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For The Record  

FTR #429 Triumph of the Shill

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Introduction: Highlighting the cynicism of Arnold Schwarzenegger’s “populist” image, this program sets forth the interests behind the man and the powers whose bidding he will do. Beginning with Schwarzenegger’s association with directors of a Las Vegas gaming company, the program notes that his campaign targeting of Indian gambling casinos smacks of conflict of interest—he is fronting for competing organizations. A central element of discussion is Schwarzenegger’s “consensual intercourse” with Enron, one of the Texas-based energy companies that participated in the gigantic rip-off of California electricity consumers. That rip-off—engineered by political allies of George W. Bush and enabled by the electricity deregulation passed by Schwarzenegger’s campaign manager Pete Wilson—is the focal point of a lawsuit by Lieutenant Governor Cruz Bustamante. In addition to the fact that the “electricity crisis” destabilized California, the program sets forth Der Terminator’s 2001 deliberations with Enron (and Bush ally) Ken Lay on the subject of sidetracking the lawsuit. No sooner did Schwarzenegger get elected, than he proposed deregulating California’s electricity market once the “current” long-term contracts expire—an apparent pay-off to his controllers. Documenting extensive collaboration between Schwarzenegger and the Bush administration, the broadcast underscores the pivotal role of W’s allies in the Schwarzenegger campaign and transition team. Among the members of that transition team is one Viet Dinh, who authored the Patriot Act for Attorney General John Ashcroft. Tellingly, Schwarzenegger brought in Florida Governor Jeb Bush’s budget supervisor to audit California’s budget—a probable harbinger of impending fiscal sleight-of-hand. Fleshing out Schwarzenegger’s role as a shill, the broadcast points out that the people handling his campaign are ex-aides to former Governor Pete Wilson, who were instrumental in packaging former Russian president Boris Yeltsin. Far from being the “everyman”elevated to Olympian heights by his Nietzschian will to power, Schwarzengger is a front man for the very special interests he allegedly opposes.

Program Highlights Include: The business relationship between the tabloid newspapers and Schwarzenegger’s business partner Joe Weider; Schwarzenegger’s idolization of Adolph Hitler; Der Terminator’s participation in US English—an organization linked to White Supremacist elements; the authoritarian, Machiavellian control Schwarzenegger exerts over publicity about him; Schwarzenegger’s heavy handed (and at times illegal) maneuvering to quash the Wendy Leigh unauthorized biography “Arnold”; a comparison between popular German perceptions of Hitler and the media presentation of Arnold Schwarzenegger.

1. Although he professes to be populist, Schwarzenegger is, in reality, a shill for powerful and cynical interests. The program begins by highlighting his campaign’s connections to Las Vegas-based gambling interests that compete with the Native American gambling casinos Schwarzenegger targeted during his campaign. “A top political adviser to Arnold Schwarzenegger serves on the board of directors of a company that owns two Las Vegas casinos and has interests in two Southern California card clubs that compete with casinos run by California Indian tribes. Schwarzenegger has made attacking tribes and their political influence a major tenet of his campaign, prompting the actor’s top Republican opponent in the recall election and a tribal gaming group to raise conflict-of-interest questions about Schwarzenegger Friday. At issue is Bonnie Reiss, a longtime Schwarzenegger ally who has taken an increasingly public role in his bid to be governor. Reiss earns $30,000.00 a year as a director of Pinnacle Entertainment. The company owns casinos in Reno and Verdi, Nev., and earns money from leases on two California card clubs, including the Hollywood Park casino, located in Inglewood (Los Angeles County) and one of the largest card clubs in California.” (“Schwarzenegger Adviser Linked to Card Clubs, Las Vegas Casinos” by Mark Martin; San Francisco Chronicle; 9/27/2003; p. A19.)

