Kennedy May Be More of a Liability Than Help to Gov.

This probably was not what Gov. Arnold Schwarzenegger had in mind when he signed up Democrat Susan Kennedy to be his chief of staff.

You’ve got to wonder, however, what exactly he was thinking. It looks like yet another case of political naivete.

Set aside, for a moment, the money stench: Schwarzenegger’s allowing Kennedy to mix public and political funds to pad her compensation package.

“I’m 45 years old; I got a mortgage to pay,” she recently told the San Francisco Chronicle. Since then, she has refused to talk to reporters on the record.

Go back to the beginning: Schwarzenegger’s selection of Kennedy in late November as his No. 1 aide. This was bound to cause political grief that a struggling, wounded governor could scarcely afford.

What was the message to GOP faithful, including his own staff, when Schwarzenegger chose a longtime Democratic operative and Gray Davis aide to be his top advisor? It was simply that no Republican was good enough for him. And, by the way, he was moving left.

Predictably, there was a Republican eruption. Conservatives demanded that Kennedy be fired. They called for the state GOP to un-endorse the governor’s reelection at its Feb. 24-26 convention.

The harsh reaction caught Schwarzenegger by surprise.

“I always will hire the people that I want to hire,” he told reporters.

“Ever since I came to California I have been a Republican, and I have had mostly Democrats working for me ... when I worked in the movie business and everywhere. And no one ever asked me, ‘Who is working for you?’....

“I was surrounded by 90% Democrats and even married a Democrat.... And all of a sudden now it becomes an issue. I don’t think it makes sense.”

That is worrisome, coming from a political leader.

Civics-1a: Sacramento, in contrast to Hollywood, operates in a two-party political system. Victors and spoils. Rewards and punishments. Party loyalties and like philosophies.

Sure, as a tough administrator and policy analyst, Kennedy is superb. She was recruited to take charge of a gubernatorial office that critics complained was dysfunctional, to refocus the governor and his administration. She may be succeeding.

Schwarzenegger mostly has been on the right course: addressing issues that directly affect people, finally getting around the state and speaking to civic leaders, laying off the dumbing-down macho lingo.

But regardless of how much Kennedy has helped inside, she has been a political drag outside.

The only way for Schwarzenegger to sell this appointment to suspicious, resentful Republicans, and Democrats who feel betrayed by Kennedy, is for the new chief of staff to concentrate on public policy. Avoid political combat and money-grubbing. Show, as Kennedy initially asserted, that she’s motivated by a desire to help Schwarzenegger achieve his policy goals -- not to make a few extra grand.

The last thing Schwarzenegger needed was for his and her ethics to be questioned. And that’s what is happening.

To recap: Since her appointment, it has been reported and acknowledged that Schwarzenegger is supplementing Kennedy’s $131,000-per-year public salary with $7,500 a month in political money. That’s supposed to pay for her political advice (which she should be offering as chief of staff anyway) and for explaining the governor’s agenda to donor groups (that she shouldn’t be going near).

Turns out, in December, while still a California Public Utilities commissioner -- a $114,000 job -- Kennedy was slipped $25,000 from Schwarzenegger’s campaign account for political advice. That came three weeks after AT&T; donated $25,000 to Schwarzenegger. The donation was made four days before Kennedy voted to approve AT&T;’s merger with SBC. Nobody is alleging a quid pro quo, but it’s a putrid perception.

“The perception of corruption is almost as bad [as the real thing] because it undermines the people’s confidence in government,” notes veteran Republican consultant Sal Russo.

There’s more: While on the PUC last year, Kennedy was paid $120,000 by an L.A. developer, Cadiz Real Estate, that wants to build a massive water storage project under the Mojave Desert. The pay purportedly was for federal regulatory and legal counsel, although Kennedy is neither a Washington lobbyist (she once worked there for Sen. Dianne Feinstein) nor a lawyer.

The most troubling is Kennedy’s double-dipping into public and political troughs, the latter fed by favor-seeking special interests. The governor’s office defends this by noting that Gov. Pete Wilson once paid his top advisor campaign money and that three Schwarzenegger aides got $5,000 monthly political perks last year.

But that doesn’t make it right. No other recent governor or president has allowed this, far as I can tell. It happens some in Congress and occasionally in the Legislature, but the power to reward donors is far greater in the executive branch.

Here’s the slippery slope: What if a governor were running short of campaign cash -- as Schwarzenegger now is -- and needed to hold a fundraiser to pay staff bonuses? What if special interests refused to attend unless they were given veto power over staffers’ appointments?

The next step would be donor-endowed desks in the governor’s office -- a “business friendly” desk, say, to replace the environmental advisor.

Special interests would be buying public personnel. They’ve always had their hooks into public policy.

“Actually the slope’s not even slippery,” says Democratic consultant Bill Carrick, a former Kennedy colleague. “It’s straight downhill.”

Schwarzenegger and Kennedy should catch themselves while they can.

Being a governor’s chief of staff is a powerful, prestigious job with big-bucks potential. But the bucks should come later.

If Kennedy can’t make it now on $131,000 a year, she should look for her payday outside public service.

George Skelton writes Monday and Thursday. Reach him at george.skelton@latimes.com.