After unseating Gray Davis for his pay-to-play politics, Arnold has accepted an above-the-limits contribution from a company that is the capitol�s foremost practitioner of pay-to-play: Mercury Insurance. Although the recall campaign ended on October 7th, Mercury contributed $38,800 on December 17th to �Arnold Schwarzenegger�s Total Recall Committee, Vote Yes To Recall Gray Davis.� Mercury gave to Arnold�s pro-recall committee because it is not subject to the normal $21,200 limit. The contribution was made on the dayof the Gov�s capital fundraiser at the Sheraton Grand but Mercury was the only donor that day to contribute to the no-limits committee.

Mercury played the no-limits game with the recalled governor as well. On August 2nd, Gray Davis signed a bill that allows insurers to surcharge motorists who were previously uninsured, despite vetoing an identical measure the year before as an illegal violation of voter-approved Proposition 103. Then, in September, Davis received $175,000 from Mercury to defeat the recall. Davis� about-face prompted our Foundation to ask the Justice Department for a bribery investigation in light of a memo from Mercury�s lobbyist suggesting a deal with Davis to flip-flop.

A recent declaration by Mercury�s lobbyist reveals that Gray Davis actually consulted Mercury about the content of his announcement that he was signing the bill -- before it was made public. This gives new meaning to the phrase �money talks.� That declaration can be read at: www.consumerwatchdog.org/insurance/rp/rp003923.pdf

What does Mercury want from Schwarzenegger? Having seen all the money going into Arnold�s campaign, Mercury must assume that it is business as usual in Sacramento and Schwarzenegger�s signature on the insurer�s agenda is up for auction. Californians elected Schwarzenegger to be above all that. Arnold should return Mercury�s cash to send the signal that the governor�s office is not for sale to an insurer who refuses to let the voters have the last word.

On supermarket racks, 7-eleven shelves and news stands across the state, Californians are being urged to pony up $4.95 a pop for a piece of California history - the Official Collector's Edition magazine "Arnold: His 60 Day Campaign That Changed California."

The commercial-free, pictorial biography of the governor takes us through his career, some of it in his own words. The magazine�s publisher, American Media, Inc. (AMI), also puts out the National Enquirer and recently acquired Weider publications, the muscle and fitness magazine publisher closely associated with Arnold. (The Arnold mag devotes eight pages to the Gov�s friendship with fitness publishing guru Joe Weider, and the magazine company is also a major donor to Arnold�s campaign.) Weider was not only involved with the making of "Arnold" but also pays one of Schwarzenegger�s firms an undisclosed amount annually, according to recent documents filed by Schwarzenegger. It's a fair question, then, whether Arnold is receiving royalties for his role as governor and the collector's edition that chronicles his ascension. - read more.

Recently ArnoldWatch called on the Governor to divest his $1 million-plus holdings in Dimensional Fund Advisors -- a private mutual fund company that has a contract to manage $636 million for CalPERS, the state�s pension fund.

If the conflict of a governor gaining financially from the decisions of a CalPERS board he has control over isn�t bad enough, here�s another reason Arnold must sell off his shares � purported to be up to 25% of the company�s ownership (though his actual stake is as-of-yet undisclosed): - read more.