Unions, Tribes, And Now... Oil

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Over the years, Governor Arnold Schwarzenegger has reserved a unique place in his own political purgatory for groups he calls "special interests." The membership list had remained pretty unchanged since 2003.

That is, until last week. Organized labor, Indian gaming tribes... make room for oil companies.

But unlike the other members of the "special interests" club, Schwarzenegger has a long political relationship with some members of this new category: campaign contributions over the years of almost $3 million.

Governor's Office

Photo: Governor's Office

The governor's decision to publicly lash out at the oil biz is the opening salvo in what is shaping up to be a bitter campaign over what a key part of his legacy, the 2006 state law regulating, and rolling back, greenhouse gases. A consortium of anti-tax groups and Republicans, with major funding by some in the oil industry, appear to have collected enough signatures to place an initiative on the November ballot that would likely suspend the law, AB 32, indefinitely.

As such, Schwarzenegger is gearing up for a fight, and has started his campaign with a little verbal taunting.

"Greedy oil companies want to roll back that clock," said the governor at an event last week. "They want us to depend on just oil, because they are greedy and they want to have the profits."

And as he assigned these oil companies the designation of "special interests," the governor said this: "As you remember in 2003, I said, 'When the special interests push me around, I will push back.' And this is exactly what we are going to do."

But unlike the many labor unions and Indian gaming tribes he's battled as "special interests," Schwarzenegger has a much friendlier past with his new enemies. Browsing through the reams of campaign finance records of his political operation over the last seven years, there's slightly more than $2.95 million in contributions from the oil biz to either Schwarzenegger or to the ballot measure efforts that he's championed. That includes Texas based companies ConocoPhillips ($248,500), ExxonMobil ($120,000), Shell ($200,000), and Tesoro ($10,000). It also includes Denver-based Venoco ($47,300).

The two largest oil industry backers of Schwarzenegger are based here in California -- Chevron ($990,800) and Occidental ($824,600).

Los Angeles-based Occidental is particularly noteworthy, because they are the most prominent switch hitter in this story -- that is, a donor to both Schwarzenegger and the initiative campaign to suspend AB 32. In fact, Occidental gave the California Jobs Initiative (AB 32 opponents) $300,000 on April 14... just two weeks after giving Schwarzenegger's California Dream Team committee $300,000.

So how does the governor square the criticisms of Big Oil with a donation like this one? His political adviser, Adam Mendelsohn, says the Occidental money was a donation in support of Schwarzenegger's campaign in support of the non-partisan primary measure, Proposition 14, while the matching anti-AB 32 donation was "disappointing." And Mendelsohn didn't mince words about Occidental's subsequent decision to campaign against AB 32.

"You realize now that a lot of oil companies are more concerned about their profits than they are the good of the state," he said.

Occidental spokesman Richard Kline said Schwarzenegger is "misinformed" when he labels as greedy the industry supporters of the anti-AB 32 initiative. He says the law will result in "substantially higher energy prices" and that the company gives political cash to "causes that we think will benefit the state."

(Two smaller oil producers gave minor donations to the governor in the past and now larger ones to the anti-AB 32 effort: Breitburn Energy of Los Angeles and Southern Counties Oil of Orange.)

But back to the infamous "special interests" label... reporters often tried in the early days of the Schwarzenegger era to get the governor to explain why some interest groups were inherently bad, and why some (mainly businesses and corporations) were not. The answer never was very revealing, but his political consiglieri Adam Mendelsohn put it this way in an interview: "What he's talking about is groups of people who are more concerned with their own needs than the benefit of the state."

Now, one would expect the charter members of the Special Interests Club to take issue with that, but at least it's a definition.

One final word, and that's about Chevron, the #1 oil company contributor to the governor and his causes through the years. The company has not backed the anti-AB 32 campaign; spokesman Morgan Crinklaw says Chevron is working with regulators on AB 32 to craft "a reasonable program that contributes to the state’s goals of reducing greenhouse gas emissions while allowing California’s economy to grow and remain competitive."

This story was the subject of an interview segment I did this morning on The California Report, which you can listen to below.

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About John Myers

John Myers is senior editor of KQED's new California Politics & Government Desk. He has covered California politics for most of the past two decades, serving previously as Sacramento bureau chief for KQED News and most recently as political editor for KXTV News10 (ABC) in Sacramento. In 2014, he was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.
  • jt taloff

    So does that mean Arnold now supports a tax on oil extraction in California? Like EVERY other oil-producing state has? He sure doesn’t mention it, and neither does this article. Until then, it’s all just hot air. Watch what he does, not what he says.

  • http://www.kqed.org/weblog/capitalnotes/blog.jsp John Myers

    The governor and his advisers maintain that Friday’s revised budget will include no new taxes, which would seem to answer the question. It’s worth remembering that Schwarzenegger did, in fact, briefly support an extraction/severance tax during the 2008-09 budget crisis… but dropped his support later.

  • Charlie Peters

    Amendments to Section 44036 California Health and Safety Code

    Consumer protection-oriented quality assurance portion of the motor vehicle inspection and maintenance program

    Preamble – Under these amendments, an in-field vehicle repair audit program is added to Section 44036 of the California Health and Safety Code. These amendments, in conjunction with existing BAR legal responsibilities will create a program with the goal and procedures intended to create maximum vehicle owner satisfaction. The in-field vehicle repair audit program will provide a mechanism for continuous improvements in how vehicles are repaired so that customers will be better satisfied with the time and investment that they are making in California’s Smog Check Program. By adopting a new philosophy of management we are acknowledging that motorists no longer need to live with vehicle repairs that might be characterized as insufficient or defective.

    By identifying the actual quality of repairs through in-field audits of known, defects, and feeding this information back to smog check technicians and BAR staff, there would be continual improvement of quality and opportunity to reduce waste in repair actions.

    Presently fear of loss of license or legal sanctions is a barrier to improving the quality of vehicle repairs. This program will encourage effective two-way communication and other mechanisms that will enable technicians and regulators and consumers to be part of the new quality audit program.

    A program will help remove the barriers that rob service technicians and managers of their pride in workmanship. The in-field vehicle repair audit program will institute a vigorous program of education and self-improvement for all participants in the Smog Check program. In summary, these amendments provide a permanent legislative and executive commitment, and the necessary audit procedures for ever-improving quality and productivity in the vehicle repairs (and emissions reductions), mandated under California’s vehicle emissions inspection and maintenance program.

    44036 (a) The consumer protection-oriented quality assurance portion of the motor vehicle inspection program shall ensure uniform and consistent tests and repairs by all qualified Smog Check technicians and licensed Smog Check stations throughout the state, and shall include a number of stations providing referee functions available to consumers.

    (b) To achieve the goal of consumer protection and quality assurance, the department is directed to adopt in-field audits using known vehicle defects. The in-field audits will be used to determine if a technician does actually detect, diagnose and repair the designated audit vehicle defect.

    (c) As there are no clear standards to see that emissions defects are being corrected, these audits are to be conducted without notification being provided to ensure accurate assessment. The improved methods generated by the audits will provide continuous improvements in the quality of vehicle repairs actually occurring.