Politics & Government

Bill raises eyebrows due to lawmaker’s connection with family taxi business

Ben Hueso, then an assemblyman, in 2013 said a bill he supported would not affect USA Cab, his family's business, which was protected by a 2009 court ruling. But labor lobbyist Barry Broad said USA Cab was still vulnerable and would benefit economically from the bill.
Ben Hueso, then an assemblyman, in 2013 said a bill he supported would not affect USA Cab, his family's business, which was protected by a 2009 court ruling. But labor lobbyist Barry Broad said USA Cab was still vulnerable and would benefit economically from the bill. hamezcua@sacbee.com

Editor’s note: This story was originally published on March 17, 2013, and is being republished.


Want to hail a cab in Sacramento? Hang out in front of the Capitol.

Want to hail a lawmaker? It helps to know someone inside.

Taxi cab companies hoping to change a law concerning cab drivers have turned to Assemblyman Ben Hueso, a San Diego Democrat whose brothers own a cab company. His Assembly Bill 1243 would generally classify cab drivers as independent contractors, rather than employees of the companies for which they drive.

The proposal has raised the ire of labor unions, which backed Hueso in his successful run last week for a vacant state Senate seat. And it’s revived a long-simmering debate in the Capitol over when a legislator should carry a bill on an issue with which he has personal -- or perhaps financial -- ties.

It’s not uncommon for lawmakers to use their experience before holding office as a platform for developing bills. Sen. Ed Hernandez, for example, a West Covina Democrat, is an optometrist who just introduced a bill that would benefit optometrists. Sen. Marty Block, D-San Diego, retired from a career as a university professor and dean, then chaired the Assembly’s higher education committee for several years. Sacramento Democratic Assemblyman Richard Pan, a pediatrician, has carried various bills concerning health care. Assembly Speaker John A. Perez, D-Los Angeles, is a former union organizer who frequently carries bills for labor.

Hueso said his bill is no different.

“I worked in the cab industry for 15 years, so I’m an expert, “ Hueso said. “Much like an attorney would carry a bill on law, or a doctor would carry a bill on health care, I thought I would be the perfect author.”

Hueso said he worked for his brothers’ business in the 1980s and ’90s but has had no financial involvement with USA Cab since 2001. The business, based in San Diego, is owned by his brothers Alfredo Hueso and Jose Antonio Hueso.

They were sued several years ago by drivers who said the brothers wrongly classified them as independent contractors while treating them like employees. The difference is a big one under the law.

Companies with employees must pay minimum wage, provide meal breaks, withhold taxes and pay into the state’s unemployment insurance, disability and workers’ compensation systems. Companies with independent contractors are free from all that.

Another big difference: Independent contractors can’t form unions – a major sticking point for the labor groups fighting Hueso’s bill.

“We oppose that because it’s very destructive to the workers, to the tax system, “ said Barry Broad, a lobbyist who represents several labor unions, including the Teamsters and the United Food and Commercial Workers, which have organized cab drivers in some cities.

“When people in the cab industry don’t have health care, then get injured and there’s no workers’ comp, the taxpayers pick up the cost.”

Unions also don’t like the idea that Hueso’s bill would treat one industry – taxi companies – differently than all others covered by the state’s labor laws.

The Huesos’ USA Cab company prevailed in its court battle with a 2009 ruling in the state’s 4th appellate district. Judge Kevin A. Enright ruled that a lower court appropriately rejected the drivers’ assertion that the case deserved class-action treatment because of widespread violations of employment law.

Ben Hueso said the bill is intended to protect other companies from the same kind of lawsuit his brothers experienced.

“My family went through a very horrific lawsuit that spanned about six years. And they won, but it came at a great cost to the company, “ he said.

“The fact that there isn’t a written code that covers independent contracting for taxis leaves the industry wide open to litigation.”

Whether his family will benefit from the bill is a central point of debate. Hueso says his brothers’ company won’t be affected because it already is protected by the 2009 ruling.

Broad, the labor lobbyist, said the USA Cab company is still vulnerable to lawsuits from individual drivers -- just not class-action suits. So the bill, he said, amounts to an economic benefit for the Hueso family’s company.

“It’s a legal validation of (their) current business practice, “ Broad said.

Ben Hueso’s personal connections to the issue do not create a conflict of interest in his introduction of the bill, said Ann Ravel, chairwoman of California’s Fair Political Practices Commission. State law says a conflict arises only when the lawmaker personally stands to benefit from a bill in a way that other people in the same industry would not.

Even so, carrying a bill so closely tied to family affairs is not a good idea, said Bob Stern, an expert in California political law.

“It’s very unlikely that it would be a conflict of interest legally. But then there is the moral question of whether he should be helping ... his brothers’ industry on something as narrow as this, “ Stern said.

“If I had been on his staff I would have said, ‘Have your brother go to somebody else and convince them it’s a problem and that they should introduce a bill.’ “

Ben Hueso’s annual statements of economic interest show that he has received income from Alfredo and Jose Antonio Hueso for the last three years. The disclosures describe the funds as loan repayments of between $10,000 and $100,000 a year for a 2008 real estate transaction.

The arrangement has nothing to do with the taxi cab business, Ben Hueso said, explaining that his brothers bought his share of an investment in two San Diego apartment buildings.

Hueso has also received nearly $9,000 in political contributions and loans from the two brothers and the taxi cab industry, campaign finance records show.

“The industry needs this bill to pass. I think consumers need this bill to pass, the state as a whole needs it, “ Hueso said.

“But that’s a good question – does my involvement hurt the bill’s chances to pass? That’s something I have to continue to look at, whether I’m the most appropriate.”

Jeremy B. White contributed to this report.