Governor Goes on Road to Mend Fences in GOP

Times Staff Writers

Sequestered at an elegant Newport Beach hotel, Gov. Arnold Schwarzenegger on Wednesday began an election-year campaign to rehabilitate himself among disaffected supporters.

At a closed-door luncheon with about 40 donors in this wealthy Republican enclave, Schwarzenegger sought to ease their fears about the direction his administration has taken in recent weeks. In an interview after the event, the governor said: "We can work through anything, because we're from the same party."

Yet, interviews this week with Republicans show, Schwarzenegger is facing deep and lingering animosity. A contrite Schwarzenegger is attempting to assuage donors who are worried that he has shape-shifted into a Democrat -- but he is facing opposition on multiple fronts.

Although many in the GOP are angry that he hired Susan Kennedy, an aide to former Democratic Gov. Gray Davis, as his new chief of staff, a more fundamental problem is emerging. The socially liberal governor appears to have lost support on a point of previously common ground with conservative Republicans: fiscal restraint.

Republicans who kept quiet when Schwarzenegger supported stem cell research, solar power and expanding domestic partnerships are now objecting to his budget plan, which calls for $6 billion in deficit spending and a separate government-building program that would be financed by borrowing $68 billion.

Mark Chapin Johnson, a Tustin businessman and a Schwarzenegger campaign supporter, said he has been invited to meetings with the governor and campaign aides but will not attend. Johnson sees Schwarzenegger as drifting too far to the left.

"I really wish him well, but I'm just standing back to watch," said Johnson. "I don't have any particular reason to be in a room with Susan Kennedy."

Michael Schroeder, the former chairman of the California Republican Party, wrote in an opinion piece last week that Schwarzenegger "has swung wildly between the far right and the far left in the apparently mistaken belief that this constitutes governing from the center. It does not. It simply defines him as erratic and unable to govern."

Enough anger is lingering that Schwarzenegger has arranged for eight separate meetings over the next two weeks with Republican donors, beginning in Newport Beach.

During the luncheon at the Island Hotel, the governor chatted with Paul Folino, chief executive of Emulex Corp. in Costa Mesa, who, along with his family and company executives, has contributed about $1.46 million to Schwarzenegger's campaigns.

Fiscal issues dominated the meeting, according to some of those who attended.

State Sen. Tom McClintock (R-Thousand Oaks), a favorite of conservative Republicans for his steadfast opposition to new taxes, said he received an invitation to the event with only a day's notice.

By inviting McClintock, Schwarzenegger's campaign team seemed to signal that the governor still enjoys the support of stalwart conservatives.

Yet in an interview before the event, McClintock conceded that he was unhappy with both the governor's proposed $125.6-billion state budget and his borrowing plans for public works projects.

"Clearly, the fiscal policies that underpin the budget and the borrowing are not Republican policies," McClintock said. "They are radically contrary to Republican principles and will need significant modification in the Legislature in order to obtain my support."

Karen Hanretty, a GOP consultant and former spokeswoman for the California Republican Party, is encouraging GOP lawmakers to vote against the governor's state budget proposal because it includes deficit spending.

"The governor's supporters in the Republican Party, who have always been his staunchest defenders, despite areas of disagreement on social issues, have great concern right now about the direction he is heading in," Hanretty said.

Schwarzenegger took Kennedy, his new chief of staff, to the Newport Beach meeting to calm fears that she would bring a liberal agenda to the governor's office.

Kennedy, in fact, is considered a pro-business moderate Democrat who has declared loyalty to the governor and his agenda.

In the interview, Schwarzenegger acknowledged some of the Republican distaste for her appointment.

The governor said he wanted his campaign supporters to get to know Kennedy -- to shake hands with her and feel comfortable about phoning her when they have a question.

Schwarzenegger said the group was eager to tamp down the costs of the public works program, and he agreed. "They wanted to ask questions about the bond and the agenda and how responsible we'll be in building it," he said.

The governor voiced confidence that his Republican supporters would not desert him in the end: "I'll do everything I can to win over everyone."

Schwarzenegger himself has joked about going back in time, like his Terminator film character, and erasing the whole special election last fall that saw voters defeat every proposal.

In his State of the State address he said: "I didn't hear the majority of Californians when they were telling me they didn't like the special election. I barreled ahead anyway, when I should have listened."

Dan Schnur, a Republican consultant who has met with Schwarzenegger donors in recent days, described the governor's effort to ease contributors' concerns as part of an "apology tour."

"I have heard them vent, and you can tell there are still a lot of hard feelings that didn't go away after the election," Schnur said. "Selling them on Susan Kennedy is going to be the easy part, and convincing them that he is taking on a new direction won't be much harder. The real challenge is going to be regaining their trust."

Ed Laning, who resigned from the California Republican Party's executive board in protest over the Kennedy appointment, said he remained disenchanted with political changes that have given some of Schwarzenegger's supporters "whiplash."

"His reform agenda last year was good, yet he stood up at the State of the State address and apologized for it," Laning said. "I felt like the principles that all of us were working for in the reform package were still valid, and yet the governor apologized for them."

Problems have been brewing among Republicans for months. After the campaign, chief political consultant Mike Murphy enraged Schwarzenegger donors when he spoke to a Chamber of Commerce meeting in Newport Beach -- and chastised the business community for not spending more money to defend the governor.

Schwarzenegger had collected more than $55 million for his special election efforts -- money that donors normally would have kept because 2005 was not a regularly scheduled election year.

Jon Fleischman, a former executive director of the California Republican Party who operates a GOP blog called FlashReport, said the consternation about Schwarzenegger "runs the gamut from donors to activists."

"I have a tremendous amount of respect for the guy," he said, "but I think he's lost his way."

As for the meetings with donors, Fleischman said the governor has "a big sales job to do."

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