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San Jose Mercury News (California)
Feb 08, 2004 - 01:00 AM

by Dion Nissenbaum; Mercury News Sacramento Bureau

Group Urges Schwarzenegger to Cancel New York Fund-Raiser

SACRAMENTO -- A consumer group Friday called on Gov. Arnold Schwarzenegger to cancel a New York fundraiser where he is asking donors to contribute a half-million dollars to his main political fund.

The Foundation for Taxpayer and Consumer Rights said the event, hosted by pharmaceutical heir Robert Wood Johnson IV, poses a conflict of interest for Schwarzenegger because California is owed more than $1 billion in rebates from drug companies.

''The public must not perceive that Mr. Johnson's sponsorship of the most expensive fundraiser in the history of the world will have influenced your decision on this budget matter or on other legislation the pharmaceutical industry lobbies in the state,'' wrote Jamie Court, president of the Santa Monica-based group.

Marty Wilson, the governor's chief fundraiser, said there were no plans to cancel the event.

''Every public figure is concerned about the perception of fundraising and so is Gov. Schwarzenegger,'' he said. ''But he has an obligation to raise a substantial sum of money to pass two very important ballot measures, and in California it costs a lot of money to educate voters.''

Schwarzenegger is set to make a stop on an East Coast trip to attend the Feb. 24 event at Johnson's Manhattan home. Participants are being asked to donate at least $50,000 to attend the event and $500,000 to become co-chairs of Schwarzenegger's political committee.

While Schwarzenegger vowed not to take money from special-interest groups such as Indian tribes with casinos and from public-employee unions, the governor accepts donations from insurance companies, business leaders and energy companies with big stakes in state policy.

Since winning the recall four months ago, Schwarzenegger has raised at least $7.4 million for his political committees. That surpasses his predecessor, Democratic Gov. Gray Davis, who raised about $6.3 million during his first six months in office.

Court called on Schwarzenegger to cancel the fundraiser to remove any perception that the governor might not aggressively pursue $1.3 billion that federal auditors estimate that pharmaceutical companies owe California for Medi-Cal drug reimbursements.

While Johnson holds no position with his family's famous company, much of his wealth comes from stock he holds in Johnson & Johnson.

Daniel Zingale, Cabinet secretary and head of the Department of Managed Health Care under Davis, said Schwarzenegger should do nothing to jeopardize California's efforts to get the money it deserves from the politically powerful industry. ''The state is at a disadvantage anyway, and you don't want politics or fundraising to create even more obstacles to the state getting what it's due,'' he said.
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Contact Dion Nissenbaum at dnissenbaum@mercurynews. com or (916) 441-4603






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