>>> TONIGHT ON KQED NEWSROOM, AND ELECTION SPECIAL ON THE RACE TO BECOME CALIFORNIA'S NEXT FISCAL WATCHDOG.

WE WILL BE TALKING WITH CANDIDATES FOR STATE COMPTROLLER, REPUBLICAN LANHEE CHEN AND DEMOCRAT MALIA COHEN.

HEADQUARTERS IN SAN FRANCISCO OCTOBER 14th, 2022.

>> HELLO AND WELCOME.

I AM SCOTT SHAFER AND FOR PRIYA DAVID CLEMENS.

TONIGHT, WE ARE DEVOTING THE WHOLE SHOW TO THE STATEWIDE RACE FOR THE OFFICE OF STATE CONTROLLER.

THE CONTROLLER'S JOB IS OFTEN UNDER THE RADAR, BUT THE POSITION CARRIES A LOT OF POWER AND RESPONSIBILITY FOR CALIFORNIA'S FINANCES.

THE CANDIDATES ARE BOTH FROM THE BAY AREA, DEMOCRAT LANHEE CHEN AND MALIA COHEN, WHAT DOES THE CONTROLLER DO?

THE CONTROLLER IS THE STATE'S FISCAL OFFICER.

HE OR SHE ACTS AS THE STATES FINANCIAL WATCHDOG, PAYS THE STATES BILLS, HELPS OVERSEE THE STATE PENSION FUNDS, AND SITS ON MORE THAN 70 STATE BOARDS AND COMMISSIONS.

WE WILL START TONIGHT WITH CANDIDATE MALIA COHEN AND SHE IS A DEMOCRAT WHO GOT HER START IN PUBLIC OFFICE AS A MEMBER OF THE SAN FRANCISCO BOARD OF SUPRVISORS, WHERE SHE SERVED FOR EIGHT YEARS REPRESENTING A FEW HUNTERS POINT, POTRERO HILL, AND OTHER NEIGHBORHOODS ON THE CITY'S EAST SIDE.

SHE CURRENTLY CHAIRS THE STATE BOARD OF EQUALIZATION, AN OBSCURE BUT POWERFUL OFFICE THAT DEALS WITH ISSUES RELATED TO PROPERTY TAXES AND OTHER FINANCIAL MATTERS.

SHE JOINS US NOW TO TALK ABOUT HER VISION FOR THE CONTROLLER'S OFFICE.

WELCOME.

WHY YOU?

>> I THINK EXPERIENCE ABSOLUTELY MATTERS.

YOU HEARD IN THE INTRODUCTION IS AND EIGHT YEARS ON THE SAN FRANCISCO BOARD OF SUPERVISORS, THREE YEARS ON THE CALIFORNIA BOARD OF EQUALIZATION AND THAT IS AN ALIAS $85 BILLION PROPERTY TAX OPERATION AND AS CHAIR OF THE BOARD OF EQUALIZATION, I SIT ON THE FRANCHISE TAX BOARD.

THE CONTROLLER SITS ON THE FRANCHISE TAX BOARD AS WELL AS SITTING ON THE STATE BOARD OF EQUALIZATION, SO I USE THIS AS AN EXAMPLE, AND THE BACKDROP IS TO HIGHLIGHT THAT THE DECK NEXUS MAKES SENSE.

THERE IS A PORTION OF THE JOB THAT I'M DOING NOW AND WILL CONTINUE TO DO.

SO, WHAT MATTERS IS EXPERIENCE IN BEING ABLE TO STAND AND BE TESTED.

>> WHAT WOULD YOU DO WITH THAT EXPERIENCE IN THIS POSITION?

THE CONTROLLER IS INDEPENDENT.

HOW WOULD YOU USE THIS POWER?

>> THREE PRIORITIES WOULD BE ACCOUNTABILITY, ACCESSIBILITY AND TRANSPARENCY.

I WANT TO MAKE SURE THAT THE INFORMATION COMMUNICATED, THAT IS CREATED, THAT THE AUDITS ARE BEING PRODUCED AND THERE ARE ACCESSIBLE FOR EVERYDAY CALIFORNIANS.

>> IS THAT THE CASE NOW?

>> IT IS NOT THE CASE NOW.

EVERYTHING IS CONDUCTED IN ENGLISH.

SO WHAT I'M TALKING ABOUT ACCESS I'M TALKING ABOUT LANGUAGE AXIS.

WHEN I TALK ABOUT ACCOUNTABILITY , THE STATE CENTRAL ACCOUNTING SYSTEM NEEDS TO BE UNIFORM.

ALL DEPARTMENTS SHOULD BE ABLE TO PULL REPORTS AND BE ABLE TO úUNDERSTAND.

AS CHAIR OF THE BOARD OF EQUALIZATION, I AM NOT ABLE TO PULL A REPORT TO UNDERSTAND WHERE MY DEPARTMENTS SPENDING IS GOING BECAUSE THE ACCOUNTING SYSTEM IS INEFFICIENT.

>> WHAT WOULD YOUR PRIORITIES BEFORE AUDITS?

