Democrat seeks union contributions as Schwarzenegger courts business leaders 

Democratic Treasurer Phil Angelides has begun to tap labor unions for campaign contributions as he tries to bounce back from a costly primary and raise the money he’ll need to compete with GOP Gov. Arnold Schwarzenegger in what could be the most expensive campaign for governor in the state’s history.


In the past month, Angelides has received the maximum $22,300 contributions from the laborers union, United Teachers of Los Angeles, the prison guards union, the iron workers union, the electrical workers union and public employee unions.

Schwarzenegger, too, has seen money come in from some of his core business supporters, including PepsiCo, Oracle USA, Pfizer, Cingular Wireless, T-Mobile, Applied Materials, the California Farm Bureau Federation, the California Business Properties Association, Fireman’s Fund Insurance Co. and a host of individuals, including Reed Hastings of Netflix and John Chambers of Cisco Systems.

The money pours in despite new limits on campaign cash in the governor’s race — restrictions that have yet to make a dent in the fundraising frenzy surrounding the contest.

Angelides, Controller Steve Westly and their well-heeled backers spent about $80 million in the June Democratic primary for governor. Schwarzenegger and Angelides are virtually guaranteed to top that number in the fall campaign.

“This is a very high-stakes battle,” said Steve Levin, a project director for the nonpartisan Center for Governmental Studies. “The numbers are only going to skyrocket more.”

The 2006 campaign is the first governor’s race run under the contribution limits set by Proposition 34, a campaign finance initiative approved by voters in 2000. The new rules cap contributions to a candidate for governor at $22,300 in the primary and another $22,300 in the general election.

That’s a far cry from the 2002 campaign for governor, in which Democratic Gov. Gray Davis could collect $612,000 from just the Operating Engineers union, for example.

With the help of six-figure donations like those, Davis pulled in better than $71 million for his successful re-election bid. But this year, Schwarzenegger still plans to raise at least $70 million, even with the contribution limits.

“We are confident we will have the resources necessary to communicate the governor’s vision for moving the state forward,” said Julie Soderlund, a spokeswoman for Schwarzenegger’s campaign.

After the hard-fought primary race that left his campaign coffers virtually drained, Angelides would be happy to raise half the governor’s goal.

The problem is that the lower contribution limits don’t address the ever-rising cost of campaigning in a sprawling state like California, said Cathy Calfo, Angelides’ campaign manager.

“It’s more work to reach out to more people,” she said. “We’re also going back to the same people who helped us in the primary and hoping everyone who helped then will help again.”

Labor money will be a big part of Angelides’ campaign fund, especially after November’s bitter special election, where unions spent more than $90 million to defeat a package of initiatives pushed by Schwarzenegger.

“The unions will support Angelides,” said Art Pulaski, executive secretary-treasurer of the California Labor Federation. “There’s a broad set of issues where Angelides is good and the governor isn’t.”

Much of the business money will be heading the governor’s way. In the 2003 recall, the California Chamber of Commerce backed Schwarzenegger with its first endorsement for governor in its 112-year history. When Schwarzenegger announced in September that he was running for re-election, a statement by chamber President Allan Zaremberg made it clear that nothing has changed.

“We are excited that the governor wants to stay in office for four more years … and we look forward to working with the governor during his second term,” Zaremberg said.

Both candidates also will benefit from money coming from across the country. For example, Angelides has received large contributions from union political funds in Washington, D.C., the transport workers union in New York City, and the locomotive engineers union in Cleveland.

Schwarzenegger also is collecting money from out-of-state companies doing business in California, as well as from GOP contributors from across the nation.

There are other ways to put big money into the race for governor. In recent weeks, the state Republican Party has collected contributions of $2 million from Stockton developer Alex Spanos, $1.5 million from Jerry Perenchio of Univision, and $1 million from Texas oilman T. Boone Pickens. The party used that cash for to pay for a statewide TV advertising campaign attacking Angelides.

The state Democratic Party also has more than $8 million in the bank that can be used to help Angelides.

Schwarzenegger and Angelides probably will benefit from another loophole in the state’s campaign funding rules that allows independent committees to raise and spend as much as they want on behalf of a candidate — as long as those actions are independent of the candidate’s campaign.

Angelides was particularly helped in the primary by televisions ads produced by an independent committee financed by Angelo Tsakopoulos, a longtime friend and business partner. By the end of the primary, the committee had raised better than $10 million, with $8.7 million coming from the Tsakopoulos family.

The new Prop. 34 limits in the governor’s race will just redirect contributors’ money into a horde of new independent expenditure committees, said Allan Hoffenblum, a GOP analyst who runs the California Target Book, a nonpartisan overview of legislative races in the state.

“The new rules will just make the (independent committees) dominant,” he said. “It takes the money underground.”

While the contribution limits will keep special interests from writing huge checks directly to the candidates, even campaign reform advocates admit the restrictions won’t keep that money out of political races.

“One way or another, a candidate will find a way to raise the money he feels he needs to get his message to the voters,” said Levin of the Center for Governmental Studies. “Communication of ideas is a good thing. The question is who’s paying for it.”