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As he did during the campaign, Governor Schwarzenegger continues to define "special interests" as those interests that are at odds with his policy goals. Everyone else is fair game to be hit up for a contribution.
Roughly a month after taking office, Schwarzenegger held a fund-raiser, sponsored by the California Manufacturers and Technology Association and megadeveloper Alex Spanos, among others. About six hundred deep-pocketed contributors, lobbyists, and their corporate clients paid up to $21,200 for the privilege of rubbing elbows with the governor.
And how's this for audacious? During the dinner, the Governor delivered a speech in which he noted that he had spent much of his campaign attacking the same "special interests" that he was now partying withÑand thanked them for being such effective straw men. If there is one thing Arnold has learned over the course of his moviemaking career, it's how important it is to have a good villain for your hero to lock horns with.
Special interests were the villain. During the recall campaign, Schwarzenegger claimed that he didn't "need to take money from anybody," then plunged into fund-raising like a man possessed, eventually taking in $12 million in campaign cash and a $4.5 million bank loanÑ$4.4 million more than California election law allows. In January, a Superior Court judge declared the loan illegal and ordered the governor to stop raising money to repay it.
As governor, Schwarzenegger has exhibited a very familiar Republican proclivity for cozying up to special interests, appearances be damned. Just three days after taking office, he paid a special visit to a large Los Angeles area auto dealership, Galpin Ford, to celebrate his repeal of the state's unpopular car tax. "Go out there," he exhorted a crowd of four hundred at a midday rally. "Buy cars. Buy new cars. Buy used cars." Buy, buy, buy! It must have been music to the ears of Galpin Ford's owner, Bert Boeckmann: imagine having a world renowned cinematic superstar hawking your product on the nightly news. The event was worth millions in free advertising. And it only cost the dealer a little over $50,000 to make it happen. Boeckmann, along with his wife, contributed $42,400 to Arnold's gubernatorial campaign and doled out another $10,000 for his inauguration.
Sometimes payback isn't a bitch, it's a heartfelt pitch.
Displaying his usual deft touch for irony, Governor Schwarzenegger used the Galpin Ford appearance to rail against politics as usualÑall while putting on a display of pay-to-play politics that would have made Gray Davis feel right at home.
Auto dealers, who donated over $800,000 to Schwarzenegger's campaign, weren't done cashing in on the governor's priced-to-move specials. They also rolled off the lot with a sweetheart deal: the firing of Steve Gourley, the head of California's Department of Motor Vehicles, an official with an admirable history of investigating and punishing shady auto industry financing practices. One of Gourley's investigations led to the 2001 indictment of a group of employees at a dealership accused of selling used cars as new, resetting odometers, and peddling fraudulent car loans. That dealership is owned by AutoNation, a company that donated $21,200 to Arnold's campaign. Do you think the gang at AutoNation felt that was money well spent when Governor Schwarzenegger canned Gourley just hours after taking the oath of office? One thing you can say for car dealers: they know a sweet deal when it comes their way. Buy, buy, buy!
Car dealers weren't the only ones hopping aboard Arnold's post-election gravy train. In the three months following his recall victory, Schwarzenegger raked in nearly $3 million in political funds. More than a few of the firms and individuals contributing to the governor have business before the state, including AT&T and developers Donald Bren and Alex Spanos. The new governor also took in $100,000 from a company that is the leading underwriter of workers' compensation insuranceÑeven as he announced plans to put a workers' compensation reform initiative on the ballot in 2004.
But that's not all: Schwarzenegger accepted a $53,000 donation from Wackenhut Corrections Corporation, a company that operates private prisons in the state. The contribution came a little over a month before California was set to close down a 224-bed facility run by the company. "We have a large investment in California," explained Wackenhut president Wayne Calabrese. "We want to do everything we can to preserve our business base in California," including buttering up the new guy in charge. Helpfully, the firm's Florida lobbyist, David Ericks, is a good buddy of Donna Arduin, the governor's budget-slashing finance director. Team Schwarzenegger, of course, has denied any connection between contributions and state affairs, saying that a decision on the Wackenhut facility wouldn't "rise to the level of the governor's consideration." Funny how that distinction was never made during the campaign, when Schwarzenegger regularly hammered Gray Davis for accepting money from the state's prison guards' unionÑa group that, it just so happens, frequently clashed with Wackenhut over the push to privatize California's prisons.
