Car Dealers in Capitol's Fast Lane
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The tipping point, dealers say, was lawmakers' refusal to alter California's business competition laws, which allowed private individuals and attorneys to bring lawsuits against dealers for violations of often minor laws, even if they had sustained no harm. The law was considered more than a nuisance for the state's 1,500 dealerships, which sold $98 billion worth of cars in 2003.

"Many, if not all, of us got sued for advertising violations, such as printing something in eight-point instead of nine-point type," said Sen. John Campbell (R-Irvine), a former car dealer in Orange County.

The dealers found a kindred spirit in Schwarzenegger, the Hummer-driving candidate who made repeal of the increase in the state vehicle license fee a campaign theme. Led by the dealers, the auto industry contributed $656,535 to his campaign and financed ads in favor of changing the fee.

The governor proved to be a valuable friend. In his first day in office, he fired Department of Motor Vehicles chief Steve Gourley, who had been aggressively investigating auto financing schemes. The governor also replaced the head of the DMV bureau that had been forcefully regulating auto repair shops.

As Schwarzenegger moved to repeal the car fee, he made an early stop at a San Fernando Valley Ford dealership owned by one of his donors, and urged Californians to "go out there and buy cars."

Though Schwarzenegger complained in his annual legislative address that Sacramento "is in the grip of the special interests," his aides deny that the governor has shown favoritism toward car dealers.

"The people of California know that this governor can't be bought," said spokeswoman Ashley Snee Giovannettone. She defined "special interests" as "those interests that separate elected officials from the will of the people. The mandate of the recall was to make government more responsive to the people of the state."

Schwarzenegger has not agreed with the dealers on every proposal. Last year, over their objections, he raised state fees on tires by 75 cents and supported tougher greenhouse gas regulations.

"There are probably more policy issues that we don't see eye to eye on with this administration than we do," said Peter Welch, president of the California Motor Car Dealers Assn., based in Sacramento and Playa del Rey.