hello and welcome to kqed newsroom. coming up in our program, protecting independent contract workers and a new state budget. first, after two days of deliberation, a jury convicted of 162 counts including rackete racketeering, corruption and murder. prosecutors confirmed as the head of a fraternal organization, chow ran a criminal organization that trafficked weapons, stolen cigarettes and liquor and he ordered the murder of one rival and conspired to order the murder of another. chow's attorney said they will appeal and calls the entire case snitch heaven. >> very early on we started

getting a signal from the judge none of our defense theories would be allowed. that's exactly what happened. our witnesses got excluded. the government had 46 witness, we had eight. our defense theory is the most important aspects were excluded. we never had a good chance to put on a good defense the jury needed to hear. >> at the jury for the announcement today. welcome, alex. take us to the scene of the courthouse. what was that like? it was packed. >> it was fairly packed and there's been intense interest in the case from the beginning, part of that is due to the fact that the former state senator, leland dee was involved in this sweeping indictment that charged 24, a couple dozen people with criminal, federal criminal charges. >> it was a five year investigation and cost millions on in taxpayer dollars. getting back to the chou case, 162 counts, how did that come

about? that's a lot of counts. >> 130 some odd of the counts are money laundering transact n transactions. those are grouped in one large group and some more a handful more are trafficking in stolen goods charges, refg stolen property these kinds of things. the federal prosecutor never alleged chou hands-on did money laundering transactions or hands-on trafficked in stolen goods. they said he introduced an undercover fbi agent within his organization that committed these crimes and chou was always hands off, an arm's length away. >> was that the core of their case? >> the core of their case, i would say the undercover fbi agent's testimony as well as the most serious charges involving murder, one that chou allegedly ordered and was carried out and

he planned but maybe actually didn't carry out. those charges were added very late in this trial's process, right before the jury trial began. the federal prosecutor's case was based upon the testimony of five cooperating wpss. tho -- cooperating witnesses who were facing charges and many had violent criminal pasts. when the defense attorney says this case was snitch heaven, that's what he's referring to, these five cooperating witnesses. >> so how is the defense team responding now? we have a little glimpse of that earlier. do you think they feel it was a mistake to put chou on the stand in his own defense? >> as we've laid out the center of the prosecution's case, that was always the center to the defense's case, once you heard directly from raymond chou, you would believe he was reformed,

he came from a life of crime and he abandoned it when he was released from federal custody for similar charges, not murder, mind you, but racketeering, things like that, in 2003. the jury didn't buy it. >> how much do you think was at stake for the federal government here when the sting brought in so many people including the former senator who faced charges last summer. there was so much publicity, was there a lot of pressure to win this case? >> i would imagine so. they don't say one way or another. we do know millions of dollars was spent on this investigation, it lasted several years and ended up n enveloping some very high profile defendants. i would think federal prosecu r prosecutors had a lot riding on this and thou wchou was found g

on all counts. >> did you get a sense there was vindication at the courthouse? did they say anything at the courthouse, the prosecutors? >> they didn't. they declined to speak to any media, basically through a spokesperson on background information, prosecutors aren't comments on this case yet because there are still many defendants in this indictment awaiting trial. they're not speaking publicly yet. >> for chou, what happens now? is there a sentencing hearing coming up? >> yes. he's scheduled to be sentenced in late march. that could change and he is f e facing life in prison, possibly multiple life sentence, he has a lot of serious charges to answer for. >> did tony seras speak out today after the verdict was handed out. >> yes. record da legendary defense attorney tony sera. chou has several defense

attorneys and tony was the lead pr pro-bono and curtis briggs we heard from a few moments ago. tony sera really focused his disappointment and disgust on the jury and jury's willingness to believe these five coopera cooperating witnesses. he believes the witnesses who bargain with prosecutors in order to potentially reduce the sentences they're facine ining shouldn't be allowed to testify in a case of a person an alleged former associate. >> he transferred his disgust at the so-called snitches in this case and now disgusted with the jury. >> he doesn't think these witnesses were credible and he was flabbergasted the jury would believe them. i have to say, there were five of them and so once you get a parade of so many witnesses, it does start to -- you know, it starts to sound more and more convin convincing, whereas one might be -- you know, you could be dismissive to say this person

