2 Schwarzenegger Donors: Old and New Wave

Two Orange County multimillionaires are the biggest donors yet to gubernatorial candidate Arnold Schwarzenegger, whom they see as the best chance for reviving Republican Party prospects in California.

Developer William Lyon and computer executive Paul Folino chipped in nearly $200,000 together to the actor’s committee to recall Gov. Gray Davis. The donations are not subject to campaign contribution limits because they are not for the actor’s own candidacy.

The two men and their spouses also each gave the maximum allowed -- $21,200 -- to Schwarzenegger’s candidacy committee. This is the first statewide election to be held under state contribution limits imposed by Proposition 34, which passed in 2000.

The donations illustrate Schwarzenegger’s appeal to both old-guard and new-wave Republican sensibilities. Lyon, 80, is a longtime home-builder and Republican activist. Folino, 58, is president and chief executive of Emulex, a Costa Mesa computer circuit manufacturer -- and he became a Republican early last year.

Folino, a member of Schwarzenegger’s team of economic advisors, said he and Lyon decided to jump-start the actor’s recall effort, called the Arnold Schwarzenegger Total Recall Committee.

The pair, Folino said, regarded the contribution as an investment not only in Schwarzenegger but also in restoring the sagging fortunes of the GOP, the state’s minority party, which has lost in the last two gubernatorial and presidential elections.

That goal took on added urgency this week, after the Los Angeles Times Poll showed the film star lagging behind Democratic Lt. Gov. Cruz Bustamante among voter choices to replace Gov. Gray Davis.

Neither Lyon nor Folino has state contracts, and their companies have no state lobbyists, according to listings with the secretary of state. As a result, there is no direct gain from their giving, observers said, other than the emotional boost that comes from throwing in with a potential winner.

“I wish I could tell you there’s some devious, backhanded reason they’re on board, but I think it really is a genuine support of the party,” said political strategist Adam D. Probolsky of Costa Mesa, who is not working on any of the recall campaigns.

Folino is a friend of Schwarzenegger, Probolsky said, and Lyon “has been a party man forever.”

“If you ask Republicans whether they’d choose a candidate who can win that they may disagree with on a few things, or go with one who can’t win, they’ll choose to be in power,” he said.

Even without a direct business stake, many business leaders believe California’s business climate is bad and “Schwarzenegger gets it,” said Jack Pitney, professor of government at Claremont McKenna College. “They think he can do something as governor to improve it.”

Successful people also like to surround themselves with other successful people, he said, especially one with Schwarzenegger’s marquee value.

“Some of this is particular to Arnold himself,” Pitney said. “If you have the opportunity to give money to Arnold Schwarzenegger [or] Bill Jones, who would you rather brag to your friends about having dinner with?”

Folino met Schwarzenegger when he served last year as secretary for the actor’s successful initiative, Proposition 49, to benefit before- and after-school programs. About $2 million for the measure was raised in Orange County.

“We were very, very strong supporters of Arnold and Prop. 49,” Folino said. “Now, we want Arnold to become governor.”

His contribution of stock to the recall committee fell just short of Lyon’s $100,000: It sold at $99,164.35, according to campaign reports.

Lyon, who couldn’t be reached for comment, is a former Air Force pilot who has built more than 70,000 homes and apartments from California to Florida. At its peak, his empire was worth about $350 million.

During the better part of three decades, Lyon had shared his wealth with a host of Republican political candidates, including George Deukmejian and Pete Wilson for their gubernatorial campaigns.

He and fellow developers Donald M. Koll and George L. Argyros have been compared to a group of Los Angeles businessmen -- including Holmes Tuttle, A.C. “Cy” Rubel and Henry Salvatori -- who bankrolled the political career of Ronald Reagan.

When the region’s real estate market collapsed in the early 1990s, however, Lyon barely hung on to his company. He survived a lengthy and humbling restructuring that allowed him to avoid bankruptcy but cost him several of his renowned vintage automobiles.

In 1995, he auctioned off a 1931 Bugatti Royale Type 31 Binder Coupe de Ville, at a starting bid of $15 million, then the highest price paid for a car. His 20,000-square-foot home in Coto de Caza had been built with huge garages to store and repair autos.

Last year, Lyon gave $25,000 to gubernatorial hopeful Richard Riordan, and $50,000 more to the GOP gubernatorial nominee, Bill Simon Jr. He also raised six figures for Simon at a fund-raiser at his foothills estate.

“Bill is obviously a very strong supporter of the Republican Party, and he’s clearly one of the flag carriers for the party,” Folino said.

Folino, known primarily for philanthropy, became fund-raising chairman last year of an ambitious drive to raise $200 million for an expansion of the Orange County Performing Arts Center. The $10 million he gave to South Coast Repertory is the largest donation in the history of the Tony Award-winning theater.

Folino wasn’t politically active until December 2001. That’s when he became a founding member of the New Majority, a group of wealthy Orange County Republicans whose aim was to broaden the attractiveness of the state GOP by focusing less on divisive social issues and more on fiscal issues.

The organization riled some established party leaders, who dismissed the group as “performing arts Republicans.”

In the last three years, the group has become the largest Republican donor group in California, spreading some $2.5 million in political contributions to more than 50 Republican candidates statewide. In 2000, it helped raise $3.2 million for George W. Bush.