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Pasadena Star-News (Pasadena, CA)
Jul 13, 2004 - 01:00 AM

by Gary Scott, Staff Writer

Hired firm out of line with governor's job pledge

PASADENA -- In his State of the State address in January, Gov. Arnold Schwarzenegger declared himself to be "California's job czar" and promised to use his skills as a salesman honed, as he said, selling a couple bad action flicks to moviegoers to boost employment in the state.

But critics say the governor turned his back on that pledge when he hired a Canadian firm, CGI-AMS, to advise the state on ways to contract for goods and services.

While the decision is meant to save the cash-strapped state millions, it will also cost Californians their jobs, said Douglas Heller, executive director of the Foundation for Taxpayer and Consumer Rights.

"Schwarzenegger has signed a contract with a company that specializes in sending local jobs overseas," Heller said. "It completely contradicts the battle the governor has waged to keep jobs in California."

The decision to hire CGI-AMSmay also signal Schwarzenegger's distaste for a bill authored by Assemblywoman Carol Liu, D-Pasadena, that would bar all state and local governments from contracting with foreign firms for services, a practice called outsourcing.

Liu introduced the bill after learning a welfare hot line was being handled by operators in India.

"For us to send away those dollars to pay for contracts to people overseas just didn't make any sense to me," Liu said.

Liu said she anticipates Schwarzenegger will veto the bill, which passed the House in May and moved out of the Senate Governmental Organization Committee on a 7-4 vote.

The dissenting votes were all Republican.

Although her bill would not affect the CGI-AMS contract since it has already been signed, Liu said she was baffled by the governor's choice of firms.

"His desire to contract withthis company, whose prime source of job performance is outsourcing," Liu said, "doesn't make much sense to me."

The California Chamber of Commerce has come out against Liu's bill and has given its support to the CGI-AMS contract.

"We think that one of the main considerations of state contracting should be the value to the taxpayers of California and the ability to deliver the best service at the lowest cost," said chamber spokesman Dominic DiMare.

Furthermore, he said restricting foreign contracts would tell the world California is afraid to compete in the international marketplace.

The governor's office has notyet taken a position on the Liu bill.

After Schwarzenegger's landslide victory in the October recall election, which followed an abbreviated campaign, Sacramento lawmakers were anxious to hear the new governor flesh out his priorities.

On Jan. 6, he made clear that,along with fiscal reform, job growth topped his agenda.

"Jobs. Jobs. Jobs," was the Schwarzenegger mantra. "The more jobs the better. I am going to become California's job czar. I'm going to travel the nation and the world to find those jobs."

He called on lawmakers to jointhe cause.

"Creating and retaining jobsand the businesses that provide them must be a priority of the Legislature."

In the past six months, Schwarzenegger has worked to promote California businesses, showing up at groundbreakings for companies opening new offices here and even lobbying one CEO not to leave the state, Heller said.

All the more perplexing thenthat the governor would tap a firm that is not only located outside the U.S., but has publicly stated its intent to use overseas labor, Heller said.

It remains to be seen what reforms CGI-AMS will recommend, but company officials have touted outsourcing, or the use of foreign labor, as a way to achieve "significant savings" for clients.

According to the company's Web site, the services that can be performed more cheaply overseas include data and calls centers, finance and accounting administration, and document management.

The Toronto-based information technology firm lists 25,000 employees and $3 billion in revenues last year. In its contract with the state of California, CGI-AMS agrees to be paid a percentage of any savings.

"I don't think anybody who heard Schwarzenegger pump up California's job potential would have thought he would let a company take California jobs overseas," Heller said. "It just doesn't compute."
Gary Scottcan be reached at [626] 578-6300, Ext. 4458, or by e-mail at

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