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How Much From Special Interests?

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Associated Press
Nov 02, 2006 - 01:00 AM

by STEVE LAWRENCE, Associated Press Writer

Schwarzenegger donations top $113 million

SACRAMENTO, CA -- When he ran for governor during the 2003 recall election, Arnold Schwarzenegger described the Capitol as a place where "special interests have a stranglehold. The money comes in, favors go out, the people lose."

Even as the governor says he is not returning favors for cash, the money has been flooding in since he rose from Hollywood celebrity to chief executive of the nation's most populous state.

An exhaustive review of campaign finance records by The Associated Press reveals that Schwarzenegger is on pace to become the most prolific fundraiser in California history. He has raised $113.4 million in the little more than three years since he launched his campaign to replace Democrat Gray Davis, who often was accused of having a "pay to play" approach to governing that favored his donors.

That amount is nearly as much as the $120 million Davis raised over seven years for two gubernatorial campaigns and to fight the recall effort. It also is more than three times as much as Schwarzenegger's Democratic opponent in Tuesday's election, state Treasurer Phil Angelides, has received during roughly the same period.

Schwarzenegger has done it despite having voter-imposed contribution limits on some of his campaign committees that Davis did not face until the 2003 recall campaign.

"Schwarzenegger has raised an average of $95,000 a day, which dwarfs the amount of money Davis raised," said Carmen Balber, a consumer advocate for the Santa Monica-based Foundation for Taxpayer and Consumer Rights, which tracks Schwarzenegger's campaign contributions and has been one of his biggest critics.

Schwarzenegger also has funneled $23.7 million of his own money into his campaigns, which have included his unsuccessful efforts to pass four ballot measures in last year's special election.

Angelides, a multimillionaire Sacramento land developer, has raised nearly $32.9 million since 2003, about 71 percent of which has come from donors who have given him at least $10,000. Those large contributors fall mainly into four groups: labor unions, attorneys, developers and fellow Greek-Americans.

Angelides' contribution totals do not include $18.7 million in independent support. That money came from unions and his longtime mentor, Sacramento developer Angelo Tsakopoulos, and Tsakopoulos' daughter, which have spent it on their own campaigns supporting his candidacy.

Schwarzenegger has raised his campaign money in large part by mining board rooms and executive suites from the Silicon Valley to Wall Street, the AP analysis shows. About 75 percent of his donations have come from contributors who have given him at least $10,000. Most of that money has come from businesses and business executives.

Spanish-language television magnate Jerry Perenchio, Stockton developer and San Diego Chargers owner Alex Spanos and William Robinson, founder of the DHL courier service, each have given the governor more than $2 million.

Mortgage lender Ameriquest Capital Corp., the California Republican Party, Henry Nicholas, chairman of NS Holdings LLC, and B. Wayne Hughes, chairman of Public Storage Inc., have chipped in more than $1 million apiece.

Chevron Texaco Corp. and Texas oil tycoon T. Boone Pickens are among those who have contributed more than $500,000.

Despite the waves of donations from corporations and the wealthy, Schwarzenegger has said repeatedly that no special interest has a stranglehold on him.

"I cannot be bought by anyone, and anyone who gives me money buys into that philosophy," he told the San Francisco Chronicle editorial board recently.

Vince Sollitto, a spokesman for the California Chamber of Commerce and a former Schwarzenegger spokesman, explained the contributions by saying, "The governor has consistently run and governed on an agenda of economic growth, and employers in California are naturally supportive of that."

Lissa Morgenthaler-Jones, chief executive officer of LiveFuels Inc., a biofuels company, was one of the first contributors to Schwarzenegger's recall campaign. She's since given him more than $130,000.

She said she initially thought the former bodybuilding champion was "probably a muscle-bound meathead" but decided after meeting him at a campaign fundraising event that he was the moderate politician she'd been seeking.

She's since become part of an effort to amend the U.S. Constitution to allow the Austrian immigrant to run for president.

"He's definitely his own man," she said. "Nobody's going to get everything they want (from him). He's the one holding the center. ... He is strong enough to hold it. In this day and age, that's a miracle."

Schwarzenegger's critics complain that the amount of his contributions shows that he failed to follow through on his campaign promise to weaken the power of wealthy special interests. They contend that wealthy special interests have even more influence these days at the Capitol.

"Money has always been important in California politics," said Ned Wigglesworth, a spokesman for California Common Cause, a campaign reform group. "But I think it's fair to say that under Schwarzenegger's watch it's become even more dominant than it was in the past. That's not just Schwarzenegger. That's the Legislature -- Democrat and Republican alike."

Schwarzenegger opposes Proposition 89, the measure on Tuesday's ballot that would authorize public financing for state candidates who give up most campaign contributions. But Wigglesworth said the governor could have pushed for legislation tightening campaign contribution limits.

"He could have made campaign finance reform the cornerstone of his governorship," Wigglesworth said. "He really had a chance to be an incredible reformer who brought power back to the people and restored some decency and fairness to Sacramento. But he didn't. It's a tremendous lost opportunity."

Current law allows most donors to give up to $22,300 per election to a gubernatorial campaign and smaller amounts to candidates for the Legislature and other state offices.

But there are no limits on how much contributors can give to candidate-controlled ballot measure committees such as Schwarzenegger's California Recovery Team, which has received most of his biggest donations.

The governor went to court last year to block an attempt by the state Fair Political Practices Commission to impose donation limits on those types of committees. A Sacramento judge's ruling that backed Schwarzenegger is being appealed by the FPPC.

Schwarzenegger has ruled out accepting donations from unions and Indian tribes with which he might have to negotiate contracts, and he has made some attempts to reform campaign finance laws.

He signed a bill in 2004 requiring that donations of $1,000 or more made to or by political parties be reported within 24 hours if they are made within the last few days before an election.

He also supported legislation that same year that would have imposed a ban on fundraising by state officials during the six months or so each year when lawmakers consider the governor's budget proposals. The bill never got out of committee.

The Foundation for Taxpayer and Consumer Rights tracked Schwarzenegger's donations and official actions and found certain times when it appeared the governor violated his pledge not to exchange favors for money.

The group "chronicled any number of times the governor acted directly in the interest of his campaign contributors," Balber said.

In particular, she cited $450,000 in donations he received last year from an insurance group, a winery and a Wal-Mart heir on the same day he vetoed bills opposed by Wal-Mart and the wine and insurance industries.

"I don't think there's any question that when you see a large campaign contribution following closely on the heels of legislative action that benefits that contributor, the average person will see undue influence where influence doesn't belong," Balber said.

Robert Stern, president of the Center for Governmental Studies, a Los Angeles-based political think tank, questions whether any one donor has much influence with gubernatorial candidates because of the sheer volume of contributions they receive.

Schwarzenegger spokeswomen Julie Soderlund notes that the governor has occasionally broken with his business allies, particularly on some key environmental bills.

"Gov. Schwarzenegger has a proven track record of making decisions based upon what he believes is the best interest of the people of California," she said. "Those who contribute do so because they believe in the governor's vision."




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