WHEN ARNOLD SCHWARZENEGGER won the 2003 recall election, he became the only Republican elected to statewide office in California. He may not have been a doctrinaire conservative like State Sen. Tom McClintock, another candidate on the ballot, but the California GOP's board of directors nevertheless endorsed him. As they saw it, a superstar like Schwarzenegger could deliver Republicans even more than the state's highest office. Gov. Schwarzenegger won reelection in a landslide--yet California Republicans are still waiting for their revolution.

While the Democrats still control both houses of the state legislature, there is a silver lining for the California GOP. Schwarzenegger is no longer the only Republican who holds statewide office. Two years ago, voters elected Steve Poizner to the post of insurance commissioner. In other states, this might be a minor position, but in California, where earthquakes and other natural disasters are a routine part of life, it is a political stepping-stone. (The last insurance commissioner, Lieutenant Governor John Garamendi, is expected to run for governor in 2010.) As the head of the California Department of Insurance, Poizner oversees 1,300 employees and a $200 million budget.

Poizner is a successful businessman from Silicon Valley who started several companies, most notably SnapTrack, Inc., which integrated GPS technology with cell phones. He made a fortune when he sold the company. But the narrative he offers is far more compelling than the typical entrepreneur turned statesman. After selling Snaptrack, Poizner didn't immediately enter politics. Rather, he became a public school teacher in a poor neighborhood, even winning an award. This will help Poizner distance himself from other business moguls who struggle to overcome the condescending air of noblesse oblige. So will Poizner's not so genteel interest in martial arts--he just earned a black belt in karate.

Given his story and ability to finance his own campaign, it's hardly surprising that many political insiders say the future of the California GOP lies in the hands of Poizner. Since taking the helm of the California Department of Insurance, Poizner has proven adept in slashing red tape, declaring insurance emergencies to ensure valid claims are paid out quickly. Simultaneously, he has stepped up efforts to police fraud on the system. For the first time ever, Poizner notes, the insurance commissioner is in direct contact with district attorneys who prosecute insurance fraud. No one knows how much there is, but Poizner estimates that it amounts to $500 for every Californian. As insurance commissioner, Poizner may not be in a position to cut taxes, but he is doing what he can to lower premiums and save people their money.

This may be Poizner's first job as an elected official, but he has proven influential in the political scene. He campaigned against and personally spent $2 million to oppose Proposition 93, which sought to exempt current state legislators from previously enacted term limits. If approved, incumbents would have been able to serve an additional 12 years. Poizner's likely opponent should he run for governor, Attorney General Jerry Brown, tried to cover up this element of the proposal by giving the ballot initiative a misleading title. Despite being outspent more than 2 to 1, Poizner helped to defeat this self-serving proposal.

Poizner has not won all of his political battles. Along with Gov. Schwarzenegger, Poizner supported Proposition 77, which would have required a panel of judges to adopt a new redistricting plan after each national census. Led by Nancy Pelosi, the no campaign raised millions. Even though Proposition 77 ultimately lost, Poizner persuaded nearly every major newspaper editorial board in California to his side. "During the Prop 77 battle," Poizner tells me, "I learned how the entire political establishment, politicians from both parties and their special interest friends, were willing to say or do anything to stop real redistricting reform where fair and competitive elections would result."

In certain respects, the California GOP is in worse shape than it was before the recall. Since Gov. Schwarzenegger took office, the Democrats have increased their voter registration advantage from 8 to 11 percent. Gov. Schwarzenegger has also ceded a host of issues, and not just social ones like gay marriage and government funding of embryonic stem cell research. Gov. Schwarzenegger has abandoned the fiscally conservative policies he once championed; recently he even proposed a tax increase to close the budget deficit. This is not s surprise: Gov. Schwarzenegger may have hired veteran Republican operatives to run his reelection campaign, but Democrats like his chief of staff, Susan Kennedy, currently hold most of the top-slots in his administration.

Calling Democrats who opposed President Bush "a bunch of girlie men," Schwarzenegger brought a lot of flash to California politics, but hasn't exactly presented much substance. Poizner is more of a West Coast Mike Bloomberg: a businessman focused less on popularity than problem solving. It may be too big of a goal to win back the state legislature in the near future. Although it might be comforting to believe that there is some conservative constituency waiting to be found in California, this is probably naïve. Revitalizing the Republican party will start with the election of another Republican for governor and retaining enough seats in the state legislature to sustain vetoes. Republicans will only start winning majorities again if they can prove to independent voters that the party can be trusted with the reigns of power.

Whether Poizner can pull this off or will even run remains to be seen. But it is reassuring that two years after taking office, Poizner is still putting ideas on the table and talking about pro-business policies to turn around California's economy. In his stump speech, Poizner observes, Nevada has "no corporate income tax, no personal income tax, where workers compensation rates are 30% less, and the electricity stays on." Poizner recognizes that if California wants to keep business and jobs from leaving the state, it's going to have to change tax and spend ways.

In his inaugural address in November 2003, Schwarzenegger remarked, "It is true that things may get harder before they get better." That's a great line, and it's also great advice to the next Republican candidate for governor who still has many obstacles to overcome.

Jaime Sneider is a contributor to the WEEKLY STANDARD online, and previously served as a speechwriter to California gubernatorial candidate Bill Simon.

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