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Shelley's committee appearance to present rare spectacle

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SACRAMENTO — Secretary of State Kevin Shelley's expected appearance before an obscure legislative committee next week presents a rare spectacle in a state Capitol where few statewide elected officials have ever found themselves so engulfed in controversy.

While many lawmakers have endured scandals and some seen the insides of prison walls, Shelley has few precedents as he prepares to testify before a committee that has traditionally concerned itself with auditing humdrum issues such as grazing fees and Medi-Cal overpayments.

Though the 14-member Joint Legislative Audit Committee is also making headlines with its probe of cost overruns on the Bay Bridge, state historians can name few high-profile JLAC investigations since the committee's 1956 creation. And they cite only two resignations of statewide officials under pressure since 1974, though a third fled to Mexico in the 1950s after being indicted.

"California state-level political figures, aside from some legislators, have largely stayed out of trouble," said William Hauck, a veteran Capitol official who now leads the California Business Roundtable. In modern state history, he said, Shelley's situation is "pretty rare"

A state audit has accused the secretary of state of mishandling millions of dollars in federal elections funds, while other investigations have probed allegations of verbal attacks on staffers, bending hiring rules to reward political supporters and taking questionable campaign contributions. Several lawmakers and at least nine newspapers have called for his resignation.

"This kind of assignment doesn't come along very often," said Sen. Chuck Poochigian, R-Fresno, a 10-year member and the committee's vice chair, "but when it does it's incumbent on us to be thoughtful and thorough."

Democrats on Friday named Sacramento attorney Malcom Segal as their JLAC independent counsel. Segal, a former U.S. attorney, specializes in white-collar crime issues. Republicans have yet to name their independent counsel.

For JLAC, Thursday's hearing will be its biggest since the 2002 Oracle hearings, which featured 110 hours of testimony on the state's no-bid, six-year $95 million software contract with the firm. Yet despite 30 witnesses and a heated political atmosphere similar to that enveloping Shelley, the investigation found no criminal wrongdoing by Oracle Corp. or former Gov. Gray Davis or four top appointees Davis fired during the probe.

The state eventually dropped charges against the only former Davis official criminally prosecuted, saying there wasn't enough evidence.

Shelley's situation — testifying under oath after being threatened with a subpoena — is most often compared to that of Republican Insurance Commissioner Charles Quackenbush, who resigned in June 2000, a day before he was to testify under oath before the Assembly Insurance Committee.

Quackenbush, once considered a rising Republican star with national potential, resigned after months of allegations that he tried to further his political career by tapping a state earthquake research and education fund established by his office. Shelley, likewise, was considered a rising Democratic politician with the potential to win higher office.

In 1974, another potential Republican governor, former Lt. Gov. Ed Reinecke, resigned after being convicted of lying to the U.S. Senate Judiciary Committee about his role in arrangements for financing the 1972 Republican National Convention. His conviction was later overturned on a technicality.

Reinecke, chosen by Gov. Ronald Reagan in January 1969 after Lt. Gov. Robert H. Finch became President Richard Nixon's secretary of health, education and welfare, was considered Reagan's choice to replace him in the governor's office.

The charge centered on testimony about when he advised then-Attorney General John N. Mitchell of an offer by International Telephone & Telegraph Corp. to underwrite the convention.

Reinecke long maintained he was "absolutely not guilty," and went into real estate and ranching near Placerville after leaving politics. He returned to politics to head the California Republican Party in the 1980s and now lives in Solvang in Santa Barbara County.

A third state official, William G. Bonelli, a longtime member and head of the State Board of Equalization, fled to Mexico in 1954 after being indicted by San Diego County and Riverside County grand juries for allegedly accepting bribes. He died in 1970.

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