San José State University|
Department of Economics
& Tornado Alley
At one point in time in California, Arthur Samish, a political lobbist, wielded more power on some issues than the Governor of California. He achieved this power through making campaign contributions to state legislators. He called it a policy of "select and elect." However a lobbyist with adequate funds would would not have to be an astute judge of who was going win elections; if necessary a lobbyist could simply contributed to both major party candidates so that whoever won would feel beholding to him. He also knew the procedures of the legislative process in such intimate detail that he could hold up legislation on technicalities. He acquired this intimate knowledge from having worked as a young man as a page and later clerk for the California General Assembly, the lower house of the state legislature. As a page he generally only ran errands for the assemblymen but as a clerk he was responsible for maintaining files for the historical record. Later, at age twenty three, he became the "Engrossing and Enrolling Clerk" for the California Legislature. In this position he was responsible for seeing that proposed legislation went through the correct legislative procedure. This meant that Samish, as engrossing and enrolling clerk, had to prepare a corrected version of any bill that had been modified through amendment or otherwise before its final passage. If a bill from the Assembly was modified in the California State Senate it had to be sent back to the Assembly. The modified version had to checked by the engrossing and enrolling clerk in every detail, including punctuation and spelling. If a bill passed both houses it had to be printed up before being delivered to the governor for his signature. If the bill was vetoed by the governor it had to go back to the legislature where a vote for overriding the veto could be take place. If a bill was passed and became law through signature by the governor or the overriding of a governor's veto it had to be delivered by the engrossing and enrolling clerk to the secretary of state for filing. Thus each step had to be verified or performed by the engrossing and enrolling clerk. Samish knew all the critical points where legislation could be delayed.
There were two other elements to Samish's power. He was the lobbyist for major interest groups such as liquor store owners and brewers. These interest groups could deliver a large bloc of votes of friends and relatives at Samish's command. The interest groups also gave Samish control over large funds, what are now called a "slush funds," which he could spend at his discretion. Samish thus had a political machine but it was organized through interest groups rather than a political party organization.
Arthur Samish was born in East Los Angeles but grew up in San Francisco. His father, an Austrian immigrant, abandoned Arthur and his mother when Arthur was about four years old. His mother moved in with her mother and devoted her life to raising Arthur. They experienced the San Francisco Earthquake of 1906 when Arthur was eight. Their home was destroyed and they lived in a variety of places and finally, in the seventh grade, Arthur quit school. He worked as a delivery boy, errand boy and grocery store clerk until, at about age sixteen, he became an office boy for a law firm. Later, through a social club he belonged to, he met the tax collector for San Francisco. The tax collector offered Arthur a job which he took. The tax office gave Arthur Samish the opportunity to meet the other important politicians of San Francisco, such as the sheriff. He reveled in the comradery of San Francis politics. His job in the tax office ended when it was discovered that he was not old enough to be a San Francisco voter, a condition required by law for employment in the tax office. He then secured a position as secretary-treasurer of an association of liquor retailers. This association of saloon owners and retail liquor stores was for political action in their common interest. It happened that the movement to prohibit the sale of alcoholic berverages, "Prohibition," was rapidly gaining ground. Samish was in charge of collecting contributions to fight prohibition. The effort to head off prohibition was unsuccessful and prohibition became law through a constitutional amendment.
Out of a job, Samish moved to Sacramento where through a friend he met the private secretary of the Hiram Johnson, Governor of California. Through this connection Samish got a job with the California Division of Motor Vehicles (DMV). There he met his future wife, Merced Sullivan, the daughter of Dan Sullivan, the state printer and president of the California State Federation of Labor. Arthur Samish was collecting a lot of significant political ties.
Samish decided that he wanted to become affiliated with the California State Legislature and he was able to become a page in the California State Assembly. This just involved doing errands but he met more politicians and was able to move up to a clerical job before becoming the Engrossing and Enrolling Clerk for the state legislature, as was mentioned previously. The control over the movement of legislation that the engrossing and enrolling clerk had was important for politicians and others who wanted to slow down the processing of legislation.
