The Governor’s Wayward Broom;

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‘Housecleaning’ puts special interests first.

The following commentary was published in The Los Angeles Times on November 23, 2003:

The governor who was going to clean the house of government is already in danger of tearing it down.

Arnold Schwarzenegger‘s first act in office may have been to cut the car tax, but his second was to put on the chopping block hundreds of pending public safety regulations that were reviled by special-interest groups.

Among the scores of new rules that were frozen for six months — in order to be vetted for their effect on business — were regulations to limit pesticides, to create drinking water standards for arsenic and to publicly disclose on the Internet doctors’ medical negligence settlements.

Schwarzenegger acknowledged when he ran for office that he wanted to promote business opportunities, but his freeze of already well-vetted regulations and his appointment of anti-regulation regulators to redraft them are beyond the pale.

For example, A.G. Kawamura fought reforms protecting farm workers and the environment when he was chairman of the Western Growers Assn. Now Kawamura, who donated the $21,200 maximum to Schwarzenegger’s campaign, has been named food and agriculture secretary and is responsible for implementing regulations on agricultural reforms. With the regulatory freeze, Kawamura has a second shot at watering down the rules — which also affect his own farming operation in Orange County.

Because her last job was top lobbyist for the HMO Health Net, the governor’s chief of staff, Patricia Clarey, just might be open to calls by the medical industry to revisit pending HMO regulations governing patients’ continuity of care, direct billing and doctor group financing.

Similarly, it stands to reason that former California Chamber of Commerce insiders would lend a sympathetic ear to industry objections to accounting reforms or new energy efficiency standards for manufacturers. Cassandra Pye, now Schwarzenegger’s deputy chief of staff for external affairs, was the California Chamber’s vice president who oversaw its political action committee. Richard Costigan, the governor’s top legislative aide, was the chamber’s former chief lobbyist.

And if there was any doubt that Schwarzenegger appointees would deliver for his biggest business boosters, look only to the vindictive firing of DMV chief Steve Gourley.

Gourley had a reputation for being tough on car dealerships, one of Schwarzenegger’s top four donor bases. Sunne McPeak, now secretary of the Business, Transportation and Housing Agency, dropped Gourley within hours of the Schwarzenegger inauguration.

The new administration is not just targeting pending rules that affect recent laws. Regulations that have been in effect for the last five years are also subject to review. Schwarzenegger’s order could set the state back years because crafting the rules necessary to implement controversial laws involves careful review of statistics, testimony and voluminous evidence.

The governor’s action has the potential to delay important public-interest protections for a long, long time by shunting regulations to the sidelines as he puts “reluctant regulators” in charge. And if anyone doubts the effect of such reluctant regulators, recent history offers the evidence of former California Insurance Commissioner Chuck Quackenbush, who took millions from the insurance industry for his election war chest and resigned in a high-profile scandal after selling his office to insurers.

Some public-interest lawyers, such as the staff at the Center for Public Interest Law, believe that the governor’s executive order might overstep the authority of the executive branch. How harshly Executive Order 2 is carried out will probably determine whether a lawsuit is filed.

In his first week, the governor who was going to oust special interests has managed not only to give them the keys to government, he’s created a potential separation-of-powers crisis. At the very least, his Executive Order 2 is going to force government agencies to do their job twice.

Is this what Schwarzenegger meant in his campaign promise to bring sweeping changes to Sacramento?
Jamie Court, author of “Corporateering: How Corporate Power Steals Your Personal Freedom and What You Can Do About It” (Tarcher/Putnam, 2003), is a founder of

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