Gov. Gets Down to Business

As he rebuffed legislation with an intensity rarely seen in California’s Capitol, Gov. Arnold Schwarzenegger’s commitment to boost business generally overruled his desire to help the environment and consumers this year.

He vetoed an increase in the minimum wage, he blocked consumer protections for used-car buyers, and he refused to impose new air pollution standards on the ports of Los Angeles and Long Beach. He killed all the top 10 “job killer” bills on the California Chamber of Commerce’s list.

Even so, Schwarzenegger wasn’t close to predictable, sometimes moving far from other Sacramento Republicans.

He created a land conservancy to protect the Sierra Nevada and banned .50-caliber guns. He agreed to let released felons receive food stamps. He legalized the sale of over-the-counter syringes -- something Gov. Gray Davis, his Democratic predecessor, had refused to do.

“I was prepared to see a more sustained and consistent veto message that was more traditionally Republican than what we saw,” said Don Perata, the Oakland Democrat who is the incoming Senate president pro tem.

In vetoing a near-record 25% of the bills passed by the Legislature, the governor began to show how he was balancing the various promises he made in last year’s recall election. He pledged to be “the people’s governor,” battling special interests. He also vowed to improve the state’s economy.

But when economic and social concerns clashed in dozens of less-heralded pieces of legislation, Schwarzenegger’s empathy for business worries usually came out on top.

Schwarzenegger opposed creating a state “green business” certification program for companies that operated in an environmentally friendly manner. He refused to provide state assistance to clean up emissions from metal-plating companies, and vetoed a plan to clamp down on air pollution at the ports of Los Angeles and Long Beach. He quashed an effort to shift the focus of California’s management of forests away from timber production and toward recreation and public enjoyment.

“There are any number of bills that the governor signed that are good environmental bills, but to my knowledge there are almost no major bills that were opposed by the Chamber of Commerce that were signed by the governor,” said Michael Schmitz, executive director of the California League for Environmental Enforcement, a statewide coalition based in Oakland.

In the conflict between consumers and companies, the governor usually sided with business.

“What the governor did over the last year was very reflective of where California is,” said Richard Costigan, Schwarzenegger’s legislative advisor. He said the governor backed “reasonable legislation that really focused on turning around the economy.”

Schwarzenegger had campaigned on the theme of boosting California’s economic climate by easing mandates on businesses, so it was not much of a surprise that he vetoed bills that would have increased the minimum wage or made it harder for Wal-Mart and other companies to build so-called superstores.

But beyond those high-profile measures, the smallest new obligations on business invariably ended up demolished by Schwarzenegger vetoes.

He declined to force the agricultural industry to offer direct deposit to its employees. He refused to require that hotel room attendants get longer rest breaks, saying that “California does not need more labor laws, just tougher enforcement of its existing laws, especially in industries with high numbers of vulnerable workers and a history of labor law violations.”

Schwarzenegger showed zero tolerance for regulation of businesses even where the threat of job losses was not apparent.

He vetoed a privacy bill that would have required businesses to inform workers if management planned to monitor their e-mail or other Internet use. He rejected an effort to stop unscrupulous car dealers from deceiving customers to sell them loans more expensive than they could get elsewhere.

He refused to block hospitals from charging uninsured patients more than they charge those with health coverage. He said no to requiring that insurers cover maternity care, though he acknowledged the “difficult policy choice” between ensuring that pregnant women have appropriate healthcare and keeping insurance costs down.

Though a self-styled revolutionary ready to “blow up” the way state government works, he turned timid when Democrats suggested creating websites to direct Californians to Canadian pharmacies where they could buy cheaper drugs. The sites, Schwarzenegger said, could make the state vulnerable to lawsuits or federal sanctions.