Samish accepted the appointment by the governor's office to a position in the California State Division of Markets. This organization had been set up to encourage the creation of cooperatives in the marketing of agricultural and other products such as fish. It also served to enforce some system of price controls.
Arthur Samish was now thoroughly enmeshed in California politics. California politics differed from other states' politics in significant ways. There has been cycles of radicalism and reaction. In the early days of California politics there were some radical tendencies, as evidenced for example by Dennis Kearney and the California Workingmen's Party. But this was followed by a period of forty years of political control by the Southern Pacific Railroad. This period of reaction came to an end in 1910 when Hiram Johnson was elected governor. Johnson used his influence to get the legislature to pass measures which created the following political institutions which make California state politics unique.
Hiram Johnson also secured passage of workmen's compensation laws, wage and hour laws for women and children, and women's suffrage.
The political measures which weakened political parties in California provided the opportunity for lobbyists to become part of the political scene.
Arthur Samish the most notorious of the lobbyist entered the field by sheer chance. A friend of Samish who represented the interest of trading stamp companies asked Samish to take over for him. Trading stamps were given out by stores for purchases by their customers. When a customer accumulated enough of these they could be turned in to the trading stamp companies, such as S&H Green Stamps, for valuable items. Customers could get through saving trading stamps some luxury items that they would not buy outright. Generally chains stores gave out green stamps whereas independent stores did not because of the cost. The independent stores were trying to promote legislation through their lobbyist to ban trading stamps in California. Samish took over as the lobbyist for the trading stamp companies and the chain stores. He solicited contributions from them to use to promote the election of legislators who would oppose a ban on trading stamps. In this he was successful and his career as "a guy who could get things done" was launched. His basic strategy was established in that first case in 1923, "select and elect."
Samish' next big case was representing the interest of a bus company operating between San Francisco and San Jose. Many of the little towns in which the bus line stopped levied a tax on it. The combined load of all these separate taxes was overwhelming. Samish attributed the local taxes to the political influence of the Southern Pacific Railroad that carried passengers along the same route. SP used its local influence to freeze out the competition from bus lines. Samish convinced bus line operators throughout the state to fund a Motor Carriers Association with Samish as secretary-manager with full control. Samish was able to convince the Legislature to pass a law declaring bus lines to be public utilities. He then organized an initiative drive to put on the ballot a measure which would exempt all bus lines and truckers from any tax except a four percent tax. The campaign was based upon reason and analysis. This measure lost by 70,000 votes.
At the next opportunity Samish raised more funds for the bus line and truckers tax initiative. This time Samish did not rely upon the reasonable merits of the measure. Instead he had billboards put around the state which showed a big, ugly pig and the slogan, "DRIVE THE HOG FROM THE ROAD! VOTE YES ON PROPOSITION NUMBER 2." Millions of handbills with the same picture and slogan were handed out. The public were led to believe the proposition had something to do with roadhogs and the measure passed by 700,000 votes. Samish did not place much credence in the rationality of the voting public ever again. This was the mid-1920's.
The cross filing shifted the emphasis in political campaign from the election to the primary. If a candidate could win the nomination of both parties then the race was won. The turnout in the primaries was relatively light. Someone like Samish who could supply campaign funds for a candidate in the primaries could influence the final results. Candidates were appreciative of campaign support in the primary because public interest was lower and regular campaign contributions harder to raise.
In 1934 a socialist, Upton Sinclair, won the nomination for governor of the Democrat Party. His program, End Poverty In California, involved putting the unemployed to work growing food in state-run farms sounded good to some and like socialism to others. Business interests, Republicans and conservative Democrats combined to elect the Republican candidate, Frank Merriam. Samish also supported Merriam but not for ideological reasons. Samish had long ago adopted the operating principle that he would not concern himself about a candidate's party or ideological affiliation; he only cared about how the candidate would vote on the legislation relating to the interests that Samish represented. He was expecting support from Merriam on the legislation he promoted. Merriam vetoed a bill which would allow the drilling for petroleum in the coastal tidelands. Merriam who was a Dry (prohibitionist) also thwarted Samish on legislation Samish promoted for the alcoholic beverage industry.