isn't credible, they have a stake in this. once you get five and the prosecutors could argue against the defense argument they koort their testimony but you have five and at least some never had a chance to really talk to each other. the jury appears to have believed them. >> like you said, there are still others awaiting trial. this was the biggest name in terms of all the people ensnared with the exception of state senator leland yee. all a very interesting case and i guess like you said, an appeal will be filed. >> i don't think this case is over. it's been going on for years now and that's just the trial part of this and it's not over. >> all right, alex, thank you for coming in. >> thank you for having me. turning now to california politics, a look at the new state budget, governor jerry brown released this week. >> since i was elected governor, the increase to school spending

is 51%. i might note that the budget itself is up over 42%. with respect to helping those struggling with low incomes, we're putting 4$400 million in for the earned income tax credit, which helps working families. we're giving a cost of living increase to me elderly, blind and disabled for the first time since 2006. the minimum wage goes up to $10. >> although the budget is flush with increased state revenues, the governor served it up with his customary brand of caution. >> if you don't remember anything else just remember everything that goes up comes down. there's not a candy store you can pick out whatever you want. you have to choose and that's what we're going to do. >> and joining me now for a closer look at the budget is scott shafer, senior editor of kqed california politics and

government. hi. what does this say about the governor's philosophy and priorities? >> this was the governor being the governor. he is not a pop the champagne kind of guy. you think back five years ago he took office, there was a sea of red ink, government was disfunctional, the state couldn't pass a budget to save its life. he has now fixed that and helped with prop 30 and new revenue, he wants to help preserve the stability and caution he has put into this budget process. he's not as eager as fellow democrats to spend a lot of money on online going things and trying to tamp down that enthusiasm. >> and from the previous red ink, how are democrats reacting to this prudent budget of his? >> they're getting used to this tone from him. i think you're seeing a sense of restle restlessness, pent up demand for spe spending. we heard senator mark leno s

sayisay ing while we appreciate the governor's caution but now we have a lot of revenue and now is the time to restore some of the cuts we made over the last several years. they're not content with the crumbs relatively speaking that the governor put into this budget. they want more. that's what the next few months will be about as the budget gets negotiated. >> it will be interesting to see how aggressive they are. he is giving some money to more programs. which ones? >> the big winner is education getting billions more dollars. we heard the governor alluding to that a minute ago. mostly because of the prop 98 formula, he has to do that according to the constitution. and med cal and health care and huge growth and that's being reflected. those kinds of things are really -- i think in terms of education, this is probably the best education budget in years, if not decades in california. schools should be very happy. >> notah is increas-- nota tuit

increases as well in this budget. there is a lot of concern about the growing income gap, how is he addressing that? >> he increased the earned income tax credit putting more cash in the pockets of working class folks and credit for undocumented children entirely on the state's dime, no federal money for that. increased again, legislation he signed, not doing it out of the goodness of his heart increasing the minimum wage to $10 pointing out that costs 4$450 million. at the same time, those talking about a $15 an hour minimum wage, if we do that, that's going to be a $4 billion cost on the general fund, more than we spend on the university of california. >> he's already sending a cautionary note about that. >> he absolutely is. we will see again, that will be that give-and-take between more liberal democrats and the

governor. >> what about the drought? we saw rain this week but the drought is a big concern? >> it is. we saw 3$300 million put into te budget for an emergency drought response everything from emergency water supplies in central valley where they ran out of water and groundwater overtapped to rebates for consumers who buy more water efficient appliances and that money is there as well. there's additional funds for fighting fires a result of the drought partly. 2 million dead trees in california, that's kindling waiting to get ignited. the governor knows that and is putting more money in the e budget for fighting fires. >> any surprises in this budget for you? >> i don't know if it's a surprise, the governor put $5 million in for marijuana regulation, hiring state work others to develop for the first time, 20 years after california legalized medical marijuana we're finally going to get regulations. that was interesting, a $65

