Angelides Unveils Reform Plan

He vows to root out political corruption. The governor's aides accuse him of hypocrisy

By Robert Salladay, Times Staff Writer

SACRAMENTO â€" Three years after Arnold Schwarzenegger entered his first race for governor, state Treasurer Phil Angelides on Monday unveiled a plan to curb political corruption in the Capitol, and accused his Republican rival of "shamefully" ignoring his own pledges made in the recall campaign.

Angelides' proposal would require political consultants in Sacramento to more fully disclose their clients; enact first-ever penalties for conflicts of interest; ban top officials from taking jobs outside of government; and require nonprofit groups that aid elected officials to disclose their donors.

Angelides spoke at the State Railroad Museum â€" the same spot where Schwarzenegger promised to "bring trust back to government" in the turbulent 2003 recall race. There, Schwarzenegger had invoked former Gov. Hiram Johnson, the populist reformer who challenged the railroad barons' stranglehold on the Capitol.

"Hiram Johnson would be rolling in his grave if he saw the Schwarzenegger administration," Angelides said, speaking as a class of noisy children trampled nearby.

The Schwarzenegger campaign accused Angelides of being a hypocrite who "will say anything if it will benefit him politically." Angelides, the aides pointed out, has voted to give lucrative investments from the state's pension fund to some of his political donors.

Angelides would require political consulting firms to report their clients, if they are assisting corporate lobbyists on legislation. Such firms have proliferated in recent years, and none of them discloses clients even though they are paid to influence public policy.

One of the most prominent of the firms is California Strategies, run by Bob White, a former chief of staff to Gov. Pete Wilson and a Schwarzenegger confidante during the recall campaign. Because of his connections, White moves in the highest circles of California government, but he is not required to report the corporate interests he represents.

A spokesman for White declined comment on Angelides' proposal.

Angelides also wants "Astroturf" campaigns â€" the creation of front groups to give the appearance of grass-roots support for legislation â€" to disclose who is behind their efforts. And he would require fines for conflict-of-interest violations by elected officials who receive income from companies or individuals that benefit from their political decisions. Currently, the only requirement is that officials disclose potential conflicts.

"There ought to be firm penalties for violations of the Political Reform Act," Angelides said, referring to the landmark 1974 law.

Angelides focused too on aspects of Schwarzenegger's own political operation. One proposal would require nonprofits that assist elected officials to disclose their donors. Another would prohibit the governor and his staff from holding jobs outside the government.

Schwarzenegger has benefited from a web of nonprofit groups that have paid for his housing and foreign travel, among other things, but the governor has only released those donors voluntarily and with far less detail than when he reports political donations.

"If the governor or the governor's office benefits from any special interests, the people of California should know," Angelides said.

After being elected in 2003, Schwarzenegger accepted a job with the publisher of Muscle & Fitness and Flex magazines that was worth up to $8 million, but did not disclose the relationship until 20 months later.

The governor had vetoed legislation banning further regulation of nutritional supplement makers, the key advertisers in those magazines. He has since canceled the magazine contract.

"I won't be working for Chess magazine or Mensa magazine," joked Angelides, who frequently mentions that he attended Harvard University.

After three decades in politics, Angelides is coming late to the debate over government reform. He has been a prolific fundraiser and has collected at least $4.5 million in campaign contributions from money managers and others seeking business with the public employee and teacher pension funds.

He is a voting member of both boards, which manage a combined $351 billion in assets.

In 2002, Angelides crusaded against new accounting rules requiring more transparency for stock options given to executives. Silicon Valley venture capitalist L. John Doerr â€" who along with family members and others in his firm have contributed $252,000 to Angelides â€" opposed those changes.

Schwarzenegger campaign spokesman Matt David on Monday said the governor has been working diligently to implement the changes he proposed during the recall. Some â€" such as banning campaign contributions during negotiations on the state budget â€" have failed in the Legislature. And voters last year rejected the governor's plan to change how voting districts are drawn.

The governor is never beholden to campaign contributors and supports full transparency of donations, David said.

Angelides, who has been struggling to find a coherent message in his bid to unseat Schwarzenegger, plans to press this issue throughout the campaign, his aides said.

He has endorsed Proposition 89, a November initiative that would enact public financing for campaigns by raising taxes on corporations. The initiative, which Schwarzenegger opposes, also would put stricter limits on campaign donations.

"This governor was elected on the promise to clean house and reject the influence of money in politics," said state Sen. Debra Bowen (D-Redondo Beach), the Democratic nominee for secretary of state, who attended Angelides' event. "But the voters got something very different."

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