Los AngelesTimes
January 29, 2005

Car Dealers in Capitol's Fast Lane
While Schwarzenegger declares war on 'special interests,' he has helped one of the state's most effective lobbies get showroom treatment.

By Jordan Rau --Times Staff Writer

SACRAMENTO — While Gov. Arnold Schwarzenegger has declared war on Sacramento's "special interests," he has helped one of California's most effective business lobbies — car dealers — accelerate to new levels of influence in the Capitol. Dealerships are among the most regulated sales industries in the state, with lemon laws that dictate precisely how they may market their products and a state board that can ban dealers from moving within 10 miles of another showroom peddling the same make of car.

Still, they have always made good mileage in Sacramento, going back to when Los Angeles dealer Holmes Tuttle was one of Ronald Reagan's earliest boosters and closest confidants. And in the last year, their political machine has been souped up.

After the dealers and the rest of the auto industry helped underwrite Schwarzenegger's 2003 gubernatorial campaign, giving him more than $1 million through his first year in office, the Republican sided with dealers last year by killing their most hated piece of legislation, which would have restricted their loan practices.

The dealers played a central role in the passage of Proposition 64, which limits lawsuits against businesses. Dealers financed a third of the campaign's $12-million cost, and Schwarzenegger stumped for it in the final weeks of the fall election.

"We've changed pretty dramatically in our approach to things," said Peter Hoffman, president of Sierra Autocars in Monrovia. "I am a Democrat, but as the Legislature just started to act like they hated business, and as they started to persecute all business in the state, we decided to get active in all issues."

This month, Schwarzenegger again delivered for the dealers when he rebuffed his own task force's recommendation that the New Motor Vehicle Board be abolished. The dealers value the panel for settling disputes with manufacturers that otherwise would end up in court, though the task force concluded "there is no need for a governmental body to take on this work."

"I've never seen the car dealers show up as prominently as they have in the last year," said Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights, a Santa Monica advocacy group. "I think what's happened is they've seen their potential power grow with Schwarzenegger. I've been shocked by how much money they're putting into the political process."

The dealers' power will be tested further in coming months, as Democratic lawmakers and consumer groups revive last year's proposal to allow buyers to return vehicles within three days of purchase. The measure, which backers have dubbed the "Car Buyers' Bill of Rights," is again sure to be one of the most contested pieces of consumer legislation. It is also being readied as a possible ballot initiative.