Backers of Ads Skirt Rules on Disclosure
A GOP group linked to the governor gave funds to the U.S. Chamber of Commerce, which put out `independent' TV spots supporting him.
By Peter Nicholas, Times Staff Writer
SACRAMENTO â€" A television ad campaign
portrayed as an independent effort to help Gov. Arnold
Schwarzenegger has been bankrolled partly by a group with
deep ties to his political operation.
An official with the New Majority, a Southern California
Republican group at the core of Schwarzenegger's
fundraising apparatus, said its members have given about $1
million to the Washington, D.C., business group that is the
public face of the ads: the U.S. Chamber of Commerce.
By pumping the ad money through the chamber, well-heeled
New Majority members have bypassed requirements that their
donations be publicly disclosed. And they skirted the
strict contribution limits â€" $22,300 each for
the June 6 primary and again for the November general
election â€" that would apply if they had
donated directly to Schwarzenegger.
The chamber, which has put out the commercials in what it
calls an "independent issue advocacy program," is not
required to report where the funding comes from or adhere
to donation limits.
Disclosure would be required after April 22, within 45 days
of the primary. The ads stopped running late last week, and
it is unclear whether more are planned.
The latest spot that ran statewide featured reminders of
Gray Davis' governorship and the exhortation "Remember?,"
coupled with upbeat images of Schwarzenegger.
Chamber officials would not say how much the ads cost. But
Andy Gharakhani, executive director of the New Majority's
Los Angeles chapter, characterized the group's contribution
as "significant."
The New Majority includes wealthy businesspeople,
Schwarzenegger campaign aides and gubernatorial
appointees.
The group's membership director is Renee Croce, who is also
finance director of one of Schwarzenegger's main
fundraising committees. She works out of a Santa Monica
building that Schwarzenegger owns and where he keeps an
office.
Croce's office referred calls to the governor's campaign
staff, which declined to comment publicly.
In membership materials obtained by The Times, the New
Majority, which supports centrist Republicans, says its top
political goal this year is Schwarzenegger's
reelection.
The group's promotional literature quotes Schwarzenegger as
saying, "I can always count on the New
Majority…. They are a large part of my
political success, and I am deeply grateful to them."
Government watchdog groups denounced the chamber ads,
depicting them as a ploy for concealing who is behind them
and for flouting the will of voters, who approved
fundraising caps in 2000 under Proposition 34.
"The public should be able to trace where the support is
coming from," said Susan Lerner, executive director of the
California Clean Money Campaign, "and draw their own
conclusions as to whether this is an effort that is
influenced â€" directly or indirectly
â€" by the governor or his supporters."
California law allows independent groups and individuals to
engage in political activity that may help or disparage a
candidate.
Disclosure requirements and fundraising caps depend on such
variables as timing, message and whether the group acts
independently or coordinates with a candidate.
The chamber ads have not explicitly called for
Schwarzenegger's reelection â€" an important
distinction under the law. If they had, they would no
longer be considered "issue" ads, and the chamber would be
required to publicly report the donations.
The chamber faced heavy criticism for its actions in a 2004
attorney general's race in Washington state. It spent $1.5
million on ads criticizing one of the candidates, routing
the money through a Seattle group that declined to reveal
the source of the funds.
A county judge ultimately ruled that the spending violated
state laws holding that campaign contributions must be
reported. The case is on appeal.
Gharakhani said the New Majority has donated about $10
million overall to the governor's campaign causes,
beginning with his push for after-school programs when he
was a private citizen in 2002.
One New Majority founder, Gary Hunt, is Schwarzenegger's
campaign finance chairman. Hunt, in an interview, said he
knew nothing about the chamber's ad campaign.
Paul Folino, chairman and chief executive of Emulex, a
high-tech company, chairs the New Majority's Orange County
chapter. He has donated $1.3 million to Schwarzenegger's
political funds over the last four years, state records
show. Folino did not return calls for comment.
Another New Majority founder is billionaire Donald Bren.
Bren is chairman of the Irvine Co., an Orange County real
estate firm that has put $410,000 toward Schwarzenegger's
political goals in the last two years.
