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How Much From Special Interests?

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San Jose Mercury News (California)
Feb 05, 2004 - 01:00 AM

by Dion Nissenbaum; Mercury News Sacramento Bureau

Big donations sparking calls for state reform;

GOVERNOR'S POLITICAL COMMITTEES RAISING LARGE, UNREGULATED SUMS
SACRAMENTO -- Gov. Arnold Schwarzenegger, who campaigned against the corrupting role of special interest money in politics, is now raising donations for his political causes at a record clip.

In the four months since the recall election forced Democratic Gov. Gray Davis from office, Schwarzenegger has collected at least $6.4 million for his political committees, more than the $6.3 million his prodigious fundraising predecessor raised during his first six months in office.

Although state laws place a strict limit on how much Schwarzenegger can collect for his own campaign, nothing prevents the Republican governor from taking unlimited contributions to the political committees he has set up to promote his ballot measures.

And that has sparked new calls from political reformers who want to see California follow federal law and crack down on such donations.

''You have exactly the same dangers of corruption or the appearance of corruption when you have officeholders raising large, unregulated sums for any kind of political purpose,'' said Don Simon, an attorney with Common Cause who is among those calling for new state restrictions.

Schwarzenegger launched his bid for governor by attacking California's politicians who did the bidding of their donors. He promised on the campaign trail not to take special interest money, which he defined as public employee unions, single-issue advocacy groups and American Indian tribes with California casinos. The pitch resonated with state voters disillusioned by the professional fundraising operation that Davis created.

As his campaign gathered steam, the wealthy Hollywood actor began to collect money from insurance companies, business moguls and real estate developers -- groups often viewed as special interests with huge stakes in issues that will come before Schwarzenegger.

Six-figure donations

Now many of those same interests are bankrolling his ballot measures.

Much of that money is going into Schwarzenegger's California Recovery Team, a committee run by the governor's political aides charged with using initiatives to push his agenda at the ballot box.

While individual donors can give no more than $21,200 to the governor's own campaign committee, they can -- and are -- writing much bigger checks to the California Recovery Team.

In the past month, the committee has collected $2.2 million, including six-figure donations from Univision head Jerry Perenchio and Zenith Insurance, one of several donors who have an interest in the governor's call for a major overhaul of the state workers' compensation system.

Later this month, Schwarzenegger is heading to a New York City fundraiser where donors are being asked -- if they can -- to donate $500,000 each.

''He's completely blown a hole in any moral credibility he had by coming into Sacramento and raising this kind of money,'' said Doug Heller, senior consumer advocate for the Foundation for Taxpayer and Consumer Rights.

Marty Wilson, the governor's chief fundraising strategist, said the half-million dollar figure is a suggested donation for supporters who want to become co-chairs of the campaigns to pass Propositions 57 and 58, Schwarzenegger's companion measures that would allow California to sell $15 billion in bonds and impose new limits on state spending.

"We're not really expecting any half million-dollar donations, but if someone wants to give us one we'd look at it pretty seriously,'' Wilson said.

Calls for reform

Schwarzenegger's bold fundraising pitch has sparked calls for new campaign-finance reforms that would mirror federal restrictions recently upheld by the U.S. Supreme Court.

Under the law, known as McCain-Feingold, federal candidates are barred from asking donors for more than $5,000 for any committees they set up to promote ballot measures or other political causes.

The goal, said Larry Noble, executive director of the Center for Responsive Politics in Washington, D.C., is to prevent politicians from circumventing the intent of campaign-finance regulations by asking donors to give to their pet causes.

''They don't care what account it goes into. They only care that the officeholder is asking for them to give,'' Noble said.

Wilson reacted coolly to the idea. While he said the team would ''look seriously at any well-thought-out proposal,'' he also argued that new limits would only force politicians to spend more time raising money -- not less.

''But if they want to take a proposition like that to the people, that's certainly their right under the California Constitution,'' Wilson said.
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Mercury News database editor Griff Palmer and database manager Jack Davis contributed to this report. Contact Dion Nissenbaum at dnissenbaum@mercurynews.com or (916) 441-4603





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