THAT IS ONE OF THE BIG POWERS THE CONTROLLER HAS.

>> WE ARE COMING OUT OF THIS PANDEMIC AND I THINK AT THE FOREFRONT OF PEOPLE'S MIND ARE TWO AREAS.

AFFORDABLE HOUSING, HOMELESSNESS, AND THIS GAS TAX.

BOTTOM LINE, CALIFORNIA'S WANT TO KNOW WHERE THEIR TAX DOLLARS ARE BEING SPENT AND HOW ARE THE CONTROLLER'S POSITION IS A WATCHDOG POSITION, NOT A LAPDOG POSITION.

I LIKE THAT BECAUSE I THINK IT REALLY DRILLS DOWN TO WHAT WE ARE TALKING ABOUT.

YOU NEED SOMEONE WHO HAS THE EXPERIENCE TO KNOW WHAT IS GOING ON AND AS A WATCHDOG, YOU'RE ABLE TO UNDERSTAND.

WHAT IS UNIQUE ABOUT ME IN THIS PARTICULAR RACE IS THAT I WOULD BE IN A POSITION WHERE I WOULD BE PERFORMING WITHOUT AUDITS WITHOUT FAVOR AND WITHOUT FEAR.

>> YOU ARE A DEMOCRAT AND YOU WORKED ON THE DEMOCRATIC CENTRAL COMMITTEE AND ARE WELL KNOWN FROM EVERYBODY TO GAVIN NEWSOM ON DOWN.

ONE OF THE ARGUMENTS THAT YOUR OPPONENT IS MAKING IS THAT YOU WOULD BE A LAPDOG.

IT IS HARDER TO AUDITS AND BE TOUGH ON YOUR FRIENDS, WHO ARE IN CONTROL AND SACRAMENTO.

HOW DO YOU RESPOND TO THAT?

>> I THINK HE MIGHT BE PROJECTING.

IT MIGHT BE DIFFICULT FOR HIM TO BE TOUGH ON HIS FRIENDS BECAUSE MR. CHEN IS A TRUMP REPUBLICAN.

>> WHAT MAKES YOU SAY THAT?

>> HE HAS LAUDED AND SUPPORTED DONALD TRUMP SUIT JUDICIAL NOMINEE TO THE SUPREME COURT, THE SAME DRESS THAT STRUCK DOWN ROE V. WADE.

>> ALTHOUGH HE SAYS HE IS PRO- CHOICE.

>> HE SAYS HE'S PRO-CHOICE BUT ONLY AFTER THE PRIMARY AND THE REAL QUESTION IS WHERE ARE YOU WHEN IT COMES TO PROP ONE.

CALIFORNIA VOTERS ARE GOING TO GO TO THE BALLOT IN THE NEXT THREE WEEKS AND PROP ONE IS ON TARGET TO PASS, AND I BELIEVE THAT MR. CHEN IS OUT OF STEP WITH WHAT CALIFORNIA'S WANT.

>> HOW COULD A CONTROLLER AFFECT EITHER THE AVAILABILITY OF ABORTION OR FUNDING OF ABORTION SERVICES?

IT DOES NOT SEEM TO MAKE SENSE TO ME.

>> IT GOES RIGHT BACK TO THE NEXUS WHERE YOU SAID, ABOUT AUDITS.

WE ARE TALKING ABOUT MULTIMILLIONS OF DOLLARS, PERHAPS EVEN BILLIONS.

ONE THING WE KNOW IS THAT WE ARE GOING TO WANT TO KNOW WHERE THOSE DOLLARS ARE GOING TO BE SPENT, SO WHETHER WE ARE TALKING ABOUT HOUSING, THE GAS TAX, REPRODUCTIVE RIGHTS IN EDUCATION -- THESE ARE STILL TAX DOLLARS THAT ARE GOING TO BE DISPERSED AND THE CONTROLLER'S OFFICE IS THE ONE THAT DISPERSES THIS MONEY.

>> LET'S PLAY AN AD OF LANHEE CHEN'S ABOUT YOU.

LET'S GIVE IT A LOOK AND THEN WE WILL COME BACK AND TALK ABOUT IT.

>> THE L.A. TIMES REPORTS MALIA COHEN DID NOT PAY HER BUSINESS TAXES, HER LICENSE REVOKED, DEFAULTED ON HER MORTGAGE AND WALKED AWAY.

COHEN CAN'T HANDLE HER OWN FINANCES.

WE CAN'T TRUST HER WITH OURS.

>> I AM LANHEE CHEN.

I SERVED UNDER PRESIDENT GEORGE BUSH.

TODAY, SACRAMENTO'S GO ALONG GET ALONG ATTITUDE WASTED BILLIONS OF YOUR TAX DOLLARS.

THAT IS WHY I WILL BE A WATCHDOG FOR YOUR MONEY.

NOT ALL UP DOG FOR THE INSIDERS.

>> DID HE GET THAT FROM YOU?

LET ME ASK YOU ABOUT THE CHARGE REGARDING YOUR PERSONAL BUSINESS.

YOU LOST YOUR BUSINESS LICENSE IN 2021.

