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The San Francisco Chronicle
May 09, 2006 - 01:00 AM

by Tom Chorneau, Chronicle Sacramento Bureau

As bond issue is set, big bucks rolling in to Schwarzenegger

Sacramento, CA -- Real estate developers, general contractors and farmers made sizable contributions to Gov. Arnold Schwarzenegger in recent weeks as legislative leaders and the administration finalized a landmark $37 billion bond package for rebuilding public works projects statewide.

The governor has raised a total of $5.1 million in the last seven weeks, much of it -- $1 million -- coming from builders and other businesses with potential interests in the infrastructure bonds approved last week for the November ballot.

Builders traditionally support Republican candidates and have given generously to Schwarzenegger in the past, but the recent surge of contributions from the industry may be a preview of what the governor can expect from the same group through November.

"I think most of us think of the governor as a pro-business and pro-infrastructure candidate -- more so than in the past," said Tom Holsman, CEO of the Associated General Contractors of California, which contributed $10,000 to Schwarzenegger's campaign in April.

"He recognizes that California needs a strong and solid infrastructure to be competitive, and he's shown a lot of leadership on the issue," Holsman said.

After raising and spending a record $55 million last year on the special election, Schwarzenegger has had to start almost from scratch this year for his re-election. During the first 3 1/2 months of this year, the governor reported contributions of $5.1 million, expenses of $2.3 million and debts of $864,000.

In the weeks since, he has matched that amount of contributions but still has a long way to go toward the $60 million he has set as a goal for the campaign.

The next full accounting of his campaign finances is not due until the end of this month.

Meanwhile, the two Democratic contenders facing a June 6 showdown for the right to face Schwarzenegger in the fall also have been busy raising money.

Treasurer Phil Angelides, who began the period with $14.5 million in the bank, has added $1.8 million. Controller Steve Westly, who has put $22.5 million of his own money into the race, reported contributions of $1 million during the past seven weeks.

The governor originally proposed that the state borrow $68 billion in bonds to fix roads, schools and flood control systems. Although much smaller, the final package that won approval last week would provide big sums of money to the same areas given priority by the governor.

The biggest share, $19.9 billion, would go for transportation improvements; schools would get $10.4 billion and $4 billion would be for levees and flood control.

Allan Hoffenblum, a GOP consultant, said that most of the negotiations over the final draft were between legislative leaders and that some of them, especially Senate President Pro Tem Don Perata, D-Oakland, also are likely to receive support from the building industry.

One key advocacy group is the California Infrastructure Coalition, which is made up of public agencies, private companies and trade associations. The group's executive director, Beth Miller, is also a partner in a public relations firm with the governor's chief fund-raising executive, Marty Wilson.

Coalition members have given to the governor's campaign in recent weeks. The donations include $22,300 from the California Building Industry Association and the $10,000 from Associated General Contractors.

Miller noted that many of the coalition members are local governments, including the cities of Los Angeles, Sacramento and San Diego. She said the group did not push any specific projects but supports a broad investment in everything from levees and highways to parks and housing.

Miller said she has never used her business relationship with Wilson to further the group's goals, nor has she sought donations from members for the governor.

Schwarzenegger's campaign also received tens of thousands more in recent weeks from individuals and companies in the same industries, including $10,000 donations from Ponderosa Homes of Pleasanton, Ryder Homes of Walnut Creek and Centex Homes of San Ramon.

Some critics of the bond building program are concerned about all the money flowing into Schwarzenegger's campaign from sources with ties to the California Infrastructure Coalition.

Gary Patton, executive director of the Planning and Conservation League, said that the final bond package approved by the Legislature is better than what the governor originally proposed, but he said he remains concerned about the connections between Schwarzenegger's administration and the builders.

"He didn't get everything he wanted," Patton said. "But, our ultimate reaction is that there is still a lot of money going to new highways and construction projects that are not necessarily 'smart growth.' "

Julie Soderlund, spokeswoman for the governor's re-election committee said Schwarzenegger's "optimistic message and leadership" attracts support from a diverse group of Californians.

Soderlund said the governor makes policy decisions based upon what he believes is in the best interest of the state.

Robert Rivinius, CEO of the California Building Industry Association, said many of his members are Republicans and frequently give money to GOP candidates, including the governor. He said there had been no coordination of political contributions.

Car dealers also gave Schwarzenegger's campaign a big boost, contributing $500,000 in the last three weeks. Donations included $44,600 from the California Motor Car Dealers Association, $22,300 from Daimer Chrysler Corp. and $20,000 from Putnam Toyota in Burlingame.

Brian Maas, spokesman for the California Motor Car Dealers Association, said his members have been supporters of Schwarzenegger since the recall election and continue to back his candidacy. He said dealers participated in a fundraising event for the governor late last month, but it was not tied to any specific issues pending before the state.

Not so, said Doug Heller of the Foundation for Taxpayer and Consumer Rights.

Heller said he believes that dealers are concerned about how the administration plans to oversee key parts of the new "Car Buyers Bill of Rights" that limits interest on dealer car loans and sets higher used car standards.

Some enforcement aspects of the law have been given to the Department of Motor Vehicles to implement, and Heller noted that the governor recently appointed a new director of the department.

"Dealers want to keep Arnold happy so Arnold keeps the DMV from aggressive oversight," he said.

Maas said the dealers supported the final version of the law and are not looking to weaken its mandates.
E-mail Tom Chorneau at

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