Schwarzenegger’s chief aide wields power with gusto

She arrives unseen at the Capitol each morning, entering through an underground garage and riding an internal elevator to the governor’s office to take command.

Rarely venturing out into public, she instills fear in legions of state workers, lobbyists and lawmakers even though many would not recognize the 5-foot-2, wiry woman with close-cropped blond hair who is likely to be remembered as the most enduring force in state government of the last decade.

Susan Kennedy: An article in Sunday’s Section A on Susan Kennedy, Gov. Arnold Schwarzenegger’s chief of staff, said that the governor obtained changes to the state workers’ compensation system during her first year with the administration in 2006. Those changes occurred in 2004, before she arrived. —

Gov. Arnold Schwarzenegger, a Republican, upended the political establishment late in 2005 when he hired Susan Kennedy as his chief of staff: She is a gay Democrat who began her career 30 years ago as an activist for liberal causes and served as a high-ranking aide to the governor’s recalled predecessor, Gray Davis. Democrats called her a traitor. Republicans called for her head.

But Schwarzenegger stuck with her, trusting Kennedy, 49, to wield his authority so completely that they came to be described as “governor and governess,” or “the big governor and the little governor.” As his administration draws to a close, Kennedy has attained near-mythic status as a partisan only to winning.

“She has a brilliant sense of power,” said Geoffrey Brown, who sat beside her on the Public Utilities Commission between her stints in the governor’s office. “She’s going to knock you over if you don’t play ball. She knows how to get power, how to get political support. She knows what you have to expend, what you have to give up, what you don’t have to give up.”

Schwarzenegger puts it another way: “She has balls.”

Yet this is the great paradox of Kennedy’s career: She possesses encyclopedic knowledge of California’s byzantine state bureaucracy and nearly unrivaled ability to use the governor’s bully pulpit and his control over appointments, funding and contracts to wield power. But she has taken leading roles under two governors widely seen as disappointments to their supporters.

Inevitably, critics ask whether the shortcomings of Davis and Schwarzenegger reflect entirely on them, or also on her.

Common bond

The relationship with Schwarzenegger began with great success, as the governor, having hired Kennedy two years into his first term, rebounded from dismal approval ratings with a string of policy wins and coasted to reelection in 2006.

They were drawn to each other by a belief in big things: the world champion bodybuilder turned blockbuster-movie star turned governor and the operative who believes she can put any plan into action and succeed, if only by seeing three moves ahead on the political game board and outmaneuvering opponents.

“My high comes from accomplishing great things -- the bigger the challenge the greater the high,” Kennedy said. “I see everything as a campaign. . . . I put 1,000% into accomplishing a goal within a specified time period. That’s what a guy like Arnold Schwarzenegger needs. He’s a pilot who wants to break the speed record. I build planes.”

The victories that first year included a landmark bill to slow global warming, changes to the state’s expensive workers’ compensation program and a $37-billion borrowing plan to build roads, bridges, schools and other infrastructure.

Since then, other plans -- a vast healthcare expansion, a “year of education,” a revision of the tax code -- have flopped or stalled. California’s budget problems, which Schwarzenegger campaigned to fix, have drawn international headlines. His approval ratings are lower than ever, with little time to improve.

The governor’s water deal with lawmakers, engineered largely by Kennedy in the fall, would be a notable exception to the setbacks of the last three years -- if voters approve an $11-billion bond issue come November.

That agreement came together only after Kennedy employed a somewhat brazen negotiating strategy. Republican lawmakers were told to make compromises or the governor would sign Democratic legislation they disliked. Democrats were told the opposite: The governor would veto their legislation without new borrowing.

The tactic nearly backfired when the Assembly Republican leader, Sam Blakeslee of San Luis Obispo, publicly accused Kennedy of making threats. But after the deal was done, he publicly thanked her.

More than 50 people were interviewed for this article. In addition, Kennedy allowed a reporter to spend time observing her at work. Many who spoke did so on condition of anonymity for fear of retaliation.

Some of Kennedy’s critics perceive the record of frustration over the goals Schwarzenegger has not achieved as due in part to her tendency to overreach instead of seeking small, more manageable change.

“She is a risk taker,” said a former colleague, speaking on condition of anonymity. “They had big ambitions. And so you had in this case a chief of staff and a governor who were drawn like magnets to big things, glitzy things, and that’s their problem.”

