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How Much From Special Interests?

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Los Angeles Times
Aug 30, 2004 - 01:00 AM

by Peter Nicholas, Times Staff Writer

Governor Is Sprinting for Donations;

Schwarzenegger is on pace to raise about $9million to fight two gambling initiatives on the Nov. 2 ballot and to promote his agenda.
SACRAMENTO -- Gov. Arnold Schwarzenegger, who once ridiculed politicians in the Capitol for taking "dirty money" and proclaimed that he didn't need to take "any money from anyone," is immersed in what could prove to be the most aggressive fundraising sprint by a California governor.

Schwarzenegger hopes that by the time the Nov. 2 election rolls around, he'll have raised about $818,000 a week during the preceding 11 weeks, according to aides. He wants to take in about $9 million in that period. Schwarzenegger's plan, aides said, is to use the money he raises to fight two initiatives on the November ballot that could undermine the gambling agreements he has signed with 10 Indian tribes.

Former Gov. Gray Davis, widely scorned for his own record-breaking fundraising, netted an average $679,000 a week during his unsuccessful campaign to defeat his recall.

Schwarzenegger aides say he won't attend any fundraising events in September, a month when he is to consider hundreds of bills that will cross his desk. But his team will be soliciting money as the governor decides to sign or veto legislation.

"We are beginning to raise money in earnest," said Martin Wilson, a senior political advisor to the governor.

Even before the current fundraising blitz began three weeks ago, Schwarzenegger had taken in about $13 million this year.

"There is no doubt that Schwarzenegger has violated the fundamental principle of his campaign: that he would keep the special interests out of his government," said Douglas Heller, executive director of the Santa Monica-based Foundation for Taxpayer and Consumer Rights.

A distinction that Schwarzenegger makes is that the money is going not to advance narrow campaign purposes, but to fight for a broader policy agenda.

"Clearly, the largest percentage of funds that we have raised have gone into initiative campaigns to support the governor's reform agenda," Wilson said. He added: "There's no connection between any policy position the governor takes and the money we solicit."

On Aug. 23, one of the governor's political committees took in $100,000 from ChevronTexaco Corp., whose chairman, David O'Reilly, held a fundraising cocktail party the week before at his Bay Area home.

Disclosure forms required by the state show that in the quarter ending June 30, ChevronTexaco lobbied the state's Air Resources Board and the Energy Commission -- both made up of gubernatorial appointees. The company lobbied the governor's office and the Legislature on 28 pieces of legislation.

As the legislative session wound down, ChevronTexaco and other petroleum companies worked to defeat a bill by Assemblywoman Christine Kehoe (D-San Diego) that proponents said would have cut gasoline consumption by 1% a year by 2020 through increased fuel efficiency, improved vehicle maintenance and high-tech tires. The bill died in the Senate on Tuesday.

ChevronTexaco's donation is "a lot of money to be contributing and receiving when matters are being decided," said V. John White, an environmental lobbyist, "though we trust and hope the governor will be listening to many, many voices."

K.C. Bishop, a lobbyist for ChevronTexaco, said his client's donation reflects satisfaction with the job Schwarzenegger is doing as governor.

"Like most Californians," Bishop said, "I think our management team has been happy that Gov. Schwarzenegger seems to be trying to address the needs of having an economy in California, and focusing on the issues that all of us care about -- business and the environmental community."

The governor held a fundraiser at a restaurant in Roseville, north of Sacramento, on Tuesday, and staged another the following day at a private home in Fresno. Combined, the two events were expected to take in $600,000.

Schwarzenegger raised about $900,000 at two other fundraisers this month: the Bay Area event and one in Napa Valley.

The last time he collected such sums was in the winter, when he campaigned to pass a $15-billion state borrowing plan and a balanced-budget initiative. Voters approved both in March.

This time, the two gambling initiatives Schwarzenegger opposes are backed by Indian tribes, racetracks and card clubs, and other interests that are expected to spend tens of millions of dollars on behalf of the ballot measures.

Proposition 68 could allow slot machines at card clubs and racetracks, ending the tribes' monopoly on Las Vegas-style gambling in California. Proposition 70 would permit casinos of unlimited size on tribal land.

A major thrust of Schwarzenegger's governorship is his stated view that the Capitol needs to curb the power of special interests.

At an appearance last month at a Cheesecake Factory restaurant in San Diego, he mocked hecklers in the crowd by chanting, "Boo to the special interests." When he announced his campaign for governor on "The Tonight Show With Jay Leno" a year ago, he said that he didn't need special-interest money.

Though the governor has declined money from certain sources -- public employee unions, for example -- he has accepted donations from his own political appointees, from corporations regulated by his appointees, from firms that went on to receive contracts from his administration and from companies that stood to benefit from actions taken by his government.

"Clearly, most of the money that is given to Schwarzenegger -- as it was to Davis -- is trying to influence or have access to him as governor," said Bob Stern, of the Center for Governmental Studies in Los Angeles. "He's now learned -- as a nouveau politician -- that if you want to raise money, you raise money from the special interests."

In March, Schwarzenegger got a $25,000 contribution from a Virginia firm, American Management Systems. The company, which has merged with a Montreal company called CGI Group, won a state contract in June to reduce the sum California spends on its vast purchases. A spokeswoman for the company said the contribution was designed to help pass the $15-billion bond measure last spring.

"We didn't see it as a campaign contribution. CGI-AMS doesn't do campaign contributions," said Heidi Green, a CGI-AMS vice president. "This was a contribution that was made toward the bond effort and for the state of California."

This year, Schwarzenegger has accepted $186,000 in contributions from drug companies -- including a $100,000 donation from Pfizer Inc. in February.

A Pfizer spokesman said the company gave the money because it wanted the $15-billion ballot measure to succeed. Had it failed, the state might have been required to cut healthcare spending, which could have meant, "ultimately, people not having access to Pfizer medicine," said Jack Cox, the company spokesman.

Pfizer and other drug makers were pushing to defeat legislation that could encourage prescription drug imports from Canada. Lawmakers last week passed legislation that sets up government Internet links to low-cost drug sites in Canada and allows bulk purchases of prescription drugs for government health programs. It is now up to Schwarzenegger to sign or veto the measures.

Pfizer also has contributed to a fund set up by the California Chamber of Commerce to raise up to $350,000 to stage three events at the Republican National Convention in New York this week. The money is coming from 20 companies and interest groups, and is being raised partly by Wilson.

About half the money has come in; the rest is expected next week, Wilson said.

About $100,000 of the sum will go toward the convention expenses of several people, including Wilson and Carl Bendix -- a friend of the governor's wife, Maria Shriver, who is helping stage the chamber events and who has assisted Schwarzenegger with various projects.

Schwarzenegger's convention expenses will be paid by the California Republican Party, according to the governor's press office.
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Among the other donors to the committee:

* The California Chamber of Commerce, which is lobbying the governor's office to veto a bill that would boost the minimum wage by $1 over two years.

* The Recording Industry Assn. of America, which reported that it had lobbied Schwarzenegger's office on two bills, including one meant to curb piracy of music and videos.




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