Two days after the special election, the California Chamber of Commerce held
its post-election powwow in the former Four Seasons hotel in Newport Beach.
The talk of the two-day affair was the keynote speech from campaign
strategist Mike Murphy, who told the room full of business leaders that they
were to blame for the governor’s defeat.
Numerous sources in attendance said Murphy chided the business community for
not matching the spending by labor unions during the election. And because
of the governor’s defeat, Murphy warned the room that they should prepare
for some uncomfortable moments in the year ahead.
Murphy did not return calls seeking comment for this story.
“He said the governor is now basically in reelect mode, and that we should
prepare for him to sign some things we’re not going to like,” said one
business donor who heard the speech and requested anonymity.
Many in the room, which included executives from high tech firms, energy
companies and developers, bristled at Murphy laying the blame at their feet.
They say the governor adopted a piecemeal agenda for the election that
embraced a number of measures the business community essentially didn’t care
about. “Why would we give a sh-t about teacher tenure, or even public
employee unions?” said one attendee. “We didn’t even know what the governor
was going to be pushing until the State of the State.”
While Murphy’s message did not go over well with some business leaders, some
of whom blamed Murphy for the governor’s defeat, the chamber is bracing for
a new set of post-election political realities. They expect the governor to
embrace a political agenda in 2006 that will include curbs on greenhouse gas
emissions, an increase in the state’s minimum wage (which he vetoed last
year), and a host of new fees on everything from water use to state roads.
User fees may wind up as a key funding source for the massive new
infrastructure bond the governor is expected to endorse next year. There has
also been talk of using the roughly $1.3 billion in transportation money,
set aside in Proposition 42, as a guaranteed funding stream for the new
And business leaders privately acknowledge that a discussion of tax
increases may be on the table.
After a disastrous campaign season in 2004, and a major setback in the
governor’s special election, the California business community and the
Chamber of Commerce is bracing for the governor to move to the left, and
they may be moving along with him, albeit grudgingly.
Republicans say that the specter of the 2006 elections will keep business
groups closely aligned with the governor. “The two scariest words in the
chamber’s vocabulary are ‘Governor Angelides’,” said GOP strategist Bill
In the meantime, the chamber is looking to tweak their image as a knee-jerk,
anti-tax organization. “There’s an assumption that we’re anti tax,” said
Dominic DiMare, the chamber’s vice president of government relations. “We
want to make sure there are sufficient safeguards and accountability for the
investments we make.”
Ben Austin, spokesman for Rob Reiner, says the universal preschool
initiative headed for the ballot was hashed out with members of labor and
the business community. Though the measure would implement a new income tax
on the wealthiest Californians, the measure has the backing of the Los
Angeles Chamber of Commerce as well as chambers in Oakland and San
And while the state chamber is not supporting the measure, Austin says they
did have a role in crafting it. “There is language in our initiative that
the state chamber suggested. As we were draftng this, they gave us
suggestions we took seriously and incorporated into the initiative.”
Austin said he did not want to talk about specific provisions suggested by
the state chamber, since they are not backing the initiative. But he did say
the LA Chamber was pivotal in determining how the new preschool programs
should be funded.
“The LA Chamber was very interested in funding stream not being a split
roll,” he said, referring to a hike in the commercial property tax. “We
While it is far from peaceful between the chamber and labor groups, business
leaders are beginning to think about changing their political approach.
Internally, there is an ongoing discussion about the community’s willingness
to fund negative advertising, and to run candidates who may not necessarily
be talking primarily about business issues.
Meanwhile, the state chamber’s legislative political organization, JobsPAC,
has hired Democrat Darry Sragow to help guide their 2006 electoral strategy,
and Sragow says part of his pitch will be to convince the chamber, and other
business groups to support Democratic candidates next November.
Sragow says the business community has to simultaneously be more cutthroat
and less partisan. “You don’t get very much in the halls of power without
being able to strike fear in the hearts of people who are going against you.
People who are successful in politics aren’t just liked or loved –they are
also feared,” he said.
“The business community, writ large, whether it’s the chamber or chamber
plus [others] is going to have a tough time until they become respected and
Sragow said he in his work for JobsPAC, he will only work to elect
Democratic candidates. “I will certainly never work for a Republican. That’s
not even remotely possible.”
Some rifts still remain in the business community from the 2004 election
cycle. Some former members of JobsPAC, including EdVoice, Southern
California Edison and the California Association of Realtors, split from the
organization, mostly over the race in the 53rd Assembly District. JobsPAC
supported Republican Greg Hill, while the other groups opted to back
Democrat Mike Gordon. But leaders from the organizations that left JobsPAC
say there may be some room for cooperation during the next election cycle.
But Sragow was adamant that include supporting some Democrats, not just in
the primaries, but in the fall. The chamber says they will be supporting
some business-friendly Democrats next November. And he says he is pushing
the group to focus on state Senate races.
“When you’re dealing with Senate candidates, typically they have some
experience under their belts. Most have served at least a term in the
Assembly,” he said. “They’re not better human beings, they’re just more
experienced. The argument I am making is if JobsPAC and the business
community chooses to play in contested primaries, in the Senate, at least
they know what they’re getting.”