2. As set forth in FTR#422, Schwarzenegger met with Enron CEO Ken Lay in May 2001 (at the height of the state’s “energy crisis”) to discuss running for governor of California. (For more about the “California energy crisis” and the destabilization of Gray Davis, see FTRs 280, 420.) This program presents insight into the nature of the discussion—Schwarzenegger’s brainstorming with Lay about how to derail a lawsuit filed by California Lieutenant Governor Cruz Bustamante. That lawsuit targeted the Texas-based energy corporations (and Bush allies) that were the vehicles of electricity rip-off that cost the state 9 billion dollars.) ” . . . The wannabe governor has yet to deny that on May 17, 2001, at the Peninsula Hotel in Los Angeles, he had consensual political intercourse with Enron chieftain Kenneth Lay. Also frolicking with Arnold and Ken was convicted stock swindler Mike Milken. Now, thirty-four pages of internal Enron memoranda have just come through this reporter’s fax machine that tell all about the tryst between Maria’s husband and the corporate con men. It turns out that Schwarzenegger knowingly joined the hush-hush encounter as part of a campaign to sabotage a Davis-Bustamente plan to make Enron and other power pirates then ravaging California pay back the $9 billion in illicit profits they carried off.” (“Arnold Unplugged—It’s Hasta La Vista to $9 Billion if the Governator is Selected” by Greg Palast; 10/3/2003; p. 1;.)

3. “Here’s the story Arnold doesn’t want you to hear. The biggest single threat to Ken lay and the electricity lords is a private lawsuit filed last year under California’s unique Civil Code provision 17200, the ‘Unfair Business Practices Act.’ This litigation, heading to trial now in Los Angeles, would make the power companies return the $9 billion they filched from California electricity and gas customers. It takes real cojones to bring such a suit. Who’s the plaintiff taking on the bad guys? Cruz Bustamante, Lieutenant Governor and reluctant leading candidate against Schwarzenegger.” (Idem.)

4. ” . . . One month after Cruz brings suit, Enron’s Lay calls an emergency secret meeting in L.A. of his political buck-buddies, including Arnold. Their plan, to undercut Davis (according to Enron memos) and ‘solve’ the energy crisis—that is, make the Bustamante legal threat go away . . .” (Idem.)

5. ” . . . While Bustamante’s kicking Enron butt in court, the Davis Administration is simultaneously demanding that George Bush’s energy regulators order the $9 billion refund. Don’t hold your breath: Bush’s federal Energy Regulatory Commission is headed by a guy proposed by . . . Ken Lay. But Bush’s boys on the commission have a problem. The evidence against the electricity barons is rock solid: fraudulent reporting of sales transactions, megawatt ‘laundering,’ fake power delivery scheduling and straight out conspiracy (including meetings in hotel rooms). So the Bush commissioners cook up a terrific scheme: charge the companies with conspiracy but offer them, behind closed doors, deals in which they have to pay only two cents on each dollar they filched.” (Ibid.; pp. 2-3.)

6. “Problem: the slap-on-the-wrist refunds won’t sail if the governor of California won’t play along. Solution: Re-call the Governor. New Problem: the guy most likely to replace Davis is not Mr. Musclehead, but Cruz Bustamante, even a bigger threat to the power companies than Davis. Solution: smear Cruz because—heaven forbid!—he took donations from Injuns (instead of Ken Lay). The pay-off? Once Arnold is Governor, he blesses the sweetheart settlements with the power companies. When that happens, Bustamante’s court cases are probably lost. There aren’t many judges who will let a case go to trial to protect a state if that state’s governor has already allowed the matter to be ‘settled’ by a regulatory agency.” (Ibid.; p. 3.)

7. As soon as Schwarzenegger sealed his electoral bid, he floated a proposal to deregulate the state’s electricity market—a move strongly suggestive of a payoff to the energy companies for which he shills. (His campaign manager—former governor Pete Wilson—presided over the deregulatory policies that undermined Gray Davis.) “Gov.-elect Arnold Schwarzenegger is preparing a push to deregulate the state’s electricity markets—a move embraced by business leaders and some energy analysts but criticized by many Democrats and consumer advocates as a return to the failed policies that sparked California’s energy crisis. . . .The actor-turned-politician made little mention of his plan to reduce state regulation of energy markets during the recall race, devoting his time instead to bashing Gov. Gray Davis for saddling the state with expensive long-term contracts for power. . . . Schwarzenegger’s energy strategy is being driven by some of the same members of former Gov. Pete Wilson’s team who led the push for energy deregulation in the mid-1990’s. The governor-elect, for example, picked for his transition team Jessie Knight, a former Wilson appointee to the Public Utilities Commissioner and a leading proponent of deregulation.” (“New Push to Deregulate Energy” by Zachary Coile; San Francisco Chronicle; 10/11/2003; pp. A1-A13.)

