State Finance Director Donna Arduin, usually ultracool and buttoned-down, practically shook with excitement. Her boss, Governor Arnold Schwarzenegger, headed to the stage to declare victory on his twin initiatives to refinance the state’s debt with $15 billion in bonds and require a balanced state budget.

As the über-guv did his thing — “You the people are the true power lifters for Kay-lee-fohr-nyah” — before about 400 invited guests in the Starlite Ballroom of Santa Monica’s Fairmont Miramar Hotel, the overwhelmingly Republican crowd (the Democrats were all up onstage) had something to cheer about again, continuing a string of California victories tied to the ideologically ambidextrous ex–bodybuilding champ.

With this historic win, Schwarzenegger is creating the permanent campaign, a political machine founded on global celebrity, big money, a presidential-campaign-level team of political operatives, and constant action. This will give him more leverage for future initiatives and in legislation and negotiation on workers’ compensation, state contract negotiations, government restructuring following a comprehensive performance review, the future of Indian casinos. It will improve his ability to get both Democrats and Republicans to alter their traditional stances on no-cuts/no taxes. Such measures might find their way onto the ballot.

Schwarzenegger won a big victory by marginalizing what looked like significant opposition in the Democratic and Republican parties. In doing so, he marked another first, the first major initiative victory in which a complex proposition started out trailing badly and then came on to win passage. He outmaneuvered his chief Democratic opponent, Treasurer Phil Angelides, “the anti-Arnold,” who thought he saw a chance to hand Schwarzenegger a stinging defeat when his initiatives trailed in the polls. Democratic legislative leaders learned they could work with Schwarzenegger.

Schwarzenegger formed surprising alliances with top Democrats, like former Assembly Speaker and San Francisco Mayor Willie Brown and former Governor and Oakland Mayor Jerry Brown, and with the California Teachers Association. Less surprisingly, his administration works closely with environmental groups, which also backed his initiative drive. State Controller Steve Westly signed on as co-chair of Schwarzenegger’s initiative campaign, and he and Senator Dianne Feinstein did TV ads in favor of Propositions 57 and 58. Even former Governor Gray Davis, Schwarzenegger’s vanquished foe from the recall, came aboard the Arnold bus.

What about the Republican right wing, never much in favor of borrowing? It was kept in check by the specter of big tax increases if the bond measure went down.

Arnold Schwarzenegger saw the opportunity for his permanent campaign early in the recall contest, when he saw that he could raise big money not just around the state but around the country. He said to me then that he could build a bicoastal fund-raising machine and
that his ability to go over the heads of politicians with initiatives would give him an edge, both to win issue victories at the ballot box
and to gain leverage for legislation and executive action.

Looking ahead after this week’s big victories, there are possible initiatives on workers’-compensation reform (already in the works with former Schwarzenegger aide and ex–Howard Jarvis Taxpayers Association leader Joel Fox), Indian-casino gambling (an initiative cooked up by two of the governor’s advisers, George Gorton and Don Sipple, they say on their own), and even a ballot-box solution to the 2004-05 budget crisis if a combination of cuts and temporary tax increases emerges from the jockeying under the Capitol dome. As of now, of course, nothing is set, as the potential for each in the wake of the passage of Propositions 57 and 58 gives impetus to the action-man governor’s ability to get what he wants through the legislative process.

Besides, this is one rookie politician who thrives on chaos. “My life is wild,” Schwarzenegger said last summer as he contemplated his moves. “I love it like that.”

While chief of staff Pat Clarey keeps the trains running on time in the Governor’s Office, communications director Rob Stutzman and press secretary Margita Thompson keep the spin flowing, longtime Arnold friend and senior adviser Bonnie Reiss serves as sounding board, former Arnold campaign manager and Pete Wilson chief of staff Bob White functions as a sort of éminence grise, counseling key staffers in the middle of a tension-filled operation, and former Democratic Assembly Speaker Bob Hertzberg provides advice and facilitates relations with Democrats. Top strategist Mike Murphy, media guru Sipple, senior adviser Gorton, political director Jeff Randle, Murphy’s PR consultant Todd Harris and fund-raising coordinator Marty Wilson form the core of the political machine.

It’s a group with experience in dozens of statewide campaigns and several presidential campaigns, American and otherwise. Murphy directed John McCain’s insurgent presidential campaign in 2000.

Murphy, who also helped mastermind the elections of governors in Michigan, New Jersey and Florida, is moving to California. With a new house in Laurel Canyon, the longtime Washington hand has gone a bit Hollywood as a consulting producer for comedian Dennis Miller’s new talk show on CNBC. Gorton has a home in Arizona as well as California, and a cable movie called Spinning Boris, about his exploits helping mastermind Boris Yeltsin’s re-election to the presidency of Russia. (Jeff Goldblum is the unlikely casting as the somewhat-diminutive Gorton, who was Wilson’s longtime campaign manager.) Sipple, who has worked with the Bushes, and before doing Schwarzenegger’s TV advertising was perhaps best known for his incendiary “They keep coming” ad touting Wilson’s backing for the anti–illegal immigrant Proposition 187 (which propelled Wilson past Kathleen Brown into a lead he never lost in his 1994 re-election as governor), has other clients, including Disney.

It is a group that, despite some ego clashes, has performed very effectively together, though, given their interests and how Schwarzenegger has structured things, plenty of room remains for not-so-little things to fall between the cracks. While fewer mistakes are always good, who’s to say a little chaos is so bad? All that control didn’t help Arnold’s new friend Gray Davis all that much.

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