WHAT HAPPENED, AND GIVEN THAT, WHY WOULD VOTERS WANT TO PUT YOU IN CHARGE OF A HUGE STATE AND FINANCES OF HUNDREDS OF GOING?

S OF DOLLARS COMING IN >> LET ME CORRECT THE RECORD.

I HAVE NOT LOST MY BUSINESS LICENSE.

I AM IN EXCELLENT STANDING.

I HAD NO OWED TAXES TO THE STATE OF CALIFORNIA THIS ATTACK I THINK IS TO DISCREDIT THE WORK I'VE DONE FOR THE LAST 15 YEARS.

THE LICENSE WAS NOT SUSPENDED.

THE LICENSE HAD AN ADMINISTRATIVE ERROR FOR THE RENEWAL PAPERWORK WAS MAILED TO AN OLD ADDRESS, AND IT HAS BEEN SINCE CORRECTED, WHEN IT WAS BROUGHT TO MY ATTENTION.

BUT, THE ATTACK SAYS I OWE TAXES.

I WANT TO BE VERY CLEAR I DON'T OWE ANY TAXES AND I NEVER HAVE >> THE OTHER ISSUE THAT HAS BEEN IN THE NEWS IS THAT YOU LOST YOUR CONDO.

WAS IT FOR LACK OF PAYMENT?

TALK ABOUT THAT.

IT WAS A WHILE AGO.

>> IT WAS A WHILE AGO, DURING THE HEIGHT OF THE 4 CRISIS, AND LIKE AMERICANS IN CALIFORNIA, 10 MILLION AMERICANS LOST THEIR HOME AND ACTUALLY, WE HAVE -- I REPRESENT CALIFORNIA'S WORKING- CLASS PEOPLE THAT HAVE LOST THEIR FOOTING BUT UNABLE TO COME BACK STRONGER THAN EVER.

BUT MORE IMPORTANTLY, TO LEARN FROM THIS AND BE ABLE TO CREATE POLICIES.

THIS STRENGTHENS ME AS A CANDIDATE TO BE ABLE TO GO AFTER THE BIG TANKS AND HOLD THEM ACCOUNTABLE.

HERE WE ARE COMING OUT OF THE PANDEMIC.

THERE ARE PEOPLE NOW THAT ARE ALSO ALSO SUFFERING, WHO ARE BEHIND IN THEIR TAXES, SO BEING ABLE TO UNDERSTAND THAT PROCESS AND CONNECT THEM TO STATE RESOURCES AND BEING VERY EMPATHETIC, KNOWING THE PAIN OF WHAT THAT IS, THE SHAME, AND SO I WANT PEOPLE TO UNDERSTAND THEY SHOULD NOT BE SHAMEFUL.

THEY CAN GET THROUGH THIS AND I WOULD BE HAPPY TO HELP THEM THROUGH IT AND >> ONE OF THE THINGS THE CONTROLLER DOES IS SIT ON THE BOARD OF THE TWO BIG PENSION FUNDS.

THERE ARE SOME FOLKS WHO PUSH PENSION FUNDS TO DIVEST, TO USE THEIR VALUES, ETHICS AND POLITICAL CLOUT OF THE PENSION FUND TOSEND A MESSAGE TO SAY, GUNMAKERS OR SOUTH AFRICA.

WOULD YOU SEE THAT AS YOUR ROLE?

WOULD YOU LIKE TO PROMOTE THAT ON THE PENSION FUNDS?

>> I WOULD NOT GO SO FAR TO SAY I WOULD BE PROMOTING IT, BUT I WOULD CERTAINLY HAVE THAT VOTE.

I SERVED SEVEN YEARS ON THE SAN FRANCISCO PENSION FUND AND WE DID DIVEST FROM FOSSIL FUEL.

IT WAS THE WORST OFFENDERS, AND SO I DO HAVE THAT IN MY BACKGROUND.

I DO HAVE THAT LEVEL OF UNDERSTANDING AND TO UNDERSTAND HOW E SG INVESTMENT CAN AND CANNOT ENHANCE A PORTFOLIO BUT I ALSO UNDERSTAND HOW A PROXY VOTE CAN CHANGE DIRECTIONS FOR ASSET ALLOCATION AND INVESTMENT, SO I THINK THAT ALSO DISTINGUISHES ME.

ALSO MAKING SURE WE DON'T HIDE BEHIND UNFUNDED LIABILITY, MAKING SURE WE HONOR OUR COMMITMENT TO STATE EMPLOYEES AND RETIREES.

MR. CHEN HAS SPENT AN ENTIRE CAREER TRYING TO BREAK UP SOCIAL SECURITY AND DISMANTLE THE SYSTEM.

>> YOU WOULD BE IN CHARGE OF THE MONEY COMING IN AND THE MONEY GOING OUT.

WHAT ARE SOME AREAS THAT YOU THINK CALIFORNIA SPENDS TOO MUCH MONEY ON, AND TOO LITTLE MONEY ON.

>> THE CONTROLLER IS NOT NECESSARILY RESPONSIBLE FOR THE MONEY COMING IN.

