Candid Talk on the Party Line

SACRAMENTO —  When wealthy contributors write checks to Gov. Arnold Schwarzenegger, they often get a few canapes and a drink -- and a secret telephone number that grants them access to his closest advisors and even the governor himself.

Twice a month, donors can become insiders’ insiders -- invited to participate in conference calls featuring information about Schwarzenegger campaign strategy that his political enemies would love to have. In turn, donors who dial in can give the governor advice.

In the latest such call, a few days ago, Schwarzenegger’s media expert, Don Sipple, outlined a strategy “based on a lot of polling” to create a “phenomenon of anger” among voters toward public employee unions. Firefighters, police officers, teachers and other state-paid workers have become the governor’s harshest critics this year.

“The process is like peeling an onion,” Sipple said, describing a multi-step plan for persuading voters that public-worker unions are “motivated by economic self-interest” instead of “doing the best job for the state.”

The Thursday discussion, involving multiple contributors and three top Schwarzenegger strategists, offered a rare glimpse of the governor’s “donor maintenance” effort: insider information, solicitous compliments, invitations to exclusive parties. It was also a window on the governor’s attack strategy ahead of an expected Nov. 8 special election.

The governor has dubbed 2005 the “year for reform,” and he needs millions of dollars for support, mainly for TV ads. The Times was given access to Thursday’s half-hour call through a participant.

“It’s a good way to keep in touch with you, our most important supporters, about the latest developments in the campaign,” Schwarzenegger’s chief fundraiser, Marty Wilson, told the contributors.

The governor participated in a call with donors two weeks ago and is expected to do so again June 16. Presumably, that will be after he signs an executive order scheduling the special election, so he can take to voters some of his proposals for changing state government.

Contributors to Schwarzenegger’s causes are first invited to join the discussions in e-mails, which tell them how to get -- for each call -- a phone number and a password. The campaign staff decides which significant donors will be included each time. The discussions feature a “special guest,” such as Sipple, talking about the governor’s plans, as well as information about fundraisers and a question-and-answer session.

In the latest call, the advisors said Schwarzenegger had spent $8 million so far on television ads defending and promoting his agenda. He launched another TV ad campaign the same day that will cost $2.5 million for a few weeks of air time, and he wants to collect $31 million to $32 million to run his initiative campaign through the fall, the advisors said.

A special election ballot is expected to include a proposed government spending cap and a plan to lengthen the time it takes teachers to get tenure -- measures embraced by Schwarzenegger and opposed by public employee unions. The unions and their Democratic allies have spent millions on TV ads criticizing the governor and his proposals -- with some success, the advisors acknowledged.

“There is no question to anybody who is rational that we have been in the barrel for the past several months,” Sipple said during the phone call. “The good news is we have polling that shows us coming out of the trench.”

Surveys by independent groups have shown Schwarzenegger’s public approval dropping as much as 20 percentage points since January, to about 40% in recent weeks. Sipple was referring to a poll commissioned by the governor’s campaign showing about 50% approval.

Renee Croce is finance director for Schwarzenegger’s California Recovery Team, the governor’s main political committee. She told donors during the call to expect a dinner June 22 at the home of Cisco Systems Chief Executive John Chambers, a fundraiser June 24 in Los Angeles and a series of statewide fundraising events corresponding with Schwarzenegger’s birthday July 30.

“The governor is very hopeful we can come together and have a big splash before July 30 to pay for all this media,” Croce said.

Sipple’s comments about unions came after a representative of Wells Fargo suggested that the governor sharpen his message to focus on public employees rather than privateindustry labor groups. The banking giant donated $100,000 last year to Schwarzenegger’s efforts to overhaul workers’ compensation through an initiative that never made the ballot.

Sipple said one piece of information makes voters particularly angry about unions: the “stinky episode” in 2002 when former Gov. Gray Davis and the Legislature granted state prison guards a 34% raise.

“People remember that,” he said, suggesting that the campaign would try to rekindle the voter disgust that swept Davis out of office and Schwarzenegger in. “You almost have to use these episodes that tap the recall to make your case.”

