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Associated Press
Mar 11, 2004 - 01:00 AM

by MICHAEL R. BLOOD, Associated Press Writer

Schwarzenegger names donors, supporters to Calif jobs panel

LONG BEACH, Calif. -- Gov. Arnold Schwarzenegger said Thursday he will turn to a privately funded commission studded with corporate chief executives and political supporters to advise him on how to create jobs, streamline business regulation and market state products.

The commission, headed by investor F. Warren Hellman and Rand Corp. Chairman Ron Olson, will have a pipeline to the governor to offer suggestions on issues from foreign trade to unemployment insurance to environmental regulation. Schwarzenegger, who's contending with a budget crisis and costly workers' compensation system, said the group will help him "make this state boom again."

Despite the commission's high-profile standing, it was left largely unclear how the private group will be organized, staffed and financed. One official said it would probably hold a mix of private and public meetings, although that has yet to be determined.

Some of its two dozen members have political or financial ties to the Republican governor that some critics said could create possible conflicts of interest.

Its members include Gap Inc. Chairman Donald Fisher, a major Schwarzenegger donor; David Booth, a Santa Monica money manager with long-standing ties to Schwarzenegger; Emulex Chairman Paul Folino, one of the governor's longtime patrons; Paul Wachter, Schwarzenegger's longtime financial adviser; and Barbara Grimm-Marshall of carrot grower Grimmway Farms, the top donor behind an effort to place a workers' compensation reform initiative on the November ballot, which mirrors a Schwarzenegger proposal from earlier this year.

The commission "creates a huge potential for conflicts of interest across the board," said Carmen Balber of the Foundation for Taxpayer and Consumer Rights, a consumer advocacy group, comparing it to the controversial industry group that advised Vice President Dick Cheney on energy issues.

"With the litany of corporate CEOs who are also Schwarzenegger donors running this private organization, it's clear their advice to the governor ... will be geared to the business interests they represent," she said.

Robert Stern, president of the Center for Governmental Studies, a nonpartisan group that monitors ethics and campaign finance, questioned why the governor didn't create a state commission subject to disclosure rules.

"This commission can meet in private, a state commission cannot meet in private," Stern said. "It's fairly normal for governors to appoint contributors because that's what they expect for their money. ... If the governor is relying on it, you want the public to be in on what the commission is doing."

Asked why the governor established a private rather than government-run entity to advise him on major economic issues, Schwarzenegger spokesman Robert Stutzman cited the state's tight budget and added, "The governor believes in a private-public partnership when it comes to job creation."

"The governor meets privately with individuals on a daily basis," Stutzman said. "It was concluded the best way to do this is with an outside organization."

Stutzman emphasized the panel included members of both parties and noted that Hellman, a co-chair, contributed money against the recall effort that put Schwarzenegger in office.

Asked about ongoing talks to reach a workers' compensation deal, Schwarzenegger said he was confident a compromise could be reached but that signatures were being collected to place an initiative on the ballot, if necessary.

"What has to be in there is cost reduction," he said, suggesting a plan could work with 25 percent to 30 percent savings.

"The bottom line ... is approximately $11 billion, but of course the numbers also have changed because the insurance business came out and said, 'Wait a minute, the total cost is less.' ... There are all kinds of debates over what the real costs are."

Members of the group, formally the California Commission for Jobs and Economic Growth, have yet to meet. They were chosen by its co-chairmen, in consultation with the governor, and also include representatives from finance, health care, entertainment and technology sectors and a union official.

The group's acting executive director, Mark Mosher, said it was expected that the group would be funded by its members, although he did not rule out fund-raising beyond those companies.




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