For Immediate Release: June 22, 2005

Court Won't Halt Schwarzenegger Fundraising Yet - Final Ruling May Be Delayed Beyond the Special Election

In a tentative ruling released this afternoon, Sacramento County Superior Court Judge Shelleyanne Chang rejected Governor Schwarzenegger's attempt to throw out a lawsuit brought by the watchdog group TheRestofUs.org, but the judge also refused to order an immediate halt to the fundraising practices that the group says violate campaign finance law.

"Money has never played as large a role in California politics as it does under Governor Schwarzenegger," said Derek Cressman, director of TheRestofUs.org. "It's clear to most people that the Governor is using multiple ballot committees under his control as a basic shell game to avoid campaign finance rules. I'm glad that the judge agrees with us that Schwarzenegger may be breaking the law, but deeply discouraged that she has introduced procedural hurdles that could mean this case will not be resolved until well after the special election. This may be a case of justice delayed being justice denied."

The California Recovery Team pays for a wide variety of expenses for Governor Schwarzenegger, including the Governor's residence at a Sacramento hotel and numerous campaign photo-ops, but by paying for and maintaining Schwarzenegger's JoinArnold website (an in-kind contribution), the Recovery Team crossed over and became a PAC, thus subjecting it to the Political Reform Act's $5,600 limit on contributions to committees that make contributions to candidates.

Judge Change found that TheRestofUs.org has "presented sufficient evidence that monies received by Citizens [to Save California] and [the California] Recovery Team have been used for election-related activities as defined under Government Code section 82105, including communications that may constitute "express advocacy," and thus constitute contributions" to Schwarzenegger's re-election campaign. If this fact were confirmed in trial, it would mean that all contributions greater than $5600 to Schwarzenegger's California Recovery Team (some $21 million) and Citizens to Save California committee (more than $10 million) would be illegal.

In light of today's preliminary ruling, the group called on the Governor and the California Recovery Team to immediately abide by the contribution limits of $5600 for the fundraiser that Schwarzenegger is holding tonight in Silicon Valley at the home of Cisco Systems President John Chambers. The CRT had been planning to accept contributions as large as $50,000 in exchange for a private dinner with the Governor.

"Governor Schwarzenegger has set up more committees than Andy Fastow set up companies," said Ned Wigglesworth, analyst for TheRestofUs.org. "Even if the courts drag their heels, the Governor must ultimately answer to the court of public opinion. I don't think many California's like Arnold's efforts to evade contribution limits and silence the only independent watchdogs that are holding him accountable."

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TheRestofUs.org is a nonpartisan, nonprofit organization working to make democracy work for ordinary citizens. TheRestofUs.org is involved in campaign finance ballot measures in Oregon and Ohio and independent redistricting policy in California, Florida, and Ohio. We recently filed an amicus brief asking the U.S. Supreme Court to review and uphold Vermont's mandatory spending limits. We also support federal efforts to eliminate the 527 loophole for soft money electioneering.