No Republican has won statewide office in California since Arnold Schwarzenegger was re-elected as governor in 2006. The editorial boards at California’s major newspapers seldom make endorsements for conservative candidates and causes.

Naturally, it came as a surprise when the Los Angeles Times recently endorsed Republican Lanhee Chen for California State Controller, the office of the state’s chief fiscal officer. Chen, a Bay Area policy wonk who worked on Mitt Romney and Marco Rubio’s presidential campaigns, has promised to serve as an independent watchdog of Democrats in Sacramento. The Times’ editorial board sees value in having someone outside the party structure overseeing the disbursement of state funds and auditing transactions. 

“California needs a fiscal watchdog who will examine why state spending has not yielded better results, and point the way toward necessary improvements,” the editorial board wrote. “The most prominent Democrats in this race seem unlikely to exhibit the independence that this moment demands of the next controller.”

It is seemingly a good year for Chen to be running. Not only is 2022 shaping up to be a “red wave” year yielding GOP overperformance nationally, but several recent developments in California fiscal policy appear to strengthen Chen’s arguments that Democrats cannot be trusted to police one another. California’s Employment Development Department has been ravaged by fraud and delays during the pandemic, and incumbent Controller Betty Yee, who is terming out of office this year, was recently accused of improperly working behind-the-scenes at the start of the pandemic to help a fledgling medical company secure a massive personal protective equipment (PPE) contract that ended very poorly for the state.

Chen is on the ballot alongside a host of Democratic candidates in the June 7 primary, and as the only Republican in the race, is very likely to advance to the general election in November. But to win that general election, he’ll need to convince a large swath of Democratic voters to back him. His Democratic opponents are doing what Gov. Gavin Newsom did in his recall election last year: Tying Chen to the national Republican Party. While Chen has declined to state whom he voted for in the last two presidential elections, he has called the Jan. 6 Capitol riots an “abomination” and criticized former President Donald Trump’s role in those riots. Prior to the Trump era, former President Barack Obama appointed him to serve on a Social Security advisory board.

He also stated that the Republican Party isn’t welcoming enough, and needs to move beyond personality and politics to focus on policy. Given his criticisms of his party and the baggage the “R” label carries on a California ballot, why is Chen running as a Republican and not as an independent?

“I’ve been a Republican my whole life, I think it’d be disingenuous to run as something else,” Chen told SFGATE. “I don’t think you can be credible in talking about how you change the nature of your party or where your party is unless you run as a representative of that party.”

SFGATE asked Chen about getting Californians to care about the controller’s office, the recent attacks he’s faced on Roe v. Wade, EDD fraud and more. The interview has been lightly edited and condensed for clarity.

SFGATE: You recently got the Los Angeles Times endorsement. Democrats in this state typically do not vote for Republicans, especially in the Trump era. Do you think that endorsement offers a permission structure for the state’s many Democrats to vote Republican?

Chen: Well, I hope it allows Californians, regardless of their political background, to take a good look at my candidacy and to understand the logic and rationale behind why the Times endorsed me, which is that they believe we need some independent accountability for how our tax dollars are spent. Folks in the one-party monopoly structure right now are not well-equipped to provide that kind of effective oversight.

The core of the Times’ argument is that this is not a position where partisanship really should be the first consideration. So I do hope it gives people who might not otherwise look at voting for a Republican candidate a reason to take a look at my candidacy, why the Times thought it was worth endorsing me, and why they ought to consider the value of having an independent watchdog as state controller. I recognize people don’t spend a lot of time thinking about who their state controller is, or maybe even why the controller’s office matters, but I do believe the Times editorial gives people a reason to at least stop, take a look at the race and decide what they want to do.

SFGATE: I think you raise an important point which is that a lot of people are unsure of what the controller even does. Do you think the latest Betty Yee scandal with the Blue Flame mask deal will help increase salience as to the importance of the controller’s office? Or are people just not going to care?

Chen: You know, it’s possible. I think awareness of the scandal should be higher. You had an elected state official who essentially tipped the scales toward a contractor in a state bidding process for PPE at the start of the COVID pandemic and that provider never actually provided the stuff they promised they would. So you have hundreds of millions of dollars in contractual obligations that were never met.

So the challenge there is twofold: One is, why do we have these crazy no-bid contracting processes in place in a state like California, where we should expect there to be some transparency around how our state does business? Second of all, why is an elected official getting involved in a contracting process? It’s just kind of a weird thing, let alone it being the official who’s supposed to be responsible for watching out for taxpayer money. I think it’s a remarkably relevant story and I think it’s important for everyone in this race to be absolutely clear about what they would do if they were in office.