Others cite poor rapport with lawmakers, many of whom say Kennedy is in a constant state of war and overly concerned with Schwarzenegger’s image. “You have to trust and like the people you are working with and feel that they wouldn’t slit your throat every single minute,” said a Democratic lawmaker.

Added a Republican lawmaker: “If it’s not viewed as a victory for him, or if it’s not going his way, it’s like, ‘You’re my enemy. Let’s go.’ ”

Belief in causes

Kennedy’s hard-driving political skills, which she brandished on behalf of Democrats for many years, were born of a longtime penchant for conflict in the name of a cause. Since at least the age of 12, she has admired people scorned by others for taking stands. Jane Fonda was the first, in the heat of her anti-Vietnam War campaign. In the late 1970s came environmental activists focused on the Three Mile Island nuclear accident near Kennedy’s hometown of Lancaster, Pa.

“My consciousness was, ‘There’s people out there that are doing things that they believe in even though it makes everyone hate them,’ ” Kennedy said. “It was something I latched on to.”

She was a hard-drinking teenager, the third of four children. She enrolled in college but quit, following her older brother, a contractor, to L.A.'s Venice at age 20.

In California, Kennedy built a career as a hyper-organized strategist for liberal causes: women’s rights, the environment, abortion rights. She loved mapping out strategies to woo supporters and defeat opponents in hard-fought campaigns.

“It was addictive to win an argument, to win a debate,” Kennedy said. “It’s like a chess game.”

She rose in Democratic politics, working as communications director for Sen. Dianne Feinstein, to whom she is still close.

She became cabinet secretary to Davis starting in 1999, but grew disgusted with what she says was constant pressure from their own party’s lawmakers to appease liberal interest groups, especially unions, at the expense of taxpayers. The party’s left wing could not abide Davis’ desire to govern as a centrist, she said.

“It was the Democrats that recalled Gray Davis,” she said. “And this was not a debate about principle or passion. . . . A lot of this was about lining the pockets of the people who suck money out of the system.”

“I thought what they were doing was unconscionable. And so I really lost faith.”

In Schwarzenegger, Kennedy found a politician without a rigid allegiance to either party, willing to battle these same lawmakers and unions.

She does not mind playing the villain in pushing Schwarzenegger’s agenda. But she wants it to be clear that she is doing it for him, on his behalf. The governor is the cause for which she’s willing to be hated.

“He doesn’t need a lot of coaching in the strategic use of power,” she said. Often that usage displays the harder side of power politics.

Soon after former Lt. Gov. John Garamendi rebuffed Kennedy’s request to cast his vote on the State Lands Commission for a liquefied natural gas terminal in coastal waters, the governor wiped out nearly two-thirds of his office budget.

Schwarzenegger eviscerated funding for the Black Infant Health Program, one Kennedy knew was important to Assembly Speaker Karen Bass (D-Los Angeles), after Bass failed to deliver approval of new offshore oil drilling as they’d agreed.

During a dispute over the budget, the governor stripped funding for a fisheries bill sponsored by Sen. Dave Cogdill of Modesto, a former GOP legislative leader with whom Kennedy shares a love of fishing.

These measures reveal one side of a woman who can veer in a flash from hardball campaign tactician to public relations spin master to demanding chief executive to policy wonk. In alternating moments, she might bombard a disagreeing listener into submission with complex policy details, crack an obscene joke, make an unprepared subordinate cower with a stare or plot a strategy to outwit lawmakers.

“She is what you call scary smart -- the whole package,” said Dan Dunmoyer, Schwarzenegger’s former cabinet secretary, a conservative Republican who is now an insurance industry executive. “You have a lot of smart managers, but they are politically tone deaf or legislatively afraid or they can’t deal with a reporter. There is nothing you can’t throw at Susan Kennedy.”

Using leverage

Sometimes, however, Kennedy charges so hard that she crashes.

She fired Robert Sawyer, a UC Berkeley professor she’d hired to head to the state Air Resources Board, after he defied instructions and proposed new regulations on car paint. The proposal, which failed, conflicted with the governor’s strategy to work with automakers to curb emissions and reduce global warming. The incident caused a media storm and prompted a legislative hearing about Schwarzenegger aides micromanaging regulators.

