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Raw Deals

The political machinations and deals in the California recall’s festival of democracy are getting ever more raw. Governor Gray Davis, covertly but not so secretly, is beginning to go against the counsel of his new adviser, former President Bill Clinton, who urged him not to attack Arnold Schwarzenegger. Davis blamed the action superstar’s movies for “much of the violence in America,” a charge that will make it hard for Davis to keep ducking his challenge to debate.

The Weekly learned that Indian casino interests, eager to expand gambling throughout California, have found a gaping loophole in the state’s campaign-finance-reform law through which they can pour several million dollars in big contributions directly into the gubernatorial campaign of their close ally Lieutenant Governor Cruz Bustamante.

Self-styled candidate of substance Peter Ueberroth, the former L.A. Olympics chief, turned up in the capital and easily surpassed the rather vague Schwarzenegger in vagueness. Right-wing state Senator Tom McClintock, scourge of the Sacramento budget debacle, enjoyed fresh attention while Bustamante mostly disappeared from public view for a week after laying out a budget plan that relies on a constitutional amendment for 40 percent of its new revenues and lays out $4.5 billion in cuts that aren’t really cuts.

In the wake of 2002 GOP nominee Bill Simon’s withdrawal, Schwarzenegger is moving to the right to consolidate the Republican vote. The New York Post reported that stars Tom Hanks, Barbra Streisand, Warren Beatty and Martin Sheen are organizing a Hollywood effort to stop Schwarzenegger. Beatty vociferously denied it, telling the Weekly, “That would be crazy. I’m not voting for him, but Arnold is a friend of mine.”

And in one of the week’s more mysterious developments, a Los Angeles Times poll purported to show a big lead for Lieutenant Governor Cruz Bustamante and shrinking support for the recall. The numbers are diametrically opposed to the views of well-informed top Democratic strategists, who are aided by their own polling.

 

Ignoring the advice of Clinton, his top political adviser, Davis is already attacking Schwarzenegger, in thinly veiled ways.

Davis visibly shied away from Senator Dianne Feinstein’s remarks criticizing the violence in Schwarzenegger’s movies at their press conference last week on the assault-weapons ban. However, the Weekly has obtained an internal Davis campaign memo from first lady Sharon Davis to key Davis supporters in which, among other things, she claims that Arnold Schwarzenegger’s movies are a principal cause of violence in America.

In urging these supporters to complain to the media about their coverage of her husband the governor — including L.A. Times columnists George Skelton and Steve Lopez, who had long opposed the recall but had just written glowingly of Schwarzenegger’s performance at his mini–economic summit and press conference last week at an L.A. airport hotel — she writes, “Another thing you might mention is that much of the violence we experience in this country could be attributed to the extreme violence in his movies.” That’s quite a stretch, to say the least, since it is big news whenever any act of violence is attributed to Hollywood entertainment. It is certainly not a standard that Davis applies to his own supporters, such as veteran Hollywood studio chief Sherry Lansing. Under her leadership, Paramount and Fox produced many movies that could be said to glorify violence; Davis made her a University of California regent.

Last Friday there was a rather curious press conference called to attack Schwarzenegger’s economic views and experience. At first blush, it seemed to be an independent operation, but upon probing it turned out to be organized by the Davis campaign, though nothing on the press release gave it away.

Representing Davis were Assembly Budget Committee chair Jenny Oropeza and investment banker Ted Roth. They both excoriated Schwarzenegger in very general terms as knowing nothing about the economy and the budget or how government works. Oropeza claimed that he obviously intended just to cut programs and to rely on deficit spending, as, in her words, Republicans do at the federal level and which Schwarzenegger obviously doesn’t understand can’t be done in state government. The Weekly pointed out that it had just spent an hour in a conference with Treasurer Phil Angelides in which he discussed his herculean task of selling $18 billion in bonds and notes to finance the current budget. This raises the state’s total bonded indebtedness to at least $65 billion.

