Schwarzenegger woos key corporate players
Fund-raising goes outside his own pockets
Robert Salladay, Chronicle Political Writer
Sunday, September 7, 2003
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http://sfgate.com/cgi-bin/article.cgi?f=/chronicle/archive/2003/09/07/ARNOLD.TMP Sacramento -- Arnold Schwarzenegger began his campaign with an indictment of special interests, vowing to self-finance his campaign for governor, but now spends much of his time raising money and collecting endorsements from some powerful corporate players.
After a private luncheon with donors Saturday, the actor appeared under a giant oak tree outside the California Farm Bureau Federation to receive the group's endorsement and that of the Western Growers Association, two groups with urgent matters before the governor's office.
While Schwarzenegger has criticized Lt. Gov. Cruz Bustamante for taking money from unions and Indian tribes, the Republican candidate has collected at least $2.5 million from individual donors, attorneys, business interests, venture capitalists and California companies. Some of them employ full-time lobbyists in Sacramento.
Schwarzenegger is under increasing pressure to explain the difference between rejecting union and tribal money and accepting contributions from corporations that lobby the Capitol as well. At a press conference, Schwarzenegger said he segregated unions and tribes because they must negotiate state-worker contracts and gambling agreements directly with the governor.
"Let me tell you, I never said that any of those people are bad," Schwarzenegger said Saturday. "There is a difference. I think we need lobbyists to listen to. I think it's good to have all these interests fighting for their causes. What I am saying is you cannot expect to represent the people of California if you are taking money from a union, and you know that down the line you are going to sit across the table from them."
The reforms of 1911 that created California's recall laws came about because corporate interests, particularly Southern Pacific railroad, dominated state government affairs. Now, as California faces the first test in a contest for governor of those recall laws, corporate special interests again are being debated.
AGGRESSIVE SCHEDULE
After promising early in the campaign to "not take money from anyone," Schwarzenegger now has an aggressive fund-raising schedule. He attended a closed-door lunch Saturday in Sacramento and scheduled another private reception with vintners and other contributors in Healdsburg last night.
Schwarzenegger has raised more than $6.5 million for the governor's race so far, including $3.5 million from his own pocket. The rest comes from donors that include businesses and real estate interests that have legislation, regulations and contracts before the state government.
Schwarzenegger's donors include Donald Bren, chairman of the Irvine Co., a real estate developer that lobbies in the Capitol on endangered-species regulations, water and transportation issues, as well as the Coastal Commission. Hilmar Cheese Co., which employs lobbyists on dairy and milk-pricing legislation, also gave him $21,200, the maximum. Executives with the tech company Emulex, Sony Pictures Entertainment and Health Net Inc., all of which have employed lobbyists in Sacramento, also donated.
Campaign-finance reports show 66 individual donors to Schwarzenegger who list themselves as either a CEO, president, chairman of the board, owner or major partner in a California business.
RETURNS $2,500 CHECK
But last week, Schwarzenegger returned a $2,500 check that had been sent to him by the Los Angeles Deputy Sheriffs' PAC, saying, "We realized this was a conflict of interest.
"As soon as you take their money, you then owe them something," Schwarzenegger said. "It's an old rule: Campaign contributions come in, favors go out, and the people are hurting."
Schwarzenegger's critics on the campaign trail, particularly independent Arianna Huffington and Republican state Sen. Tom McClintock, R-Thousand Oaks (Ventura County), have attacked the actor-turned-candidate for drawing a "distinction without a difference" between union and Indian tribe money, and corporate interests in Sacramento.
"Sure, there are great businesses," Huffington said. "But we've had so many examples of unscrupulous, greedy businesspeople who basically cost California billions of dollars in pension fund and shareholder wealth. I think the distinction he's making shows that this is not a part of his world."
Daniel Zingale, Davis' Cabinet secretary, said Schwarzenegger's contention that somehow business interests who donate campaign contributions are not "negotiating" with the governor is "either disingenuous or misleading."
He said the California Chamber of Commerce, which endorsed Schwarzenegger on Friday, as well as the Farm Bureau Federation, the Western Growers and private companies associated with them constantly approach the governor on bills, regulations and state contracts.
"The governor hears from them virtually every day with requests for one thing or another," said Zingale.
Zingale said the governor's office currently is in detailed and intense negotiations with the Chamber of Commerce over reforming the workers' compensation system. That, he said, means balancing corporate demands with providing adequate worker benefits.
EXPLAINING NO-MONEY RULE
Schwarzenegger campaign consultant Mike Murphy said the no-money rule applies only to groups that depend directly on the governor for paycheck and benefit contracts or gaming compacts. Schwarzenegger is expected to announce a campaign-finance plan in the coming weeks.
"I think we're being held to a little unfair standard because we're the only politician out of the major candidates who is putting any limit on fund-raising, and somehow we're the guy who is not perfect," Murphy said. "What he's saying is no money from tribal gaming interests and public employee unions. PACs are OK, individuals are OK. We are going to take contributions."
Over the past few years, public employee unions and Indian tribes have grown in influence in Sacramento. No individual organization spends more money lobbying the Capitol than the California Teachers Association, the most recent state records show.
But as a group, California corporations dominate lobbying at the state level. Lobbyists working for manufacturing, oil and gas, agriculture, utility, real estate, entertainment, retail and restaurant interests spent $136.8 million for the two-year cycle ending 2000. Lobbying by labor unions and public employees accounted for $18.2 million, state records show.
At Saturday's events in Sacramento, growers said environmental and worker regulations were running up costs and hampering their business. They were unapologetic in supporting Schwarzenegger because they believed they would benefit from his administration.
"Arnold has told us that he plans to protect farmers and protect business," said Edwin Camp, chairman of the Western Growers Association. "Wow, a governor who would really want us. We need a governor . . . who can say 'no' to the runaway liberal Legislature."
Carl's Jr. franchise owner Russ Clark from Yuba City said he donated $1,000 to Schwarzenegger because he believes he can win the Oct. 7 election, then act as a moderating force over extremists in the Legislature.
Clark said his donation was "absolutely not" an attempt to sway Schwarzenegger on issues important to him, including a pending health insurance mandate for small business owners. He said that because Schwarzenegger could run for governor without any outside help, he is better able to fight special interests in the Capitol.
"Whether it's the lawyers' lobby or the business lobby or the labor lobbyists, they dump millions of dollars, and they want something for it," Clark said. "They are buying things, and it's hurting us all."
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