8. “‘Deregulation has already cost the state $50 billion, give or take,’ said Mike Florio, senior attorney for The Utility Reform Network. ‘Why on earth anyone would want to do that again is mystifying to us. Florio also said he was suspicious of Schwarenegger’s idea because former Enron Corp. chairman and CEO Ken Lay met with the actor and others in the spring of 2001, when Lay was pushing deregulation in California. Schwarzenegger has said he doesn’t remember details of the meeting.” (Ibid.; p. A13.)

9. Another suspicious move by Der Terminator was his selection of the Florida State Budget director to conduct a review of California’s budget—a matter of public record overseen by a staff of 200. Florida, of course, is the state governed by Jeb Bush and the site of the subversion of the 2000 Florida election. “Arnold Schwarzenegger announced Thursday that a fiscal adviser to Florida Gov. Jeb Bush would oversee the audit of California’s spending that the newly elected governor says is needed before he lays out his plan to fix state finances. The task will fall to Donna Arduin, who will take temporary leave as Florida’s state budget director, to conduct the review. . . .” (“Audit Falls to Florida’s Budget Chief” by Christian Berthelsen, Lynda Gledhill and John Wildermuth; San Francisco Chronicle; 10/10/2003; p. A17.)

10. ” . . . But Schwarzenegger’s insistence on an ‘outside’ audit is causing many in the Capitol to scratch their heads. California has a highly public budgeting process each year, and the state’s spending plan is available to anyone who wants to see it. The state also has both a state auditor who conducts a review of state spending every year and a nonpartisan analyst who examines the governor’s annual budget. Another statewide officer, the state controller, employs 200 auditors that regularly conduct spending inquiries . . . .” (Idem.)

11. Schwarzenegger’s explanation was as unsatisfactory as it was inarticulate. “Asked what he thought an audit would reveal that could not be found in readily available state documents, Schwarzenegger said: ‘Well, we don’t know. . . . We will know very soon of what is in there that we don’t know. As you know that every day there are new surprises that we find. And so we want to really open up the books and not have any surprises, because the only way that you can make good decisions is if you have all the information available.'” (Idem.)

12. Further cementing the recall election as a Bush/Republican coup d’etat against the Democratic administration of Gray Davis, the broadcast documents the pivotal role of Bush Republicans in Schwarzenegger’s “transition team.” ” . . . Schwarzenegger asserted Thursday there was ‘no White House connection’ in his transition team, and Bush had insisted throughout the recall campaign that he was only a spectator watching a ‘fascinating political drama.’ Nevertheless, the transition team announced Thursday contains many of Bush’s closest California contacts, including four of the seven leaders of Bush’s 2000 California campaign: Gerald Parsky, the chairman, Rep. David Dreier of San Dimas (Los Angeles County) and state Sen. Jim Brulte of Rancho Cucamonga (San Bernardino County), who co-chaired the campaign, and Eloise Anderson, who served on the Bush 2000 California committee.” (“Ties to Bush Clear in Transition Team” by Zachary Coile and Marc Sandalow; San Francisco Chronicle; 10/10/2003; p. A18.)

13. “The transition team also includes Bush confidante George Shultz, Matt Fong, the former state treasurer who raised in excess of $100,000 for Bush’s 2000 campaign, and Viet Dinh, a former assistant attorney general in Bush’s Justice Department. John Cogan, a Hoover Institution fellow instrumental in developing Schwarzenegger’s economic plan, was among Bush’s top economic advisers during the campaign and the early days of his administration.” (Idem.)