Oropeza gave a rather amusing explanation of how the budget got so out of control. She claimed that Assembly Democrats and the governor had not foolishly believed that the increased revenues from the dot-com bubble and stock-market boom would continue in perpetuity. Then she was asked why they continued to add on more spending, what was their plan, did they expect the Republicans to just vote for more taxes. “Yes, we did,” was her answer.

 

Top Democratic advisers backing the governor were themselves stunned by the weekend’s L.A. Times poll, which found only a narrow lead for the recall and a big lead for Bustamante over Schwarzenegger. These experts had, quite tellingly, just described to the Weekly a very different political environment, replete with serious crepe hanging about the prospects of Davis and Bustamante. The recall, according to these strategists and other polls, remains well ahead, and the race between Schwarzenegger, recovering from a bad week and hampered by several Republicans being in the race, and Bustamante is extremely competitive.

Schwarzenegger’s Rolling Stones–type appearance in Orange County, and the potent conservative fund-raising Lincoln Clubs’ endorsement of the actor and call on other Republicans to get out of the race, helped narrow the field.

The ex–Mr. Universe was sanguine about his Republican rivals shortly before Simon dropped out, telling the Weekly that last year’s Republican standard-bearer “is a really nice guy. I think it will work out.”

With McClintock hugging the far-right flank, from which he can get a big vote but cannot win, the only danger to Schwarzenegger in the middle is Ueberroth, who appeared in the capital on Monday. Billing himself as the candidate of substance and pitching his candidacy to newspaper editorialists, he had already run afoul of his own claims, notably that $6 billion could be reaped from a tax-amnesty program, a figure unsupported by any research. In his talk, he said that he would call a special legislative session to pass “one major job-creating bill.” Amazingly, the fabled corporate-turnaround artist would not say what policies he wanted in that bill. “There are a lot of ideas,” he said. “I’m going around the state gathering them. By the time of the special legislative session, we’ll know.” Reminded that he was asking voters to elect him before he called that legislative session and that some clue to what if any economic policy he has would be part of voters’ calculus, Ueberroth rambled and stumbled. “The ideas in the bill will not necessarily be my ideas,” he replied, unhelpfully. “There may be other ideas, better ideas. This has to be a team effort. There is no silver bullet, you know. I want to let solutions come from a process. I will have something to say about solutions before this election is over.”

One solution that is in place is Bustamante’s plan to launder Indian casino money into his gubernatorial campaign in contravention of the seeming $21,200 contribution limit of Proposition 34. According to Fair Political Practices Commission Director Mark Krause, Bustamante can use his old lieutenant-governor campaign committee as a receptacle for massive contributions from the casino tribes by “attributing” portions of these huge new checks to past contributors to the old committee, which is not subject to the Prop. 34 limits, then moving the money directly to the new gubernatorial campaign committee.

For example, he can take the $300,000 a San Diego–area casino tribe gave to him on Monday, match portions of it to previous contributors — up to $21,200 apiece — and then move it to his new gubernatorial committee.

Given the structure of Bustamante’s past fund-raising, he can use this loophole, which Krause calls “an accounting device,” agreed to by the commission when no one was paying attention, to launder several million dollars of casino money directly into his campaign.

It was previously thought that the casino tribes would spend heavily for Bustamante in a so-called “independent expenditure” campaign, which they may do as well. Bustamante’s allegiance to Indian casino interests is clear. He says that far from contributing too little of their burgeoning revenue to the state, they pay too much. In reality, as a result of deals negotiated by Davis and backed by Bustamante, the tribes pay nothing to the state’s reeling general fund.

Bustamante, incidentally, has been mostly off the radar screen for a week since his widely covered budget press conference. Like Schwarzenegger, the veteran politician is receiving policy briefings. He has also been raising money, which had been going very slowly before this innovation with the casino tribes’ money.

But that is one deal that may be too raw for Californians tired of clever special-interest politics.

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