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Associated Press
Sep 10, 2004 - 01:00 AM

by STEVE LAWRENCE, Associated Press

Schwarzenegger sides with business groups on two November props

SACRAMENTO - Angering environmentalists and consumer groups, Gov. Arnold Schwarzenegger sided Friday with his business allies and announced his support for Proposition 64 and his opposition to Proposition 72.

Meanwhile, state Insurance Commissioner John Garamendi endorsed Proposition 72, calling it "an important step" toward providing health insurance for all Californians.

Proposition 64 would limit use of the state's Unfair Competition Law to sue businesses for practices that would allegedly give them an unfair advantage over their competitors or defraud consumers.

Supporters, which include a long list of major corporations, say it would prevent law firms from filing "shakedown lawsuits" to get settlement money from businesses for minor violations.

But opponents say it would cripple efforts by public-interest groups to enforce environmental and consumer protection requirements.

Proposition 72 would implement a new law requiring employers with at least 50 workers to help pay for health insurance for their employees. It was approved by lawmakers last year and signed by then-Gov. Gray Davis, but employers collected enough voter signatures to force a referendum on the measure.

Schwarzenegger contended that passing Proposition 64 and defeating Proposition 72 would help keep the state's economy "on the rebound."

He said Proposition 64 would stop "bounty hunter" lawyers from "stalking innocent small businesses that create jobs and opportunity in California."

He said Proposition 72's attempt to reduce the number of Californians without health insurance was a "positive goal."

"However, we must find a better way than doing so at the cost of putting employers out of business," he said. "Well-intentioned as it may be, Proposition 72 will only reverse California's recovery and trigger an exodus of jobs from the state."

But Senate President Pro Tem John Burton, the main author of Proposition 72, said Schwarzenegger had chosen to "be a girlie man for the Chamber of Commerce and Wal-Mart as opposed to being a he-man fighting for health insurance for the working men and women of California."

"He's siding with the worst elements of big business - the Wal-Marts of the world - against people who work 40 hours a week for a living at almost poverty wages and have no health insurance," said Burton, D-San Francisco.

"When they don't have health insurance it's the taxpayers of the state California and various counties that have to pay for it because people end up going to emergency rooms and trauma centers."

Bill Magavern, a lobbyist for the Sierra Club, said Schwarzenegger's support for Proposition 64 broke two promises.

"He promised strict environmental enforcement and Proposition 64 drastically limits environmental enforcement, and he pledged to seek a legislative solution to enforcing the Unfair Competition Law. He never lifted a finger."

Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, a Santa Monica-based consumer group, said Schwarzenegger should announce his own plan to expand health insurance coverage and give back $2.4 million in campaign donations he's received from supporters of Proposition 64.

But Allan Zaremberg, president of the California Chamber of Commerce, praised Schwarzenegger's decisions, saying they would "reinforce the message to employers around the country and around the world that jobs and businesses are wanted back in our state."

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