MORE

Neel Kashkari and Tim Donnelly Are Fighting for the Right to Lose to Governor Jerry Brown

Neel Kashkari and Tim Donnelly Are Fighting for the Right to Lose to Governor Jerry Brown

ILLUSTRATION BY IVAN MINSLOFF

Like most people, Bill Bloomfield does not think Neel Kashkari will be the next governor of California. Jerry Brown, he says, is "clearly going to be re-elected."

"I wear it as a badge of honor that the architect of the destruction of the middle class doesn't like me." —Tim Donnelly, on Karl Rove

Nevertheless, Bloomfield has decided to dip into his family's wealth — he made a pile on coin-op laundry machines — to pay for $140,000 worth of pro-Kashkari mailers.

The gubernatorial primary is June 3. According to the polls, Tim Donnelly, the gun-toting Tea Party candidate, is leading in the race to be the Republican standard-bearer against Brown in November. Bloomfield believes this would doom the party to irrelevancy.

"He needs to be stopped," Bloomfield says. "Shame on this state if the best they can come up with is Tim Donnelly."

It's a strange year for California Republicans. With Brown riding high and party registration at an all-time low, the key question for the GOP in the primary is whether it is better to lose with Kashkari or lose with Donnelly.

The campaign reflects the debate that is playing out in Republican primaries across the country. Should voters go with the establishment choice in hopes of attracting women and minorities back to the party? Or should they embrace the fervor of the activist base?

Though neither candidate is likely to take back the governor's mansion, the race has nevertheless turned into an epic — and often absurd — contest for the soul of the California Republican Party.

Kashkari has more money, including $2 million out of his own pocket. But though he is gaining on Donnelly, he's still five points behind him for the second spot in the November runoff, according to the most recent PPIC survey. For now, conservative Republicans are siding with principles ahead of pragmatism.

"We have no illusion that Donnelly's gonna win. We don't believe Kashkari's going to win, either," says Lou Desmond, a talk radio host in San Bernardino. "So if we're gonna lose, let's lose with our chin out and fighting."

"Hello, governor, how are you?"

Tim Donnelly is moving through the lobby at a conservative conference in Riverside. He has just given his stump speech, and now well-wishers are shaking his hand, taking photos and repeating his lines back to him. "Common sense, not Common Core!" says a man in a yellow "Don't Tread on Me" T-shirt.

Five hundred people from 22 conservative groups (Tea Party affiliates, Oath Keepers, the Norco chapter of the John Birch Society) have gathered to hear speakers including Dinesh D'Souza and Ann Coulter.

At one table, a group is raffling off a Winchester rifle. At another, people are tossing rolls of toilet paper into a porcelain toilet with President Obama's face on it. This doubles as a protest of "the bathroom bill," a state law that allows transgender students to use the bathroom of their choice. Donnelly, who believes it allows boys to ogle naked girls in the showers, fought to repeal it.

It has been a tough couple of weeks for Donnelly. On Monday, he was the lone vote in the Assembly against a law banning the sale of Confederate flags on state property. He saw it as a First Amendment issue, but it gave fuel to the persistent charge that he is a racist.

The same day, his campaign posted a link on Facebook to an old Washington Times article that faulted Kashkari for speaking at a Treasury Department workshop on Shariah finance. That sparked a firestorm, and Donnelly was forced to retreat slightly. In the crowd, a supporter brings up the topic. "It was an official workshop," Donnelly says. "I just asked questions and I got annihilated."

The Republican establishment has started to gang up on Donnelly, fearful that he will be the party's candidate against Jerry Brown in November. The day before, strategist Karl Rove warned on The Hugh Hewitt Show that Donnelly could say something outrageous that would hurt Republicans nationwide.

With two weeks to go before the election, Donnelly is feeling embattled. But he's also enjoying himself. Asked about Rove, he says, "I wear it as a badge of honor that the architect of the destruction of the conservative movement doesn't like me. I'm a threat to the political power class."

