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How Much From Special Interests?

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Sacramento Bee
Oct 16, 2005 - 01:00 AM

by Gary Delsohn -- Bee Capitol Bureau

Governor's star status pays off;

Appearances lead to campaign giving - and raised eyebrows.
Back in July, with his fundraising appearances in high gear, Gov. Arnold Schwarzenegger took time from his busy schedule and spoke with employees at the Silicon Valley headquarters of Yahoo, the Internet search engine.

Schwarzenegger had agreed to participate in the company's regular in-house speakers' program, and the former movie star was a big draw.

Within days, Schwarzenegger's special election campaign received $100,000 contributions from two top executives, Terry Semel and Jerry Yang.

More recently, Schwarzenegger held one of his campaign "town hall" meetings at Sun Microsystems in Menlo Park. Soon after the Sept. 28 event, a $250,000 campaign contribution came in from Vinod Khosla, one of the company's co-founders.

And Oct. 7, the same day he vetoed a bill regarding insurance benefits that was opposed by executives at Wal-Mart, the giant retailer, his California Recovery Team got a $250,000 contribution from Christy Walton, the widow of former company heir John Walton.

The multimillionaire Republican governor and his aides have said many times he cannot be influenced by campaign contributions. He signs or vetoes bills, makes appointments and appearances and adopts policy, they insist, based on what he believes is best for California.

But as an incumbent governor and major Hollywood celebrity, Schwarzenegger has some built-in fundraising advantages that are helping fatten his campaign accounts - whether he exploits them explicitly or not.

"The governor is raising money from people who want something from him," said Robert Stern, president of the nonpartisan Center for Governmental Studies in Los Angeles.

"Maybe he's not giving it to them, but the perception is there. I'm sure no one in the Governor's Office says, 'We'll sign or veto this bill because of a contribution,' but people give money because they want to have influence. I'm not sure Wal-Mart would have given $250,000 if he signed the bill."

No one at Wal-Mart's public relations office, nor the Sacramento lobbyist who worked on the bill, responded to a phone call seeking comment on the issue. But in a letter last March from Wal-Mart lobbyist Barry Brokaw to Assemblyman Jerome Horton, D-Inglewood, Brokaw said Wal-Mart opposed the bill because it was too narrowly drafted.

The bill would have required the state to publish a report on companies that employ more than 25 people, listing how many of their employees receive state assistance for insurance and other benefits.

Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights in Santa Monica, which frequently criticizes Schwarzenegger's fundraising, said there is a connection between such vetoes and campaign contributions.

"It's a pattern with the governor," Heller said. "If you make a payment, he'll play your game. The governor is vetoing bills if you pay up, and it's a disturbing pattern that is reminiscent of what drove Gray Davis out of office."

Regarding Schwarzenegger's visit to Sun Microsystems, Khosla, one of the company's founders, said he no longer is connected with the firm and didn't even know Schwarzenegger would be there.

In an e-mail, Khosla said he gave $250,000 to the committee pushing Schwarzenegger's legislative redistricting proposal after Steve Poizner, a former college classmate and chairman of the committee, called and "made a great case on why it was important for good governance."

Officials at Yahoo could not be reached for comment.

There are other connections between campaign money and personal appearances that a governor can benefit from.

Last week, after Stockton developer Alex Spanos wrote two $500,000 checks to two different Schwarzenegger campaign committees, Schwarzenegger was Spanos' guest for a Monday night football game between his San Diego Chargers and the Pittsburgh Steelers.

"I'm here to support Alex Spanos' team, and to support the Chargers," Schwarzenegger told host Al Michaels during an interview. "It's a great team."

Schwarzenegger gave Spanos a similar plug the following morning during an appearance on a Sacramento talk radio show.

Steve Maviglio, who was press secretary to recalled Gov. Davis, conceded that all governors are able to take advantage of donors who may want to curry favor with the state's chief executive - even if no specific favor is granted.

"The difference," said Maviglio, who now works for a labor and Democratic coalition opposing Schwarzenegger's special election agenda, "is that this guy said he wouldn't do it. That he didn't need to raise money from special interests, that he wouldn't take money during the budget or bill-signing. He's the ultimate hypocrite."

Stern said Schwarzenegger's name-dropping or personal appearances "encourage people to give. He's not just the governor. He's a star. When he shows up, people will be there. They want to be around him. They want to give money and have access to a star."

When it comes to bill signings or vetoes, Schwarzenegger has opened himself up to additional criticism because he said when he ran for the job that he didn't think it appropriate to take money during bill-signing season.

Senate Bill 399, another example cited by his critics, would have brought the state $225 million in insurance claims, supporters said, by allowing doctors and hospitals to try to collect from third parties and insurance companies for treatment of injuries not covered by Medi-Cal.

On the same day that Schwarzenegger vetoed the bill, saying it would encourage litigation and lead to inflated medical costs, the American Insurance Association contributed $105,000 to his campaign committee.

"This is, of course, the worst kind of shakedown politics," Heller's group said on its Web site, ArnoldWatch. "(It's) the kind that had Californians so hopping mad in 2003 that they threw out the last cash-register governor. As Arnold said during the recall, 'The money comes in, the favors go out.' "

Rob Stutzman, Schwarzenegger's communications director, said the veto had nothing to do with money from the insurance industry, which opposed the bill.

"Mr. Heller commonly makes such accusations, and obviously the governor doesn't make any decisions on policy based on what a contributor may do," Stutzman said. "But in addition, this accusation is from an organization who won't disclose who their donors are. Their donors, as far as we know, are North Korean generals, more likely trial lawyers."

As for Schwarzenegger's earlier comments that governors shouldn't take money during bill signing, Stutzman said, "That would be the easiest thing. Unfortunately, that's just not possible when you have an election coming up in four weeks. There's fundraising that has coincided. That's just a reality. Californians know this is a governor who can't be bought."

To Stern, it's as much the timing of some of the contributions as it is the money itself that generates criticism. It's criticism Stern believes is fair.

"When a huge contribution comes in the same day as a bill signing or a veto or a personal appearance, it just increases the cynicism of the public and it backfires on Schwarzenegger," Stern said. "He's the one who said he wouldn't be a tool of the special interests and didn't need to raise money from them.

"He gets the 'hypocrite of the day' award. But in a sense, he has to do it, especially on the ballot measures, because the other side is raising so much money, too."
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The Bee's Gary Delsohn can be reached at (916) 326-5545 or gdelsohn@sacbee.com.
Clea Benson of The Bee Capitol Bureau contributed to this report.




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