During the 1930's Samish perfected his system. One component of it was a network of intelligence about what was going on in the government in Sacramento. He had a team of men and women who attended each of the legislative sessions open to the public. They were not known to be his agents and did not even know each other. Each day Samish would get a report from each of his agents separately and give them assignments. He probably knew better than anyone else in Sacramento what was happening politically. No one else had the system for consolidating information that he had.
People who had a problem or feared they would have a problem with legislation sought Samish for a solution. For example, a bill was introduced that would limit the fee an employment agency could charge for getting someone a job to seven percent of the first month's pay. Talent agents in Hollywood charged their clients ten percent of all their earnings. These talent agents were afraid that the legislation for employment agencies would be construed as applying to them. They sent a representative to Samish and he arranged to block the progress of the bill in the California Senate's Judiary Committee. Two years later similar bill was introduced and the talent agents now knew because of its wording that it applied to them. Again their representative went to Samish and again he arranged for it to be bottled up in a committee, this time the Assembly Judiary Committee. In this matter the intervention of the lobbyist Samish prevented the unjustified and harmful intervention of the State in a free market.
At this point it is appropriate to make the observation that the unfettered operation of the government does not produce an optimal result; instead it is a very imperfect system that operates far from the social optimum. The other imperfections of society, such as the actions of lobbyists, may sometimes produce a result that is better than what would occur in their absence. Stated another way, imperfections are not additive. One imperfection may counterbalance another imperfection.
But as often as not government intervention in competitive markets comes from some interest group, through political influence, commandeering the police power of the state to restrict competition in a market. The public rationale for this is usually the public interest. Thus the state does "bad" while professing to do "good." Perhaps the source of the problem is the lack of constraints on governmental action. Freedom of speech and religion are implemented by constitutionally forbidding government to interfere in these areas. The lack of a constitutional constraint on economic intervention creates a treasure trove for special interest groups if they can capture it through the political process. This means promoting the candidacy of cooperative politicians; selecting and electing.
Samish not only helped candidates he expected to favor his interest groups he worked to defeat those he expected to oppose his interest groups. This he did by supporting opposition candidates. Sometimes he helped some candidates and then found they did not support him as he expected. Then he untook to try to defeat them in their next race and thus provide an example for other politicians who might consider breaking with Samish. He was not always successful in his efforts and made some bitter enemies in his attempts. But all in all Samish ran an effective, efficient operation.
Elmer Ritter Rusco, who did his doctoral dissertation at U.C.- Berkeley on Samish judged that Samish had a better organized political operation during the decades from 1930 to 1950 than either the Democrat or Republican Parties in California.
In statewide contests Samish welded his special interest groups into an efficient machine that could deliver a large enough bloc of votes to swing the election. For example, he represented the 50,000 liquor retailers. Each owner of a liquor store could be counted on to vote the way Samish asked, as could the family of the liquor store owner. Each store would also have a few customers who also could be counted to vote Samish' recommendations. Samish felt that he had about 500,000 votes he could direct. To gain that bloc of votes from Samish politicians would have to "play ball" with Samish. Thus Samish had a political machine.
Samish used his political influence to assure that the person who got elected as Speaker of the Assembly was friendly to him. The Speaker of the Assembly is second only to the governor in political power in the state government. What Samish needed from the Speaker was friendly representation on two key committees of the Assembly. These two committees were the Committee on Public Morals, which had jurisdiction over the sale of alcohol sales and cigarets and over racetracks and the Committee on Revenue and Taxation. In the California Senate the committee appointments were handled by a Senate Committee on Committees. The two key committees Samish was interested in the Senate was the Committee on Governmental Efficiency, which corresponded to the Assembly's Committee on Public Moral and the Senate Committee on Revenue and Taxation.