“He had projected a moderate image, and we were expecting some moderation on prescription drugs and protecting the uninsured,” said Anthony Wright, executive director of Health Access California, a Sacramento-based advocacy group. “We certainly expected that there were going to be differences ideologically, but I am surprised that he didn’t even sign any of the major bills for health consumers. He went down the line in favor of industry and against patients.”

There were exceptions, but they were rare. Schwarzenegger abandoned his own pro-business philosophy by requiring insurers to cover asthma treatment and making those who spray pesticides liable for the medical bills of anyone who was exposed.

It remains to be seen if California’s electorate will find these actions to their liking. A recent poll by the Public Policy Institute of California found that 54% of Californians believe government regulation of business is necessary to protect the public -- an increase of eight percentage points from 2000.

With issues on which corporate California expressed no position, Schwarzenegger showed himself to be flexible, unpredictable and willing to parse topics on their merits. It was in these areas that his liberal side appeared most frequently.

The governor required health insurers to provide domestic partners of employees with the same benefits they offer spouses -- an action lauded by gay rights groups and one to which the insurance lobby did not object.

“What he looked at were rational arguments that were put up for opposition, rather than looking purely at the philosophical point of view,” said Robert Ricker, a lobbyist who represents the Coalition to Stop Gun Violence, a national gun control group based in Washington, D.C. “He’s a person you can approach and argue to and present evidence to, and you have an even shot at making your point.”

Despite decrying “silly bills,” the governor agreed to outlaw the force-feeding of ducks in the making of pate and banned the declawing of wild and exotic cats such as jaguars. Animal rights activists were ecstatic.

Schwarzenegger didn’t mind a little silliness of his own. He prefaced his refusal to allow ferrets to be kept as pets by saying, “I love ferrets. I co-starred with a ferret in ‘Kindergarten Cop.’ ”

While rejecting the idea of allowing schools to provide classes in personal finances, he flippantly announced that he “would welcome future legislation that requires all members of the state Legislature to complete a course in financial management and responsibility” -- adding that “I believe the Legislature should begin teaching kids by example.”

Schwarzenegger was not always consistent. He routinely rejected proposals to reorganize government agencies, saying he preferred to first evaluate the proposals of his own California Performance Review, which urges consolidating the state’s sprawling agencies and commissions. Yet even though his advisors raised those same objections over a measure to create a new Ocean Protection Council to guard coastal waters and ecosystems, Schwarzenegger signed it.

By and large, Republican lawmakers did quite well this year. Schwarzenegger signed 92% of the bills the minority-party GOP was able to get through the Legislature. Only 68% of Democratic legislation was signed. Overall, he rejected a greater proportion of all bills than any of the previous five California governors vetoed in their first year.

The decisions Schwarzenegger made on dozens of bills have intensified complaints that it is he who is beholden to special interest money. Pharmaceutical companies, the Chamber of Commerce and car dealers have all been among his most generous sponsors, and the governor gave them what they wanted on nearly all of their major concerns.

The Foundation for Taxpayer and Consumer Rights, a Santa Monica advocacy group, calculated that Schwarzenegger took more money from drug companies over the last year than any elected American official except President Bush.

Some of the vetoes may have caused hurt feelings that could make next year’s negotiations more difficult.

Schwarzenegger slighted Assembly Speaker Fabian Nunez (D-Los Angeles) by rebuffing five of seven of the measures the speaker sponsored, including the hotel-attendants bill and another allowing utilities to build power plants. The governor’s spokesman, Rob Stutzman, said Nunez was at fault because he “carried so much water for special interests.”

Noting that many of his bills had bipartisan backing in the Legislature, the speaker said the vetoes were “an expression that there’s some pettiness going on in the governor’s office.”

Nunez said Schwarzenegger’s actions showed that the governor was acting like the same kind of politician he rebuked during his campaign.

“One of the things he said time and time again was that he was going to put an end to the way special interests work. What did he say? ‘Money goes in, favors go out.’ So what has changed?”

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Times staff writer Nancy Vogel contributed to this report.