vehicle fee proposing everyone would pay including drivers of electric cars to pay for road maintenance. those are a couple of things that jumped out. >> i want to ask you about something else in the headlines, earlier this week governor brown declared a state of emergency over the methane leak in southern california displacing thousands of residents. how much internet they in is being -- how much methane is being released? >> there has been dispute, we saw 20% of all greenhouse gases. >> sounds like a lot. >> it is a lot and was wrong. methane is about 9% of all the greenhouse gases released. not a lot in terms of the overall percentage of greenhouse gases but internet main gmethant of damage to the environment. a lot of people thought the governor was a bit asleep on the switch on this. he met earlier this week with

families from southern california and obviously they lit a fire under him because he made that decoratilaratiodeclar >> what does this say about environmental programs we potentially face? is there a bigger hit? >> ever since the san bruno pipeline explosion in 2010 killed five people we took a look and began asking questions. there is a huge network of pipelines underground and came to learn pg & e wasn't mainta maintaining them properly and didn't even have records. they are maintaining them and put in shutoff valves so the worst explosions won't happen. it is a huge system and always a chance of something going wrong. >> as we can see in this case, something went very wrong. a lot of concern because methane is 80 times more potent than carbon dioxide when it comes to

global warming properties. >> the california utilities supposed to be regulating utilitiey ies has not done a gr job. the former federal executive is under investigation for being too cozy with pg & e. this is a very complicated problem. >> one to watch. scott shafer, thank you so much. >> you bet. a job with flexible hours. where your office might be your car and your orders come in on your smartphone. companies like uber and ab & b and tax grabber are changing how many people make money. it's estimated 20% of people have offered goods or services in this so-called gig academy and division whether they should be considered employees and rights be granted. from san diego, proposing a bill to give independent workers new labor rights even if they're not part of an aoun i don't

know. she join us now from uc san diego. welcome. >> thank you. thank you for having me. >> how is your bill different from the various proposals and lawsuits seeking to allow gig work others to unionize? >> this doesn't prescribe anything. it provides a legal ability for these drivers or workers depe depending what platform they're on, to get together and che collectively bargain, leverage their strength as a group of workers with the owners of the companies. we don't say what that should be, what it would be bargaining about and allows them the opportunity to bargain currently they don't have as independent contract contractors. >> why can't you put provisions there in to cover things like minimum wage, workers comp, unemployment benefits, why leave that out? >> it's the idea we are not going to challenge through the legislation these are independent contractors. that's a separate fight.

some people are suing about that. i support the idea these are actually employees. but the state can't prescribe. we can overregulate from a conference room in sacramento every detail of this economy or say these workers have the right to get together to form an organization and have a representative bargain for them and do that without worrying about legal laws or antitrust law. we need a legal change in state law to allow them to do that. >> who will this legislation affect? everybody that works in this acade economy or certain workers? >> any workers in this economy who work in a platform by which they're hired the owners of the company set rates and are the facilitators of those people who want to use the services. and take a profit from it. of course, uber and lyft and new companies coming up every single

day. we can't say what's out there tomorrow. >> why is this important to you? >> you know, it's interesting from a state perspective and taxpayer perspective. we know nearly a third of these workers, 14 million throughout the united states are now re relying on this as their sole or primary source of income. as that happens we know they aren't getting social security, can't get health care, unemployment, workers compensation, all these things that allow them not to have larger and larger safety net. rather than taxpayers to foot it we should allow the workers to bargain for it quite frankly. the other reason this is important is it's a free market approach to the new economy. let the organization they form, let the workers negotiate the platform and then we're not sitting in a conference room in sacramento trying to figure out every detail of every one of these platforms.

