CALIFORNIA GOP HOPING TO REGROUP PARTY TO WRESTLE WITH FINANCES, ELECTION WOES.

Byline: HARRISON SHEPPARD

Sacramento Bureau

SACRAMENTO -- As the state's GOP faithful gather today for their semiannual convention, the mood is far from jubilant as leaders grapple with Republican Party finances and a failure to make any major gains in November's election.

Conservative activists also are continuing to grumble about the politics of Gov. Arnold Schwarzenegger, whom they feel often acts more like a Democrat.

"I think there's great concern over the dramatic turn to the left he's made in the past year and the damage that's done to the state and to the party," said Sen. Tom McClintock, R-Thousand Oaks.

Schwarzenegger is scheduled to address the convention tonight at an $80-per-person dinner. He also is expected to meet privately with former New York Mayor Rudy Giuliani, a likely presidential contender who will speak at a luncheon Saturday.

Aaron McLear, a spokesman for the governor, said Schwarzenegger will emphasize his pride in being a Republican and will highlight public safety and other traditional party issues.

He also is expected to pitch his health care reform plan, which has met with skepticism from the party base because it offers subsidized coverage to children of illegal immigrants and increases fees on employers, doctors and hospitals.

And Schwarzenegger is expected to urge party unity.

GOP Chairman Duf Sundheim said Schwarzenegger -- who is conservative on financial issues but progressive on social issues -- can help the party win over decline-to-state voters, who have been steadily increasing over the past decade.

"Because we have Schwarzenegger for the next four years, I think that provides us with an opportunity to redefine who we are as Republicans," Sundheim said.

"And to say, Look, we have that strong conservative group and you hear from that voice within the legislative community, but we also represent a voice that's strong on the economic issues, libertarian on the social issues and progressive on the environmental issues."

But even as the party looks to broader issues, it faces internal turmoil over management and spending practices that left it with $4.4 million in outstanding debt at the end of last year.

Critics say the party got very little for the money. While Schwarzenegger won re-election, and Steve Poizner won the insurance commissioner's office, the party failed to take any other statewide offices nor gain any legislative seats.

Mike Spence, president of the conservative activist group California Republican Assembly, said the party focused too heavily on Schwarzenegger.

"It's not like they were spending this money to elect other Republicans," Spence said. "They were spending it on a guy up 20 points in the polls. It doesn't make any sense."

Sundheim said leaders decided to give an equal and consistent level of financial support to all of the party's statewide candidates rather than trying to adjust the amount based on the latest polls.

Roger Salazar, a spokesman for the California Democratic Party, said Republicans are in low spirits.

"They have a whole host of problems now," Salazar said. "There's millions of dollars in debt. People have been calling for an audit into how they spent their get-out-the-vote money. They have a governor who basically ignored them during the election -- he didn't lift a finger to help any of the party darlings like (controller candidate Tony) Strickland or McClintock."

"So I don't think it's a good time to be a Republican in California."

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