Neel Kashkari was introduced to the American people as a human piñata. In the fall of 2008, he was given control of $700 billion, which he was to spray liberally at the U.S. banking system in hopes of averting a depression.

The banks had caused the crisis, and bailing them out was deeply unpopular. Appearing before Congress, Kashkari was pilloried for not asserting greater control over bailed-out bank executives, who were awarding themselves lavish bonuses while continuing to foreclose on homeowners.

"I don't think you understand at all the pain and the hurting that is going on in this country," said then–Rep. Don Manzullo, R-Ill., urging Kashkari to resign.

Kashkari grew up in northeast Ohio, the son of Indian immigrants from Kashmir. As a young man, he earned bachelor's and master's degrees in mechanical engineering, followed by an MBA from the Wharton School. He joined Goldman Sachs and then the Treasury Department, gaining entree into the establishment just at its moment of lowest repute. At 35, he became the poster boy for the bank bailouts. Seated at the witness table, he listened to an outpouring of populist rage, his hands folded and lips pursed.

"I know from having drafted legislation, negotiated it, implemented it, in one of the toughest times in American history, economically, that nuance matters." —Neel Kashkari

After the crisis passed, Kashkari retreated to his own personal Walden Pond, a cabin near Lake Tahoe, where he chopped wood and ruminated on the abuse he had endured in Washington.

He vowed to re-enter public life. He took a lucrative job at Pimco, the Orange County–based investment firm, and penned high-minded editorials for the Washington Post opinion page. Earlier this year, he declared his candidacy for governor.

But Kashkari seems doomed to repeat his first experience in politics. Once again, he is confronted with an angry, populist backlash.

At a radio debate in a sweaty hotel conference room in Anaheim, Kashkari faced a horde of whooping Donnelly supporters. When he suggested that alienating minority groups was not the best way to expand the Republican Party, he was shouted down.

"Secure the border!" a Donnelly supporter cried. Screamed another: "Go home and put Americans back to work!"

Tim Donnelly is genuinely curious about how to win over Latinos. So when he is approached in the candidates' reception room at the Riverside conference by Cesar Hernandez, a Republican from Rialto, he starts pumping him for information. What could he do to get more Latinos on his side?

Hernandez suggests he print his materials in Spanish, and then begins discussing how he came to realize that government services were not free — that he was paying for them every week in his paycheck. Donnelly is fascinated.

"I gotta be able to distill that to three or four words and seven seconds," he says.

Donnelly lives near Lake Arrowhead, where for many years he ran a plastics business out of his garage. He discovered his talent for rhetoric as a Minuteman at the Mexican border in 2005. He was fed up with illegal immigration, and with a government that seemed hell-bent on amnesty. Once he arrived at the border, carrying a semi-automatic handgun and a Colt .45, he realized the best use of his time would be to get on the TV news.

He learned to state his case with simplicity and passion, a skill that translated to politics. In 2010, he jumped into the race for the state Assembly, vowing to introduce a carbon copy of the Arizona law that cracked down on immigration. The backing of KFI radio hosts John Kobylt and Ken Chiampou helped put him over the top.

In the Assembly, heavily outnumbered by Democrats, Donnelly gained a reputation as a lone ranger. Most of his bills went nowhere. But he managed to forge alliances with liberals on a handful of issues, typically those involving resistance to government power — opposition to the National Defense Authorization Act and NSA spying, and an audit of Child Protective Services.

Such victories give him hope that he can win over Democratic constituencies. He has toned down his emphasis on immigration in hopes of becoming a more unifying force.

"Donnelly will pull in more Hispanics, more blacks and more disenfranchised Democrats than anyone else running," says retired state senator Richard Mountjoy, a longtime Donnelly supporter and the author of Proposition 187, which denied services to illegal immigrants. "He's always done it. He's been very popular among those people because he reaches down to them."

Such efforts are not always sure-footed, or successful. And statewide, Donnelly probably still is best known as the Assemblyman who was arrested for taking a loaded gun into an airport — an episode that had the benefit of confirming his Second Amendment credentials.

