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Associated Press
Jul 21, 2005 - 01:00 AM

by TOM CHORNEAU, Associated Press Writer

Despite controversies, Governor's fund-raising team carries on

SACRAMENTO, CA -- Gov. Arnold Schwarzenegger may be slumping in the polls and beset by conflict-of-interest charges, but the governor's fund-raising team continues to bring in sizable donations, including a $1 million contribution this month.

Schwarzenegger said in January that he would need to raise at least $50 million to support his ballot initiatives in the upcoming Nov. 8 special election. The governor's top money manager said Wednesday the team is more than halfway to that goal.

"We are on track with what we said publicly we would do," said Marty Wilson, a senior Schwarzenegger campaign consultant who oversees fund-raising.

"We've spent a considerable sum already between drafting the initiatives and getting them qualified for the ballot," he said. "But we have an aggressive fund-raising program that we are currently engaged."

The governor has qualified three initiatives for the ballot to impose new state spending controls, change how legislative districts are drawn and lengthen the probationary period for public school teachers before they are granted tenure.

Also on the ballot are measures that would require minors seeking an abortion to get parental permission; re-regulate the state's electricity market; lower prescription drug costs; and force unions to get written consent from their members before using dues for political purposes.

Voter disapproval over the call for a special election surrounding the election has driven Schwarzenegger's popularity down in the polls to the lowest level since taking office. A June Field Poll showed his job approval rating at 37 percent. Last week's disclosure that the governor had a multimillion dollar consultant contract with a fitness magazine with interests before the Legislature sparked new controversy. Democrats filed with the state's political watchdog agency that Schwarzenegger has violated conflict of interest rules.

Almost daily, however, the governor files campaign contribution reports indicating he remains popular among core Republicans and business groups.

The largest of the contributions so far in July was $1 million given to Schwarzenegger's California Recovery Team by B. Wayne Hughes, chairman of Glendale-based Public Storage Inc., which owns 1,400 storage facilities in 37 states. Hughes is a major GOP donor, having contributed more than $600,000 to Republican political organizations in 2004.

Yahoo Inc. executive Terry Semel, who co-hosted a fund-raising event for the governor in June, contributed $100,000.

Meanwhile, watchdog groups are raising new questions about Schwarzenegger renting office space to his political committees in a Santa Monica building that is owned by a holding company he controls.

Records show that three of the governor's political committees have paid over $160,000 to Main Street Plaza, the Schwarzenegger holding company, to lease space in a three-story building since 2002.

Margita Thompson, spokeswoman for the governor, said the governor's attorneys sought guidance from the state's Fair Political Practices Commission before making the arrangement and there is no conflict-of-interest violation.

"Everything is appropriate," she said. "They proactively sought out the FPPC advice letter."

Some activist groups, however, note that state law prohibits elected officials from using campaign funds to pay rent on property they own. They argue the governor is taking advantage of a loophole that allows him to collect the rent because the building is owned by the holding company and not him personally.

"If this is not a violation of the law - which it might be - it's certainly a violation of the spirit of the law," said Carmen Balber, from the nonprofit Foundation for Taxpayer and Consumer Rights. "The governor is fund-raising for his political committees and then pocketing some of that cash. That's not right."
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On the Net:
Secretary of State's office: http://www.ss.ca.gov/




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