Governor's travel costs uncovered

By: AARON C. DAVIS - Associated Press | Monday, December 10, 2007 9:53 PM PST ∞

SACRAMENTO -- A secretive nonprofit funded by some of the state's richest businessmen has spent more than $1.6 million for chartered jets, luxury hotels and private motorcades to ferry Gov. Arnold Schwarzenegger and aides around Asia, Europe and Mexico in the name of promoting California trade.

The expenditures -- some dating back to Schwarzenegger's first full year in office in 2004 -- haven't been broken down until now because the nonprofit and the governor's office decided to stop classifying the expenses as gifts to the governor. That move kept the bills off standard conflict-of-interest reports reviewed by journalists.

Schwarzenegger's office on Monday released memos offering a rough outline of the travel expenses paid by the California State Protocol Foundation, which Schwarzenegger has fundraised for and is run under the auspices of the California Chamber of Commerce.

The memos reveal, among other expenses, that the foundation paid more than $353,000 for a chartered jet for Schwarzenegger to fly to China in 2005, and more than $4,000 a night for his hotel room. On that trip, the foundation also paid $96,306 for airfare and $140,538 for lodging for the governor's 15-member entourage.

"The purpose is always to lessen the burden on state government," said Larry Dicke, chief financial officer for the chamber and volunteer treasurer for the foundation. "I can't recall us ever saying no" to an expense approved by the governor's office, Dicke said.

Open government advocates said the memos expose an arrangement between Schwarzenegger and the nonprofit that benefits the governor directly and therefore runs counter to the spirit of state disclosure laws.

The group keeps its spending on Schwarzenegger's office off standard gift reports by classifying the expenses as gifts to the governor's "office," and not directly to him.

"The regulation was not designed to exempt the governor from disclosing all of this," said Bob Stern, president of the nonpartisan Center for Governmental Studies and a former general counsel at the California Fair Political Practices Commission.

Stern explained that the provision was intended for instances when a boss directs a state employee to travel to conferences and other events paid for by an outside group.

"It's for when a staff member is going and that isn't the same person determining the trip and benefiting from the gift," said Stern, who reviewed the memos at the AP's request. "But here the governor is in charge. He is the one responsible for making the decision to go. He benefits and everybody knows that all along. That's why they are giving money."

Aaron McLear, Schwarzenegger's press secretary, stressed that aides in the governor's office -- and not Schwarzenegger -- make decisions about which staffers go on the trips. He also pointed to an advice letter the foundation requested from the FPPC in 2004 that indicated travel expenses could be considered gifts to an office, and not the office holder.

"This is not a gift to the governor; personally, the governor does not benefit personally from these gifts," McLear said. "When he travels, he is working hard from the time he gets up until the time he goes to bed to promote the business of California. These are business trips."

Schwarzenegger headlined a fundraiser for the Protocol Foundation last month. By attending the dinner, the governor in essence solicited the donations on behalf of the group under California law, forcing the foundation and the governor to release the names of those who attended the event and contributed.

Last week, Schwarzenegger's office for the first time released a list of the millionaires and billionaires who pay to send him on the trips.

Well-known California businessmen who have supported him publicly, such as winemaker Robert Mondavi and Gap founder Don Fisher, were on the list. But so were the names of both Republican and Democratic lawyers, developers, and others who have kept a low profile, or even remained anonymous, in supporting California's celebrity governor.

According to annual reports filed with the Internal Revenue Service, the Protocol Foundation raised more than $4.2 million from 2003 to 2006. Besides the $1.6 million for travel for the governor and his staff, Dicke said the group has spent hundreds of thousands of dollars on receptions for both U.S. and foreign dignitaries on each trip.

The foundation also has paid for state dinners, Capitol receptions, an annual luncheon for the consular corps, a barbecue for the news media and the Christmas Tree-lighting and Chanukah celebrations at the Capitol.

"The governor believes he ought to save taxpayer dollars whenever he can," McLear said. "If the question is do you have taxpayers pay for these or this foundation, when faced with that choice the governor wants taxpayer dollars saved whenever he can."

Still, McLear acknowledged the governor travels well. "Yes, he stays in a nice place," he said.