14. Of particular significance is the presence of Viet Dinh on Der Terminator’s team. Dinh was the primary author of the Patriot Act. ” . . . Margaret Warner: Now for a closer look at the man at the helm of the Justice Department and the act that has stirred such controversy, we’re joined by Viet Dinh, the former assistant attorney general for the Office of Legal Policy at the justice Department. He helped draft the Patriot Act; and he now teaches at the Georgetown University Law Center.” (“Considering the Patriot Act”—discussion with former Assistant Attorney General Viet Dinh and Laura Murphy of the American Civil Liberties Union, moderated by Laura Warner; Online Newshour; from ; 8/19/2003; p. 2.)

15. Perhaps the most striking aspect of this coup d’etat against California concerned the extraordinary packaging of Schwarzenegger by what the Nazi tract Serpent’s Walk calls “the opinion-forming media.” Rigorously packaged by those media interests, the “action-hero” was craftily guided by former aides to his campaign manager, former Governor Pete Wilson. These same aides had sculpted the media image of former Russian president Boris Yeltsin in 1996. ” . . . That spring [1996], three former staffers for then-California Gov. Pete Wilson slipped into a hotel room near the Kremlin and got to work teaching Russia—a nation with an 800-year history of coups, poisonings-disguised as heart attacks and exile to Siberia, but almost no experience in free elections—how to run a modern campaign. Enter George Gorton, Joe Shumate and Dick Dresner. You may have heard of them, not because they helped keep Yeltsin in office and preserve democracy in Russia, which they quite possibly did, but because in recent months all three have been working overtime to put Arnold Schwarzenegger in the California governor’s office.” (“Russians Wonder Who’s Spinning Whom in Film” by Kim Murphy; Los Angeles Times; 10/4/2003; p. A3.)

16. Prior to the election, observers speculated about what the tabloids would have to say about Schwarzenegger’s numerous sexual peccadilloes. The business connections between Schwarzenegger’s patron Joe Weider and American Media—the leading tabloid conglomerate—apparently led to a deliberate decision to “lay off” Schwarzenegger. ” . . . Last week, the San Jose Mercury News turned over a few pieces of the puzzle when it reported that, in January, Schwarzenegger’s mentor and early business partner, Joe Weider, had sold his publishing empire—including Muscle and Fitness, Shape, and Men’s Fitness magazines—for $350 million to American Media, the tabloid conglomerate that owns The Enquirer, The Star, The Globe and The News of the World. . . .”

17. ” . . . On another front, the New York Daily News reported that American Media owner and CEO David Pecker had assured Weider that the tabloids were going to ‘lay off’ Schwrzenegger. ‘We’re not going to pull up any dirt on him,’ Weider said Pecker told him. (American Media spokesman Richard Valvo calls the conversation ‘unfounded rumor’; Weider reconfirmed it Wednesday.” (Idem.)

18. In FTR#’s 421, 422, we examined material from Wendy Leigh’s biography of Schwarzenegger. Aware of her investigation, Schwarzenegger precipitated a heavy-handed campaign to squelch the biography. Note that Schwarzenegger’s alleged attempts at getting an associate to secretly tape record Wendy Leigh would be illegal under the laws of many states. “Taking [body builder Rick Wayne’s] experience into account, as well as the remarks of journalist Joan Goodman—who in Playboy characterized Arnold as ‘one of the more finely tuned control freaks I have met in a career of celebrity journalism’—I decided not to contact Arnold until my research for the book was well under way.” (Arnold: The Unauthorized Biography; by Wendy Leigh; Copyright 1990 by Wendy Leigh; Congdon & Weed [HC]; ISBN 0-86553-216-8; p. 270.)

19. “I made no secret of the project, however, contacting Arnold’s friends and family at an early stage. When any of them asked me if Arnold had authorized the book, I told them he had not and that I hadn’t yet contacted him but planned to when I was ready. As a result, Arnold was aware of the book from the start. His close associates Art Zeller, Frank Zane, and Joe Weider confided to me during taped interviews that they had asked Arnold’s permission to talk to me and that he had agreed to let them. Weider, however, had a court reporter present during our interview, and beforehand he insisted that I see him alone (without Steve [Leigh’s husband], who was with me) and went on to interrogate me about what I intended to write in my book. I explained that the content of my book depended on the outcome of my research. Weider left me with the distinct impression that his questions had been dictated by Arnold. After allowing Steve back into the room, he then proceeded to give me a half-hour interview during which he was polite but didn’t go into great detail. A few days afterward, I interviewed a leading bodybuilder who confided to me that Arnold had asked him to ‘get her over to your house and tape-record her without her knowing it.'” (Idem.)