On most economic and cultural issues, he is a conservative firebrand. He believes that climate change is a hoax pushed by "eco-tyrants." He vowed to line up at the state border to block the implementation of Obamacare. And he calls Jerry Brown a "Marxist progressive parading as a Democrat."

"I use very strong language, but there's method to the madness," Donnelly says. "If you are ardent and unyielding in the defense of liberty, people will follow you to the ends of the earth."

In the gubernatorial primary, Donnelly has turned his rhetoric on the rulers of the Republican Party. With the party split along class lines, Donnelly is the one who sounds a little like a Marxist progressive.

"I'm a threat to the country-club Republicans," he told the San Francisco Chronicle after he was denounced by the Lincoln Club of Orange County. "I'm a danger because I might bring a little more country into the club."

At the Friendly Hills Country Club in Whittier, Neel Kashkari is telling a Republican women's group why he decided to run for governor. In 2006, while Donnelly was protesting George W. Bush, Kashkari went to work for him.

"He's a great man, isn't he?" Kashkari asks.

Kashkari had been a junior banker at Goldman Sachs in San Francisco. When the company's CEO, Henry Paulson, was appointed Treasury secretary, Kashkari saw an opportunity and leaped for it. He left Paulson a voicemail offering his services. Paulson would become his patron, making him an assistant secretary, and would rely heavily on him during the 2008 financial crisis.

The events of that period proved to be so dramatic that they became the subject of several books and an HBO movie, Too Big to Fail.

Kashkari says that film captured some of the flavor of the events, but "it didn't come anywhere close to capturing the intensity." He compares the film to the cartoonish depiction of war in Rambo, whereas the visceral reality was closer to Black Hawk Down.

"It was brutal, but it was also really rewarding," he tells the Weekly. "I felt like we did important work for the American people."

In late 2012, he began to think about running for governor of California. First he paid a visit to his old boss at his office in Dallas.

"I half expected President Bush to say, 'Neel, you're a good young man. Don't get ahead of yourself. This is crazy,' " Kashkari tells the Republican women's group. "Instead he said, 'Y'know what, this isn't crazy.' "

It may not have been the most resounding endorsement, but evidently Kashkari didn't need much encouragement.

His connections have opened some doors. Paulson and his wife each have contributed the maximum $27,200 to Kashkari's campaign, which has received another $84,000 from Goldman employees. He also has endorsements from party leaders including Mitt Romney and Jeb Bush, which helps with some voters.

"He's friends of the Bushes," says Janet Bachman, of Whittier, after the luncheon. "I love the Bushes."

But Kashkari is not well known to the general public. His base seems to be Indian-American Republicans, which is a small group. (According to Pew, just 18 percent of Indian-Americans identify as Republicans, the high profile of GOP governors Bobby Jindal and Nikki Haley notwithstanding.) And while Kashkari has more money than Donnelly, he still doesn't have enough to run a full-fledged campaign statewide. So he has had to dip into his own bank account to get his message out.

The once-proud California GOP, the party of Nixon and Reagan, has fallen to 28.6 percent of total registration. State party elders are fond of convening seminars on how to reverse that decline, but so far they haven't come up with a good answer.

Kashkari's message is "Jobs and Education. That's It," which sounds like what a consultant would tell a Republican candidate to focus on. He also has slammed Jerry Brown for supporting the high-speed rail project, which he calls "the crazy train." In his TV commercial, Kashkari is shown chopping a toy train with an ax.

If Kashkari can get past Donnelly, Brown and his allies are sure to use the same playbook they used to defeat eBay billionaire Meg Whitman in 2010. They will portray him as an out-of-touch plutocrat who wants to buy his way into elected office. Kashkari says he is ready for that.

"I don't think they can do that to me," Kashkari says, citing his own middle-class origins. "Nobody has led a life of privilege like Jerry Brown."

Democrats also will be able to slam Kashkari for using taxpayer funds to bail out Goldman Sachs, his former employer. But first he has to get past Donnelly.