>> most labor groups want these workers to have the right to unionize. are you confident you can get this passed without union help? >> i think eventually we will have union support. they can't organize in a traditional way under the union because they're not employees of the international labor relat n relations act. we have to set up a whole new form just like we have in california for public employees and for farm workers. i think we'll see some of the unions get into business and helping work with these work others to organize themselves and have a representative and collectively bargain. >> you have a long history as a labor leader. when do you expect to introduce this bill? >> hopefully, i'm talking to all the stakeholders and making sure we get this language right. it's a whole new proposal and going into unchartered areas and

have it in a way that's understandable. by the end of the month i think we will actually be submitting the language. >> lorena gonzalez, thank you for your time. >> thank you. >> for your reaction and analysis, we turn to the "wall street journal" douglas mcmillan. thank you. >> thank you for having me. >> you were sitting here. what do you think of her proposal? >> i think it's a great idea. i think we're at the beginning of a big transformation how our work force transmits this new technology and not going to a desk 9:00 to 5:00 and picking up an uber errand here or there to pay their student bills. we're in the beginning of a new economy. it's good to get as many ideas and voices in that transformation as possible and not rush into one solution.

the more voices debated and i a ideas out there, the more likely it is we will end up with a system for classifying workers is peter fbetter for everybody. >> does it go far enough? it covers only those services that offer act-based services and doesn't have provisions as to what rights they actually have. >> i think it's a good start. good to starts broad and open as opposed to prescribing what workers this applies to. >> under california employment law, what are the standards in writing that define who is considered an employee and who is not? >> it's a very complicated question and we probably don't have enough time on this program to get to all of them. some of the things is distinction whether or not somebody has job flexibility, whether they can set their own schedule. whether somebody gets training from a company like uber factors into it.

whether or not they're allowed to work for multiple companies and more specific things like whether or not you're wearing a uniform of that company. >> it sounds like our currently a belling system is very been in nary. you're either an employee with all the protections that come with that or you're not and nothing for those in between sort of where these workers are now. >> the problem is if you're in between you're missing out on health care benefits, unemployment benefits, wage p - protecti protection, there are all these things people signing up to drive for uber or drive for lyft like the flexibility and like the idea of doing this but a lot of them find out down the road, when they have a big house bill probably that wasn't such a good idea because they didn't have that benefit. >> how many people are we talking about here? i heard wide ranging as many as 45 million and nationwide as many as 10% of the population. does that sound about right? >> it sounds about right.

i don't know if there's tens of thousands or hundreds of thousands. hard to tell. people try it once and decide it's not for them. definitely, it's a growing number. as more and more types of services are offered and more apps out there, there will be more people that join this economy because they find out their skills apply to a part-time situation help. >> are there states or other countries doing a good job addressing this issue now? >> i think it's still a pretty global problem. i read france, since 2009, had an auto entrepreneur classification. i think that really a pliey eien you're applying for taxes and labels people who don't have a full time or part-time classification. it has done good things for them and misses some things. i think no country and certainly not the u.s. has come up with a one size fits all solution here.

good to have many different voices in this debate and discussion what is the best way to classify these workers. >> given how fast it's growing, do you feel the discussion is going too slowly? the discussion probably needs to go slowly, but in the meantime, there are probably stopgap solutions where the private sector jumped forward to fill in some of these gaps. there's a start up called peers for example offering services to these independent contractors who make a living off a company like uber will offer a $20 keep driving service. they pay $20 a month. if their car is in the shop for repair, this company will loan them a car to go out and continue driving. there are private sector solutions and potentially big start-up opportunities for servicing these type of workers,

even if there isn't a government solution or government safety net at this point. >> is a government solution really needed? is it necessary? you have some companies moving on to reclassify their workers as employees. chip has done it, instacard has done it. >> it remains to be seen. there needs to be a support system for these workers. interesting to hear councilman gonzalez stepping forward with support. the lobbying ability of these big companies, often what we hear in this debate is the big company's side of the table. to hear proposals from councilwoman gonzalez and others is wonderful and we have seen unionization and seattle in the past couple of weeks passed the measure to allow ride sharing drirchs seattle to unionize.

we'll see if these workers in seattle can unionize on their own and stick up for themselves and have their own wage protection. >> how are the companies responding to proposals like that and upcoming proposal by someone like gonzalez. >> i'm not sure. they called it illegal. they're pennsylvaniapennsylvani opposing to unionize. we're looking at this class action lawsuit in california and will take time and that will have a big bearing whether these people are employees or contr t contractors or something else. >> it has been expended so quite a few people. >> yes. it cuddle have a big impact on other people and other industries. >> great. we'll have you back again. >> thank you. i'd love to come back. >> that does it for tonight. thanks for watching.

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