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Arnold Inc: Living Like a Star

CBS TV5 San Francisco | FEBRUARY 04, 2005

by Hank Plante

What do you do after you've amassed a fortune estimated at $400 million? After you've married into one of the most glamorous dynasties in America? After you've taken up part-time residence in Sacramento, because, oh yes, you've been elected governor?

Well, you keep living like a star. And nobody in Sacramento, or anywhere in state politics, has ever seen anything like "Arnold, Incorporated."

"There's a wide wake in Arnold's path," said State Sen. Carole Midgen, D-San Francisco. "There's no question that there's a lot of advance, a lot of entourage. One isn't surprised to know you're in the presence of a global celebrity."

But it's costly. Schwarzenegger commutes weekly from LA by private jet. He lives in Sacramento in a $7,000-a-month suite at the Hyatt Hotel. He travels with more CHP and private security than any of his predecessors. And when he has an event -- even a simple press conference -- the lighting, sound and stage-teams sweep in hours beforehand with the best equipment. Even the president of the United States doesn't travel with his own Hollywood lighting team.

Now, some consumer watchdog groups are starting to ask questions about who pays for Arnold, Incorporated, and why.

"The cost to the state of California having a movie-star governor is extravagant," said Jamie Court of the Foundation for Taxpayer and Consumer Rights. "We are picking up hotel bills, we are picking up security bills, there's all sorts of travel bills. Wherever this governor goes he goes with a huge entourage. And if taxpayers don't wind up paying for the entourage -- in most cases they don't -- the special interest groups that are paying for the entourage are getting some chits with the governor, and they're getting a rate of return somewhere."

The Schwarzeneggers live in a gated community in the Brentwood section of LA. The family has always had lots of private security and they've always lived an A-list Hollywood lifestyle. And he brings all that to the governor's office.

So Schwarzenegger has set up half-a-dozen private political committees to pay for the jets, the hotels, the travel, the big events, the lifestyle -- and records show that funding those committees with millions of dollars are some of the biggest developers, insurance companies, financiers and corporations in the State.

"Gray Davis set the standard until Governor Schwarzenegger blew him out of the water," said Doug Heller, with the Santa Monica public-interest group called "Gov. Schwarzenegger raises somewhere between $72,000 and $80,000 every single day of the year. That's double what Gray Davis did when Gray Davis was at his height of fundraising... The donors, I think, have gotten more than they would have dreamed up. Because you can look at a number of different levels where Gov. Schwarzenegger has served the corporate donors who have been contributing to both his campaigns and these charitable groups."

As for the governor, his office notes that he's not taking any salary to do his job. And he himself says his fortune keeps him independent.

"No one can buy me," Schwarzenegger said. "I am independently financially successful. I have enough money that I don't have to take anyone's money to be bought. That is the key thing."

But it's not so simple, when you look at the bills the Governor has signed and vetoed, and when you connect the dots to his contributors. And we'll press him on that, in our next report.