20. “Confident that I was armed with enough facts to interview him in depth, I wrote to Arnold in the summer of 1989 to request an interview. His secretary, Lynn Marks, wrote back with a request for more details about my project. This response was couched in terms designed to give the impression that Arnold knew nothing about the book. Judging from what the people I interviewed had said, however, that was not true. I replied to the letter, giving the requested details. However, Arnold would grant me an interview only under circumstances that would give him control of the book and that no responsible journalist would do.” (Ibid.; pp. 270-271.)

21. “After that, the next Arnold intimate whom I contacted and who asked Arnold’s permission to talk to me, Charles Gaines, told me that Arnold’s secretary had told him that Arnold ‘very strongly discouraged him’ from speaking to me. I also wrote to Maria Shriver requesting an interview, received a request for more details from a representative of hers, and then responded with the relevant details, but I never received a reply to my second letter.” (Ibid.; p. 271.)

22. According to Leigh, the attempts at squelching the biography went further than that. She began receiving threatening late-night phone calls. After discussing attempts at interdicting reporters’ questions at the 1990 Cannes Film Festival, the broadcast highlights these accounts. ” . . . But according to Leigh, the intimidation went further than Cannes. Book promotion and appearances were mysteriously canceled, callers made late-night threats, and her publishers received an offer that Schwarzenegger would sell them a book if they didn’t publish Leigh’s biography, she said. ‘This is a man who has total contempt for the public and the truth, and does his best to suppress publicity’, said Leigh.” (“Taking Charge” by don Nissenbaum and Eric Nalder; San Jose Mercury News; 10/5/2003; p. 18A.)

23. Supplementing information presented at length in FTR#421, the broadcast sets forth additional information indicating Schwarzenegger’s expressions of admiration for Hitler. “A film producer who chronicled Arnold Shwarzenegger’s rise to fame as a champion bodybuilder in the 1970’s circulated a book proposal six years ago that quoted the young Mr. Schwarzenegger expressing admiration for Adolph Hitler. The book proposal by the producer, George Butler, included what were presented as verbatim excerpts from interviews conducted with Mr. Schwarzenegger in the filming of the documentary ‘Pumping Iron.’ In a part of the interview not used in the film, Mr. Schwarzenegger was asked to name his heroes—’who do you admire most.'” (“Schwarzenegger Admired Hitler, Book Proposal Says” by Adam Nagourney and David D. Kirkpatrick; The New York Times; 10/3/2003; p. A19.)

24. ” ‘It depends for what,’ Mr. Schwarzenegger said, according to the transcript contained in the book proposal. ‘I admired Hitler, for instance, because he came from being a little man with almost no formal education up to power. And I admire him for being such a good public speaker and for what he did with it.’ In addition to the transcript, Mr. Butler wrote in his book proposal that in the 1970’s, he considered Mr. Schwarzenegger a ‘flagrant, outspoken admirer of Hitler.’ In the proposal, Mr. Butler also said he had witnessed Mr. Schwarzenegger playing ‘Nazi marching songs from long-playing records in his collection at home’ and said that the actor ‘frequently clicked his heels and pretended to be an S.S. officer. . . .” (Idem.)

25. ” . . . A copy of the proposal for the book, which would have been entitled ‘The Master Plan,’ was provided to the New York Times on Tuesday by someone who has no obvious affiliation with any of the California campaigns. The person provided the copy on the condition that his identity be kept secret and would not explain the motivation for releasing it. But the person was aware that the disclosure, coming within days of the California recall election, could damage Mr. Schwarzenegger’s campaign.” (Idem.)

