Arnold’s Transfers Circumvent Ballot Disclosure Law

Published on

Is Arnold using a complex set
of campaign committees and money transfers to skirt California law and
hide funding of the Yes on Propositions 57 & 58 campaign from the

In 1996, California voters went the the ballot box to require
initiative sponsors to reveal who is really behind measures on the
ballot every election. The law requires: "Any advertisement for or
against any ballot measure shall include a disclosure statement
identifying any person whose cumulative contributions are fifty
thousand dollars ($50,000) or more." It goes on to say that a ballot
measure committee "shall name and identify itself using a name or
phrase that clearly identifies the economic or other special interest
of its major donors of fifty thousand dollars ($50,000) or more…"
(View an example at the end of the ad at*)

By funding most of the campaign for Yes on 57 & 58 through money
transfers from the "Governor Schwarzenegger’s California Recovery Team"
committee, Arnold has skirted both of these rules and made it look as
though the initiative is paid for by the action hero himself, despite
the true source of the campaign cash.

Because of these transfers, in order to comply with the campaign reform
rules, a Yes on 57/58 ad would currently disclose that the ad is
"sponsored by Californians for a Balanced Budget – Yes on 57 & 58,
Major funding from Governor Schwarzenegger’s California Recovery Team
and Western Manufactured Housing Communities Association Issues PAC."
(This association is the only other donor to the 57/58 campaign to have
given $50K.)

Voters will not be told, however, that a quarter million each has come
in to the Recovery Team from banking firm American Sterling
Corporation, the high tech Emulex Corporation, builder William Lyon
Homes, developer Castle and Cooke and media mogul Jerry Perenchio.
Other large contributions have come from insurance and energy firms.
With the state budget hanging in the balance, these companies
understand that if the bond initiative fails they may face corporate
tax increases or a change in the state‚s commercial property tax

Arnold’s polling team has probably figured out that the already
unpopular proposals would be in a lot more trouble if every
advertisement ended with: "Sponsored by Californians for a Balanced
Budget – Yes on 57 & 58; a coalition of banks, developers,
insurance companies and energy firms. Major funding from American
Sterling Corporation and William Lyon Homes, Inc."

Whether or not the initiatives are good for California is not the point
here. Arnold promised that he would make government and politics more
transparent; he would deliver the state back to the People of
California. California voters ought to know the special interests
behind these ballot measures. The innocuous, or even encouraging,
appearance that these efforts are funded by some fantastic Recovery
Team that Arnold has put together for California flouts the rules of
the game.

*ArnoldWatch has not taken a position on Prop 56

Consumer Watchdog
Consumer Watchdog
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