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The Los Angeles Times
Nov 15, 2005 - 01:00 AM

by Jamie Court - Op-Ed Commentary

The governor's odd traveling companions;

A host of big-buck contributors and cronies are along for the ride in China, and they're looking out for themselves, not California.
The following Op-Ed commentary by Jamie Court, author of "Corporateering: How Corporate Power Steals Your Personal Freedom And What You Can Do About It" " (Tarcher/Penguin, 2004), and president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights, was published in the Los Angeles Times on Tuesday, November 15, 2005:
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Gov. Arnold Schwarzenegger is making a high-profile trade trip to China this week. It's supposed to benefit you and me by opening up Chinese markets for California goods. But the guest list is a dead giveaway: Of the 80 businessmen, government officials and others accompanying the governor, about two dozen are big-bucks Schwarzenegger supporters who have together contributed more than $2.5 million to his campaign committees.

For many of these Schwarzenegger donors, this China junket is more likely to help their own companies than California. And in some cases, that might actually do the rest of us harm.

Consider venture capitalist Tim Draper, one of the businessmen onboard with the governor. He and his family have contributed over a quarter of a million dollars to Schwarzenegger-controlled campaign committees. What business does a venture capitalist like Draper have in China? It makes sense that he would be looking to move money into that market.

But the governor's trade trip is supposed to bring money home, not send it abroad. Draper and his firm, Draper Fisher Jurvetson, may benefit from sending capital to China, but if California ventures lose capital to Chinese companies, what's good for Draper et al could be bad for us at home.

Draper isn't the only money guy on the trip. Others traveling under the state seal and with an incentive to export their dollars are venture capitalists F. Warren Hellman ($50,000 contributor to Schwarzenegger) and William Edwards ($21,200), along with the California Bankers Assn. ($25,000) and Paul Wachter (of Main Street Advisors, which handles Schwarzenegger's personal investments in a blind trust).

Another member of the official California trade delegation is the Target Corp., which contributed more than $230,000 to Schwarzenegger campaign committees. As far as we know, Target isn't planning to open new stores full of California products along the Great Wall. It's a better bet that the retail giant is looking for cheap new sources of textiles and other products to sell here. This China connection could threaten the higher-paying jobs of garment workers in downtown Los Angeles and across the state. Maybe that's why there isn't a labor union representative in the trade delegation.

Chevron has given $471,200 in campaign cash to Schwarzenegger. The company's interest in China is clearing hurdles to move supplies of liquefied natural gas from Asian wells, across the Pacific and into the United States -- and possibly into the Chinese market as well. Not surprisingly, Chevron's emissary on the trade junket will be its vice president for global gas. But what does this do for California, a state that has no LNG terminals, so it cannot use or traffic in LNG? In fact, some California cities have opposed the building of LNG terminals because of safety fears and concerns that the terminals could be targets of terrorism.

Here's another odd junketer: the California Hospital Association. Hospitals are not a commodity that is usually considered exportable. A good guess as to why the association is on board is that one of its key members, Kaiser Permanente, has been seeking to sell its brand of private medical care in countries with state health systems.

It might be good for Kaiser, a $150,000 Schwarzenegger donor, to open such doors in China, but except for that one company's fortunes, how does that help the rest of California business?

The gravy train to China for these campaign donors shows a fundamental Schwarzenegger misjudgment. What's good for big business isn't always good for California.

Legitimate California business opportunities such as increasing exports of food, wine and intellectual property do exist in China, and there are members in Schwarzenegger's delegation positioned to make the case for these commodities. Even so, there's no evidence that expensive gubernatorial public relations trips ever work in accomplishing such ends.

For instance, Schwarzenegger made a splashy trade trip to Japan last year. So far, he has yet to show that it added a yen to the California economy. And last week, the giant Japanese automaker Nissan announced that it would be moving "out" of California. But if the state as a whole is unlikely to see much improvement in its bottom line after the China trip, the individuals along for the ride have much better prospects. Schwarzenegger's big campaign contributors will receive gubernatorial introductions to Chinese officials that can help them make lots of dough.




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