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Orange County Register (California)
Dec 24, 2003 - 01:00 AM

by JIM HINCH , The Orange County Register

Schwarzenegger outpacing Davis in fund raising

SACRAMENTO -- Gov. Arnold Schwarzenegger, who campaigned on a promise to rid Sacramento of special-interest money, has raised at least $2.7 million since his Oct. 7 election -- a faster pace than ousted Gov. Gray Davis, who was roundly criticized for the unprecedented volume of his fund-raising efforts.

Schwarzenegger's donations, including a batch reported to the secretary of state late Monday, come primarily from lobbyists, large corporations and interest groups who also gave heavily to Davis: oil companies, technology firms and real- estate developers.

Nearly a quarter of the money Schwarzenegger has raised comes from Orange County, primarily from homebuilders, technology companies, a mortgage firm and individuals such as environmental advocate Joan Irvine Smith and Paul Goldenberg, owner of Paul's TV in La Habra.

The donations range from the $5,000 minimum that must be reported by law to $100,000 from an insurance firm with a stake in Schwarzenegger's proposed reform of the state's workers' compensation system.

In a campaign commercial, Schwarzenegger declared: ''Special interests have a stranglehold on Sacramento. Here's how it works: Money goes in. Favors go out. The people lose. We need to send a message: Game over.''

Told during a press conference last week that he was on pace to outstrip to Davis' fund raising, Schwarzenegger joked: ''I would tell (Davis) that he was weak in fund raising, OK?''

Then he continued: ''I am not concerned about it because the kind of money I get from people would not have any influence on my decision- making at all. ... Someone gives me $10,000, I will not make sure they can develop their project somewhere in Long Beach or somewhere. It won't happen. Trust me.''

Jim Knox, director of California Common Cause, said Gray Davis raised $1 million a month on average during his first six months in office. Schwarzenegger has raised $2.7 million in 2.5 months, so he's running ahead of Davis' pace.

"You can't ride a wave of populist anger into the governor's office and then ignore the source of that anger,'' said Doug Heller of the watchdog group Foundation for Taxpayer and Consumer Rights. ''You can't ignore that with flip comments like, 'I'll terminate special interests,' when what you're doing contradicts what you promised.''

Marty Wilson, a campaign consultant who has helped coordinate a statewide series of fund-raisers for Schwarzenegger, said the new governor has taken money primarily to pay off about $2.5 million in bills and other debts accrued by his campaign. Unlike Davis, Schwarzenegger has solicited money only occasionally and has announced his fund-raising events publicly, Wilson said.

One large debt owed by the committee is to Schwarzenegger himself. The governor lent his campaign $4 million. Aides declined to say whether Schwarzenegger will continue raising money to pay the loan off -- a move critics say would amount to donors putting money directly in Schwarzenegger's pockets.

Rob Stutzman, a spokesman for the governor, said in the next few weeks consultants will create a new committee to support a statewide campaign to pass the governor's proposed $15 billion bond issue and spending cap.

''The political contributions are a fact of life in California,'' Wilson said.

Donors said they give to the governor not in expectation of reward but because they support Schwarzenegger's policies.

Tom Phelps, a partner in Los Angeles lobbying firm Manatt, Phelps & Phillips, wrote Schwarzenegger a $5,000 check this month. Phelps' firm represents, among numerous corporate clients, a group of health-care companies that oppose aspects of proposed state regulation of medical-equipment purchasing.

''Manatt doesn't subscribe to the cynical view that you buy access to politicians,'' said Tom McMorrow, a partner in the firm's Sacramento office. "If Tom Phelps wrote a personal check to Schwarzenegger, he did it because Tom is an incredibly optimistic person and shares and supports the governor's optimism about California's future.''

So far, Schwarzenegger's fund raising has had little effect on his public image, said Darry Sragow, a Democratic political consultant.

''Both Gray Davis' reputation as a fund-raiser and the lack of a sense on the part of voters that Schwarzenegger is a fund-raiser are the result of the same phenomenon: Schwarzenegger is doing plenty of other stuff,'' Sragow said. ''Davis never did publicly the things Schwarzenegger is doing. He didn't hold press conferences. He was invisible. So the only thing voters saw was fund

Dwayne Smith, a retired firefighter in Rossmoor who sent Schwarzenegger congratulatory gifts after his election, said he voted for the new governor ''to get rid of that godawful money-grubbing Gray Davis.''

Smith said he was under the impression Schwarzenegger had sworn off fund raising altogether. When told the governor has raised millions, Smith paused.

''That is interesting,'' he said thoughtfully. ''Hopefully he's going to do as he claimed he was going to do. ... I expect him to do what's right.''
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