Timing of Gov.’s Bid a Sign of Deep Woes

Gov. Arnold Schwarzenegger’s plan to announce his re-election bid today reflects the gravity of his political and financial troubles as he strives to restore a battered public image in time to win approval of his November ballot measures.

Timed largely to inspire a burst of donations to his initiative campaigns, Schwarzenegger’s noon reelection launch in San Diego could help him narrow the huge financial advantage that labor unions hold as they wage a blistering ad assault against him and his election agenda, strategists say.

But like other major problems that Schwarzenegger faces, his poor financial shape is at least partly a self-inflicted injury. His campaign committees reported spending nearly $26 million in the first six months of the year, leaving his political accounts all but depleted by the end of June. The $1.2 million in cash left was entirely offset, and then some, by $3.8 million in debts.

His summer fundraising has yielded nearly $7.5 million in new money. But unions and Democratic Party groups are still likely to continue vastly outspending the Republican governor on TV ads in the 53 days left in the fall initiative campaign.

Even by the costly standards of California, the most expensive state for running campaigns, Schwarzenegger’s spending on consultants, pollsters and other vendors has been lavish. It included $5 million in the spring for television ads that failed to stop his slide in popularity, more than $550,000 in pollster fees and unspecified sums for ballot measures that Schwarzenegger abandoned.

With his job approval score having sunk to a record low of 36% of registered voters in the latest Field Poll, even Republican strategists are questioning how Schwarzenegger’s political team could have squandered his once-overwhelming popularity.

“It seems to be a vendor-driven operation, where you have so many people making so much money from this full-time political operation that no one steps back and says, ‘What is the strategy?’ ” said Arnold Steinberg, a Republican strategist.

Schwarzenegger, whose advisors deny overspending and blame his woes mainly on the union TV ads, outlined his strategy for political recovery this week as he campaigned in Riverside and Fresno.

In essence, he is trying to recapture the image he built two years ago in the recall race that ushered him into office -- that of an outsider sent by the people to “fix a broken system” in Sacramento, as Schwarzenegger puts it.

State lawmakers, the governor told guests at his Riverside campaign event Monday, “have to answer some higher power, if it is the powerful government employee union bosses, or if it is the special interests, or if it is corporate America.”

“Whatever it is, they have to answer to them, so they can’t move on,” he said. “So this is why we have to go the initiative route.”

For Schwarzenegger, the question is whether he can still succeed in casting himself as an outsider challenging what he calls the status quo in Sacramento.

His fame as an action film hero has gradually diminished as a political asset, driven down over the last year by increasingly partisan rhetoric, disputes with legislative leaders and fundraising on a scale unmatched even by his tossed-out predecessor, Gray Davis.

Schwarzenegger’s strategists say today’s announcement will help both financially and politically.

“People are clear that the public employee unions’ bosses have a beef with the governor,” said Rob Stutzman, communications director for Schwarzenegger’s campaign. “And now they’re going to hear what the governor’s trying to do: Bring reform to a system that badly needs it.”

Stutzman, who dismissed accusations of overspending as sour-grapes complaints by consultants not hired by the governor, said the announcement would both spur donations and assure voters “that they’re supporting efforts that have a long-standing positive influence on the state.”

“It’s important for the people of California to understand that the governor approaches this with a long-term plan, that this isn’t simply about some initiatives and then he’s going to ride off into the sunset next year,” he said.

Schwarzenegger is pushing three measures on the Nov. 8 ballot: Proposition 74, which would extend teachers’ probation period from two years to five; Proposition 76, which would restrict state spending and enhance the governor’s budget powers; and Proposition 77, which would strip state lawmakers of their power to draw congressional and legislative district maps.

Recent polls have found all of the measures losing.

Schwarzenegger has also spoken favorably of Proposition 75, a measure that would bar public-employee unions from spending member dues on political contributions without prior consent. Unions have concentrated their early advertising on that measure, calling it part of Schwarzenegger’s “hidden agenda” to weaken those who challenge him. Initial polls suggest that voters support the measure, which Democratic leaders fear would choke off their pipeline of labor donations.

