Spending May Prove Costly to Governor

By Robert Salladay

March 19, 2006 12 AM PT

Times Staff Writer

SACRAMENTO —

Almost everywhere Gov. Arnold Schwarzenegger travels, he is shadowed by another sturdy Austrian: Dieter Rauter, his stunt double on “Terminator 3” and other films.

Rauter today is a member of the governor’s vast and expensive political apparatus. When Schwarzenegger meets the public, Rauter’s hand-held digital camera records the event for posterity, a service that has cost about $62,000 since Schwarzenegger entered politics about four years ago.

Another longtime Schwarzenegger friend gets $100,000 a year as a speech coach. A Hollywood acquaintance makes campaign jackets and T-shirts, a $69,000 expense so far.

Schwarzenegger hires scores of the best political operatives, travels exclusively by private jet and insists on a sought-after cinematographer to film his commercials -- productions that involve casting agents, caterers, dry-cleaners. In flashiness and magnitude, his public appearances have exceeded anything else in modern California politics.

The premium expenses show that although Schwarzenegger is working in Sacramento, he hasn’t entirely left Hollywood. The platinum-plated operation has given a tactical advantage to his political foes, whose spending habits have been more efficient and traditional.

Schwarzenegger’s campaigns have written more than 8,100 checks totaling $142 million to promote nearly a dozen ballot initiatives, get him elected in the 2003 recall and launch his reelection effort. Fourteen campaign committees have existed to raise money for his causes.

The governor spends tens of millions of dollars on public events, television ads, polling and other traditional political activity. But he has spent a smaller percentage than his opponents on the No. 1 task of any campaign: communicating with the public.

The public employee unions that ran an anti-Schwarzenegger campaign during last year’s special election spent about 75% of their money addressing voters through television ads, radio spots, phone banks and mailed brochures, according to state records. Schwarzenegger, who sponsored four ballot initiatives and lost every one, spent 63% of his cash communicating his message in those ways, the records show.

Schwarzenegger was vastly outspent by his opponents overall last year, but inefficiency hurt him too, said Ray McNally, a lead consultant on the successful union-backed effort. The governor waited so long to schedule time on TV stations, for example, that he paid dearly for it -- frequently double what the unions paid to place an ad in the same time slot.

In politics, McNally said, there are “two things you cannot afford to waste -- money and time -- and he wasted both.”

Schwarzenegger’s spending could be a critical issue this year as he seeks reelection. He hopes to raise as much as $75 million and must contend with new limits on donations.

His two main Democratic rivals already have millions more than Schwarzenegger, whose campaign started the year in debt.

The governor has acknowledged worrying about his spending. He hired a longtime friend, Steven Kram, a former chief operating officer of the William Morris Agency who handled business matters for Schwarzenegger, to monitor expenses and cut costs last year. The campaign paid Kram’s consulting company, MAX MMC Inc., $130,000 for his work.

Schwarzenegger said in an interview that he personally reviewed last year’s finances and “couldn’t really find anything. It was not like someone ripped us off or someone misused money.”

This year, Schwarzenegger said, he wants to “get the best for the money.... Every dollar we raise we will have to spend on television and other ads.”

Schwarzenegger is not the biggest spender in California politics. The unions spent $164 million against his initiatives last year. The pharmaceutical industry unloaded $90 million on two other measures related to drug prices, both of which failed.

The governor came in third, spending about $74 million, rounding out the most expensive year ever in California politics. Schwarzenegger’s fame, however, gets him more publicity than his opponents and costs his campaign nothing.

But no other elected official in California has raised and spent as much money as Schwarzenegger, particularly in such a short time. Beyond the $142 million already garnered and spent from mostly corporate contributors, Schwarzenegger has benefited from millions more raised through nonprofit entities created to support his political endeavors, housing and foreign travel.

The governor and his wife, Maria Shriver, have spent $25 million of their personal fortune on his political causes. Schwarzenegger does not take his $175,000 government salary, and he pays for his commuting costs between Los Angeles and Sacramento.

Some of the campaign money has been spent on things only Schwarzenegger might require as one of the most recognizable figures in the world, a member of the Kennedy clan and a former movie star with admittedly large appetites and unique security needs.

One of his largest expenses is for the jets that take him to his many public events. Former Gov. Gray Davis did far fewer of those than Schwarzenegger and secured private jets from donors only in the final weeks of campaigning. (And Davis, like Schwarzenegger a Los Angeles resident, commuted mostly on Southwest Airlines).