THE TREASURER BRINGS THE MONEY INTO THE STATE AND THE CONTROLLER IS IN CHARGE OF THE DISBURSEMENT.

HOW IS THE MONEY BEING SPENT, WAS IT ACCURATELY BEING SPENT HARD WAS SUPPOSED TO.

THAT IS WHERE MY EXPERTISE WOULD COME IN.

I UNDERSTAND THE BUDGET ON A LOCAL LEVEL.

>> WHAT JUMPS OUT AT YOU NOW WHEN YOU THINK OH, WE'RE SPENDING TOO MUCH ON THAT.

>> A PERFECT EXAMPLE WOULD BE AFFORDABLE HOUSING.

WE ARE IN THE MIDDLE OF A HOUSING CRISIS.

THERE HAS BEEN A CHANGE TO HOW AFFORDABLE HOUSING DEVELOPERS CAN GET MONEY FOR THEIR AFFORDABLE HOUSING PROJECTS AND SO WHAT I WOULD LIKE TO SEE IS THE PROCESS BE MORE STREAMLINED.

THE OTHER THING WE ARE DOING ON THE BOARD OF EQUALIZATION IS EXAMINING HOW TAX ABATEMENTS COULD STIMULATE THAT MIDDLE ECONOMY, SO THE WORK I AM DOING NOW STILL BUILDS ON AND WILL BE PREDICATED ON THE WORK I HOPE TO DO IS STAY CONTROLLER.

>> PERHAPS THE MOST CONTROVERSIAL PROJECT IN CALIFORNIA IS HIGH-SPEED RAIL.

HOW WOULD YOU APPROACH THAT?

>> AS A CONTROLLER, YOU WOULD COME IN JUST REVIEWING PAST AUDITS, SEEING WHAT THE AUDITS HAVE FOUND, AND IF THERE WERE SOLUTIONS PROPOSED.

>> ARE YOU CONCERNED THAT PERHAPS THE SPENDING IS OUT OF CONTROL?

>> I AM CONCERNED ANYTIME THERE IS A TAX DOLLARS BEING SPENT IF IT IS SPENT OUT OF CONTROL OR BUDGET.

THIS IS NOT TO COLOR MY OPINION OF THE HIGH-SPEED RAIL.

IT IS IMPORTANT THAT WE HAVE ACCURATE ACCOUNTING BUSINESS PRACTICES IN PLACE SO THAT WE CAN REPORT BACK TO TAXPAYERS.

>> SPEAKING OF WHICH, THE EMPLOYMENT DEVELOPMENT DEPARTMENT, BIG DEPARTMENT, TENS OF BILLIONS OF DOLLARS WENT TO FRAUDSTERS, APPARENTLY.

THE AUDITOR WHO REPORTS TO THE LEGISLATURE COMPLAINED ABOUT THAT 10 YEARS AGO, THAT THE SYSTEM WAS BROKEN AND NOTHING WAS REALLY DONE.

HOW WOULD YOU GET THE ATTENTION OF THE LEGISLATURE AND THE GOVERNOR IN A WAY THE AUDITOR DID NOT.

>> THE AUDITOR DOES NOT RUN.

THEY ARE APPOINTED BY THE LEGISLATURE AND CONFIRMED, SO THEY WORK AT THE BEHEST OF THE LEGISLATURE.

THE AUDITOR ROLE IS DIFFERENT THAN CONTROLLER.

THE CONTROLLER IS DULY ELECTED, BUT I THINK THAT IS WHAT DISTINGUISHES ME.

I CAN LOOK AT AN AUDIT THAT I ALSO HAVE THE LEGISLATIVE BACKGROUND SO I CAN UNDERSTAND THE LEGISLATIVE PROCESS AND CLOSE THE GAP.

THAT IS WHERE I BELIEVE THE PROBLEM LIES.

SOLUTIONS WERE NOT PROPOSED AND SOMETIMES SOLUTIONS ARE EIGHT LEGISLATIVE FIX.

>> QUICKLY, HOW ARE WE GOING TO KNOW THAT YOU HAVE DONE A GOOD JOB AS CONTROLLER?

HOW WOULD YOU GRADE YOURSELF?

>> I THINK IF THE UNCLAIMED LIABILITY EXCUSE ME, IF THE UNCLAIMED PROPERTY PROGRAM IN THE CALIFORNIA CONTROLLER'S OFFICE IS UP AND OPERATIONAL, WE'VE PASSED SOME LEGISLATION AND MADE IT ROBUST, THAT IS AN INDICATOR.

ANOTHER INDICATOR OF SUCCESS WOULD BE THE AMOUNT OF AUDITS, IF WE HAVE FOUND ANY ABUSE OR FRAUD I WOULD LIKE TO MAKE IT EASY TO REPORT.

>> ARE GOING TO HAVE TO LEAVE IT RIGHT THERE.

MALIA COHEN, THANK YOU SO MUCH FOR COMING IN.

>> THANK YOU FOR HAVING ME.

>> NOW THE OTHER CANDIDATE FOR STATE COMPTROLLER.

