The Blog

The Money Race

The recall effort is cash-poor. Will Gray Davis be able to spend his way out of the recall?

8:45 AM, Sep 11, 2003 • By BILL WHALEN
Widget tooltip
Single Page Print Larger Text Smaller Text Alerts

RECALL JUNKIES awoke Wednesday morning to this email from Howard Kaloogian, chairman of the Recall Gray Davis Committee: "I know you are all probably getting sick of hearing about this, but it is absolutely pertinent that we have the funding to match the 'No on Recall' campaign. Whether you can afford a contribution of $100, $50, $25, $250, $500 or $1,000 I still need thousands of supporters to step forward and help pay for these critical campaign ads."

It adds: "Remember--if you contribute $1,000 or more towards our 'Yes on Recall' ad campaign you will be able to tell us what TV or radio station(s) you want the ads you paid for to run on."

If the solicitation sounds like a distress signal, that's because California's recall committees find themselves in troubled waters these days. On the positive side, they've succeeded beyond their wildest expectations in pushing Davis to the brink of recall. The latest Field Poll has the governor losing, 55 percent to 40 percent. Six months ago, before the recall movement kicked into high gear, only a narrow plurality of registered voters (46 percent to 43) thought Gray should go.

Recall supporters also plan a very public rally this weekend to show support for the cause. That will occur Saturday afternoon in Long Beach, near the Queen Mary. (Kaloogian's email asked for "an additional 500 more RSVPs to guarantee a decent-sized crowd.")

There's only one catch: now that the recall committees have Davis on the ropes, can they finish him off? More to the point: do they have the finances to get the job done? It's a question worth asking, especially after a quick look at the cash flow of the pro- and anti-recall efforts.

Here's the money breakdown, from the California Secretary of State's webpage. The numbers are as of August 23, 2003:

ContributionsExpendituresEnding Cash
Rescue California$2,790,849$3,475,358$12,086
Davis Recall Committee$192,385$171,844$20,542
Recall Gray Davis Committee$708,000$677,094$30,906
Schwarzenegger's Total Recall Committee$100,00$331,690$100,000
Taxpayers Against the Recall$2,421,353$2,833,741$93,609
Californians Against the Costly Recall$3,416,037$453,527$2,962,509
The Governor Gray Davis Committee$1,122,345$2,312,116$899,600

Pro-Recall Cash: $163,604

Anti-Recall Cash: $3,862,109

First, a note of caution about that chart: Those numbers date back prior to Labor Day, and before the anti-recall side began to spend heavily on television ads featuring Democratic senator Dianne Feinstein. But if three of the recall committees have only a combined $63,00 in cash (not including the Schwarzenegger effort), and are counting on the Internet to fill their coffers, one wonders how they can compete financially down the stretch against Davis and his allies. Recall cannot thrive in a climate where three of its committees are outspent nearly 24 to 1.

So where to go for help? They won't find much sympathy from corporate California. Early in the recall process, the state's business leaders decided to remain neutral--or to denounce the effort. Some even donated to the anti-recall side. That's an ironic choice, given that California's business climate cratered under Davis's watch. But it's also practical politics. Davis can still deliver for benefactors by way of unfinished legislation. Besides, if he survives recall, he'll remember who was with him in the foxhole.

What seems more plausible is for a deep-pocketed Republican to step in to give recall its final shove. Would that be Rep. Darrell Issa, the organizer of the most effective recall effort? Don't count on it. Issa donated $2 million from his personal fortune to Rescue California, which collected nearly 2 million signatures and tapped into roughly 70,000 donors, but he seems reluctant to write any more checks. The congressman will give a speech at this weekend's Republican convention. Perhaps he'll surprise the press by announcing a new strategy. But could just be taking a victory lap for making recall possible.

Or perhaps he'll pass the torch to Arnold and his Total Recall Committee. Schwarzenegger's committee has two things the other recall efforts don't. The first is money in the bank: nearly $1 million, according to Tuesday's Los Angeles Times. That includes $500,000 from the actor himself. The other is a handful of businesses willing to donate to Arnold's recall effort. That includes $100,000 from the Irvine-based American Sterling Corp.; $57,000 from Fletcher Jones Management, which runs a Mercedes-Benz dealership; $60,000 donation from Diversified Collection Services, a Bay area firm which collects on delinquent student loans; and $100,000 from Orange County's William Lyon Homes.

THE QUESTION isn't whether Arnold can raise the money, it's how he'll spend it. If the goal is to recall Davis, the Schwarzenegger campaign could run ads specifically denouncing the governor. They wouldn't even have to spend time writing a script: Issa's Rescue California committee already has two recall ads ready to go. That requires Arnold's camp to make a strategic choice: Who do they make the foil, Davis or Lieutenant Governor Cruz Bustamante?

In California's special election, recall ads come in varying degrees. They can be distinctly anti-Gray, as were Rescue California's radio spots during the signature-gathering process (accusing Davis of lying about the size of the state deficit). Or, they can serve to promote a candidate more than the recall. Soon after he entered recall, Arnold ran ads pointing out that he's running for governor, without explicitly asking voters to choose him--and only a banner urging Californians to support recall. But because he didn't advocate his candidacy, California law allowed Arnold to pay for such ads out of his Total Recall account. If Arnold stays the latter course, he promotes his candidacy. But that might come with a cost: failing to remind voters why they're unhappy with Davis. And without that closing argument, and a campaign focused on the second half of the ballot, perhaps Davis escapes defeat.

While he studies public policy, Arnold might want to bone up on some California political history. In the 1990 governor's race, Republican Pete Wilson ran neck-and-neck with Democrat Feinstein. At a campaign debate near the end of the election, Wilson announced his support for Proposition 140 and a new term limits law. Wilson supported term limits and Feinstein did not. Wilson won narrowly, but earned fewer votes than Prop. 140.

Let's suppose it takes a minimum of 35-40 percent to win on October 7. On the second half of the ballot, Arnold at present gets close to 30 percent of the vote. On the first half of the ballot, recall pulls down 55 percent of the vote. Doesn't it makes sense for Arnold to pump up recall and the first half of the ballot, then ride its coattails to victory?

Bill Whalen is a research fellow at the Hoover Institution, where he follows California and national politics.