We all were outraged to learn how Enron bilked billions from California ratepayers by creating an artificial energy crisis in our state. The demise of the energy giant didn’t recoup our losses, but it was a distinct point of state pride. News of its shady “mark to market” accounting practices provided a bit of icing, bringing down accounting giant Arthur Andersen.

In San Francisco the “smartest guys in the room” are at the firm of Barnes, Mosher, Whitehurst, and Lauter (BMW). Watch out, BMW is now looking to launch their own “Mark to market” strategy with the candidacy of Mark Leno for the State Senate. BMW is probably best known for their role in successfully challenging San Francisco’s stringent soft money regulations and then managing the record-shattering $3.2 million soft money operation to re-elect Mayor Willie Brown in 1999. In what may have been the most negative campaign the City had ever seen, the upstart effort of progressive Tom Ammiano was crushed.

BMW brags about independent expenditures on their website:

"Exercise your free speech rights to support or oppose political candidates in an election, and participate in the democratic process at a level you want.

"Government rules place limits on the amount of money individuals can contribute directly to candidate campaigns. Independent expenditure campaigns offer another option for getting your message out, and BMWL is one of the premier Bay Area firms when it comes to managing these highly specialized, highly regulated campaigns.

"We can help you develop a comprehensive campaign that is completely separate from a candidate and their campaign, but which influences voters with impact, precision and clarity. BMWL ran independent expenditure campaigns that were instrumental in winning elections for San Francisco Mayor Gavin Newsom, former San Francisco Mayor Willie Brown and San Jose Mayor Ron Gonzales. We also run effective opposition campaigns."

BMW’s full-service operation not only provided the monies and independent campaigns to get their candidates elected, it also enabled them to influence these electeds to get their deals done for their clients. This juice allowed them to go back to their corporate and development clients to raise even more soft money for the next cycle of elections. The added sweetness of this set-up for BMW* they’re able to get theirs coming and going in both fees earned for their lobbying efforts and in their take of the soft money operations.

In the 2000 Supervisor races, BMW moved close to a half-million dollars of soft money in Willie Brown-backed candidates. This time their soft money game was not enough to counter voter discontent with Brown and strong neighborhood candidates in district elections. With the “progressive sweep” in 2000 and increasing scrutiny into BMW’s practices, it was time to shift gears. BMW’s fortunes, along with those of their downtown special interest clientele, would now rest with 2 of the other victors in that 2000 election * Gavin Newsom and Mark Leno.

Their first test was to get Mark Leno elected to the open State Assembly seat against progressive stalwart Harry Britt. In the closely contested race, BMW’s “Where was Harry?” negative campaigning probably made the difference.

Next up, getting Gavin into Room 200. BMW took a familiar role in helping their candidate by working outside the candidate-controlled committee,moving close to $800,000 through the “Committee to Stop Aggressive Panhandling”. This “issue campaign”, closely identified with Supervisor Gavin Newsom, allowed big-time contributors to help the Mayoral candidate get around those pesky $750 donation limits to his Newsom 2003 campaign committee.

The downtown front group the Committee on Jobs dropped a whopping $328,061 on the anti-panhandling effort with the Golden Gate Restaurant Association adding $43,109. The big October and November spending proved quite helpful as Newsom locked down the race with early absentee votes before Gonzalez fully got going in the run-off.

While based in San Francisco, BMW has understood that the bigger waters are in Sacramento. One would have thought that Arnold Schwarzenegger’s ouster of Gray Davis would have cost the (mostly) Democratic firm big. Not so. Arnold took quickly to the SF Mayor confidant, Mark Mosher, who he tapped to head his Committee on Jobs and the Economy. Mosher quickly organized a high profile trade mission for the Governator to China.

In 2006, Newsom, who continually maintains high (BMW-commissioned) poll numbers, was starting to get flak from his mishandling of the popular Transbay Transit project. BMW was called back into the City to defeat Prop C that I authored with the support of long-time Transbay advocates the Sierra Club and San Francisco Tomorrow.

BMW brokered a deal to raise $40,000 from the Committee on Jobs and another $20,000 from BOMA in exchange for a commitment from Newsom to not pursue a new tax for the November election. The final $140,618.59 price tag was more than enough to defeat the measure. Its direct attack on me with “Don’t Let Chris Daly Hold Up the Transbay Terminal” signs and mailers was only a harbinger of things to come.

Partner Sam Lauter of BMW promised that it wouldn’t happen again. “Our clients may oppose you," he said, "but BMW will not participate in any negative campaigning.” This assurance was also made to others, including President of the Board of Supervisors Aaron Peskin.

While SFSOS clearly was out in front with their “Dump Daly” effort, by the early fall BMW’s clients started to weigh in with the big dollars and increasingly nasty mailers. After a hit piece paid for by the Plumbers Union landed, Lauter made a special trip to the Mission District to apologize and to promise again that it would not happen again.

Little did I know that while we were speaking, BMW was reaching deeper into its bag of dirty tricks. BMW had a poll in the field that accused me of opposing anti-crime measures and efforts to help homeless people. The results of their push poll had Rob Black ahead by 8-10 points.

Nevermind that Rob Black was never ahead in the race. BMW needed to create the impression that he could win in order to round up more money from the Restaurant Association, BOMA, Jobs, and the Plumbers. The money flowed, the mailers rained heavily in District 6, and BMW took their percentage.

Before this election was certified and only a short time after BMW's client (the Golden Gate Restaurant Association) filed suit against the City’s universal healthcare plan, BMW was in the field with a Rob Black-style push poll for a possible Mark Leno bid against incumbent State Senator Carole Migden. With negligible policy differences between the 2 Sacramento politicians, the poll focused heavily on Carole Migden’s style * critiquing her for mistreating staff and mistakenly casting a vote for another member of the Assembly.

The Leno announcement that he was considering a run against his one-time ally was big news. Leno had played down any speculation that he would contend against Newsom for Room 200. “It would cause too much dissention in the LGBT community,” Leno once told me after I encouraged him to think about it.

So why was Mark considering a run against one of the most powerful lesbian politicians around? No answer makes much sense unless you consider BMW’s “Mark to market” strategy. While no one is perfect, Migden's record on the environment, domestic partners, consumer protection, and tenant rights is decidedly progressive.

A Migden/Leno showdown certainly would be a big money affair. BMW always seems to be looking for work. Movement of a BMW guy up the ladder means more juice and even more work in Sacramento. And the kicker, for those who know how soft Mayor Gavin Newsom’s real polling numbers are, a significant diversion from November’s Mayor’s race could be just what’s needed to keep Newsom in office.

Mark Leno's cozying to the Newsom Administration needs to be analyzed and should cause any progressive a great deal of pause. Leno's long-term relationship with BMW should draw even more scrutiny.