In their attacks on Schwarzenegger, the unions are trying to undermine what remains of his populist appeal, using firefighters, police officers, teachers and nurses in their ads to put faces on those they say would be harmed by his proposals.

“These ads are very effective,” said Ken Khachigian, a San Clemente lawyer and veteran Republican strategist. “The real question is how to counter their effectiveness.”

The unions also hope to cement the impression that Schwarzenegger has failed to make good on his vow to shut down the money-buys-influence culture in Sacramento. One of their latest TV spots features a police officer saying Schwarzenegger has taken more “special-interest money” than former Gov. Davis. The closing slogan: “Not the governor we thought you’d be.”

Schwarzenegger’s rapid campaign spending -- and his consequent need to raise millions more in the weeks ahead -- is sure to further enable adversaries to portray him as favoring business allies over working Californians, analysts say.

In the recall contest he argued he was so wealthy that no special interest group could buy influence in his administration, but “he’s lost that advantage,” said Elizabeth Garrett, director of the USC-Caltech Center for the Study of Law and Politics.

“If he has to rely on the business interests to give him money all year long every year, then he’s going to open himself to charges of undue influence by those groups,” she said.

Part of the problem, Garrett said, is Schwarzenegger’s repeat trips to the ballot box. “He can’t fund a perpetual campaign,” she said. “There’s an initiative industry, and they are not cheap.”

Other analysts suggest that a fundamental flaw in Schwarzenegger’s political strategy has been to expect that he could easily marshal his popularity to win voter support for proposals thwarted by the Democrats who control the Legislature.

“The assumption seems to have been that his celebrity-hood would cover him, and this kind of approval would continue for a long time,” said Stanley Moore, a Pepperdine University political science professor. “Things change.”

Former Gov. George Deukmejian, a Republican, said Schwarzenegger’s inexperience in Sacramento may have led him to underestimate the power of the unions threatened by his proposals.

“To take on all of the interest groups that he did at the same time -- and interest groups that have deep pockets and tremendous numbers of members -- may not have been the wisest approach, politically,” Deukmejian said at a Los Angeles forum of former California governors in July. “Perhaps it might have been more effective to take on one at a time.”

But for all his troubles, Schwarzenegger remains more popular than the Legislature, meaning he can still position himself as an agent of reform in the Capitol.

“In politics, it’s always an ‘as compared to’ game,” Garrett said.

Indeed, regardless of how Schwarzenegger’s ballot measures fare in November, he still holds distinct advantages over potential 2006 Democratic rivals Steve Westly, the state controller, and Phil Angelides, the state treasurer -- above all, charisma and a name well known to California voters.

“No politician is dead until there’s a flat line on the monitor,” said Ray McNally, a Republican consultant working on the union campaign against Schwarzenegger’s ballot measures. “He can come back.”

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Times staff writer Dan Morain contributed to this report.

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Raising and spending money

The debt accrued by Gov. Arnold Schwarzenegger’s campaign committees exceeded cash on hand June 30. The panels have raised about $7.5 million since. Updated spending figures aren’t available.

Financial position through June 30:

*--* Spent since Cash on Outstanding Committee Jan.1 hand debt Citizens to Save $12,048,772 $37,634 $1,437,824 California Schwarzenegger’s 11,070,642 570,614 1,810,311 California Recovery Team Californians for 2,316,944(1) 149,894 275,059 Schwarzenegger 2006 Californians for 443,417 484,262 327,919 Schwarzenegger Total $25,879,775 $1,242,404 $3,851,113

*--*

Includes $1 million transferred to Schwarzenegger’s California

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Contributions received July 1 through Sept. 14:

Citizens to Save California: 106,000

Schwarzenegger’s California Recovery Team: 7,349,000

Californians for Schwarzenegger 2006 : None

Californians for Schwarzenegger: None

Total: $7,455,000

Source: California secretary of state