At times its actions have seemed blatantly political, such as when it adopted an anti-torture policy in response to the Iraq prison scandal and, more recently, urged companies to disclose financial risks from global warming. Last year the pension fund's critics cried foul after it voted its shares in a failed attempt to remove Safeway's CEO, Steve Burd, from the Safeway board only months after a bitter labor dispute in Southern California that pitted Burd against the grocery workers' union headed by then-CalPERS President Harrigan. (Harrigan's ouster from the CalPERS board was widely seen as payback on behalf of the union leader's opponents.)
That episode caused discontent even among the pension fund's allies. "I do think it has become too political, and I've told them so," says Rich Koppes, CalPERS's former general counsel. Still, he opposes the pension reform proposal. "I don't think you heal the patient by killing it."
Courtesy of AP Wide World
Gov. Arnold Schwarzenegger: "Platinum-plated"
pensions have got to go.
Courtesy of AP Wide World
Gov. Schwarzenegger and state Finance Director
Tom Campbell.
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Whether the governor and his backers get the chance to reshape CalPERS will depend largely on how political events play out in the next few weeks. Pension reform supporters say that barring a compromise with the Legislature, Schwarzenegger is likely to issue his call for a special election by the third week in April, if he decides to try to get an initiative before voters in November. Reed Dickens, the spokesman for Citizens to Save California, the umbrella group Schwarzenegger is using to push each of his reform measures -- and which has been circulating petitions since February -- says that collecting the needed 600,000 signatures "will be no problem."
Citizens to Save California is a who's who of Team Schwarzenegger. Its board includes California Chamber of Commerce President Allan Zaremberg; William Hauck, president of the California Business Roundtable; Joel Fox, president of the Small Business Action Committee; and Jon Coupal, president of the Howard Jarvis Taxpayers Association, among others. But the team isn't restricted to California's borders. Grover Norquist, who runs the influential Americans for Tax Reform in Washington, D.C., and who has close ties to the Bush administration, has said that his group will help promote and finance the measure should it reach the ballot.
For its only TV spot to date, Citizens to Save California has turned to Goddard Clausen, the consulting firm whose principals created the 1993 "Harry and Louise" TV ads that helped torpedo President Clinton's health care reform. Republican operative Mike Murphy, who was Schwarzenegger's chief strategist during the recall election, is also expected to play a key role in the reform effort, sources say. Murphy's Washington-based consulting firm, D.C. Navigators, lists the California Manufacturers and Technology Association -- which is on board with the governor's pension fund plans -- among its clients.
CalPERS's defenders aren't taking the governor's efforts lying down. Union leaders, cheered by early polls that show the governor without much traction on the pension issue, are pledging to raise as much money as it takes to counteract the opposition. Nurses, firefighters, and other labor groups have taken to shadowing Schwarzenegger at public events, even crashing recent fund-raisers with corporate high-rollers in Washington and at New York's trendy 21 Club. "He can run, but he can't hide," says Carroll Wills, who heads the 30,000-member California Firefighters Association and who predicts the governor will get more than he bargained for in tampering with CalPERS. "He started in his Humvee making a big splash. And look, we've already got him sneaking into side doors."