The Schwarzenegger campaign has spent $2.5 million on travel, housing and meals for the governor, the vast majority of it on jets. The money mostly is paid to Schwarzenegger’s company, Oak Productions. It hires the jets, which vary in size depending on his entourage. The campaign also has spent $23,000 to rent helicopters, including one for surveying damage after a series of devastating wildfires in Southern California in the fall of 2003, before he was inaugurated.

Last year, when Schwarzenegger needed television ads to promote his special election, he hired cinematographer Adam Greenberg, with whom he worked on two “Terminator” movies and “Collateral Damage” and “Junior.”

A member of the production crew said Schwarzenegger likes Greenberg because “he makes him look beautiful and makes him feel fuzzy and warm.”

Joshua Luka, who runs the grip-and-lighting company used by the governor’s campaign, said that with a Hollywood icon, “there has to be a certain etiquette and certain professionalism.”

Those standards extended to other aspects of Schwarzenegger’s ad productions. Most political campaigns cut costs, hiring nonunion crews or fewer experts. But Schwarzenegger went Hollywood.

Last year, his campaign hired a sound mixer who worked on the movie “Being John Malkovich” and a specialized “layout board” company that works for major studios, protecting floors and other surfaces on sets. He also hired Hollywood sound stages, production companies, sound mixers, crane and dolly suppliers, caterers and lighting specialists as well as a casting agent, a makeup artist and a dry-cleaner.

Movie director and actor Walter von Huene, who gets $100,000 a year for reviewing the governor’s speeches to make sure they accommodate his accent and personality, is a confidant who often plays chess with Schwarzenegger. He was a drama and dialogue coach on Schwarzenegger films including “Batman & Robin” and “End of Days.”

The campaign paid a year of the governor’s rent for the penthouse suite at the Hyatt Hotel in Sacramento: $66,000. The operation has held events at the Beverly Hilton, the Four Seasons and the Century Plaza hotels.

Schwarzenegger’s people have hired Carl Bendix, a production designer and Schwarzenegger friend who has done the Academy Awards Governors Ball and other Hollywood events. For catering, Schwarzenegger turns to Wolfgang Puck and other upscale merchants.

The governor and his family are now protected by the California Highway Patrol. But during the recall campaign, after being mobbed by crowds, Schwarzenegger hired a threat assessment and security firm, Gavin de Becker & Associates, for about $300,000. The company advertises as “a very unusual firm” whose clients include “the world’s most famous and the world’s most anonymous.... We advise famous people who are the targets of would-be assassins, stalkers, unwanted pursuers and intrusive news-gathering methods.”

Schwarzenegger has paid his core group of political consultants handsomely. The fees are not much more than other campaigns pay top consultants, but he employs dozens while most candidates hire a few. In total, the governor has paid them $14.7 million, about 10% of his campaign spending.

Chief Schwarzenegger consultant Mike Murphy and his companies -- Bonaparte Films, MPGH and DC Navigators -- have earned more than $950,000 working for the governor since the recall. Murphy no longer plays a major role in the campaign.

Schwarzenegger’s public disclosures list nearly 200 companies and individuals as campaign consultants, including speechwriter Landon Parvin, who worked for President Reagan. In addition, 22 government employees toggled back and forth between their state jobs and Schwarzenegger campaign jobs, records show.

The governor has paid a premium for collecting signatures to place initiatives on the ballot.

Signatures for a 2004 initiative to overhaul California’s workers’ compensation system cost $4.9 million; most initiatives can be placed on the ballot for about half that. He paid similarly to qualify initiatives in 2005, because he waited until the final weeks before the deadline to start his petition drive. In total, he has spent more than $20 million to get initiatives on the ballot.

Schwarzenegger bought television time week by week last year, paying premiums when other campaigns had booked time slots weeks in advance.

“It’s simply supply and demand,” said Rick Colsky, media consultant for the unions.

Records from one Sacramento station show that Schwarzenegger’s campaign paid an average $1,736 for each airing of his ads during one critical week before the special election. That is nearly double the $877 per spot paid by the governor’s union opponents, the Alliance for a Better California, in the same week.

Schwarzenegger conceded in the interview that his campaign paid more for the ad time than his opponents, but he said he doubted that made the difference in his defeat.

He said even being significantly outspent likely didn’t matter, either: “Certain things are meant to be, and certain things are not meant to be.”

(BEGIN TEXT OF INFOBOX)

Big spender

Gov. Arnold Schwarzenegger has spent more than $142.5 million in campaign donations since entering politics about four years ago.

A sampling:

TV commercials ($69.3 million)

Campaign consultants ($14.7 million)

Mail to voters ($10.9 million)

Travel, hotels for Schwarzenegger, his wife and staff ($4.9 million)

Public event production ($4.9 million)

Polling ($2.2 million)

Jet ($1.9 million)