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Court's About-Face Restarts Campaign's Final Sprint

An 11-member appeals panel reverses a ruling that suspended the Oct. 7 recall vote. In a separate case, a court finds that Lt. Gov. Bustamante broke campaign laws by shifting $4 million in donations for an advertising blitz. Issa endorses Schwarzenegger.

September 28, 2003


* Federal appeals court judges sharply challenged attorneys seeking to postpone the Oct. 7 recall election, posing questions that were notably unsympathetic in tone during an hourlong, nationally televised hearing. Legal scholars and lawyers close to both sides of the case said after the hearing that the judges had appeared to lean toward the argument, made by lawyers for Secretary of State Kevin Shelley, that postponing the election would be unfair to voters.

* A judge ruled that Lt. Gov. Cruz Bustamante had broken campaign laws by using about $4 million in six- and seven-figure donations to pay for an advertising blitz. The judge ordered Bustamante to return the contributions. Bustamante's chief political consultant said that all the money was gone. In a 12-page order issued in response to a lawsuit by a Republican state senator, Sacramento Superior Court Judge Loren McMaster wrote that a fund-raising maneuver Bustamante had employed had violated the "plain and unambiguous language" of Proposition 34. That measure, passed by voters in 2000, caps political contributions at $21,200 in the recall race. The lieutenant governor accepted donations far exceeding that sum -- including a $1.5-million gift from an Indian tribe -- in an old campaign fund established before Proposition 34 took effect. Then he shifted the money to a new fund and used it for an ad campaign. McMaster issued a preliminary injunction forbidding Bustamante to transfer any more of the disputed money to his current campaign. But the judge also said that Bustamante had probably "acted in good faith" and had not intentionally broken the law.

* Arnold Schwarzenegger began airing a statewide television ad that accused his rivals of taking millions of dollars in donations from "Indian casino tribes" -- an apparent departure from his pledges to forgo attacks on other candidates. Schwarzenegger also started running a spot that called Gov. Gray Davis incompetent, blames him for high energy prices and hammered him for letting illegal immigrants get driver's licenses. It accused Davis of fiscal mismanagement and criticized him for tripling the state car tax. Schwarzenegger spokesman Sean Walsh denied that the candidate was going back on a promise. "This is not negative campaigning. This is simply stating the facts," he said.


* The federal appeals court put the California recall race back on track for an Oct. 7 election, reversing an order to postpone the vote and setting off a 13-day sprint to a final public judgment on Gov. Gray Davis. Lawyers for the American Civil Liberties Union who had challenged the date said they would not pursue the matter further. Legal experts had projected slim odds for success, if the ACLU appealed to the U.S. Supreme Court. The definitive election date came as a relief to the Democratic governor and the three leading contenders for his job. Each had hoped -- and assumed -- that the vote would occur Oct. 7 as planned. In their unanimous ruling, an 11-judge panel of the U.S. 9th Circuit Court of Appeals stated "there is no doubt that the right to vote is fundamental, but a federal court cannot lightly interfere" with a state election.

* The recall race took a distinctly negative turn with a spate of new television ads. A day after Arnold Schwarzenegger started running a spot accusing rivals of trading state favors for donations from Indian tribes, Lt. Gov. Cruz Bustamante began airing one of his own, saying that the actor "doesn't share our values" and "lives on Planet Hollywood." In an interview on CNN, Bustamante called Schwarzenegger a "hypocrite" for accepting $62,000 in Indian donations last year for a ballot measure he was supporting. "Arnold is pretty phony on this whole issue," Bustamante said. Rob Stutzman, a spokesman for Schwarzenegger, said the situations were different because a governor can negotiate casino pacts with tribes.

* Anxiety appeared to rise among Republicans over the party's failure to unite behind one candidate in the race to replace Davis if he is recalled. Polls have found Republican voters split between Schwarzenegger and state Sen. Tom McClintock (R-Thousand Oaks), with Bustamante, the only prominent Democrat in the race, holding a narrow lead over the action-film star. "Somebody needs to recognize that the election of Cruz Bustamante is a real possibility if these two Republicans continue to divide the vote," said state Senate Republican Leader Jim Brulte of Rancho Cucamonga, California's top GOP officeholder.

* Schwarzenegger gave more details on his plan for closing the state's budget gap. He said that, as governor, he would raise money by offering a tax amnesty and cracking down on waste in the Medi-Cal system, the state's insurance program for the poor and disabled. Schwarzenegger also said he would press the federal government for more funding, contending that for every federal tax dollar Californians pay, they get back just 77 cents in services.


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