The difficulty is that Donnelly offers absolutist positions with clarity. Kashkari has a more nuanced case to make. He wants to amend Obamacare, not repeal it. He's not against Common Core, or really for it, either. He also has to argue that the deeply unpopular bank bailout was actually good policy.

"I know from having drafted legislation, negotiated it, implemented it, in one of the toughest times in American history, economically, that nuance matters," Kashkari says. "Details matter in terms of whether a program works or not."

As he continues to trail Donnelly in the polls, he has had to confront him. When Donnelly's campaign accused Kashkari on Twitter and Facebook of "submitting" to Shariah law, the Kashkari campaign pounced on it, circulating remarks from commentators who called it "racist," "bigoted" and "despicable."

But the issue is tricky. Shariah finance is an unfamiliar topic, and it makes many people uncomfortable.

Asked about the controversy at the luncheon, Kashkari calls the allegations "nonsense," and explains that the conference was intended to advance free-market principles abroad. The facts are more complicated — it was also about domestic regulatory issues — but Kashkari is trying to keep it simple.

The irony is that Kashkari is a Hindu, not a Muslim. His parents are Kashmiri Pandits who left India in the 1960s to pursue an education in the United States. In the decades since, almost all Pandits have left Kashmir due to Muslim discrimination and persecution. Kashmiri Pandits probably would be the last ethnic group to want to import Shariah law to the United States. But that's another nuance that would be tough to get across in a political campaign.

There is even less to be gained in trying to explain or defend Shariah finance, or in trying to draw a distinction between harmless banking practices and the more brutal forms of Islamic law.

Instead, Kashkari's strategy is to take offense — but not as a Hindu, and not on behalf of Muslims. Speaking to a Republican audience, he treats it as a slur against President Bush. "I know President Bush," he says. "I worked for President Bush. I admire President Bush. He protected us."

Asked afterward if he thought Donnelly was race-baiting, Kashkari says, "I don't know what's in his heart. I don't know if he's a racist or not. ... I think he is so desperate for any kind of media coverage that he'll say anything."

The truth is that Kashkari also could use some exposure, which is why he has agreed to square off against Donnelly on The John and Ken Show on KFI the following week. It will be their only debate.

"I think it'll be fun," he says.

The debate is scheduled for 5 p.m. on May 15 at the Ayres Hotel in Anaheim. Donnelly supporters begin lining up on the sidewalk before noon, despite the 100-degree heat. They bring umbrellas and coolers, and wear black Donnelly T-shirts with "Got Liberty?" across the front.

Kim Harris of La Habra Heights says she has just returned from Cliven Bundy's ranch in Nevada. She shows pictures of herself dancing with Bundy, and says she's disgusted that the media chose to focus on his racist comments rather than the federal government's abuse of power.

Although Donnelly had been downplaying the Shariah issue all week, for many of his supporters — almost all of whom are white — Kashkari's involvement with the Treasury seminar was a source of serious concern. Several held copies of a commentary on the issue that referred to Kashkari as a "Shariah pimp."

"I got a personal issue when it comes to Shariah," says Marje LaMar, of Brea, who wears cutoff shorts and a Donnelly T-shirt over her gun tattoos. "It means [Kashkari] doesn't want rights for women."

By the time a handful of Kashkari supporters shows up around 4 p.m., all the seats are filled with raucous Donnelly fans. The Kashkari folks stand in back, until the fire marshal declares the room overcrowded and orders them into the hallway.

So it's a Donnelly crowd. Debate moderators Chiampou and Kobylt encourage them to make noise, and they do not hold back.

For the first 30 minutes, the candidates stay on message, offering snippets of their stump speeches. But then Chiampou invites each to attack the other.

Donnelly, ahead in the polls, declines the bait.

"I think that Neel Kashkari is a nice guy," he says. "But campaigns are won when you inspire people and fire them up with ideas."

When it is Kashkari's turn, he has to attack. The problem is that anything he could attack Donnelly for is something beloved by Donnelly's supporters.

Kashkari says he will offer a more inclusive vision for the party.