He also said: “When you get to the point of ... ‘These people are on your payroll and they are out to roll you every day,’ that creates a kind of phenomenon of anger. But it takes a long time to get there.... As the campaign goes on, we have to articulate that.”

A political consultant who is organizing opposition to Schwarzenegger’s agenda said Sipple’s use of the word “create” was apt. Gale Kaufman works for the Alliance for a Better California, a coalition that includes several unions. She said the public sees firefighters, teachers and others as public servants, not leeches.

“Sounds to me like when [Schwarzenegger’s advisors] noticed there wasn’t a problem, they had to create one,” Kaufman said.

Two donors participating in the call said they wanted to do more “than just write checks,” and offered to send letters to the editor or opinion pieces to newspapers in support of the governor.

Wilson called that “a tremendous idea” and promised to provide “message points” for the donors to use in their efforts.

Sipple said one problem was that voters weren’t getting correct information about the governor’s proposed budget -- which includes $3 billion more for schools.

An executive with the Associated Builders and Contractors Inc. of San Diego asked during Thursday’s call if the governor was “going to come out strongly supportive” of a ballot initiative that would force public employee unions to get permission to use a member’s dues for political activities, such as the current TV ads attacking the governor.

The building official, whose industry has donated more than $14 million to Schwarzenegger, said there was a “compelling argument” for the governor to support the measure. “If you are looking for the seminal battle between status quo and change that benefits the state over the long term, this is a tremendous arrow in the quiver.”

Sipple told him that Schwarzenegger might withhold an endorsement of the initiative in exchange for concessions from the Legislature on other matters. He said it was a “distinct possibility” that the governor would endorse the measure, however. “We certainly would encourage it,” Sipple said.

Campaign finance experts said there is nothing illegal about conference calls with donors, if the contributors do not “cross the line” and push for favors.

Kathay Feng, executive director of California Common Cause, said that Schwarzenegger’s donors are allowed to discuss policy with him and interact with him but that non-donors should not be shut out. Both should have access to the administration to express their views, she said.

The governor’s public calendars show many visitors to his office who are not campaign donors. And he has repeatedly said he does not trade campaign money for favors.

Wilson, in an interview, said the conference calls allowed the campaign to interact with contributors without “going through the filter of any kind of third-party intermediary, whether that be the news media or somebody on their staff. They can get their information directly from a senior official” on the campaign.

Some of the donors offered unsolicited help to the strategists. One donor pressed Sipple and Wilson to reach out to Latinos because Schwarzenegger “is a good-looking guy, and people in the Hispanic community would love to see more of him on television.”

An executive with the American Electronics Assn., which has donated $25,000 to the California Republican Party, said: “We can get our public relations entity involved and send out our own press releases endorsing the governor’s activities, etc.”

“We could use your help,” Wilson replied.

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(BEGIN TEXT OF INFOBOX)

Talking to donors

Excerpt from a conference call last week involving Gov. Arnold Schwarzenegger’s top political aides and major campaign contributors:

‘We ... don’t feel great about where we have been. But we kind of see ourselves on an upward trajectory as we go toward a November special [election].’

Don Sipple

Schwarzenegger media advisor, on the governor’s public approval ratings ahead of the expected election

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‘I think we will do a very good job with boosting the governor’s popularity so he will be a very good salesman at the end of the day.’

Marty Wilson

Schwarzenegger’s chief fundraiser, on prospects that the governor’s proposals would pass in a special election

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‘The opposition is obviously spending millions of dollars to demonize the governor, but they are not coming anywhere close to demonizing the truth.’

A donor from Fresno

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‘That is the one the governor bristles at the most.... That will be the thorniest one. We need to correct the misperception about cutting education.’

Sipple

On complaints that the governor broke his promise to provide

$2 billion more to schools

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‘I’m sure you are aware the [Assembly] speaker and Democrats proposed a $3-billion tax increase. I think it will affect anybody who is on this call.’

Sipple

Referring to a plan to raise taxes on individuals making more than $143,000 a year

Los Angeles Times