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Associated Press
Apr 09, 2004

by STEVE LAWRENCE, Associated Press Writer

Governor to keep $100,000 from workers' comp insurer

SACRAMENTO -- Gov. Arnold Schwarzenegger, who frequently criticizes the influence of "special interests" at the Capitol, has decided to keep a $100,000 contribution from a workers' compensation insurance company as he negotiates workers' comp legislation.

The Republican governor had pledged not to take money from workers' comp insurers because it might give the impression that he was beholden to them while he tries to reach a compromise with lawmakers on how to curb skyrocketing costs of work-related injuries.

Marty Wilson, who oversees the operation of Schwarzenegger's California Recovery Team campaign committee, said donations received from workers' comp insurers after the March 2 primary election would be "promptly returned."

But he said the $100,000 contribution from the American Financial Group was an exception because it was pledged before the primary, when Schwarzenegger was raising money to pass Propositions 57 and 58, both part of his efforts to deal with the state's budget problems.

The American Financial Group donation was received by the campaign committee on March 4.

In comments last month Schwarzenegger seemed to say that there was no starting date for the donation policy.

"If I get a campaign contribution from an insurance company that deals with workers' compensation I will send it back because I don't want to be beholden to an insurance company that deals with workers' compensation, because I know I need to negotiate with them," he said.

"We don't put a date on it, March 2 or before or after or anything like that," he added.

Wilson said he was "not going to get into whether (Schwarzenegger) misspoke or not. I'm stating what the policy is. We're going to stick with this policy."

He said Schwarzenegger was "aware of this policy, is in agreement with it and will abide by it."

The San Jose Mercury News reported the decision Friday.

American Financial Group companies sold workers' comp polices that generated $270 million in premiums last year in California, nearly 2 percent of the market, according to Norman Williams, a spokesman for the Department of Insurance.

According to the Foundation for Taxpayer and Consumer Rights, a Santa Monica-based consumer advocacy group, Schwarzenegger has collected more than $552,000 in campaign contributions from workers' comp insurers since November.

That total doesn't include a $50,000 contribution from Zurich American Insurance Co. that Schwarzenegger aides said was returned in mid-March.

Doug Heller, the foundation's executive director, said that by accepting the American Financial money the governor was "proving himself to be just another politician" and was using "tortured logic" to define good and bad campaign donations.

"I think what is going on is every so often Schwarzenegger will return a contribution in order to clean himself," Heller said. "If you take a bath but don't use soap you're still dirty. I think that's what's going on here."

Schwarzenegger and legislative leaders have been negotiating for weeks on legislation that would attempt to rein in the high cost of the workers' compensation insurance that most businesses are required to buy.

The governor's business-group supporters say Schwarzenegger is seeking commonsense changes that have worked to hold down those costs in other states. But Democrats, labor leaders and workers' attorneys contend that the governor's proposals would harm injured workers without ensuring that insurance rates would drop.

Schwarzenegger has threatened to put an initiative on the November ballot to push through his proposals if there isn't an agreement soon with Democrats who dominate both houses of the Legislature. He given $1 million of his campaign funds to help gather the voter signatures needed to qualify the measure.

Initiative supporters say they plan to turn in those signatures next Friday if there is no legislative agreement. Schwarzenegger spokesman Vince Sollitto said Capitol staffers planned to work through the weekend on bill language that could be turned into a deal.



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