REPUBLICAN LANHEE CHEN IS A FELLOW AT STANFORD'S HUGH HOOVER INSTITUTION.

THIS IS HIS FIRST RUN FOR OFFICE HAS ADVISED SEVERAL RESIDENTIAL CANDIDATES IN THE PAST.

HE ALSO SERVED IN THE OBAMA ADMINISTRATION ON THE BIPARTISAN SOCIAL SECURITY ADVISORY BOARD CHEN IS HOPING TO DO SOMETHING NO REPUBLICAN HAS DONE SINCE 2006.

THAT IS WHEN A STATEWIDE ELECTION IN CALIFORNIA.

THIS OFFICE, AS YOU WELL KNOW, HAS QUITE A BIT OF POWER OVER FISCAL MATTERS.

HOW DO YOU WANT TO USE THAT POWER?

>> I THINK WE NEED GREATER ACCOUNTABILITY FOR HOW THE STATE SPENDS MONEY.

THE OFFICE WAS SET UP TO BE A FISCAL WATCHDOG TO GIVE TAXPAYERS A MONEY OF HOW AND WHERE THEIR MONEY IS BEING SPENT .

THAT POWER IS VERY IMPORTANT.

KNOWLEDGE IS POWER, AND INFORMATION IS POWER.

AS TAXPAYERS IN CALIFORNIA, WE DON'T HAVE NEARLY ENOUGH OF A SENSE OF WHERE THE MONEY GOES AND HOW IT IS SPENT THAT HAS RESULTED IN SOME SITUATIONS WHERE THERE HAS BEEN MISMANAGEMENT.

I WANT TO BRING TRANSPARENCY AND ACCOUNTABILITY BACK TO SACRAMENTO.

>> YOU HAVE USED THE PHRASE RADICAL TRANSPARENCY.

>> I'LL GIVE YOU AN EXAMPLE.

WE HAVE ABOUT $300 BILLION A YEAR IN CHECKS THAT WE CUT AS A STATE WHERE THE CONTROLLER IS SUPPOSED TO SIGN OFF ON THOSE.

CALIFORNIA IS ONE OF THE FEW STATES WHERE WE DON'T HAVE TRANSPARENCY INTO THE LINE BY LINE LEDGER.

THEY HAVE IT IN MANY OTHER STATES, BUT WHAT I THINK WE NEED IS SOME CAPACITY TO UNDERSTAND WHERE EVERY DOLLAR IS GOING SO THAT TAXPAYERS CAN FIND THAT INFORMATION ON THE INTERNET AND I HAVE TALKED ABOUT A NAP ON YOUR PHONE.

THAT IS WHAT I MEAN ABOUT RADICAL TRANSPARENCY, BEING ABLE TO SEE WHAT YOUR STATE GOVERNMENT IS SPENDING MONEY ON, DOWN TO THE PENNY.

>> YOU HAVE MENTIONED MISMANAGEMENT AND THE FIRST THING THAT COMES TO MIND IS THE EMPLOYMENT DEVELOPMENT DEPARTMENT WHERE DURING THE PANDEMIC, TENS OF BILLIONS OF DOLLARS GOT FRAUDULENTLY RECEIVED BY PEOPLE WHO DID NOT DESERVE IT.

AS YOU KNOW, THE INDEPENDENT AUDITOR 10 YEARS AGO WARNED ABOUT THAT AND NO ONE DID ANYTHING.

WHAT MAKES YOU THINK YOU, AS AN OUTSIDER, AND A SENSE, COULD HAVE A BIGGER IMPACT THAN THE PERSON WHOSE JOB IT WAS TO AUDIT THOSE DEPARTMENTS?

>> THE AUDITOR AT THE END OF THE DAY DOES NOT HAVE AN INDEPENDENT AUDIT CAPACITY.

THE CONTROLLER IS AN INDEPENDENT OFFICER WHOSE JOB IT IS TO MAINTAIN FAIRNESS AND MAKE SURE WE'RE SOLVING PROBLEMS.

>> YOU'RE RIGHT.

THE AUDITOR WORKS FOR US IT SPECIFIC AMOUNT OF TIME, BUT SHE LAID OUT THE PROBLEMS AND IT WAS IGNORED.

>> ELAINE HOWELL WHO RECENTLY LEFT THE JOB DID A TERRIFIC JOB FOR OUR STATE AND PEOPLE SHOULD RECOGNIZE ALL THE GREAT THINGS SHE DID.

THE PROBLEM IS, WHEN YOU'RE NOT INDEPENDENTLY ELECTED, WHEN YOU DON'T HAVE THE PLATFORM TO STAND THERE AND SAY YOU HAVE TO SOLVE THIS PROBLEM -- YOU'RE RIGHT.

WE HAVE A PROCESS FAILURE.

FAILURES IN THE PROCESS OF HOW THAT MONEY GOT OUT THE DOOR AND WHEN NO ONE IS PAYING ATTENTION AND WILLING TO HOLD POLITICIANS AND INSIDERS ACCOUNTABLE, THAT IS WHAT HAPPENS.