“It was more about control than a real well-thought-out agenda,” Sawyer said in an interview.

Kennedy has used state contract negotiations as leverage to get labor leaders to support Schwarzenegger politically, or at least remain neutral. Last May, she let union leaders know the consequences of opposing a spending cap the governor sought in Proposition 1A.

“She was very much like, ‘Do you really think the governor is going to sign X or do Y or do Z if you spend money on the No on 1A campaign?’ ” one of the leaders said.

Some unions heeded her warnings, but the strategy failed as voters rejected Proposition 1A and most of the package the governor had backed.

With Schwarzenegger’s preference for jet-setting over holing up in the Capitol, he has relied on Kennedy to watch over the day-to-day so much that many joke he works for her. It is an idea she hates; an aide stays behind the scenes. The reality is fuzzy, however, because often Kennedy channels him, making decisions by knowing his wants and needs.

Some would say Kennedy has put her role even above matters most personal to her. Although she calls herself “a thorn in the side” of a state that does not recognize gay marriage, she has advised both governors she’s served to veto bills that would have legalized it. Overturning the voters’ will would be politically damaging and legally and morally wrong, she argues.

In 2000, Kennedy and her wife, Vicki Marti, had a big wedding in Maui attended by a host of political power brokers. They married officially -- and quietly -- in Sacramento last year, before voters outlawed same-sex marriage.

The couple live in a two-story house built on a hillside up a steep, winding road in Marin County, with a stunning view over Mt. Tamalpais, and an infinity pool on a deck below. In the study are photos of Hillary Clinton, with whom Marti went to high school in Illinois, including some with Kennedy.

Kennedy wakes at 5 a.m., checks the day’s news and begins firing e-mails to underlings, sometimes demanding to know (often with an obscenity) why they didn’t spin a story better. She works out daily, lifting weights and using exercise machines, then juggles calls on two phones through her 90-minute commute to Sacramento in a black, state-owned Chrysler Sebring.

From the point that she strides into the Capitol to lead the daily senior staff meeting, Kennedy is firmly at the center of power. She remains by Schwarzenegger’s side in negotiations with legislative leaders when their staffs have been ordered to leave. Lawmakers may call her first on an issue -- and dial Schwarzenegger if they cannot reach her.

“It is like a marriage, in the office,” said Schwarzenegger, who spoke at Kennedy’s St. Mary’s College graduation in 2007.

Intuitive sense

On the day the water deal was coming together in early November, the governor’s communications director, Matt David, had walked into Kennedy’s office. He was looking for help prevailing on Schwarzenegger to cancel an appearance on Jay Leno’s show because he might need to be in Sacramento for last-minute negotiations with lawmakers.

She assured him the governor would not object. “You were right,” David said, returning minutes later. “Told you,” Kennedy replied, clearly proud at this evidence of her intuition.

Although water was the hot topic, there was a government to run, and Kennedy’s office turned for a while into a command center. She took calls and barked out instructions on judgeships, healthcare and prisons.

Then there was a lull. Kennedy sat quietly, answering e-mails, a woman alone in her bunker. She stood up, folded her arms and stared off, reading glasses around her neck.

It was mid-morning. Kennedy called state health officials to make sure they had an adequate stockpile of swine flu masks. Schwarzenegger had inquired about this weeks before; he might ask again soon.

“I can feel it coming -- it’s an instinctual sense I have with him,” she said. “It’s like a dog’s whistle. So I tell them, ‘Make sure you follow up on what the governor asked you to do.’ ”

Testimonials to both of them, and their relationship, surround Kennedy in her office as she steers the big government every day. There are magazine covers of Schwarzenegger, photographs and bobblehead dolls of him. One is wearing a pink dress; another carries a submachine gun.

There are pictures of Kennedy with the governor and other politicians, and a photo of her on a fishing trip to Iceland, holding a giant salmon.

On the wall behind her desk hangs a moody, blown-up portrait of kayakers on an early morning outing in Canada. In the foreground is the photographer’s boat, an oar dangling above the darkened water. In the background follows another boat with a lone, silhouetted figure, so tiny in the distance that a viewer cannot make out her face. It is Kennedy, raising the paddle above her head for the camera, as if she were signaling victory.