26. Among the less-appetizing of Schwarzenegger’s associations is his membership on the board of US English, an organization that appears to have metamorphosed from a literacy-promotion consortium into a xenophobic group, frequented by fellow travelers of the White Supremacist movement. “Arnold Schwarzenegger is coming under growing criticism from civil rights groups and immigrants’ advocates for his 16-year membership on the advisory board of U.S. English, a Washington-based organization that bills itself as the nation’s largest group dedicated to preserving English as America’s official language. . . .The organization’s chairman, a Chilean-born architect named Mauro Mujica, said the organization’s internal politics have nothing to do with Schwarzenegger or California’s recall election . . . Earlier this month, Mujica accepted the resignation of his communications director, James Lubinskas, after the Southern Poverty Law Center linked Lubinskas with white extremists. Mark Potok, editor of the Southern Poverty Law Center’s quarterly Intelligence Report, said Lubinskas shared the podium at Washington conferences in 1999 and 2000 with former Ku Klux Klan members David Duke and Don Black. In addition, Potok said, Lubinskas wrote as recently as this spring for a journal run by white supremacist Jared Taylor. . . .” (“Schwarzenegger Criticized for U.S. English Connection” by Greg Krikorian and Joe Mathews; Los Angeles Times; 8/30/2003; p. A16.)

27. As discussed in FTR#421, Schwarzenegger appears to be eyeing the presidency. One of the promoters of the bill that would enable Schwarzenegger (a naturalized citizen) to run for the presidency is Orrin Hatch, the chairman of the Senate Judiciary Committee. The possibility that Schwarzenegger might become President is not one to be too readily dismissed. “On October 8, 1993—a day short of exactly ten years before the originally scheduled date of California’s recall election—one of Sylvester Stallone’s better movies opened wide at area theatres. In ‘Demolition man,’ Stallone played a Los Angeles cop, cryogenically frozen around the turn of the century as punishment for a bum rap, who is thawed out in the year 2032 to give chase to his similarly thawed-out criminal nemesis. . . . As she [Sandra Bullock] is showing him around the L.A. of the future—where everything is tidy, corporate, and bland—he does a double take when she mentions the ‘Schwarzenegger Presidential Library.’ Decades before, Bullock explains perkily, Arnold Schwarzenegger became so popular that the American people waived the technicalities and made him their maximum leader. . . .” (“Strongman” by Hendrik Hertzberg; The New Yorker; 9/29/2003; p. 43.)

28. ” . . . On July 10th, Senator Orrin Hatch, Republican of Utah, quietly introduced what he hopes will become the twenty-eighth amendment. . . .As it happens Arnold Schwarzenegger (who, according to the Deseret News, Hatch’s home-town paper, is both a ‘pal’ and a ‘fund-raising helper’ of the Senator’s) became a citizen of the United States precisely 20 years ago. Hatch is the chairman of the Senate Judiciary Committee, where constitutional amendments originate. His amendment stands a good chance of going to the states, thirty-eight of which would be needed for ratification. It would certainly pass in the states where Latino and other foreign-born citizens, now twelve million strong, are concentrated, and legislators elsewhere might support it as a gesture toward the ‘nation of immigrants’ catechism of America’s religion.” (Idem.)

29. The program concludes with a passage excerpted in FTR#268. A German university professor’s observation on the appeal of Hitler to the average German should be instructive. It was apparently the media-driven image of Schwarzenegger-the-action-hero that generated the identification of the average voter with Der Terminator. “What happened here was the gradual habituation of the people, little by little, to being governed by surprise, to receiving decisions deliberated in secret, to believing that the situation was so complicated that the government had to act on information which the people could not understand because of nationality security, so dangerous that even if the people the people could understand it, it could not be released because of national security. And their sense of identification with Hitler, their trust in him may have incidentally have reassured those who would otherwise have worried about it. Their trust in him made it easier to reassure others who might have worried about it.” (They Thought they Were Free: The Germans 1933-1945; by Milton Mayer; copyright 1955 [SC]; University of Chicago Press; ISBN 0-226-51190-1; pp. 166-167.)


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