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Orange County Business Journal
Aug 08, 2005 - 01:00 AM

by Pat Maio

SUPPORT BASE: OC's Money, Moderation Bankrolls Schwarzenegger

Orange County's wealth, coupled with the emergence of moderate politics here, has turned the county into a piggybank for Gov. Arnold Schwarzenegger.

By one estimate, roughly a quarter of the more than $40 million Schwarzenegger has raised in California since 2003 has come from the county. Wealthy executives from OC make up half of the governor's top 10 donors.

"Arnold has moved the decimal point one-if not two columns-on giving here," said Tracy Price, a member of the Republican Lincoln Club of Orange County who just stepped down as president. "It's like nothing anyone has ever seen."

The money Schwarzenegger has raised here prompted Mark Petracca, a political science professor at the University of California, Irvine, to dub OC as the governor's "hog bank, not piggybank."

The governor is the beneficiary of a shift that's played out here in the past decade. OC executives have made it their mission to set aside rigid ideology and back moderate Republicans as their best hope in a state where Democrats dominate.

In the past two years, Schwarzenegger has come here for fund-raisers at the Newport Beach home of writer Dean Koontz, the Coto de Caza home of Emulex Corp.'s Paul Folino, Hadi and Paul Makarechian's St. Regis Monarch Beach Resort & Spa, Shady Canyon Golf Club and a barn burner at the Hyatt Regency in Irvine, which raised $3.2 million.

Just how much the county's movers and shakers have given to the governor isn't entirely clear. Unknown is what percentage of donations to local and state Republican Party groups has been put to work for Schwarzenegger.

Still, giving by executives here to Schwarzenegger-for his gubernatorial campaign, inaugural, ballot measures and committees that back his reform efforts-is immense:

* Roland Arnall, chairman and owner of Orange-based mortgage lender Ameriquest Capital Corp., has given $1.5 million to the governor and his causes. Arnall has given another $1 million to the Republican Party at the county and state levels.
* Folino, chief executive of networking adapter maker Emulex, has given about $500,000 to the governor and his causes. That doesn't include $117,724 Folino gave a few years back to support Proposition 49, the 2002 after-school initiative where Schwarzenegger took his first steps as a politician. Folino serves on the governor's job-creation commission and last month became chairman of the New Majority, a moderate GOP group that's a big Schwarzenegger backer.
* William Lyon, chief executive of Newport Beach homebuilder William Lyon Homes Inc., and "affiliated entities" have given about $466,000 to Schwarzenegger. This doesn't count another $950,000 Lyon has given to the state's Republican Party and $25,000 to the New Majority.
* The Irvine Company's Donald Bren has given $155,000 to Schwarzenegger. Another $471,000 was given to the Republican Party at the state and county levels. The Irvine Co. itself and employees have given more than $200,000 to the governor. Folino, wife Daranne with Schwarzenegger in background: OC accounts for an estimated 25% of state giving to governor.
* Henry Samueli, cofounder, chairman and chief technical officer of Irvine-based Broadcom Corp., supported Schwarzenegger with $170,000.

The list of contributors here is endless. It includes Bob McKnight of Quiksilver Inc., Hadi Makarechian of Capital Pacific Holdings Inc., Larry Dodge's American Sterling Corp., auto dealer David Wilson and real estate developer and South Coast Plaza owner Henry Segerstrom.

The jury still is out on whether Henry Nicholas, Broadcom's other cofounder and former chief executive, will ante up for Schwarzenegger and his initiatives in the November election-or even a possible Schwarzenegger re-election bid in 2006.

Nicholas last year gave $3.3 million to help defeat Proposition 66, which would have weakened California's three-strikes law. The money went toward TV ads featuring the governor speaking out against the initiative.

The donation tally could have gone as high as $4 million, if out-of-pocket expenses for filming ads and other things were included, Nicholas said.

For now, Nicholas said he's mulling over the prospect of directly supporting Schwarzenegger.

"I guess I'd say I'm endorsing him if I were to vote today," he said. "When I support something financially, it's something I strongly, strongly believe in and get very actively involved with. Of all of the candidates I've seen, if I were to support one, it'd be Schwarzenegger."

Whether OC is the top giver to the governor is unclear-though the county surely ranks near the top, said Carmen Balber, a spokeswoman with the Santa Monica-based Foundation for Taxpayer and Consumer Rights, which tracks giving to the governor.

In all, Schwarzenegger has raised nearly $50 million in the past two years, including about $9 million from donors outside the state.

The governor has groomed givers here for a long time.

Schwarzenegger has worked OC as far back as 1998, when he helped Mary Bono raise money to run in Riverside County's congressional seat once held by her late husband Sonny Bono, according to the Lincoln Club's Price.

Schwarzenegger lined up Mary Bono's meeting with OC businessman and former ambassador to Spain, George Argyros, according to Price. At the cocktail party, Schwarzenegger joked about being married to a Kennedy, Price said.

"Arnold said, 'Many people must think it's difficult being married to a Kennedy,'" Price recalled. "He then joked that it wasn't until he started sleeping in the garage." "His self-deprecating humor endeared him to many people," Price said. "That was my first exposure to him."

Schwarzenegger helped line up $30,000 for Bono, whose husband had visited OC on the contribution trail.

Now the Schwarzenegger cash machine is gearing up for the November special election, in which voters are set to weigh in on his teacher tenure and budget reform measures.

Fund raising is even more critical this time around, with polls showing slumping support for the governor and the special election.

A third measure on redistricting is set for the ballot but faces a court challenge. Schwarzenegger hasn't yet taken a stance on other measures, including the so-called paycheck protection initiative and a measure to re-regulate the state's electricity markets.

The governor has held a few fund-raisers this year in a bid to drum up $50 million. Those include a dinner last month at Koontz's in Newport.

The event raised close to $1 million, including $200,000 from the New Majority. The New Majority is a big part of why OC is such a huge money source for Schwarzenegger. In many ways, the governor is the group's dream candidate: a fiscal conservative, moderate on social issues and with strong name recognition.

After Schwarzenegger said in 2003 he planned to run on "The Tonight Show With Jay Leno," one of his first calls was to New Majority members dining at the Pacific Club in Newport Beach. Within a week, the New Majority was the first group to endorse Schwarzenegger.

Schwarzenegger's rise coincides with the emergence of moderate politics here, ushered in by the likes of technology executive Folino, who's found allies in Bren, Lyon, Argyros and other longtime GOP political donors here.

Schwarzenegger's reception by the New Majority stands in contrast to the cold shoulder the movie star got from Thomas Fuentes, who served 20 years as chairman of the Republican Party of Orange County until Scott Baugh replaced him last year. Fuentes, who clashed with the New Majority a few years back, now is a senior fellow with the conservative Claremont Institute for the Study of Statesmanship and Political Philosophy.

He's still critical of the New Majority and Schwarzenegger: "Just because any rich man is a check writer, that certainly does not mean that he assumes a position of leadership in the party. Political leadership and stature have to be earned. Remember, politics is the realm of people, not just money."

Much of the tension between the New Majority and conservatives has been smoothed over, with credit given to Baugh.

The New Majority is "a successful political PAC that has the respect of virtually everyone and has equal standing within the county, particularly with the Lincoln Club with its conservatives," said Adam D. Probolsky, president of political consultant and pollster Probolsky Research in Laguna Hills.

"Successful people write checks. People in politics will sniff out wealth. Arnold is a great example," Probolsky said. "You have to court Orange County to be successful in statewide politics."




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