Schwarzenegger race now owes $2.4 million

Posted on Sat, Sep. 27, 2003
Schwarzenegger race now owes $2.4 million
By Don Thompson
ASSOCIATED PRESS

SACRAMENTO - Arnold Schwarzenegger's campaign accounts owe more than $2.4 million in unpaid bills to consultants and other creditors, leaving more cash free for his time-compressed governor's recall campaign.

Schwarzenegger, who promises to trim government overhead if he is elected to replace Gov. Gray Davis, is spending $500,000 a month on campaign consultants, new campaign reports show.

Many of his consultants, fund-raisers and office expenses have not been paid, however, freeing up that money for advertising and other creditors who demand payment up front, campaign treasurer Colleen McAndrews said Friday.

The high debt is a result of fund raising that slowed down as a federal appellate court considered postponing the election, McAndrews said. "We're hoping it picks back up."

Schwarzenegger personally contributed $2 million to his campaign and Total Recall funds Sept. 4, the day Associated Press first questioned the campaign's heavy debt. Much of that went to pay what was then reported as about $1 million in unpaid bills, McAndrews said, but new finance records show about $900,000 remains unpaid from the previous reporting period.

The $901,985 left unpaid in the Total Recall account, $691,134 of it from the last month, was triple the $333,892 on hand as the reporting period closed Saturday, meaning the fund's checks would have bounced had they been written to pay all its bills.

Had Californians for Schwarzenegger paid the $2.4 million it owed that day, it would have reduced its $3.4 million cash balance down to $1 million.

But the unique rules of this recall means nearly $750,000 in expenses, the bulk of Total Recall's debt, is shared debt that shows up on both committees' reports, McAndrews said. The two funds are ostensibly independent, however, allowing Total Recall to accept donations far above the $21,200 limit to Schwarzenegger's individual fund because it is aimed at unseating Davis, not at promoting any particular replacement.

She blamed the heavy debt on the unique compacted timetable of the recall campaign.

"We're spending in 60 days what usually takes months," she said. "It's a tsunami that has overwhelmed the mechanisms of a normal campaign."

Schwarzenegger's spending dwarfs that of other campaigns, but so does his debt.

His major Republican opponent, state Sen. Tom McClintock, owed $49,870 and had a cash balance of $305,415.

Davis' Californians Against the Costly Recall committee owed $332,329 on a bank balance of $1.4 million. Davis' individual committee owed $48,976 but had $830,210 on hand.

"If he can't run his campaign, how do we expect him to run the fifth-largest economy in the world?" asked Davis spokesman Peter Ragone.

Democratic Lt. Gov. Cruz Bustamante owed $286,696 and had a bank balance of $100,114 in his individual account. His committee to oppose Proposition 54, which is supposed to be refunding money it spent on TV ads opposing a ban on public collection of racial data, owes $39,915 on a cash balance of $2,708. Only his No on the Recall committee had a positive ratio: $6,040 owed on a balance of $66,413.

Bustamante's cumulative debt was a fraction of Schwarzenegger's, however.

Independent Arianna Huffington had the same cash-poor ratio as Schwarzenegger and Bustamante, with $138,294 in debt and $62,173 in the bank. Green Party candidate Peter Camejo, however, was owed money.