ARNOLD GETS MUSCLE FOR REFORMS PROMINENT BUSINESS ADVOCATES HELP POWER HIS CAMPAIGN TO AMEND CONSTITUTION.

Byline: David M. Drucker Sacramento Bureau

SACRAMENTO - Gov. Arnold Schwarzenegger has turned to an independent committee led by seven of California's most influential and prominent business advocates to drive his efforts for fiscal and political reform.

The group, Citizens to Save California, has supplied most of the funding and manpower for Schwarzenegger's statewide push for the 600,000 signatures he needs to qualify each of his proposed constitutional amendments for a November special-election ballot.

``We're just in (post) recall Year 2 - that's where we are,'' said Joel Fox, a Granada Hills small-business activist who is co-chairman of the committee.

Since March 1, when Schwarzenegger announced he was done waiting for legislators to vote his measures onto the ballot, Citizens to Save California has sponsored five Schwarzenegger campaign appearances at small businesses and restaurants throughout the state and enlisted an army of paid signature-gatherers.

The group reports it has raised nearly $1.8 million toward its $13 million goal, including one donation of $1.5 million from A. Jerrold Perenchio, chairman of the board and chief executive officer of Univision, a Spanish-language television network based in Los Angeles.

Fox heads Citizens to Save California with co-chairman Allan Zaremberg, president of the California Chamber of Commerce.

Also leading the committee are Jon Coupal, president of the Howard Jarvis Taxpayers Association; Bill Hauck, president of the California Business Roundtable; Rex Hime, president of the California Business Properties Association; Janet Lamkin, president of the California Bankers Association; and Larry McCarthy, president of the California Taxpayers Association.

All seven are close allies of Schwarzenegger, sharing his philosophy of avoiding tax increases and reducing state business regulations that economists say have put California at a competitive disadvantage with other states and curtailed the creation of good-paying jobs.

The governor's critics say his close alliance with business leaders - including some who lobby state government - blows a hole in his claim to be a populist reformer representing ``the people'' against powerful and well-connected special interests that have held undue influence over lawmakers.

If anything, say Democratic leaders and liberal government-watchdog groups, the individuals behind Citizens to Save California lead organizations that are the real big-moneyed special interests - not the unions representing civil service employees, public school teachers, firefighters and police officers.

``Citizens to Save California is comprised of neither citizens; nor are they going to save California,'' said Carmen Balber, spokeswoman for the Santa Monica-based Foundation for Taxpayer and Consumer Rights. ``It represents the largest industry interests in California, most of whom are also Gov. Schwarzenegger's largest campaign contributors.''

Organized labor is fighting back and has created a campaign committee of its own.

Six unions - including the California Teachers Association and California Professional Firefighters - formed Seriously, Saving California. This committee, which could publicize its agenda as early as this week, expects to endorse and campaign for ballot measures and encourage voters not to sign the governor's petitions.

Officials of the committee declined to comment.

Schwarzenegger wants to amend the California Constitution to add a spending restraint to the state budget, implement merit pay for public school teachers and transform the public employee pension system from one that guarantees benefits to a market-dependent 401(k) system. He also wants to remove the power to draw legislative and congressional districts from the Legislature and give it to a panel of retired judges.

Constitutional amendments - whether placed on the ballot by signed petitions or by a two-thirds vote of the Legislature - require voter approval. Fox said Citizens to Save California plans to use petitions to qualify three measures that relate to Schwarzenegger's agenda, as a backstop against legislative resistance.

The governor has already endorsed initiatives to overhaul the public employee pension system and lengthen the number of years - from two to five - that public school teachers must work to gain tenure. Once the group agrees on an initiative to restrain government spending, Schwarzenegger is expected to endorse that one as well.

``We saw somebody who was willing to lead major reforms, and we knew he needed help to get the job done,'' said Fox, who is also president of the Small Business Action Committee and worked as a policy consultant for Schwarzenegger's gubernatorial campaign when the action hero was elected and former Gov. Grey Davis recalled in October 2003.

Of Schwarzenegger's four proposals, redistricting reform is the one Citizens to Save California does not plan to address. On that issue, Schwarzenegger is backing an initiative authored by conservative Sacramento political activist Ted Costa, who filed the petition that led to the Davis recall.

Schwarzenegger decided to coordinate his 2005 signature-gathering effort with Citizens to Save California rather than through his own political committee, the California Recovery Team, because of new state campaign-finance regulations limiting how much money can be raised by a ballot committee controlled by an elected official.

Last summer, the Fair Political Practices Commission ruled that governors and gubernatorial candidates are limited to accepting $22,300 per individual contributor, per election, and so are the political committees they control.

That regulation - effective for all elections after Nov. 2, 2004 - was not on the books during Schwarzenegger's gubernatorial race in 2003 or his various 2004 ballot campaigns. Committees not controlled by candidates or elected officials, like Citizens to Save California, are still exempt and permitted to raise money in unlimited amounts.

``The rules changed,'' said Marty Wilson, who directs fund raising for the governor's re-election committee and the California Recovery Team.

TheRestofUs.org, a Sacramento-based fund-raising watchdog group that has singled out Schwarzenegger for criticism, believes the committee is, in fact, controlled by Schwarzenegger. TheRestofUs.org, in a complaint recently filed with the Fair Political Practices Commission, accused Citizens to Save California of violating campaign-finance regulations by accepting contributions in excess of $22,300.

Citizens to Save California denies that Schwarzenegger controls it. Its attorney emphasizes that regulations specifically allow committees and elected officials to coordinate their activities, and he says that nothing precludes a committee from tailoring its campaigns around an elected official's agenda.

``This committee has done everything by the book,'' attorney Steve Lucas said.

Officials of the committee note that while their pension-overhaul initiative, endorsed by Schwarzenegger, is similar to his plan introduced into the Legislature, their education-reform measure does not include the merit-pay component that is central to Schwarzenegger's legislative proposal.

David M. Drucker, [phone]

david.drucker(at)dailybulletin.com

CAPTION(S):

2 photos, box

Photo:

(1) Joel Fox

(2) Allan Zaremberg

Box:

POWER PLAY

SOURCE: California Chamber of Commerce and Small Business Action Committee.