Group to Aid Gov.’s Push for Reforms

SACRAMENTO —  A coalition of business and taxpayer groups friendly to Gov. Arnold Schwarzenegger is preparing to raise tens of millions of dollars that can be used to push for initiatives the governor appears set to champion in a special election campaign.

Citizens to Save California could emerge as a crucial source of funding for the governor’s agenda because politicians are no longer allowed to raise unlimited sums for initiative campaigns.

The newly formed coalition, a private nonprofit group, is under no such restriction and could ensure that Schwarzenegger has the money to mount a full-scale campaign for passage of his reforms.

Liberal groups and Democratic lawmakers with resources of their own are expected to take various labor and consumer causes to the ballot. Bolstered by the new committee of well-funded associates, Schwarzenegger would be well positioned to wage a fight.

“It is my guess that they will be a very important ally,” said Marty Wilson, a Schwarzenegger fundraising aide.

Schwarzenegger is calling for tough spending controls, legislative and congressional redistricting and pension reform. Various proponents have filed initiatives supporting each of those goals, promising a crowded ballot and costly campaigns if a special election is called.

The five board members of Citizens to Save California include people with close ties to the Schwarzenegger camp. In some cases, they represent business interests that welcomed the governor’s vetoes last year of a minimum-wage increase and bills that would have cut prescription drug costs and made it tougher for companies to move jobs overseas.

Joel Fox worked for Schwarzenegger in the recall campaign and sponsored a workers’ compensation reform initiative that the governor endorsed last year. Allan Zaremberg is president of the California Chamber of Commerce, whose pro-business agenda comports with that of the governor.

William Houck, president of the California Business Roundtable, was named by the governor last year to co-chair a panel that reviewed the massive proposal for overhauling state government, the “California Performance Review.”

The political consultant that the coalition has hired, Rick Claussen, helped manage campaigns for two of the governor’s initiatives last year: Propositions 57 and 58, a $15-billion bond issue and a balanced budget measure. Voters passed both last March.

“The governor laid out an agenda in the State of the State speech” last week, said Claussen, who co-produced the “Harry and Louise” TV ads that helped torpedo former President Clinton’s healthcare overhaul. “Our desire is to help him achieve that agenda.”

Schwarzenegger told reporters Monday that if the Legislature refused to pass the reform package he wanted, he would call a special election this year and appeal directly to voters.

That could be “the mother of the mother of all wars,” said Steve Merksamer, a Sacramento attorney whose law firm is representing the coalition. The group expects to sift through the proposed initiatives and decide which ones to support. “We have too much automatic pilot going on in this state,” said Fox, invoking a phrase Schwarzenegger has used to describe state spending.

Citizens to Save California board members said they intended to tap business interests for donations that could total $20 million to $30 million. They also plan to hire a full-time fundraiser.

Some corporate lobbyists are aware of the effort and expect the donations to flow.

“We’re planning to participate in it and we’re going to ask clients to seriously consider supporting it,” said Dan Dunmoyer, president of the Personal Insurance Federation of California, which represents major auto and homeowner insurance companies.

But a representative of ChevronTexaco said some businesses might be reluctant to write checks.

“Good government is a great thing to be for, but it’s unlikely that you’ll raise as much money for good government as something that hits your pocketbook,” said Jack Coffey, manager of California state relations for ChevronTexaco.

Until last year, Schwarzenegger could rely on his own aggressive fundraising to underwrite ballot campaigns. He proved successful at it. One of his political committees, the California Recovery Team, took in scores of contributions exceeding $100,000 each.

But the rules have changed. The state Fair Political Practices Committee last year forbade unlimited contributions to such ballot committees, subjecting them to the same $22,300 cap that applies to ordinary political campaign committees.

Citizens to Save California may help Schwarzenegger fill the gap. The governor, a popular draw wherever he goes, is free to appear at the group’s fundraising events. And he can encourage donors to support its efforts, according to people involved.

Fox said Schwarzenegger is barred from exerting “legal control” over the committee.

Still, “we can certainly talk to the governor’s office,” he said. “We can get a feel of where the governor is going to go. He’s the big king on the chessboard. Wherever he moves, a lot of things move with him.”