The Irvine Co. has sought a donation to the TV ad campaign
from Chevron Corp., according to a Chevron official.
Chevron decided not to make a donation because of other
campaign spending priorities, according to the official,
who asked not to be named because, he said, the overture
from Irvine was "preliminary."
Irvine Co. spokesman Larry Thomas did not return calls for
comment.
For help with the ad project, the chamber has hired
consultant Robert C. Lapsley of Sacramento. In the last few
months, Lapsley has met with the governor and First Lady
Maria Shriver as he was being considered for senior
positions in Schwarzenegger's administration and in his
reelection campaign. Lapsley, who declined to comment, has
not taken a job.
Lapsley is a former aide to George Argyros, an Orange
County developer and former U.S. ambassador to Spain.
Argyros too is a founder of the New Majority and a member
of the U.S. chamber's board of directors. He co-sponsored a
luncheon for Schwarzenegger donors in Newport Beach in
January.
The New Majority's promotional material contains a list of
appointments that members have received. It includes A.G.
Kawamura, whom Schwarzenegger appointed secretary of Food
and Agriculture, and Folino, who was named to a
Schwarzenegger jobs commission.
Ned Wigglesworth, an analyst with TheRestofUs.org, a
government watchdog group in Sacramento, called the chamber
campaign a "sham."
"We have limits so that wealthy interests don't gain a
disproportionate say in the election process," he said.
"These sham issue ads are a way to enable wealthy interests
to have a disproportionate say."
Both the chamber and the Schwarzenegger campaign say they
have not consulted each other on the 30-second spots.
"The U.S. chamber's ad was not run in coordination with the
governor's campaign for reelection," said Julie Soderlund,
a spokeswoman for the Schwarzenegger campaign.
The first ad appeared March 8 and focused on
Schwarzenegger's proposed public works construction
project. When that foundered in the Legislature, the ad was
replaced.
In the most recent commercial, the announcer reminds
viewers of multibillion-dollar budget shortfalls, rolling
blackouts and a hike in the vehicle license fee under Gov.
Davis. The screen then fills with pictures of
Schwarzenegger taking the oath of office, holding a child's
face in his hands, mixing with enthusiastic crowds.
"Arnold Schwarzenegger delivered," the announcer says.
As the ad fades out, a message at the bottom of the screen
says it was paid for by the U.S. Chamber of Commerce. There
is no mention of other donors.
The chamber would not discuss how the ads have been
financed, except to say the money came from unnamed
members. Spokesman Eric Wohlschlegel said the purpose of
the commercials was to "highlight a lot of issues that the
chamber finds important to the business community."
Gharakhani said the New Majority had contributed to the
chamber effort because it wanted to help showcase
Schwarzenegger and his record.
"Our members feel these commercials are important because
they stress the governor's vision for California and
investing in California," he said, "but are also important
to remind Californians what has been accomplished since the
governor took office after the recall" of Davis.
*
(INFOBOX BELOW)
Behind the ads
Television ads lauding Gov. Arnold Schwarzenegger have been
aired by the U.S. Chamber of Commerce as an independent
effort to help the governor, who is running for reelection.
The chamber is not required to disclose that the ads have
been partly paid for by members of the New Majority, a
Southern California Republican group tied to the governor's
political operation. New Majority members include:
• Renee Croce, the group's membership
director and finance director of one of Schwarzenegger's
main fundraising committees.
• Gary Hunt, a founder of the group and
Schwarzenegger's campaign finance chairman.
• Paul Folino, chairman of the group's
Orange County chapter and a major donor to
Schwarzenegger.
• Donald Bren, a founder of the group
and chairman of the Irvine Co. real estate concern. Irvine
Co. sought a donation to the ad campaign from Chevron
Corp., according to a Chevron official, who said no
donation was made.
• George Argyros, a founder of the group
and a member of the U.S. Chamber of Commerce board of
directors. He co-sponsored a luncheon for Schwarzenegger
donors in January.
* Source: Times staff
Los Angeles Times
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