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Sacramento Bee
Jan 23, 2005 - 01:00 AM

by Andy Furillo -- Bee Capitol Bureau

Battle of the boards heats up;

Foes say governor's plan to cut state panels favors business donors.
Gov. Arnold Schwarzenegger wants to get rid of the Commission on Health and Safety and Workers Compensation.

It's an agency credited by both labor and management with providing solid analysis of issues arising in the state's contentious workers' comp wars. But activists say it also ran afoul last year of a big Schwarzenegger contributor - the pharmaceutical industry - when it put out a report recommending the system bring its prescription drug costs in line with Medi-Cal payouts.

Schwarzenegger, meanwhile, wants to keep the New Motor Vehicle Board, despite the fact that his own California Performance Review Commission recommended it be axed.

The board, on which car dealers are heavily represented, has been criticized by consumer advocates as favoring the interests of the dealers. But the California Motor Car Dealers Association argued to keep the board up and running, and the governor, who has accepted more than $1 million in campaign contributions from car dealers over the past year and half, gave the panel a pass.

In the battle taking shape over the administration's plan to eliminate 88 state boards and commissions, consumer rights activists, labor leaders and others accuse the Republican governor of doing favors for business interests who are major campaign contributors by proposing to kill off some boards while keeping others.

Art Pulaski, executive secretary-treasurer of the California Labor Federation, said the shakeout among the boards and commissions suggests to him that Schwarzenegger "is becoming the biggest corporate-interest, special-interest governor in the state's history."

"He's surrounded himself with big business interests, and he is basically implementing their programs," Pulaski said. "That is not a good balance for California."

Gubernatorial spokeswoman Ashley Snee disputed the notion of the governor working as a front man for an alleged corporate agenda. She said the functions of the boards and commissions proposed for elimination will continue within various executive-level agencies and that they were evaluated solely on the basis of whether they are performing on behalf of the populations they were designed to serve.

"The governor is following the people's agenda, the people who sent him to Sacramento to reform government and make it more responsive," Snee said.

Bill Hauck, president of the California Business Roundtable and co-chair of the California Performance Review Commission, said politics already infuses the workings of the boards. He said it will continue to play a role in the decision-making process regardless of whether the commissions remain intact or their functions are rolled into the governor's agencies, as proposed by the commission.

Hauck said reorganization is vital to smoothing out California's regulatory environment and improving the business climate.

"We're talking about the regulatory side of government with the boards and commissions," Hauck said. "California has the most complex regulatory process in the United States ... and it can be improved without abrogating any environmental law or existing protections for Californians."

Eliminating the boards and commissions represents Schwarzen egger's first thrust into the government reorganization business. A report that accompanied the recommended cuts Jan. 6 said the boards on the hit list "do little to advance the interests of the people of California" and that getting rid of them "will improve the productivity of state government."

The first vetting of the administration's government reorganization plan is scheduled for Wednesday with the Little Hoover Commission at a site yet to be determined. The commission will make recommendations to the Legislature next month, before lawmakers vote the total package up or down - no picking and choosing which boards to keep or kill.

Even the most ardent critics of the governor's plan concede that a good many of the boards and commissions are far from perfect, that some of their appointees got their sinecures strictly as a result of political patronage, that some of them are irrelevant or inefficient or are geared more toward promoting industries or activities than regulating them.

But some of the activists, such as Richard Holober, executive director of the Consumer Federation of California, say there does not appear to be much rhyme or reason to which boards got whacked and which commissions received a pass from the governor.

"He clearly has an imperial sense of his governorship," Holober said.

Schwarzenegger also included the medical and dental boards on the target list, which drew protest from two of the governor's fellow Republican officeholders, state Sen. Sam Aanestad of Grass Valley, who is a dentist by profession, and Assemblyman Keith Richman of Northridge, who is a doctor. Neither said he was consulted by the administration.

"I have some concerns about that," Richman said of the medical board cut. "I think it's very important for boards to have members of the profession so there can be adequate and appropriate peer review."

In the end, members of the California Performance Review Commission recommended 132 boards and commissions for elimination. Schwarzenegger took them up on 88. Left off the list were agencies such as the New Motor Vehicle Board. Kept on were others like the workers' comp commission, known to insiders by the pronunciation of its acronym ("cheesewick," for CHSWC).

Power politics, some of the advocates suspect, played a key role in the governor's decision-making process.

Jill Dulich is a senior director of Marriott International and a former employers' representative on the workers' comp commission. She characterized the pharmaceutical industry, which has contributed more than $367,000 to Schwarzenegger, as being "very unhappy" over the recommendations in the prescription drug report.

Dulich said the state would be making a mistake if it gets rid of the workers' comp commission.

"It's the only organization in (state government) that does independent research and uses organizations from outside the state to get documentation," Dulich said. "It was one of the most crucial components to last year's reforms."

She said the elimination of the commission signals that "special interests are going to take over the system again."

Rick Rice, promoted Friday to undersecretary of the governor's Labor and Workforce Development Agency, said the commission's main function of preparing and overseeing reports on workers' comp can easily be contracted out.

"Anybody can do that," Rice said.

But the administration has decided to keep the New Motor Vehicle Board, which hears appeals on rulings by the director of the Department of Motor Vehicles and can restrict new dealerships from opening for business within 10 miles of existing ones.

"They feel their primary mission is to protect car dealers and not the public," said Rosemary Shahan, president of the Davis-based Consumers for Auto Reliability and Safety.

The board's survival in the face of the effort to do away with it "shows the car dealers are special interests who have tremendous influence over this governor," Shahan said.

Peter Welch, president of the California Motor Car Dealers Association, said the board is needed to resolve disputes between car dealers and manufacturers. He said he found it "curious" that none of the board's critics who are airing their concerns now spoke up at the CPR's public hearing in September.

Even though the dealers have given substantial sums to Schwarzenegger, Welch said the association never attempted to intervene during the CPR process.

"We did not talk to the governor on this issue," Welch said. "We went through the process just like everyone else did."
About the writer:
The Bee's Andy Furillo can be reached at (916) 321-1141 or

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