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The New York Times
Mar 07, 2005

by DEAN E. MURPHY

Donors' Influence on Schwarzenegger Is an Issue

SAN FRANCISCO, CA -- Arnold Schwarzenegger scoffs at the suggestion that he could be bought by political donors, like the Wall Street financiers, corporate executives and entertainers who will pay thousands of dollars on Monday to have dinner with him at the "21" Club in Manhattan.

"I don't need any money; I have plenty," Mr. Schwarzenegger, the millionaire governor of California, said in a recent interview when asked about his approach to fund-raising. "This is why it is easier for me to take this money. I don't even know who is giving me the money in the first place, and I don't even care. No one can buy me."

As governor for 16 months, Mr. Schwarzenegger, a Republican, has made raising money from big corporations and wealthy businesspeople a mainstay in his drive for political change, which in California's unusual ballot-box approach to governing has focused on winning the backing of voters on measures relating to health care, government borrowing and crime.

Now as Mr. Schwarzenegger pursues his most aggressive program yet to overhaul California government - which he says needs to be rid of moneyed "special interests" that act as "ghostwriters" for lawmakers - some Democrats, independent watchdog groups and scholars are raising questions about the influence of money on Mr. Schwarzenegger himself.

This week the governor is scheduled to be in Manhattan and in Washington collecting checks from lobbyists, businesspeople and other Republicans for a possible re-election campaign in 2006. He will also be rounding up financial support for his "Year of Reform" agenda, which calls for changing the way legislative districts are drawn, teachers are paid, state pensions are managed and the budget is balanced.

Mr. Schwarzenegger's stated goal is to raise $50 million this year to ensure that the proposals become law, more than double the $23 million he raised last year and about three times what he raised in 2003, when he was elected governor as Gray Davis was recalled. Invitations to events featuring Mr. Schwarzenegger across California in the coming weeks include a category for $100,000 donors.

"The amount of fund-raising is unprecedented," said Richard L. Hasen, a professor at Loyola Law School in Los Angeles who is an expert on the state's election and campaign finance laws. Professor Hasen described Mr. Schwarzenegger as "a poster child" for the need to impose limits on fund-raising by candidates for ballot measures, the main focus of Mr. Schwarzenegger's solicitations and a favorite policy tool of many California governors before him.

California Common Cause, which is a major backer of one of Mr. Schwarzenegger's most significant initiatives, the bid to have the boundaries of legislative districts decided by a panel of retired judges rather than elected officials, is among the groups expressing alarm at the fund-raising.

Kathay Feng, the newly named executive director of the group, said that no matter how laudable some of his proposals may be, Mr. Schwarzenegger's reliance on big contributors gives wealthy interests undue access to him.

"Part of the problem is that there is a common perception that Mr. Schwarzenegger is not an inside-the-Beltway kind of politician because we know him as an actor and a lot of other roles," Ms. Feng said. "But the concern is once you get into politics and you start playing by the old machine rules, and you raise money from special interests in exorbitant amounts, that you may no longer be representing the public as you espouse."

A nonpartisan group in Sacramento, TheRestofUs.org, which monitors the role of money in politics, filed a complaint last month with the California Fair Political Practices Commission, accusing Mr. Schwarzenegger of violating a state regulation that places limits on raising money through committees controlled by candidates.

The group leading the effort to collect signatures to qualify some of Mr. Schwarzenegger's proposals for a possible statewide vote in November, Citizens to Save California, was formed by the California Chamber of Commerce in January. Though not formally associated with the group, Mr. Schwarzenegger spent much of last week making appearances on its behalf. TheRestofUs.org asserts the committee is effectively a Schwarzenegger fund-raising tool.

"He has the potential to be a Teddy Roosevelt reformer," said Derek Cressman, director of TheRestofUs.org. "It is disappointing to see him turn around and raise money hand over fist."

The Fair Political Practices Commission has not ruled on the complaint, which if successful would limit donors to the committee to $22,300 instead of the unlimited amount now in place. In what they describe as a pre-emptive strike, lawyers for Citizens to Save California have filed a lawsuit in Sacramento challenging the state regulation as unconstitutional.

One of the lawyers, Steven A. Merksamer, said supporters of the governor feared the complaint would "chill our contributor base" by creating the impression that the committee was doing something illegal, which he said it was not.

"We felt that we had better take the bull by the horn and go to the court and deal with this quickly," Mr. Merksamer said. The regulation "would have a chilling effect on the First Amendment association rights of not only people who want to support our measures, but also candidates, including potentially the governor and legislators, who want to support our measures."

Ms. Feng of Common Cause said the group's board recently voted to side with TheRestofUs.org in the dispute. She said Mr. Schwarzenegger's fund-raising was unduly dependent on large donors, which "drowns out the voices of the general public."

Last year, contributors to Mr. Schwarzenegger's ballot measure committees included Henry Nicholas, a billionaire in Orange County who gave $1.5 million, and the Ameriquest Capital Corporation of Long Beach, which gave $1 million. Other major donors were A. Jerrold Perenchio, the chairman of Univision Communications, who contributed $750,000, and Alex G. Spanos, owner of the San Diego Chargers, who gave a total of $750,000 personally and through his real estate company.

On his current fund-raising trip, which began on Friday in Cincinnati, Mr. Schwarzenegger will be in the company of other prominent supporters. The hosts at the events include Gov. George E. Pataki, in New York; Carl H. Lindner, owner of the Cincinnati Reds and a former chief executive at Chiquita Brands International, in Cincinnati; and W. Howard Lester, chairman of the retailer Williams-Sonoma, in Palm Desert, Calif.

"I think the contributors are very responsive to the governor's message and they believe wholeheartedly in what he is trying to do to turn the state around," said Martin Wilson, a consultant who is Mr. Schwarzenegger's chief fund-raiser. "It doesn't hurt that he is also a much sought after celebrity figure they like to have their photos taken with."

Allan Zaremberg, president of the Chamber of Commerce and co-chairman of Citizens to Save California, said raising big sums of money in a short amount of time was a fact of life in California.

Mr. Zaremberg said it would cost about $13 million just to collect the signatures required to qualify the various ballot measures Mr. Schwarzenegger has proposed.

Inevitably, he said, that means turning to wealthy donors. Last Wednesday, Mr. Perenchio of Univision gave $1.5 million.

An invitation to a fund-raising event sponsored by Citizens to Save California on March 22 in Irvine, Calif., lists ticket prices starting at $1,000. The top donation of $100,000 includes dinner for two at Mr. Schwarzenegger's table and three photographs with him.

The speaker of the California Assembly, Fabian Nez, Democrat of Los Angeles, said Mr. Schwarzenegger's pursuit of political contributions had become a serious impediment to his dealings with Democrats in the Legislature.

"There is a time to be in a campaign mode, but you can't govern if you are in a campaign mode 120 percent of the time," Mr. Nez said. "It is clouding his ability to sit down and negotiate in a thoughtful way with the Legislature."

Mr. Schwarzenegger told the state Republican convention last month that he needed to raise $50 million because his opponents were determined to raise four times that amount. "This is going to be a great battle," he predicted.

In the interview he said, "My money is all for selling and promoting our initiatives to make this state better."

"The only reason why I get away with it is because I am real," Mr. Schwarzenegger said. "You see, I am honest."


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