HMO Exec a Top Candidate for Schwarzenegger Chief of Staff

Gov.-elect Arnold Schwarzenegger appeared close to selecting a chief of staff Monday, with a former Wilson administration official turned health maintenance organization executive as a prime candidate, but with other names also being floated.

While his transition office was moving into a larger space, Schwarzenegger was preparing to confer with legislative leaders Wednesday and with outgoing Gov. Gray Davis on Thursday in what would be his first public trip to Sacramento since the Oct. 7 recall.

Schwarzenegger’s aides already have been meeting with Davis’ top deputies in an effort to smooth the change in government. Even with that, there were complications.

Given Schwarzenegger’s celebrity, longtime Republican Party spokesman Rob Stutzman, expected to be communications director in the new administration, was considering seeking larger quarters to hold gubernatorial news conferences.

He also was making plans to increase the size of the communications office, given interest from national and international news organizations in the new governor, and the decisions by several California television stations to reestablish state Capitol bureaus.

Los Angeles and San Francisco stations all but abandoned Capitol coverage after Gov. Jerry Brown left office 20 years ago.

Several sources, speaking on condition that they not be identified, said top advisors to Schwarzenegger are advocating that he appoint Patricia T. Clarey as his chief of staff. A final decision has not been made. Clarey could not be reached.

The chief of staff is the key appointed official in any gubernatorial administration, playing a major role in the selection of other important appointed officials.

A moderate on social issues who is described as a no-nonsense manager, Clarey was deputy to Schwarzenegger campaign manager Bob White when White was chief of staff to Gov. Pete Wilson. She had worked in the White House under President Reagan and the first President Bush before joining the Wilson administration.

More recently, Clarey worked on Schwarzenegger’s campaign, and on former Los Angeles Mayor Richard Riordan’s failed gubernatorial campaign in 2002.

Clarey is vice president for governmental affairs for Health Net Inc. of Woodland Hills, which describes itself as the third largest health maintenance organization in California.

Along with other HMOs, Health Net is a significant player in Sacramento. Health Net was neutral on one of the most far-reaching health-care measures of the year -- a bill that Davis signed into law requiring most employers to provide health care coverage.

The company has spent $178,000 in California on political contributions so far this year, including $25,000 to Davis in August, after the recall had qualified for the ballot.

Altogether, Health Net donated $135,000 to Davis during his tenure.

The president of Health Net gave $2,000 to Schwarzenegger’s campaign.

The company also donates to federal campaigns, spending $205,000 in the 2001-02 election cycle, almost evenly split between Democrats and Republicans.

Health Net had $10 billion in revenue in 2002 and provided coverage to 5.4 million people in 15 states.

The company provides coverage to 1.76 million people, plus 823,000 people enrolled in state and federal health care programs.

“Pat Clarey is an incredibly talented executive and would bring a tremendous skill set to the day-to-day management of the governor’s office and state government,” said Senate Republican leader Jim Brulte of Rancho Cucamonga.

Brulte and some other state legislators had been mentioned as potential Schwarzenegger appointees. However, a state constitutional provision bars legislators from accepting executive branch appointments during their legislative terms, whether or not they resign their seats.

Sen. Charles Poochigian (R-Fresno), who worked with Clarey in the Wilson administration, lauded her potential selection, calling her “bright, focused, intelligent, loyal.”

“She has a wealth of experience in and out of government,” Poochigian said. “She is not a self-promoter. She has feet on the ground and has a lot of common sense.”

Lobbyist Beth Capell, who works on health-care issues for organized labor, described Heath Net as being “like any other HMO -- no better, no worse.”

Jamie Court of the Foundation for Taxpayer and Consumer Rights in Santa Monica blasted the potential selection, calling Health Net “among the most unfriendly HMOs.”

“If the governor-elect chooses a chief of staff from one of the worst HMOs in the business, he is sending a signal that special interests are running the show,” Court said. “To put a lobbyist in charge of the governor’s office is give away the house, not to clean it.”