If you were elected, would you use the power of the controller’s office to try to affect contracting outcomes, or would you, as I’ve done, pledge to stay out of any contract decisions because I just don’t think it’s appropriate for an elected official to be involved in what is essentially a commercial transaction between the state and a vendor. The whole thing just reeks of the Sacramento insider mentality, which is they can do with the taxpayers’ money whatever they want. I just don’t agree with that.

California controller candidate Lanhee Chen with his family.

Chen for Controller

SFGATE: You talk a lot about wanting to increase transparency in the controller’s office. How do you plan to do that in way a that’s accessible for most people? 

Chen: That’s a good question. The challenge is you can provide all the data you want, but if people can’t get access to it or understand it in a format that’s easy to digest, it doesn’t do a whole lot of good. I think there are a couple of things we need to do. First of all, we need to make the data publicly available so people can search it. They can search by transaction, by vendor, and also by category. Are we paying for construction costs? Are we paying for food and beverages? Are we paying for something else? People just need to be able to search it and digest it in an easy-to-understand format that’s online, or I’ve talked about creating an app where you can get in on your phone.

The other thing we need to with the information is make it machine-readable. And what I mean by that is sometimes people come in and do large-scale data analyses to really see trends and understand where this spending is going. They need to be able to get the data and use it in a format that they can easily analyze and provide information to the public. Journalists, watchdog organizations, they should be able to have access to the information so they can digest and process large amounts of information to report it to the public.

The broader issue in my mind is about the mentality of Sacramento and the mentality of transparency in the office. I think for too long, the assumption has been, “The public really doesn’t need to know some of what’s happening, why tell them.” The reality is, we live in a time and a place where we have major challenges in the state, so if you’re going to spend tens of billions of dollars on the homelessness crisis, it would help to understand where the money is going so we can assess how effective it’s been. The controller’s office typically hasn’t done a lot by way of performance auditing, but that is something that clearly is a blind spot for this state. We spend so much money but don’t know what the impact of any of that spending is. I would love to see us furnish information but go one step further, which is help the public understand how effective that spending has been so they really judge along with policymakers, “Does this make sense or not?”

The controller can’t make policy; I can’t go and change homelessness policy. But I can at least inform the debate by saying, “Here’s what we’re spending money on and here’s how effective that spending has been.”

SFGATE: But gauging effectiveness of a policy requires some subjectivity right? What metrics are you going to point to say, “For this much that we’ve put into this homelessness initiative, here’s how that’s working?”

Chen: I think it is possible to assess a program against the measure of whatever was expected out of the program. All of these programs have some kind of statement of, “Here’s what we think we can do.” It’s not for me judge whether the original expectations were realistic or not, it’s, “These were the promises that were made, so let’s figure out if those promises were kept or not.” I do agree with you that the tendency for subjectivity is quite tempting, because you can want to say, “Well, actually, I don’t think you did that great of a job,” but really, my goal in all of this is to remove my judgment as much as possible.

At the end of the day, I want to look at a program and say, “What does the data tell us about how well this program actually performed?” Let’s say for an example, you have a program that said it would house 200,000 people, but housed 30,000 people. We can just say, “Well what percentage does that work out to?” We’re trying to make it as easy as possible for people to understand what the goals were, what was actually accomplished, and what that means in terms of efficacy. I don’t disagree with you that it’s not a super easy process, but I do think it’s one that’s worthwhile.

SFGATE: Let’s pivot a little and talk about issues with the Employment Development Department, ranging from fraud to people waiting forever for payments. What do you think went wrong there, and what, specifically, would you do to address it that is not already being done?

Chen: The program was allowed to linger unchanged and untouched for almost a decade before the pandemic hit. We could have been making, for example, programmatic or technological improvements to systems that unfortunately were not able to handle demand during the pandemic.

If you go back and look at the post-financial-crisis period in 2008 and 2009, the California State Auditor issued a report that said, “If you don’t fix these things about EDD, you’re going to be subject to massive fraud.” And that’s what happened. When the pandemic actually hit, there were some poor decisions made by the Newsom administration, that included, for example, making the decision to completely open up the program to anyone who applied regardless of their potential eligibility, and not putting in place some very basic flags, like, for example, if someone applies from San Quentin State Prison, maybe you don’t pay the benefits right away, you figure out why they’re applying. That kind of basic blocking and tackling didn’t happen and as a result, you had $20 to $30 billion in fraud that went to people on death row, prisoners, Russian mobsters, China, it went to all sorts of places around the world.

