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Raw Deal II

As Gov. Arnold Schwarzenegger’s failed “Year of Reform” draws to a merciful close, it’s worth looking at how and why he made his fateful right turn in private meetings in August 2004 on what one top Republican calls “Arnold’s Hiroshima Day.” Especially since he’s shifting back to the center.

The crucial secret meetings that set the rightward “Year of Reform” direction occurred on August 5 and 6 (the anniversary of the American nuking of Hiroshima, Japan, to end World War II and of his announcement of candidacy on The Tonight Show) in Sacramento’s Sheraton Grand and Hyatt Regency hotels. There the cabal of advisers that clearly seized the wheel in his operation — strategist Mike Murphy, chief of staff Pat Clarey, communications director Rob Stutzman and legislative director Richard Costigan (late of the Chamber of Commerce) — carried the day. They advised the governor to move to the right, as Republican insiders tell it, become much more clearly a partisan Republican, intervene personally in legislative races up and down the state in an effort to take a host of Democratic districts, speak at the Republican National Convention, and campaign for George W. Bush. The 2005 special election idea was also promoted. (This became a definite go when he lost all the legislative races, and used reapportionment as the excuse.)

Although it was the first anniversary of one of the most showy and dramatic political announcements in California history, its celebration was largely glitz-free, having none of the posh scale of his inaugural gala less than nine months earlier. The centerpiece was a relatively quiet buffet dinner for 15 to 20 insiders on the veranda of the governor’s suite at the Capitol Park Hyatt Regency. Schwarzenegger had flown back into town after taping an anniversary appearance in Burbank with his friend Jay Leno on The Tonight Show. He was more into joking about Jay than talking about a dramatic departure in his approach to the governorship. Perhaps he didn’t acknowledge it to himself as a departure. Schwarzenegger is a man who always sees himself as being consistent, even if others do not. He is always Arnold, and moving Arnold forward is always the imperative. If he says he is a bipartisan centrist, he is, even if he is making very partisan moves.

Why become more of a partisan Republican in mostly Democratic California? His dominant advisers were partisans. Chief strategist Murphy worked for John McCain’s maverick 2000 presidential campaign; indeed, it was that credential that was most important in his gaining the senior strategist post in Schwarzenegger’s 2003 campaign, as Maria Shriver and savvy Republicans including Schwarzenegger himself recognized that only a “different kind of Republican” could prevail in a top-of-the-ticket California race. But he also worked closely with Jeb Bush and Oliver North and had many major corporate clients. As former Governor Pete Wilson’s deputy chief of staff, Clarey, later an HMO lobbyist, was the enforcer in Wilson’s gubernatorial office. Stutzman was a key Schwarzenegger link to the right, a former communications chief for the state Republican Party and a true believer in hard right 1998 Republican gubernatorial nominee Dan Lungren, later a religious broadcaster, who was buried in a landslide by Gray Davis. And Costigan, also a well-known conservative, was the Chamber of Commerce’s man on the inside of the Governor’s Office.

According to insiders, Schwarzenegger himself was getting impatient with the lack of change in Sacramento, where things move at a more sedate pace than in a typical James Cameron extravaganza production, like the Terminator pictures and True Lies. Legislative Democrats were in the way. He had already referred to them as “girlie men,” which he quickly dubbed a joke. His dominant advisers played to his impatience and ambition in pushing their agenda.

At Murphy’s urging, he had just turned a minor difference on the budget — whether it would a three-fourths vote of the Legislature or a two-thirds vote to raid local government funding to balance the state budget, a difference of a few votes — into a fatefully backfiring and unsuccessful budget fight.

And he was tantalized with the vision of becoming president, which he discussed privately. Some advisers felt he should solve the problems in California and lead an independent movement if he really wanted to change the Constitution and be president. The dominant advisors felt he would need a party. And if he became a superhero to Republicans, it could happen. Or so went the reasoning. Actually, it was always quite unlikely that Republican senators and governors, many of whom look in their bathroom mirrors and see a potential president, would go out of their way to help an Austrian-born movie star win the White House.

Some had thought issues like housing and health care were to be on the agenda as Team Schwarzenegger gathered to celebrate the first anniversary of his election and plot the future. Perhaps even the task of choosing among ideas for government efficiencies in the California Performance Review, which had just been oddly leaked to the two newspapers most critical of him in the recall, the Los Angeles Times and San Francisco Chronicle, leading to negative stories. The Performance Review, which allowed business and some conservative lobbyists access other advocates did not have, was problematic. Nevertheless, the basic concept of delivering services in a more efficient manner had widespread popular appeal, and Schwarzenegger, who emphasized it in his campaign, liked it. But there was a different agenda on tap.

Instead, there was a turn away from the centrist populism that sold so well in the 2003 recall. In going over plans to defeat the casino-gambling initiatives, Murphy and fund-raising chief Marty Wilson wanted the governor to appear in TV ads with leaders of the casino tribes represented by attorney Howard Dickstein, who had cut the few deals won by Schwarzenegger to gain revenue from the booming Indian casino business. Schwarzenegger rejected this advice; it wasn’t his role to promote casino tribes that might become sources of business for his consultants. It was to defeat the casino initiatives pushed by the other casino tribes and the racetrack lobby.

A draft of his proposed speech to the Republican National Convention was filled with partisan boilerplate. That got changed to words that, with a few revisions, would be perfectly acceptable at a Democratic convention. But the overall direction veered right and Schwarzenegger ultimately campaigned for Bush in Ohio, where he is popular from his bodybuilding days, and where Bush won a narrow victory that helped him gain re-election.

The governor had already engaged in a silly state budget battle with legislative Democrats. Murphy had urged the governor to appear in ads against Democratic legislators who weren’t going along with him. This made no sense, as the issue itself was thoroughly arcane, and Schwarzenegger didn’t do it. But the gambit of having him make forays into their districts — appearing in mall food courts and restaurants, urging people to call their legislators to back the governor’s position — proved a wet firecracker. Few calls were made to the Democrats’ legislative offices. Indeed, insiders were already beginning to suspect Schwarzenegger was a paper tiger. Which I wrote at the time, to the displeasure of the governor and much of his court.

Around the time of his fateful August 2004 meetings, I spoke with the governor, without knowing of the specific machinations. I had heard he might intervene in legislative races, and yet in our talks he vowed he was a bipartisan guy. I asked how he could be a bipartisan guy if he was going to go after a bunch of Democrats while endorsing none. It was as though Schwarzenegger felt he could credibly occupy two places at once through an act of will. Something much easier for a quark than a politician.

He has complained privately of late that his team was pushing him away from the bipartisan centrist approach of his dramatic recall campaign. I told him this in several conversations last year and early this year, flatly predicting doom for his more harshly partisan course. I wrote as much in a series of columns and articles over the last two years, as the unwisely partisan inclinations of Murphy, Clarey and others manifested themselves early in the transition before Schwarzenegger was sworn in. He was not enthusiastic about these critical assessments.

Of course, the governor lost all the 2004 legislative races, despite Murphy’s consulting on the campaigns and Stutzman’s overseeing of the vetting of the candidates. His Republican convention speech was a hit, but made him appear to Democrats and independents in this very polarized era like a partisan Republican. His campaigning for Bush was effective, but infuriated Democrats back home, where Democrat John Kerry won easily. Top Democrats admit that, had Kerry won, the crowds that dogged Schwarzenegger at all his public appearances in 2005 for his special election would likely have been much smaller and less vociferous.

Now the governor is on a different path, perhaps the one he was originally on in the recall. His problem will be convincing Californians that it is the path of principle and not merely the path of opportunity.