria said at the time. "I'm not sure we're on the menu right now, but we also haven't been at the table."
As interim mayor after Filner's resignation, Gloria reappointed Sloat Higgins as lobbyist late in September for a contract of up to $126,000 scheduled to expire in June, which Gloria said would give the city enough time to draft a formal request for proposal to other lobbyists.
At a meeting of the council's intergovernmental relations committee in October, there appeared to be continuing doubts about how thoroughly the firm was pushing for the city's priorities in Sacramento.
"A number of you had affordable housing as one of your chief priorities going into last year," Sloat told the committee, but added that he doubted it would pass because it includes a $75 recording fee on home sales to support affordable housing. "I think this is going to be one of the five most contentious bills of the year. It's going to be tough to pass this."
Emerald questioned his assessment.
"I'm baffled by why that should be a hard bill to pass. There are so many other things you have to sign when you buy a house, I don't know why a $75 fee would be that important," she said.
Sloat's comments came shortly after one of his employees told the committee that she thought there was enough critical mass in Sacramento to support the bill.