The governor’s mega-bucks bid for a special election

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The following commentary by FTCR president Jamie Court was published on Sunday, March 6, 2005 in The San Francisco Chronicle:
If enough California voters sign one of the petitions for the three ballot initiatives that Gov. Arnold Schwarzenegger began circulating last week, taxpayers could face what amounts to a poll tax of $70 million for the cost of the extra election the governor is planning this fall. The price of this election is too big and the justification is too little.

Ordinarily, Californians would not vote on ballot measures until the June 2006 primary. Schwarzenegger is planning an earlier election on his proposals — to privatize public pension funds, change how teachers are paid and redraw political districts — for only one good reason. He believes he can raise as much campaign cash as possible and has already sued state campaign-finance watchdogs for that right.

If the governor waits until 2006, California’s Political Reform Act clearly will bar him from waging the big-money ballot battle for which he is preparing, for he will be a candidate for governor. For example, his fund- raising stop at the Hyatt Regency in Irvine later this month would be illegal, because Schwarzenegger is asking $100,000 per person for dinner and a photo. The act bars any candidate from working on ballot initiatives where more than $25,000 per person is raised.

Schwarzenegger claims he will pump $50 million into his ballot campaigns, including big bucks from out-of-state fund-raising events in Cincinnati, Manhattan and Washington over the next week. At $25,000 a head, the effort would take 2,000 donors. That’s a difficult task even for the governor, who, among all politicians in California history, holds the record for raising the most money in one year.

Schwarzenegger may be accustomed to big-budget Hollywood productions, but taxpayers should not have to pick up the tab for an extra election just so the governor can skirt campaign-finance laws and wage a no-limits ballot fight financed largely by industries with business before the state.

Why else would out-of-state donors care enough about California ballot measures to donate six figures? Either they want access for other pending business they have here or they stand to gain directly from the ballot measures. You can bet, for example, Wall Street brokers will be supping with the gov at Manhattan’s 21 Club Monday night because they will gain control over hundreds of billions of dollars if Schwarzenegger can turn state-worker pensions into 401(k) plans.

Fortune 500 CEOs hooking up with Schwarzenegger for lunch Tuesday at the St. Regis near the White House might kick in six figures because the governor’s public-pension changes would get corporate reformers at the California Public Employee Retirement System — who have demanded the highest standards of corporate governance — off the CEOs’ backs.

A Field Poll released last month found that more than two thirds of Californians oppose the special election after hearing of its costs. None of the ballot initiatives Schwarzenegger proposes are so urgent they cannot wait a few months for the regularly scheduled elections in June and November of 2006.

Democratic legislators even announced last week their willingness to allow retired judges to redraw political districts — offering Schwarzenegger a compromise, as long as districts are drawn every decade rather than mid- decade as the governor demands.

This extra election is all about creating the big-bucks ballot wars with mega TV exposure that the showman in Schwarzenegger yearns for. If he succeeds in privatizing public pension funds — similar to President Bush‘s plan to privatize Social Security — the governor will likely boost his own presidential profile and hopes of securing a constitutional amendment that would allow the foreign-born actor to occupy the White House.

But wasn’t this the governor who claimed in the recall election “I don’t have to take money from anybody. I have plenty of money?” Apparently, Schwarzenegger is not as rich as he thought. He has raised almost $77,000 a day since announcing he was a candidate — that’s twice Gray Davis‘ clip of $36,000 a day in his first year.

The biggest price of Schwarzenegger’s extra election plan is for taxpayers who already face difficult budget choices. The $70 million taxpayer cost of the election is twice the state’s budget for all HMO and managed-care plan oversight. It is four times the total budget for the state department that evaluates risks posed by hazardous substances. And how many potholes can $70 million repair? How many schoolbooks can it buy?

Prior to the recall in October 2003, the last statewide special election in California was a decade earlier. Other governors have recognized that taxpayer dollars are precious and not to be toyed with. If Schwarzenegger wants an extra election, the megamillionaire should reach into his own pocket and pay for it himself. Otherwise, Schwarzenegger, who ran on a platform of removing money from politics, should wait for 2006 and the campaign-finance limits that come with it.
Jamie Court, author of “Corporateering” (Tarcher/Penguin, 2004), is president of the Foundation for Taxpayer and Consumer Rights in Santa Monica.

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