L.A. Power Brokers Dig Deep for New Governor

By HOWARD FINE

Staff Reporter

Despite his pledge not to take money from special interests, Gov. Arnold Schwarzenegger has reaped hundreds of thousands of dollars in contributions from major L.A. developers and executives since he won the recall election on Oct. 7.

Among the biggest local contributors are City of Industry-based Majestic Realty Co., the real estate developer, real estate broker-turned investor Fred Sands, billionaire investor Otis Booth and Yahoo Inc. Chief Executive Terry Semel.

All told, Schwarzenegger has taken in about $1.1 million since Oct. 7, according to records compiled by the Secretary of State’s office. Some of the contributions were actually made in the days prior to the election, but didn’t get processed until after the balloting. But most of the money came in after the recall.

The cash is on top of the $12 million Schwarzenegger took in during the recall campaign, and that doesn’t include a $4.5 million loan to the campaign that he made from his own funds.

Topping the list of post-Oct. 7 contributors is Majestic Realty, its chairman, Ed Roski Jr. and his wife Gayle. All told, they have contributed $100,000 to two committees controlled by Schwarzenegger: his own campaign committee and the “Yes to Recall Gray Davis” committee. That puts Majestic and its owners on a par with New York-based American International Group Inc. and Ameriquest Capital Corp. of Orange as the largest contributors to Schwarzenegger since Oct. 7.

Other notables who have given to the Schwarzenegger committees: Sands ($21,200), Semel ($10,000), Booth ($10,000), Trust Company of the West Chairman Robert Day ($25,000), Cypress Land Co. President Brian Harvey ($10,000) and Jane Boeckmann, wife of auto dealer magnate Burt Boeckmann, who gave $21,200.

Broken pledge?

With so many dollars coming from business executives, especially in the real estate industry, critics charge that Schwarzenegger is violating his own campaign pledge not to take money from special interests.

In a press conference in Burbank on the day he announced his candidacy on the “Tonight Show,” Schwarzenegger said, “I don’t need to take money from anyone. I have plenty of money myself.”

He also promised to “clean up Sacramento” and get rid of special interest money.

“Now that he’s elected, his behavior is indistinguishable from Gray Davis, who he criticized as being a ‘pay-to-play’ governor,” said Jim Knox, executive director of California Common Cause.

But Schwarzenegger spokesman Rob Stutzman said that in making those initial comments, the governor was referring only to groups that his administration would have to negotiate with: public employee unions and Indian tribes. During the campaign itself, though, Schwarzenegger made no such distinctions.

Knox dismissed this definition of special interest as “a joke It’s a very novel and self-serving definition of special interests. He’s taking large sums of money from interest groups and companies that are seeking to get legislation on his desk for his signature.”

Roski said his main objective was not to push for specific legislation but to support someone who promised to improve California’s business climate.

“Everyone understands that we have a very fragile and declining business climate in California,” Roski said in a statement. “We saw this as an opportunity to help revitalize the state we prefer the creation of new jobs and revenues to support government programs such as education, infrastructure, health, transportation, environment, and other important issues.”

Semel has a long-standing policy of not commenting on political contributions, according to Yahoo Inc. spokeswoman Joanna Stevens. Calls to Sands, Booth, Day, Harvey and Boeckmann were not returned.

Only a portion of the contributions to Schwarzenegger came from locals.

Companies making contributions over the last two months include Palm Beach, Fla.-based Wackenhut Corrections, a private prison management firm, Pleasanton-based Safeway Inc. and Houston, Texas-based Waste Management Inc.

Contributions to Schwarzenegger’s campaign committee are limited to $21,200 per individual or corporation, although there is no limit on the number of individuals within a corporation that can make personal contributions. That’s why Roski could give $21,200 on top of Majestic Realty’s contribution to Schwarzenegger’s campaign committee.

There are no limits on contributions to the “Yes on Recall” committee, since the measure was an initiative and not a candidate race.

All the money taken in since Oct. 7 is being used to pay an estimated $2 million in debts incurred during the campaign, Stutzman said. To finish paying off the debts, Schwarzenegger had scheduled fundraisers in Sacramento and Los Angeles late last week and another one for San Diego this week.

Stutzman added that there would be “ongoing political expenses, including some travel and lodging, some of which will be paid for through campaign fundraising.”

In addition, the spokesman said, Schwarzenegger will likely campaign for or against several ballot measures and on behalf of other candidates. But those dollars would not flow into Schwarzenegger-controlled committees.