AND HERE'S THE THING IT DOES NOT HAVE TO HAPPEN AGAIN, BUT IT COULD IF THOSE THINGS DON'T GET FIXED, SO IT HAS TO BE A PRIORITY OF THE NEXT CONTROLLER TO MAKE SURE WE FIX THAT EDD PROBLEM .

>> THE LAST TIME WE HAD A GOVERNOR AND A CONTROLLER OF DIFFERENT PARTIES WAS WHEN PETE WILSON WAS GOVERNOR, GREG DAVIS WAS THE CONTROLLER AND THEY WERE AT LOGGERHEADS ALL THE TIME FIGHTING OVER THINGS LIKE IOUS AND WHETHER TO PAY BILLS.

IS THAT WHAT WOULD HAPPEN IF YOU BECAME CONTROLLER?

>> I THINK THE MOST IMPORTANT THING FOR PEOPLE TO UNDERSTAND IS THAT THE CONTROLLER SHOULD NOT SEEK OUT CONFLICT BUT THE CONTROLLER'S JOB IS TO MAKE SURE THERE IS AN INDEPENDENT FORCE IN GOVERNMENT LOOKING OUT FOR WHAT IS HAPPENING.

THERE WILL BE TIMES WHEN I WILL WORK VERY WELL TOGETHER WITH THE LEGISLATURE, THE GOVERNOR AND OTHERS, WHEN WE ARE TRYING TO MOVE IN THE SAME DIRECTION BUT WHERE THERE ARE SITUATIONS WHERE WE SEE THE GOVERNOR OR THE LEGISLATURE STANDING IN THE úWAY OF THE TRANSPARENCY WE HAV TALKED ABOUT THEN WE ARE GOING TO HAVE CONFLICT, AND WE SHOULD NOT SHY AWAY FROM THAT.

WE HAVE A SYSTEM OF CHECKS AND BALANCES IN CALIFORNIA AND IN THE UNITED STATES, AND THAT SYSTEM WAS PUT IN PLACE INTENTIONALLY TO CREATE SOME TENSION IN THE SYSTEM.

WHEN THERE IS NO TENSION, THERE IS NOBODY ASKING QUESTIONS.

THAT IS WHY WE DO NEED TO HAVE A LITTLE BIT MORE BALANCE IN OUR SYSTEM AND THAT IS WHAT I WOULD BRING.

>> AS A CONTROLLER YOU HAVE A LOT OF INDEPENDENCE, AND A LOT OF AGENCIES AND PROGRAMS YOU COULD AUDIT.

WHAT ARE YOUR TOP THREE THINGS YOU WANT TO FOCUS ON?

>> I THINK WE HAVE TO START AT THE TOP OF THE BUDGET AND WORK DOWN, BEING SYSTEMATIC ABOUT THE APPROACH.

WE CANNOT LET POLITICS GET IN THE WAY AND SAY WHERE ARE WE SPENDING OUR MONEY?

THERE IS NO QUESTION WE HAVE TO LOOK AT PUBLIC EDUCATION.

IN THE STATE IT IS IN AREA WHERE THE CONTROLLER CAN LOOK DOWN TO THE LOCAL SCHOOL DISTRICT LEVEL BECAUSE THE CONTROLLER HAS THE ABILITY TO AUDIT THE FLOW OF FUNDS.

DURING THE PANDEMIC, A MASSIVE AMOUNT OF FEDERAL MONEY CAME INTO THE STATE, ABOUT $60 BILLION FOR PUBLIC EDUCATION.

THERE IS A BIG?

ABOUT WHERE THAT MONEY WAS SPENT.

DID IT HELP OUR TEACHERS?

DID OUR KIDS GET ACCESS TO SAFER CLASSROOMS WITH FILTRATION?

THESE ARE THE KINDS OF QUESTIONS WE NEED TO GET ANSWERS TO, AND IN TOO MANY CASES, SCHOOL DISTRICTS HAVE NOT DISCLOSED THAT INFORMATION.

THERE IS A SENSE THAT MANY SCHOOL DISTRICTS ARE NOT PROVIDING REQUIRED INFORMATION ABOUT PAY AND BENEFITS.

70% OF DISTRICTS HAVE NOT DONE THAT.

THOSE ARE THE PRIORITIES THE CONTROLLER NEEDS TO FOCUS ON BEYOND HEALTHCARE, BY THE WAY.

EDUCATION AND HEALTHCARE ARE TWO BIG PRIORITIES.

AND THEN YOU HAVE CORRECTIONS.

YOU CAN GO DOWN THE LIST AND REALLY TAKE A LOOK AND SAY WHERE ARE WE SPENDING MONEY?

>> YOU MENTIONED HEALTHCARE.

LET'S PLAY AN AD.

WE DID THIS FOR YOUR OPPONENT, MALIA COHEN.

LET'S PLAY ONE OF HER ADS FOR YOU AND THEN WE WILL GET YOUR REACTION.

>> IS A HEALTHCARE PROVIDER I AM VOTING MALIA COHEN FOR CONTROLLER.