And people who deserved and could have used those benefits had to wait in these awful lines. They had to hire private officials to contact their government to figure out where the benefits were. It’s unconscionable what the state did and how poorly managed it was. What can the next controller do? A couple things. First of all, the report that discovered the $20 to $30 billion in fraud outlined a number of action items the state needed to take to make sure this didn’t happen again. Last I checked, out of those six or seven items that had to get done, I think only one or two were actually done.

The controller can directly hold the Legislature accountable and say, “Here are specific changes that need to happen, why aren’t they happening?” and then repeatedly follow up. One of the things that happens in our fast-moving media cycle is things fall away from public attention. One of the things the controller can do is make sure this stuff stays in the public light so that there is a continual pressure applied on policymakers. And this goes back to my earlier point: If you’ve got a Democratic super-majority Legislature, and you’ve got Democrats across the statewide offices, you don’t have an accountability or oversight structure that encourages the Legislature to actually get things done. If you have a controller from the other party, you actually have the possibility that these guys’ feet can get held to the fire and they can be required to do the things that need to be done.

Lanhee Chen, then Mitt Romney's policy director, deplanes in Gdansk, Poland, July 30, 2012. 

Lanhee Chen, then Mitt Romney’s policy director, deplanes in Gdansk, Poland, July 30, 2012. 

Charles Dharapak/AP

SFGATE: The California Democratic machine is laying into you right now over Roe v. Wade. You’ve said it’s a distraction, but as controller, you would have a role to play in abortion policy. Would you have any issue doling out funds to abortion clinics or travel funds for women in other states seeking abortions in California if that’s what the Legislature so desires?

Chen: The job of the controller is not to make public policy. The controller does not have that power, and I would not have the inclination to intervene in this policy area. I have already said publicly — and I’ve said it repeatedly — I’d have no intention of restricting access to abortion services as controller. That’s not my job, and I think any controller who would do that is exceeding the constitutional and statutory bounds of the office.

I think the broader question is why is it my opponents refuse to discuss the issues that are directly salient to what the controller can, and can’t do. We’ve already talked about Blue Flame, but why won’t they take a pledge not to interfere in government contracting and things that are actually relevant to what the controller can do?

But on this issue, your question is, “If the Legislature has a policy, they pass the policy, and the governor signs the policy,” you know what it’s the controller’s job to do? To make sure the funds are properly issued. The controller really doesn’t have the ability to go off and freelance, and people need to recognize that those who argue that somehow the controller can do something extra-constitutional about this are misunderstanding the duties of the office. I would recommend that they go and actually figure out what the controller does before they make these arguments.

SFGATE: You have repeatedly declined to state who you voted for in 2016 and 2020 and I get the political calculation there. If you say you voted for Trump, that’s a non-starter for many Democrats, and if you say you didn’t, you’re branded a “RINO” by Republicans. But is there upside in saying, “Hey, you know what, I’m all about transparency, here’s who I voted for, but that doesn’t impact my job as controller?” I think there’s an argument to be made your caginess undermines that transparency pitch.

Chen: First of all, I’m entirely focused on the challenges the state faces. The whole line of questioning around these issues is, “Does this person have a demonstrated ability to be independent? Is this person going to be a party hack? Is this going to be somebody who hews the party line all the time?” and part of that line of questioning is who they’ve supported in the past and who they’ve worked for in the past.

The point that I’ve made is I’m the only one who has a demonstrated record of crossing the aisle, of working with Democrats on many occasions and demonstrating my ability to be independent from my party on a whole host of issues, including some very controversial ones. Specifically, the whole set of questions around what happened on Jan. 6. I believe it was an absolute abomination for which the former president bears responsibility. I’ve been very clear about that. My point is, judge me based on my record. There’s a tendency in our politics now to try to categorize people as, “that’s a such-and-such person,” or “they support such-and-such.” What I’m saying to people is judge me by the entirety of my record, and I’ve been very clear and transparent of the entirety of my record. 

That’s really why I have answered and dealt with these questions in that way, because, again, the question is do you have the ability to be independent enough in this office, can you do it that way, and do you have a record of proven independence from your party and from the status quo, and I believe I have.

SFGATE: What’s the endgame for you? Is controller your dream job or do you see higher office down the line?

Chen: If we could figure out how to get these fiscal affairs in California straightened out, if we could provide accountability and transparency, I’d be more than happy to do this job and then go back to private life. But I’m not mapping several steps ahead. I know this office has been referred to as a stepping stone, but I’m squarely focused on how we can communicate what I’m trying to do in this office to win this election, and go do this job for the people of this state for the next four years.

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