Donations Pick Up for State GOP

Capitalizing on Gov. Arnold Schwarzenegger’s popularity and moderate profile, the California Republican Party is raising millions of dollars by tapping disaffected Democratic givers and donors the governor has shunned.

Nearly a year before the 2004 legislative elections, party executives say they already have checks and commitments exceeding the $11 million they raised for all of last year’s statewide contests. Schwarzenegger himself has raised more than $1.5 million since taking office two months ago.

Since Schwarzenegger took over, California Republicans “have died and gone to heaven,” said state Sen. Don Perata (D-Oakland). “For the foreseeable future, they have an enormously popular governor who has much broader appeal than any Republican I can think of, including the president.”

Republican stalwarts such as Alex Spanos, a Stockton developer who owns the San Diego Chargers football team, and companies such as ChevronTexaco account for much of the money.

California Republican Party Chairman Duf Sundheim, seeking to wrest control of the Legislature from the Democrats next year, also is tapping some entities that Schwarzenegger has shunned as “special interests,” including an Indian tribe, a union of public employees and several trade organizations.

Republicans also have wooed one of the Democrats’ largest donors, mortgage lender Ameriquest Capital Corp., and its principals, Roland and Dawn Arnall. Ameriquest and the Arnalls have donated or promised $2 million to the California GOP, according to information Sundheim gave prospective donors in Sacramento this week.

Democrats accounted for 89% of the $1.15 million that Ameriquest contributed to incumbents and candidates seeking state office between 2000 and 2002. Former Gov. Gray Davis alone received $348,000 from Ameriquest during his tenure. But Ameriquest and the Arnalls have given $142,000 to Schwarzenegger since Davis was recalled Oct. 7.

“For a Democrat, that should be a canary in the mine,” said Perata, a longtime recipient of their money.

Some Democrats say the GOP is inflating its numbers. The party’s fundraising reports for the final quarter of 2003 won’t be filed with the state until January. The Republicans reported raising $3.1 million as of Sept. 30. The Democratic Party reported $3.7 million raised for that period.

In any change of administration, donors’ wallets tend to open to those who take control. But Schwarzenegger is proving to be a tonic for a party that emerged from the 2002 election having lost all statewide offices. The Republicans’ recent polls show Californians gaining a favorable view of the GOP after years of seeing it as “anti-intellectual” and riven by dissention, Sundheim said.

ChevronTexaco, for example, has given $500,000 to the Republicans this year. In 2000, Chevron’s state GOP contribution amounted to $5,000.

Company executives concluded that the party’s social conservatism in 2000 had become a “road map to self-destruction,” said Jack Coffey, general manager of governmental relations for the oil firm. Now, he said, the party is smoothing its edges with the ascension of moderate Sundheim as party chairman and Schwarzenegger as governor.

“They have a Republican governor who is socially moderate, to say the least -- and that is fine with us,” Coffey said.

Some Democratic insiders said that at least some businesses formerly friendly to their party have become disillusioned with it. In a trend that became pronounced last year, Democrats approved several measures that businesses viewed as harmful. Examples range from a new law that expanded consumers’ financial privacy rights to one that required many employers to pay for health insurance for their workers.

Ameriquest, based in Orange, and the Arnalls began giving to Republicans a year ago -- in a big way. The Arnalls gave $1 million to the Republican National Committee in October 2002, federal campaign records show.

That same month, state records show, the couple gave $100,000 to Republicans running for California legislative seats. Last August, the Arnalls were hosts to a fundraiser for President Bush that brought in $1 million.

A brochure that Sundheim hands out to prospective donors says the Arnalls and their company have pledged to give another $2 million to help the GOP win legislative seats in 2004.

The Arnalls did not respond to calls seeking comment. But Perata speculated that they have become disenchanted with Democratic support for legislation they view as damaging to business generally and the financial services sector in particular.

Ameriquest has been hurt, Perata said, by legislation cracking down on lenders that specialize in high-interest loans to individuals with bad credit.

The Arnalls are “finding California to be an increasingly difficult place to do business in,” Perata said.

California Democratic Party Chairman Art Torres could not be reached for comment.

The list of donors that Sundheim has shown to prospective contributors includes several whose money Schwarzenegger has rejected, calling the groups “special interests.”

Schwarzenegger also has turned down donations from single-interest trade organizations. Eleven such groups, including Realtors, dentists and grocers, have given or pledged $125,000 to the state Republicans, according to Sundheim’s brochure.

Sundheim’s list also shows that the Morongo Band of Mission Indians, which owns a casino near Palm Springs, has pledged $50,000 to the GOP. Altria Group, the tobacco company formerly known as Philip Morris, has committed $125,000, according to the brochure

It also shows a $250,000 pledge from the California Correctional Peace Officers Assn. -- the state prison guards’ union -- although the group’s executive vice president, Lance Corcoran, said he was unaware of it.

The party defends its decision to tap an array of donors.

“Why is it not OK? We are working to build a better California,” said Assemblyman Kevin McCarthy (R-Bakersfield), who will soon take over as Assembly Republican leader.

Schwarzenegger has not sought to impose his own fundraising standards on the party, said gubernatorial aide Marty Wilson, because he believes the party should decide for itself from whom it will take money.

Some critics say the GOP should consider abiding by Schwarzenegger’s standards, because the governor would benefit, at least indirectly, from any legislative gains by the party in 2004.