THE CONTROLLER OVERSEES FUNDING FOR REPRODUCTIVE HEALTH ORGANIZATIONS LIKE PLANNED PARENTHOOD.

REPUBLICANS LIKE LANHEE CHEN PUT ABORTION AT RISK EVEN IN CALIFORNIA.

CHEN SUPPORTS TRUMP REPUBLICANS PUSHING A NATIONAL ABORTION BAN, AND REFUSES TO SUPPORT THE EMBEDMENT TO ENSHRINE ABORTION IN THE CALIFORNIA CONSTITUTION.

WE CAN'T RISK HAVING LANHEE CHEN IN OFFICE.

>> REACTION.

>> NEVER ONCE IN THE END SHE STATE MY POSITIO ON ABORTION WHICH IS THAT I AM PRO-CHOICE AND I HAVE SAID CLEARLY HAVE CONTROLLER I WOULD HAVE NEITHER THE POWER NOR THE INCLINATION TO RESTRICT ACCESS TO ANY REPRODUCTIVE SERVICES.

I AM A SUPPORTER OF REPRODUCTIVE RIGHTS, AND SO I THINK IT IS PART OF AN EFFORT BY MY OPPONENT TO MISLEAD PEOPLE WITH RESPECT TO THIS ISSUE, AND MORE BROADLY, TO MISLEAD PEOPLE ABOUT THE CONTROLLERS ROLE OR LACK THEREOF WHEN IT COMES TO ABORTION RIGHTS AND SERVICES.

I CAN ONLY STATE MY POSITION AND LET PEOPLE KNOW WHERE I STAND.

IT IS UNFORTUNATE THAT MY OPPONENT CHOOSES TO LIE ABOUT MY POSITION BUT THAT IS HER PREROGATIVE.

>> PROPOSITION ONE ON THE STATE BALLOT WOULD ENSHRINE ABORTION AND REPRODUCTIVE RIGHTS.

SUPPORT OR OPPOSE?

>> I SUPPORT ENSHRINING CURRENT LAW.

PROP ONE, I HAVE CONCERNS ABOUT THE WAY IT HAS BEEN DRAFTED.

I HAVE HEARD IT COULD CAUSE FURTHER LITIGATION DOWN THE ROAD AND SO I AM CONCERNED ABOUT IT AND BY THE WAY, WE HAVE SEVEN PROPOSITIONS WE'VE GOT TO VOTE ON.

WE TAKE A LOOK AT ALL OF THOSE AND PROP ONE IS GOING TO BE ONE THAT I AM EVALUATING.

>> SOME PEOPLE ARE GOING TO HEAR THAT AN SEO, HE'S NOT SAYING HOW HE WILL VOTE ON THAT.

I UNDERSTAND THE CONCERNS YOU HAVE ARE LEGITIMATE.

YOU'RE NOT THE ONLY ONE, BUT HOW DO YOU ASSURE WOMEN AND OTHERS ABOUT THIS ISSUE THAT THEY CAN TRUST YOU IN THIS JOB.

>> IT IS AN INCREDIBLY IMPORTANT ISSUE.

WHAT IS HAPPENING AT THE NATIONAL LEVEL IS PROBLEMATIC.

THE EFFORTS TO RESTRICT ABORTION RIGHTS AND ACCESS TO REPRODUCTIVE SERVICES IS CONCERNING.

I CAN ONLY RESTATE MY POSITION THAT I AM PRO-CHOICE.

I BELIEVE THE CONTROLLER FIRST OF ALL DOES NOT HAVE THE ABILITY TO ALTER SPENDING IN THIS AREA.

THE NOTION THAT THE CONTROLLER CAN GO IN AND CUT SPENDING WILLY-NILLY IS RIDICULOUS.

THE CONTROLLER CAN'T DO THAT.

ACCESS TO ABORTION RIGHTS AND THE SERVICES IS SOMETHING I BELIEVE IN.

>> WHAT ABOUT AUDITING THE $200 MILLION IN THE BUDGET RIGHT NOW FOR ABORTION SERVICES?

IS THAT SOMETHING YOU MIGHT LOOK AT?

>> WE SHOULD NOT BE SINGLING OUT ANY SPECIFIC SERVICE LINE FOR AN AUDIT.

HEALTHCARE IN GENERAL INTHE STATE DOES NEED TO BE LOOKED AT.

IT'S BEEN OVER 20 YEARS SINCE WE LOOKED AT A PROGRAM THAT HAS GROWN BY OVER 40% SO I THINK HEALTHCARE IS AN AREA THAT WE NEED TO TAKE A LOOK AT BROADLY, BUT THE NOTION OF TARGETING SPECIFIC SERVICES, ABSOLUTLY NOT.

>> WHAT ABOUT HIGH-SPEED RAIL?

IS BEING BUILT.

>> IT IS BEING BUILT BUT IT IS OVER BUDGET AND NOT ON TIME, AND THE CAPACITY OF WHAT WE ARE BUILDING IS A LOT SMALLER THAN WHAT WE HAD INTENDED, SO HIGH- SPEED RAIL IS CERTAINLY AN AREA THE CONTROLLER SHOULD TAKE A LOOK AT.

