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Sacramento Bee
Apr 02, 2004 - 01:00 AM

by Margaret Talev, Bee Capitol Bureau

Governor's pitches take hit

Schwarzenegger says he's selling state; critics say he's promoting big donors
VACAVILLE -- When biotechnology giant Genentech broke ground Thursday to expand its manufacturing operations in Northern California, it got a public relations boost most companies only dream of: a personal appearance by celebrity Gov. Arnold Schwarzenegger.

"This is a huge win for our state," the beaming governor told a sea of news cameras. Then he trudged across the windy construction site, picked up a shovel and turned the dirt alongside company executives.

Schwarzenegger says he's fulfilling his promise to promote California business at a time when the high costs of workers' compensation, land, salaries, taxes and permitting restrictions are tempting companies to leave for cheaper pastures.

Campaign finance watchdogs see another pattern at work. They say he's making his marketing power available to a select set: his campaign contributors.

This was at least the third time since taking office in November that Schwarzenegger has gone to a major donor's place of business to promote it while talking about economic recovery. Genentech has donated at least $41,200 to Schwarzenegger committees.

"How many groundbreakings were there in California today?" said Doug Heller of the Foundation for Taxpayer and Consumer Rights. "Schwarzenegger showed up at his donor's.

"I don't begrudge him for encouraging businesses to stay in California. But he looks more like a pitchman for his donors."

Schwarzenegger spokesman Vince Sollitto rejected that criticism as "just nonsense."

He said the governor has staged other speeches about workers' compensation reform and a bond campaign at companies that have not contributed to his campaign, including one in Torrance and another in Fresno.

"Californians know that this governor can't be bought," Sollitto said. "When the governor is looking for a place to highlight and showcase and message, he looks for the right venue for that message."

Some donors have benefited in the process.

His first week in office, Schwarzenegger celebrated his rollback of vehicle license fees by staging an event at Galpin Ford in the San Fernando Valley, where he urged Californians to buy cars. The family that owns the dealership has donated more than $50,000 to Schwarzenegger committees.

Last month, the GOP governor helped break ground for the future Dole Wellness Center, Spa and Hotel in Westlake Village. A former bodybuilding champion who urges children and adults to exercise and eat healthy food, Schwarzenegger praised the resort concept for its positive message as well its potential to create jobs and tourism.

The project is the brainchild of Dole Food Co. CEO and real estate magnate David Murdock, a major Republican contributor who has given at least $350,000 to Schwarzenegger committees.

Schwarzenegger isn't the first politician to highlight his donors' businesses. His predecessor, Gray Davis, was criticized for similar moves, including his participation last year in a casino groundbreaking for an Indian tribe that had donated at least $100,000 to his campaign.

Genentech contributes generously to politicians from both major parties. It has given thousands of dollars to Democrats, including state Controller Steve Westly, Treasurer Phil Angelides and Davis.

The South San Francisco-based company is a big employer with the sort of environmentally clean, high-paying jobs that governors across the country want to attract. About 4,500 of its 6,000 employees are based in California, said Susan Hellmann, Genentech's president of product development. The Vacaville site now employs 550. The $600 million expansion could mean short-term work for 5,600 people. The project is to be completed in 2009, adding 575 permanent jobs.

When Genentech decided to expand, it seriously considered doing so in another state, Hellmann said.

Schwarzenegger said he telephoned CEO Art Levinson and implored him to expand locally. "I said to him, 'Give me time and you will see that we are getting California back on track.' "

Hellmann said Schwarzenegger's involvement helped, but that the firm likely would not have expanded in Vacaville if not for its existing facility and the fact it already owned the land and held permits.

"California is simply not competitive in major economic development decisions," she said.

The company donated to Schwarzenegger, Hellmann said, because "we're supporting California having an environment where businesses like Genentech will want to stay."

Heller said he understands Schwarzenegger's desire to reward big businesses that choose California but said Schwarzenegger's promise not to engage in special-interest politics means he must be held to a higher standard.

"It's not like consumers are suddenly going to line up at Genentech's doors and say, 'Ooh, what can we buy from you?' " Heller said.

"But a corporation always looks to build its brand, either with consumers or shareholders. The governor keeps renting himself out for these events and he's straddling the line between governing and hawking a product."
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The Bee's Margaret Talev can be reached at (916) 326-5540 or mtalev@sacbee.com




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