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Associated Press
Mar 22, 2005

by TOM CHORNEAU, Associated Press Writer

Schwarzenegger Criticized for Fund-Raising

SACRAMENTO, Calif. (AP) -- Shortly before he was elected governor in 2003, Arnold Schwarzenegger stood in the state's railroad museum, which he called a monument to the special interest that dominated California politics for decades until it was finally curbed in the early 1900s.

Californians, Schwarzenegger declared that day, believe their government "is corrupted by dirty money, closed doors and back-room dealing. They see the contributions go in, the favors go out and they're punished with wasteful spending and high taxes."

Now, as governor, Schwarzenegger is being accused of blatant hypocrisy over his own two-fisted fund-raising.

The Republican collected a record $26 million in contributions last year, much of it in big corporate checks from the pharmaceutical, insurance and energy industries. And this year he wants to raise twice that amount to push government-overhaul measures he is trying to put on the ballot this fall.

He has raised more money in more ways than former Gov. Gray Davis, whose own lusty fund-raising helped lead to his recall from office. To back his agenda, Schwarzenegger has created a network of nonprofit groups that do not reveal their sources of money or where they spend it. And he has sued the state's election watchdog to let his allies raise more money than California regulations allow.

"This is Gray Davis on steroids," said Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, a Santa Monica consumer group.

Accusations of hypocrisy are growing louder as the man who once said he didn't need outside money is spending increasing amounts of time raising it.

"He's doing the exact opposite of what he said he would do," said Raphael Sonenshein, a political science professor at California State University, Fullerton.

For his part, Schwarzenegger insists he can accept big campaign checks and remain completely independent, while his opponents cannot. The governor has said he is "representing the people's interests, not the special interests, and not the unions' interests."

Schwarzenegger is pushing for ballot measures that would cut state spending; partially privatize public employees' pensions; pay teachers according to merit, not seniority; and let retired judges, not lawmakers, draw legislative districts.

This month he completed a fund-raising swing through Washington, New York and Cincinnati. Last week he had events in Sacramento and Los Angeles.

In Cincinnati, financier Carl Lindner, who owns baseball's Cincinnati Reds, and his wife, Edith, each gave $22,300, the maximum allowed under California law, to the California Recovery Team, a political fund controlled by Schwarzenegger. He also gave $200,000 to Citizens to Save California, a coalition of business and anti-tax interests raising money to support Schwarzenegger's proposals.

At the New York fund-raiser, he took $22,300 from the American International Group, the huge insurance company whose chief executive, Maurice "Hank" Greenberg was forced to resign last week amid investigations into AIG's business practices.

At each stop, wealthy Republicans and corporate lobbyists stood in line to pay as much as $100,000 to share a meal, a photo and a brief moment with the governor. At each stop, too, have been protesters; on March 16 in Los Angeles, close to 1,000 union members shut down the streets surrounding the Century Plaza Hotel.

Despite his claims of independence, critics see troubling instances of the governor's policy decisions intersecting with the desires of his contributors.

The trade group representing the nation's biggest drug manufacturers emerged in recent months as one of Schwarzenegger's biggest supporters after the governor vetoed four bills in September that would have made it easier for Californians to buy cheaper prescription drugs from Canada. So far, the Pharmaceutical Research and Manufacturers of America Alliance has raised almost $8 million from drug companies to get voters to approve a discount drug plan backed by Schwarzenegger. Schwarzenegger and his aides said contributions have no effect on his decisions; donors, they said, give because they support his overall goals.

The governor has brought some of the problem on himself, said Allan Hoffenblum, a GOP consultant.

"He gave the impression that he would not need to raise money, and many people perceive what he's doing now as hypocritical,'' Hoffenblum said. "And secondly, he never defined what special interests were."
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On the Net:

Governor's home page: http://www.governor.ca.gov/state/govsite/gov-homepage.jsp

Arnold Watch, sponsored by Foundation for Taxpayer and Consumer Rights: http://www.arnoldwatch.org


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