THERE HAVE BEEN REPORTS OF CONTRACTORS BEEN PAID FOR SERVICES THAT HAVE NOT BEEN RENDERED.

WHAT ARE TAXPAYERS GETTING FOR THE HUNDREDS AND BILLIONS OF DOLLARS THAT ARE GOING INTO THIS?

THE CONTROLLER HAS THE ABILITY TO LOOK AT HIGH-SPEED RAIL AND TAKE A HARD EXAMINATION OF WHAT KIND OF RESULTS WE ARE GETTING AND IF THE PROJECT SHOULD CONTINUE TO MAKE RECOMMENDATIONS ONE WAY OR THE OTHER.

>> YOU WOULD HAVE A ROLE OVERSEEING PENSION FUNDS.

THERE IS OFTEN A PUSH THERE TO BE ACTIVE ON ISSUES LIKE APARTHEID AND DIVEST FROM COMPANIES WITH BUSINESS IN SOUTH AFRICA.

RIGHT NOW THERE IS TALK ABOUT FOSSIL FUELS IN RUSSIA.

WHAT WOULD YOUR POSITION BE IN GENERAL?

>> LET'S BACK UP FOR A MINUTE HERE THE ROLE OF CONTROLLER ON THOSE BOARDS IS TO MAKE SURE THEY ARE A FIDUCIARY OF TAXPAYER MONEY.

I BELIEF IS THAT THOSE FUNDS NEED TO BE RETURNING THE MAXIMUM AMOUNTS ON INVESTMENTS OF TAX PAYERS.

WE HAVE MADE PROMISES AND OBLIGATIONS.

IT'S GOING TO BE HARD FOR US TO DO THOSE IF THE FUNDS ARE NOT FOCUSED ACCOLADES ARE TO MAKE SURE THEY RETURN MAXIMUM AMOUNTS.

I JUST BELIEVE WE HAVE TO EVALUATE THINGS ON A CASE-BY- CASE BASIS, BUT AS A GENERAL MATTER, MY PHILOSOPHY IS TO RETURN WHAT THE TAXPAYERS DESERVE AND MAKE SURE WE GET THESE BENEFITS PAID.

>> SPEAKING OF RETURNS, $12 BILLION OF REBATES ARE GOING OUT .

WOULD YOU HAVE SUPPORTED THAT BEING TARGETED TO MIDDLE AND LOWER INCOME FOLKS AS A WAY TO OFFSET COSTS FOR GAS AND OTHER THINGS?

>> I THINK IT IS IMPORTANT TO GIVE RELIEF TO PEOPLE BUT I THINK THAT RELIEF NEEDS TO BE PERMANENT AND STRUCTURAL RELEASE.

THE PROBLEM WITH THESE ONE TIME SUGAR HIDES IS THAT THEY DON'T ADDRESS THE LONG-TERM PROBLEMS WE HAVE IN CALIFORNIA.

WE HAVE TO ADDRESS THE STRUCTURAL CHALLENGES, AND THAT INCLUDES THE PENSION ISSUES WE DISCUSSED EARLIER BUT IT INCLUDES AN EFFORT TO MAKE SURE IF WE'RE GOING TO SPEND MONEY, AND IT IS GREAT WE HAVE A SURPLUS, WE WILL HAVE ONE IN A COUPLE OF YEARS, BY THE WAY, IT'S MAKE SURE WE ARE PREPARED FOR DOWNTIMES.

IF WE'RE GOING TO MAKE CHANGES TO THE ECONOMY INTO THE TAX CODE, LIKES MAKE SURE THOSE CHANGES ARE HERE TO LAST TO HELP FAMILIES IN CALIFORNIA.

>> ALL RIGHT.

A FEW MORE WEEKS TO MAKE A DECISION ON THIS RACE.

LANHEE CHEN, CANDIDATE FOR STATE CONTROLLER.

FOR MORE ELECTION COVERAGE, JOIN ME FOR A DEBATE BETWEEN THE CANDIDATES FOR THE STATE'S TOP JOB ON OCTOBER 23rd.

WE WILL MODERATE THE ONE AND ONLY DEBATE BETWEEN THE CANDIDATES FOR GOVERNOR.

YOU WILL FIND IT RIGHT HERE ON KQED 9.

>> FROM KQED HEADQUARTERS, DEMOCRATIC GOVERNOR BRIAN NEWSOM AND NEWCOMER BRIAN DALEY GO FACE-TO-FACE SUNDAY EVENING AT 6:00 ON KQED NINE.

>> THAT IS GOING TO BE SUNDAY OCTOBER 23rd AND THAT IS THE END OF OUR SHOW FOR TONIGHT.

YOU CAN FIND KQED NEWSROOM ONLINE, ON TWITTER OR EMAIL US @KQEDNEWSROOM OR YOU CAN REACH ME ON SOCIAL MEDIA AT SCOTT SCHAEFER.

WE WILL SEE YOU BACK HERE NEXT FRIDAY NIGHT.

HAVE A GREAT WEEKEND.