Of course, we could have seen this coming from the moment he insisted that he was not taking any money from special interests, only from "powerful interests"Ña distinction that seemed to have been lost in translation. Call them what you like, "special interests," "powerful interests," or "extremely self-interested interests," Arnold's donations include $100,000 from Yellowstone Development, a company accused by the EPA of illegally polluting rivers and wetlands, $21,200 from the giant HMO Health Net, which contracts with the state for programs like Healthy Families, $50,000 from Affiliated Computer Services, a Texas computer consulting company that specializes in government contracts, and $363,700 from real estate developer Alex Spanos and his family, along with large donations from other major real estate developers, car dealers, and agribusiness kingpins. So when you look at Arnold's contributors, they aren't, in fact, very "special" interests, just run-of-the mill big-business interests Republicans have been in thrall to for decades.
While Arnold might be understandably shy about discussing George Bush's policies and the part they irrefutably played in what's happened to California, he's not so coy when it comes to tapping Bush's donors. The president's big boosters, the Rangers and the Pioneers, courageous multimillionaires who have tamed the wild frontiers of influence peddling, also turned out their pockets for Arnold. And among his campaign donors was President Bush's father.
Arnold's backers included some who hedged their bets by supporting both the actor and Gray Davis. Big developers, who knew that, no matter who was in office, there would always be a few rules that needed bending and one or two loopholes that needed stretching, donated $400,000 to Schwarzenegger and $300,000 to the then-governor.
The body politic is no different from the human body: you are what you eat. Arnold's claim of independence from the backroom boys evaporated when he endorsed his $100,000 check from Yellowstone Development. By their donors, ye shall know them. He may claim to be a public servant, but he's only on loan from his corporate donors.
His failure to conduct his long-promised independent audit of the state's accounts underlines the contradictions between his campaign rhetoric and his actions. In speech after speech on the campaign trail, he vowed that his first act as governor would be an exhaustive audit that would uncover billions in waste. "There is more special tricks and special effects than Terminator 3," he said about California's budget. "I'll send accounting firms to really look at that, and do auditing for sixty days, then we can find out exactly where we can cut." In other interviews, he predicted there would be "billions of dollars to be played around with when you open those books." Schwarzenegger spokesman Sean Walsh pledged that the audit would be "real" and "forensic." And the day after his election, Schwarzenegger reiterated his plan to have a "line-by-line" examination of the state's books.
Soon after taking office, however, the new governor began singing a different tune. The promised thorough, wide-ranging audit was replaced by a cursory assessment of earlier budget reports already produced by state agencies, and vows to "open the books" to the public were quickly scuttled. "I would not view this as an audit," said former state controller Kathleen Connell, one member of the three-person team Schwarzenegger had chosen to review the "audit" findings. Talk about an anticlimax.
In one of the campaign TV ads Arnold blanketed the airwaves with, he made solving the budget crisis sound like a nobrainer. "Here is my plan: audit everything, open the books, and then we end the crazy deficit spending."
Easier said than done. Those "billions of dollars to be played around with" have proven as elusive as Iraqi WMD.
As galling as Schwarzenegger's audit flip-flop was, it can't hold a candle to the jaw-dropping about-face he executed on his pledge to protect local governments from the loss of revenue caused by his rollback of the state's car tax. Local governments have become the front linesÑthe "leading indicators," if you willÑof the damage that is being wrought all across the country by the fanatical obsession with cutting taxes and "shrinking government." Not satisfied with plunging itself into a sea of red ink, the federal government continues cutting aid to cities, causing budget deficits and underfunded safety net programs. Before taking office, the governor-elect had personally guaranteed that California's cities and counties would be compensated for the close to $4 billion the rollback would cost themÑthree-quarters of which is earmarked for police, fire, and other public safety services. "I can guarantee you that we will not take money away from them," he said. "They need the money." During the campaign he had even promised that he would provide an alternative source of funding on the same day that he cut the car tax.
Well, true to his vow to the tax-cut crowd, he repealed the car tax on his very first day in office, but he clearly had no plan for how to keep his word on the second half of the bargain.
All across the state, local officials cried bloody murder. Even the notoriously mild-mannered mayor of Los Angeles, James Hahn, a Democrat who had been a part of Schwarzenegger's transition team, went ballistic: "We now have a governor who made a personal pledge to me, made a personal pledge to the people of California . . . I think it's immoral for people to break their word, to go back on pledges."
The outcry caused Schwarzenegger to change course and direct that local governments be reimbursed for the loss, but he did not identify a funding source. Then, three weeks later, he reversed course yet again, taking back $1.3 billion in property taxes from local governments. It was downright dizzying.
These two Schwarzenegger promisesÑone immediately kept and one so casually brokenÑspeak volumes about the mind-set of the tax-cut fanatics. It's particularly striking how blithely the pain and suffering resulting from scaled-back services is dismissed: Hey, it's not my fault.
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