In a telephone call from his Capitol office, Schwarzenegger secured agreement from General Electric’s chairman and chief executive, Jeffrey Immelt, that the Fortune 500 company would co-host and help pay for the Border Governors Conference this August at Universal Studios in Hollywood, which the corporation owns.
The event could cost more than $3 million between GE and other private sponsors, according to participants in the planning of the conference, who requested anonymity because they were not authorized to discuss the arrangements.
That would make it an expensive example of a technique Schwarzenegger has embraced to bring the glitzy style he appreciates to ceremonial state functions: getting corporations and wealthy supporters to pay for them. The governor’s aides say the practice saves taxpayers money.
Government watchdog groups argue that it may compromise the administration’s independence from corporate interests. Schwarzenegger’s phone call with Immelt was arranged by a GE executive, formerly an advisor to the governor, who oversees the company’s lobbyists in Sacramento.
“It’s a governmental conference, with governmental officials,” said Robert Stern, president of the Center for Governmental Studies in Los Angeles. “If GE is paying for it, the question is what does GE expect for their contribution? And they are certainly going to expect good will.”
A spokesman for General Electric said the size and nature of the company’s contribution have not been finalized, and administration officials said there is no budget yet.
Schwarzenegger’s office has accepted millions of dollars in private gifts for things such as state dinners, international travel and ornaments on state Christmas trees.
The cross-border conference, held each year in one of the 10 participating U.S. and Mexican states, is an important event for Schwarzenegger because it is the first to be hosted in California in eight years, and the only one while he is governor.
“We are going to take this important annual event to a whole new level,” Schwarzenegger said last month in a statement announcing the partnership.
The three-day conference will feature a “Green Tech Expo,” along with festivities at the Universal theme park’s “Streets of the World” and “Spartacus Square,” and at the nearby Hilton hotel.
The thread connecting Schwarzenegger and the company is an interest in environmentally friendly technology. GE has a 3-year-old program, “Ecomagination,” which includes producing such things as clean locomotive engines, wind turbines, energy-efficient appliances and solar panels. Ecomagination accounted for $14 billion of GE’s $173 billion in revenue last year, a spokesman said.
GE has spent $475,000 lobbying California government since the beginning of 2007 on such matters as corporate taxes, the film industry and the recall of unsafe products. Paul Miner, the former Schwarzenegger aide who brokered the conference deal, is now the GE government relations manager who coordinates the lobbying team.
Aaron McLear, Schwarzenegger’s spokesman, said the governor never unduly favors his supporters in official decisions. McLear said the conference would boost business in Los Angeles without costing the public money.
“The governor absolutely believes in saving the taxpayers money any chance he can,” McLear said. “So if he can partner with a private entity to host an event like this, that saves taxpayer dollars.”
GE spokesman Peter O’Toole said Immelt agreed to sponsor the conference, which will require closing parts of Universal Studios to tourists, partly because both Schwarzenegger and Immelt are “fairly progressive.”
“We’re doing it because he asked and we have a good relationship,” O’Toole said. “Our thinking is similar between the CEO and the governor. . . . It’s not a quid pro quo, but we thought it was something important to do. It’s an important market for us.”
Schwarzenegger’s office has received a wide range of corporate gifts. For the governor’s Christmas tree lighting event one year, S. Martinelli and Co. gave $297 in sparkling apple cider. A New York ornament maker, whose glittery creations are collected by the governor and First Lady Maria Shriver, donated a few to decorate trees in Schwarzenegger’s office.
Microsoft and Google each committed to donate hundreds of hours of consulting time for a state website soon to be unveiled that will allow Californians to compare public schools. The Jordan Vineyard & Winery held a retreat for 20 of the governor’s staff members. General Motors donated the use of vehicles and drivers for two of the governor’s trips to Asia.
Schwarzenegger’s inaugural ceremonies last year were funded by $2.9 million in donations from the pharmaceutical industry, energy companies, home builders and others. Companies pay for the governor’s Sacramento hotel suite, costing $107,000 this year.
The bulk of private support received by Schwarzenegger’s office has come from the California Protocol Foundation, a nonprofit group affiliated with the California Chamber of Commerce that does not disclose the names of its donors or the details of specific expenditures.
The foundation paid $306,000 in 2006 for a Sacramento dinner for then-Mexican President Vicente Fox, state records show. It has funded annual receptions after Schwarzenegger’s State of the State addresses. The group has spent millions on jet planes, hotels and meals for the governor and his staff on trips described as “trade missions.”
“If the taxpayers were paying for some of these glitzy things, I think there would be objections,” said Jon Coupal, president of the Howard Jarvis Taxpayers Assn. But the flow of private money to elected officials’ causes is “something that should be watched.”
“We recognize that there could never be a solid wall of separation between government and private interests, but sometimes when the relationship gets a little too cozy, it makes us nervous,” Coupal said.
Since 1980, when it was first convened in Chihuahua, Mexico, the Border Governors Conference has alternated between U.S. and Mexican states. The purpose is to keep open lines of communication.
Former Gov. Gray Davis hosted the event in 2000 in Sacramento. Meetings were held at public buildings, including the Capitol and a city library, where government absorbed the costs. The Golden State Host Committee, a privately funded nonprofit also affiliated with the California Chamber of Commerce, spent $196,000 to hold two dinners during the conference.
In planning last year’s conference in Sonora, Mexico, a small industrial and agricultural state, Gov. Eduardo Bours Castelo recruited corporations to pay for it, said Luis Borbon, an aide. “It was going to be very, very expensive for the government,” Borbon said.