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Feb 09, 2004 - 02:30 PM

Arnold's Transfers Circumvent Ballot Disclosure Law

by Doug Heller and Carmen Balber
Is Arnold using a complex set of campaign committees and money transfers to skirt California law and hide funding of the Yes on Propositions 57 & 58 campaign from the public?

In 1996, California voters went the the ballot box to require initiative sponsors to reveal who is really behind measures on the ballot every election. The law requires: "Any advertisement for or against any ballot measure shall include a disclosure statement identifying any person whose cumulative contributions are fifty thousand dollars ($50,000) or more." It goes on to say that a ballot measure committee "shall name and identify itself using a name or phrase that clearly identifies the economic or other special interest of its major donors of fifty thousand dollars ($50,000) or more..." (View an example at the end of the ad at*)

By funding most of the campaign for Yes on 57 & 58 through money transfers from the "Governor Schwarzenegger's California Recovery Team" committee, Arnold has skirted both of these rules and made it look as though the initiative is paid for by the action hero himself, despite the true source of the campaign cash.

Because of these transfers, in order to comply with the campaign reform rules, a Yes on 57/58 ad would currently disclose that the ad is "sponsored by Californians for a Balanced Budget - Yes on 57 & 58, Major funding from Governor Schwarzenegger's California Recovery Team and Western Manufactured Housing Communities Association Issues PAC." (This association is the only other donor to the 57/58 campaign to have given $50K.)

Voters will not be told, however, that a quarter million each has come in to the Recovery Team from banking firm American Sterling Corporation, the high tech Emulex Corporation, builder William Lyon Homes, developer Castle and Cooke and media mogul Jerry Perenchio. Other large contributions have come from insurance and energy firms. With the state budget hanging in the balance, these companies understand that if the bond initiative fails they may face corporate tax increases or a change in the state‚s commercial property tax structure.

Arnold's polling team has probably figured out that the already unpopular proposals would be in a lot more trouble if every advertisement ended with: "Sponsored by Californians for a Balanced Budget - Yes on 57 & 58; a coalition of banks, developers, insurance companies and energy firms. Major funding from American Sterling Corporation and William Lyon Homes, Inc."

Whether or not the initiatives are good for California is not the point here. Arnold promised that he would make government and politics more transparent; he would deliver the state back to the People of California. California voters ought to know the special interests behind these ballot measures. The innocuous, or even encouraging, appearance that these efforts are funded by some fantastic Recovery Team that Arnold has put together for California flouts the rules of the game.

*ArnoldWatch has not taken a position on Prop 56

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