Samish had a number of humorous episodes over the years. Once an assemblyman who had had too much to drink took the floor to criticize a bill that would benefit the trucking industry. Samish who was promoting that bill and counting on the assemblyman's support was shocked until he realized that the assemblyman was just a bit drunk. Samish sent him a note explaining the situation. The assemblyman read the note and said, "Now that I have told you the bad things about this bill..." He then proceded to defend the bill.
One of the most infamous relationship of Samish was with Lewis Rosenstiel of Schenley, a manufacturer of whiskey. Rosenstiel was jealous of the market share enjoyed by a whiskey called Ten High, a product of Hiram Walker. It was the largest selling whiskey in California. Rosenstiel wanted Samish to do something about Ten High. Samish asked Rosenstiel to tell him some characteristic of Ten High. Rosenstiel said that it was aged three years. That was all Samish needed. He had a bill proposed that required all whiskey sold in California to be aged four years or more. This was presented as being in the public's interest because it supposedly increased the quality of the whiskey available to the public, but it was simply a way for Schenley to destroy its competition.
This was of course an abomination. But Samish was responsible for almost all of the legislation concerning the California alcoholic beverage industries and some judged California code to be the best in the nation.
Samish' downfall came as a result of two articles about him in Collier's magazine. The articles detailed Samish's power and power and arrogance, but the key element was a quotation from then Governor of California Earl Warren. When Governor Warren was asked who had more influence over the Legislature, himself or Arthur Samish he said,
On matters that affect his clients, Artie unquestionably has more power than the governor.
Articles had been written about Samish before but none created the sensation caused by those twe in Collier's. Afterwards former associates in government had to distance themselves from Samish. A Committee was convened to study the influence of lobbyists and Samish was called to testify. The committee hired a special investigator. The Governor called for legislation regulating lobbyists. The Legislature responded with the Collier Act and then the Erwin Act. The Legislature also voted to ban Arthur Samish from its building. That was of no consequence because Samish almost never came to the Legislature, the legislators came to him.
A key element of Samish's power was his influence on the committee structure of the Assembly. This was achieved by making sure the Speaker was someone favorably disposed towards him. In 1953 a group in the Assembly, calling themselves the Good Government Group, successfully promoted the election of a Speaker not under Samish's influence. The new speaker, James W. Silliman, organized the Assembly's committee structure to eliminate Samish control. Thereafter, in 1954, the Assembly took administration of the Alcoholic Beverage Control Act away from the State Board of Equalization, an organization Samish was able to control. Samish's major source of funding came from the organization of California brewers and was based upon Samish's ability to prevent the passage of new taxes on alcoholic beverages and the maintainance of "fair trade" laws which prevented price competition for alcoholic beveraages.
Samish became so notorious that Estes Kefauver, the U.S. Senator from Tennessee, who ran the Special U.S. Senate Committee to Investigate Crime in Interstate Commerce, came to San Francisco and subpoenaed Samish to testify at televised hearings. The investigation began to focus on the slush funds that Samish's interest groups provided for him to help favorable candidates and hinder political enemies. The expenditure of the funds often was in cash and not documented. Samish's clients had no problem with this system. For the government the problem was that there was no way of distinguishing the expenditure of this money for Samish's own personal benefit and for the benefit of his clients. If Samish spent money from this fund for himself or gave it to someone other than for the purposes of his clients then it must be counted as personal income and was subject to the income tax. To not have reported such income was tax evasion and subject to fine or imprisonment. There had been some $72 thousand in payments made by an advertising firm that Samish had recommended for consideration by the Schenley company. The checks had not been made out to Samish but he received possession of them and the IRS deemed it tax evasion. In 1953 Samish was sentenced to three years in Federal prison and a $40,000 fine. He appealed his conviction but the Appellate Court, while making some comments favorable to Samish, did not reverse the conviction. Samish appealed to the Supreme Court but was denied a hearing. Many influential figures appealed to court to grant probation instead of prison time but to no avail. Samish spent 26 months in McNeil Island prison in the State of Washington. He also had to pay nearly a million dollar of taxes assessed by the IRS on the slush funds he mangaged. After his release Arthur Samish retired from politics.
HOME PAGE OF Thayer Watkins