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Press Release
Jul 19, 2007 - 01:00 AM

CONTACT: Carmen Balber, (310) 392-0522, ext. 324

Audit Needed to Probe Contracts to Schwarzenegger Backers;

General Motors Won Exclusive Deal After Gift to Gov
Santa Monica, CA -- The Foundation for Taxpayer and Consumer Rights called on the State Auditor to investigate Governor Schwarzenegger's close political and financial ties to General Motors and the exclusive contract structured to add the auto company's "flex-fuel" vehicles to the state fleet. The cars, which never ran on alternative fuel and release more pollution than the cars they replaced, were nonetheless used by Schwarzenegger as proof of his administration's commitment to environmental protection.

"General Motors has helped the governor greenwash himself as an environmental hero while lining his campaign war chest. It's more than a little suspicious that the administration designed a contract that only GM could fulfill. Taxpayers deserve a state audit to determine if the administration is pulling strings, or pushing unnecessary deals, for the governor's donors," said Carmen Balber, consumer advocate with the Foundation for Taxpayer and Consumer Rights (FTCR).

General Motors contributed the use of six vehicles and drivers for Schwarzenegger's trip to Japan in 2004, a few months before the administration purchased 1,134 vehicles from the company. GM was the only corporation to contribute directly to the governor for the trip.

During the recall campaign, Schwarzenegger said he would not accept contributions from companies that contract with the state. In addition to the gift of vehicles, General Motors has contributed $47,000 to Schwarzenegger's campaign accounts.

A month before the Japan trip, Schwarzenegger drove a Hummer on loan from General Motors to the launch of another yet-to-be-realized proposal the governor touts as an environmental accomplishment, his "hydrogen highway."

The state auditor is already investigating another Schwarzenegger contributor with a contract of questionable value to the state. ACS faces concerns that it was overly aggressive in retrieving unclaimed property for its own financial benefit. The company and its executives have given Schwarzenegger $265,471. Hewlett Packard, a $321,200 donor to the governor, also does business with the state.

"An audit that begins with General Motors should expand to cover every Schwarzenegger booster that may have received special treatment from the administration. How deep do the governor's entanglements with state contractors go? Do donors scratch the governor's back if he scratches theirs? It's critical the state auditor investigate these relationships now, before the state starts distributing billions in voter-approved bond money," said Balber.

Read the documents memorializing General Motors' gift to Governor Schwarzenegger:

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The Foundation for Taxpayer and Consumer Rights is a leading nonprofit and nonpartisan consumer watchdog group. For more information visit us on the web at:

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