California Conservative

The Sacramento Bee reports: “A nonprofit consumer group that is one of Gov. Arnold Schwarzenegger’s biggest critics has been awarded $200,000 through a legal settlement approved by Attorney General Bill Lockyer, a Democrat considering his own run for governor next year.

Lockyer, who has stepped up his criticism of Schwarzenegger in recent months, signed off last year on the money for the Santa Monica-based Foundation for Taxpayer and Consumer Rights. The payment was part of an $85 million antitrust settlement against six large vitamin manufacturers.

[T]he foundation payment has raised eyebrows among some Republicans because the Santa Monica-based group also runs Arnold Watch, a Web site that has been bashing Schwarzenegger for his fund raising and his policies since the day he took office.

As a 501(c)3 organization, however, the foundation is not required to disclose the sources of its income, which exceeded $1.8 million in 2003, according to its most recent tax return.

Schwarzenegger communications director Rob Stutzman declined comment on the issue, but supporters of the governor were not hesitant.

“This is not unique to California, but politicians can be very creative in finding ways to hand out money,” said Sen. Charles Poochigian, a Fresno Republican who plans to run for attorney general next year.

“This incident raises serious questions. Close scrutiny is imperative anytime politicians are the beneficiary of something like this. They’re (the foundation) well-known for the political stances they take and their political activity, which is very much on the left.“

Karen Hanretty, spokeswoman for the California Republican Party, was even more critical.

“I think it’s outrageous that Bill Lockyer would abuse the power of the attorney general’s office to benefit a partisan political shill like Harvey Rosenfeld,” she said.

“Lockyer knows exactly who and what Harvey is all about, and it’s to Lockyer’s advantage to make sure he’s well funded.”

Rosenfeld, founder of the foundation, declined to comment. But Jamie Court, its executive director, said the money is not being used for Arnold Watch or any other partisan activities.

The $85 million settlement results from a Lockyer class-action lawsuit for alleged international price-fixing against six major vitamin manufacturers. In announcing the antitrust settlement in October 2000, Lockyer said the fraud “resulted in California consumers and businesses being overcharged for a variety of products over the last 12 years.”

In typical class-action suits, money goes directly to injured parties. But when it would be difficult and expensive to accurately identify everyone who was harmed by the behavior, courts have increasingly turned to arrangements in which money goes to charitable uses related to the litigation.

UPDATE: Walter Olson at PointofLaw.com comments on the Litigation slush funds controversy

RELATED: Case Against Class-Actions

This entry was posted on Thursday, April 14th, 2005 at 9:20 am and is filed under Activism, Arnold, Elections. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.