Gov. Funds Public Events Privately

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Times Staff Writers

A tax-exempt group set up to create jobs is being used by Gov. Arnold Schwarzenegger to bankroll a pair of splashy bill-signing events designed to attract publicity as he runs for reelection.

Unlike contributions to Schwarzenegger’s campaign account, donations to the nonprofit are not subject to caps or disclosure requirements.

Schwarzenegger this week staged carefully choreographed ceremonies against the picturesque backdrops of Malibu and San Francisco Bay’s Treasure Island, signing legislation to curb emissions that contribute to global warming.


The events were meant to showcase the governor’s environmental credentials at a time when he wants to maximize his appeal to independent voters.

Part of the cost is being picked up by the Commission for Jobs and Economic Growth, a nonprofit panel that Schwarzenegger launched in 2004 to lure business to California. The commission is planning to raise about $25,000 to help pay for the events, according to executive director Mark Mosher.

Among the commission’s donors are major California companies with business before the state, including PG&E; and Southern California Edison.

Watchdog groups said that when the governor takes official actions, taxpayers should foot the bill -- not companies with business in Sacramento.

“In my judgment, it violates the spirit of the Political Reform Act for him to privatize a gubernatorial function,” said Robert Fellmeth, director of the Center for Public Interest Law at the University of San Diego, referring to the 1974 law promoting ethics in government.

PG&E; spokeswoman Jann Taber said the company donated $100,000 to the governor’s nonprofit group in March. Although a Schwarzenegger aide raised the subject of an additional contribution to help cover bill-signing costs, the company has not given more, she said.


Another company official, explaining PG&E;’s support for the new law, said the company already has relatively clean emissions and is committed to reducing global warming.

Both PG&E; and Southern California Edison maintain an active lobbying presence in Sacramento and are regulated by the state Public Utilities Commission. A majority of the PUC’s five commissioners have been appointed by Schwarzenegger.

Asked why the governor is using private money to underwrite public functions, the governor’s press secretary, Margita Thompson, said: “We’ve always done everything we can to minimize the cost to taxpayers.”

She added that the bill signings amounted to a “historic event” that called for more than routine treatment.

Mosher said his group is paying part of the tab “because we have a number of companies that have expressed interest in environmental technology as a growth area for the economy.”

He said the jobs commission is a “nonpartisan, completely nonpolitical organization.”

More than a year ago, Mosher told The Times that the jobs commission had raised about $1 million in contributions. He has not responded to repeated Times requests for an updated amount.


In addition to using money from the jobs panel, the governor will also pay for the bill signings with campaign funds and donations from environmental groups, Thompson said.

Taxpayer money will pay the travel expenses of gubernatorial aides who attended the ceremonies. Thompson did not provide an estimate of the total cost, saying the bills are still coming in.

Aides to Schwarzenegger’s Democratic challenger, state Treasurer Phil Angelides, sharply criticized the governor’s use of corporate money that is not publicly disclosed.

“These are nothing but campaign events,” said Angelides strategist Bill Carrick, “and he is funding them with ... donations that are secret.”

At both bill-signing ceremonies, the stagecraft was elaborate.

In San Francisco, 141 flags flapped in the wind while British Prime Minister Tony Blair praised the governor on an enormous video screen set up at the end of a large stage. During the Malibu event, Schwarzenegger appeared in front of a backdrop of flags while, off to the side, Richard Branson, head of Virgin Group, appeared via a video screen.

In Malibu, Schwarzenegger praised PG&E; and other companies for supporting the global warming bill, calling them “farsighted.”


Another supporter of the legislation, Waste Management Inc., the trash collection and recycling company, was asked to give money for the events recently.

“We got a very preliminary call but no details,” said R. Kent Stoddard, the company executive who oversees governmental affairs in Sacramento. The company has not made a donation, though a Waste Management executive attended the Malibu event.

Schwarzenegger has set some limits on who may contribute to his campaigns, but the jobs panel operates by different rules.

For example, Schwarzenegger aides once refused to accept direct campaign contributions from PG&E;, hoping to avoid the appearance of a conflict of interest as the governor crafted a state energy policy. But there were no such restrictions for the jobs commission.

From its inception, the jobs panel has been used by Schwarzenegger to pay for some of his showy events.

The group once arranged for Schwarzenegger to help move a 14-employee company from Nevada to California in an 18-wheel truck with the name “Arnold’s Moving Co.” stenciled on the side. It also underwrote a national billboard campaign promoting California that made Schwarzenegger its centerpiece.


Like Schwarzenegger, former Gov. Gray Davis used nonprofit corporations to defray costs of travel and events. But he never raised money from private donors to pay for bill signings, his former press secretary said.

“Our committee was used for travel, receptions and protocol events, not for bill signings,” said Steve Maviglio, now spokesman for Assembly Speaker Fabian Nunez (D-Los Angeles), author of the global warming bill.