"In the last few months, you've managed to denigrate Latinos, African-Americans, Jews, Muslims and Hindus," he begins — but the audience won't let him finish the thought, bursting into an uproar. "That's true!" Kashkari insists.

Donnelly is set up perfectly to present himself as a unifying figure, and to argue that it is Kashkari who is being divisive.

"The only colors that matter to me are red, white and blue," Donnelly says, to thundering applause. "Because those are the colors of freedom."

Later, Kashkari tries again, noting that the Lincoln Club of Orange County has warned that Donnelly is unfit to be governor.

"Thank God the California voters are gonna decide that, not the Orange County Lincoln Club!" Donnelly says, again to wild applause.

When it's time for the candidates to ask one another questions, Kashkari decides to go after Donnelly on one of his strengths — gun rights. He asks why Donnelly proposed a bill to consolidate the handling of concealed-carry permits in Sacramento.

In Kashkari's reckoning, that would take discretion away from local sheriffs and give it to Attorney General Kamala Harris, a liberal Democrat.

Donnelly responds by reciting the Second Amendment. The crowd joins him for the last few words: "Shall! Not! Be! Infringed!"

Donnelly notes that his bill — which died in committee — would have required Harris to issue weapons permits to everyone, not just the wealthy and politically connected. When Kashkari presses him, Donnelly brushes him aside. "Are you calling me weak on the Second Amendment?" he asks. "This is gonna be a first."

Swigging from a Monster Energy drink, Donnelly is having a great time. It's his turn to ask Kashkari a question.

"Why'd you vote for Barack Obama?"

Among conservatives, this is a dagger blow. The crowd hoots its appreciation.

Kashkari begins by calling Obama a "partisan warrior" and says he had only voted for him in 2008 because "John McCain had no idea what was going on in the financial crisis."

"Once I saw who Barack Obama really was, I strongly supported Mitt Romney for president," he says.

The Donnelly supporters, many of whom didn't much care for Romney either, boo loudly.

The Obama vote is nearly impossible for conservatives to forgive. Later, an audience member asks Kashkari his views on immigration, and Kashkari says that Obama has refused to enforce federal immigration law.

"YOU VOTED FOR HIM," an audience member shouts.

Kashkari tries to score a point by alluding to Donnelly's gun arrest. One man shouts, "You're no Minuteman!"

The Shariah issue doesn't come up until later, when an Indian-American Kashkari supporter asks about it.

Donnelly doesn't disavow the topic or make an explicit accusation, instead sticking to his "I'm just asking questions" approach. "Given how barbaric Shariah is, why would we want to be compliant to anything Shariah?" Donnelly says.

Kashkari tells Donnelly he should be ashamed of himself. "You think that George Bush wants to bring Islamic law to America?"

"YES!" shouts one man in the audience.

In the hallway afterward, Jay Taneja, the Kashkari supporter who asked the question, says he was deeply troubled by the response.

"After 9/11, we got looks from everybody," he says. "I thought we were past that. But his comments bring us back to square one."

Aaron McLear, Kashkari's consultant, later describes the event as a "circus." But he doesn't regret sending Kashkari in there.

"It was important for Neel to go into the lion's den and stand up to the lion," he says.

Kashkari believes that Donnelly's supporters represent a small sliver of the GOP electorate that will show up on June 3.

"I wasn't trying to convince the people in the room of anything," Kashkari says later. "I was trying to convince the listeners that were tuned in that there is a brighter future for the Republican Party."

The traditional wisdom of Republican primaries is that the party should pick the most conservative candidate who can win. It's known as the Buckley Rule, named for conservative columnist William F. Buckley Jr.

But what if neither candidate can win? The Buckley Rule is silent. The California Republican Party also is confounded; it has opted not to endorse either candidate.

"They should have endorsed Jerry," says syndicated columnist Joe Mathews, noting Brown's thrifty approach to budgeting. "Jerry's the best Republican they've got. The fundamental Republican mistake was fielding a candidate for governor."

Neel Kashkari

PHOTO BY STAR FOREMANNeel Kashkari