My Evening With Governor Arnold Schwarzenegger And A Few Of His Rich Friends
Print Friendly and PDF

Have I ever told you about the evening in 2005 when I had dinner with California Governor Arnold Schwarzenegger?

Me and a hundred other people, that is.

The fundraiser, held at real estate billionaire tycoon Alex Spanos' Stockton, California mansion, gave me a close up look at how political patronage works—not that I didn't fully understand it before I walked through the front door.

But sitting among the insiders for that one night as the proverbial fly on the wall confirmed my worst fears about the influence of money on power.

By this time, you're probably asking yourself how a lowly English as a Second Language instructor toiling in obscurity at the Lodi Adult School received an invitation to participate in a ritzy gala on behalf of the governor of the union's largest state.

I certainly wasn't invited because someone thought I qualified as a candidate for a generous donation. Not only didn't I have any money, I didn't even own any appropriate clothing to wear!

Here's how it happened.

One day a wealthy acquaintance complained to me that Spanos was leaning on him to fork over $5,000 a plate for two tickets to a Schwarzenegger fundraiser. Because of my friend's long-standing personal association with Spanos, he couldn't turn down the request.

But, my friend went on to explain, he dreaded the idea of schmoozing all night.

"Give me the tickets and I'll go in your place," I said.

And with that, I was off to hobnob with the rich and influential.

Within minutes of my arrival, I realized that the donors were all real estate developers, commercial bankers and mortgage specialists.

When they asked me how I earned a living, I replied: "I teach ESL." Although I got curious stares, no one was rude enough to follow up with: "What are you doing here?"

Shortly after Schwarzenegger arrived—about a half an hour late—our group was broken up into two. The extremely well-heeled went into the large dining room where the governor spoke about California's prosperity and how, in order to keep the state thriving, his 2006 re-election was essential. Lesser lights like me got shuffled off to a smaller room where everyone (except me) spoke about Schwarzenegger's outstanding leadership.

Of course, even though Schwarzenegger had promised during the 2003 Recall Gray Davis election that he had plenty of his own money, he was not embarrassed that night to ask the flush to open their wallets.

What I didn't realize at the time, but is crystal-clear today, is that those assembled bankers and real estate developers, through their predatory minority mortgage lending policies—already well in progress in 2005— were on the verge of bringing California to its knees.

The evening's honoree, Schwarzenegger, served as the great enabler for California's collapse. And our host, Spanos, played at least a minor part albeit unwittingly.

Because Spanos is the immigrant success story so wildly coveted by the MainStream Media, Spanos provided the perfect role model for the Schwarzenegger banking connection, especially as it involved mortgages to unqualified Hispanic borrowers.

In his autobiography Sharing the Wealth: My Story, Spanos, the son of Greek immigrants, expresses enormous sympathy for illegal aliens exploited under the Bracero program.

In 1951, with his young wife Faye and their infant child, Spanos took a risk and left his father's bakery business, borrowed $800 and purchased a truck to sell sandwiches to the San Joaquin Valley's migrant farm workers.

With Faye's assistance, Spanos transformed his first venture into a food services business that soon became so lucrative that he invested his profits in real estate.

By 1960, Spanos had formed A.G. Spanos Construction that eventually became the country's top-ranked housing construction company. Today Spanos is chairman of eight companies, collectively known as A.G. Spanos Companies.

Spanos' personal achievements may have been a factor in influencing other developers and Schwarzenegger that the sub-prime, no-money-down loans made mostly to Hispanics would work out fine.

If everything ended up so well for the diligent young Greek immigrant decades ago, why shouldn't bankers give the hardworking Mexicans the same kind of break Spanos?

But as we sadly know, things didn't pan out. Instead disaster struck. As Steve Sailer reported earlier this week, California accounts for 66 percent of the America's home value decline.

Ironically Stockton, where Spanos was born and thrived, is today the country's foreclosure capital.

Yet the confluence of Schwarzenegger, Spanos, the real estate developers and bankers—all of whom profited so enormously during the housing boom—is breathtaking.

According to filings on record at with the California Secretary of State, through 2008 the real estate and finance industries rank numbers one and two as the most magnanimous contributors to Schwarzenegger, totaling $21 and $14 million respectively.

The complete top twenty donors' list includes many prominent Minority Meltdown Mortgage players, for example Ameriquest.

To date, Spanos family members and his various companies are, in the aggregate, Schwarzenegger's second-highest contributors, having given just under $3 million.

Furthermore, Spanos enthusiastically supported another minority home ownership advocate, former President George W. Bush. Via A.G. Spanos Companies and legally laundered through Progress for America, Spanos gave a total of more than $5 million in campaign donations since 2004 to Schwarzenegger and Bush.

Critics of Progress for America's influence on Bush describe the organization as functioning "like an unofficial extension of the White House, advancing the president's policies alongside the Republican National Committee."

One of Bush's key domestic "policies" no matter its risks— was minority home ownership.

As is all too typical with politicians, Schwarzenegger has found religion—after the bottom fell out.

In September 2008, Schwarzenegger signed legislation to protect California homeowners and homebuyers and help (or so he shamelessly claimed) establish a safer, more responsible lending environment by increasing accountability among lenders and preventing their abusive practices.

Said Schwarzenegger:

"All Californians deserve the opportunity to achieve the American dream of homeownership and this legislation will help homebuyers realize that dream in the aftermath of the housing crisis. I am pleased to sign legislation that protects consumers and creates a responsible and accountable lending environment that will encourage homeownership in our state." [Schwarzenegger Signs Mortgage Legislation to Protect California Homeowners and Homebuyers, Imperial Valley News, September 20, 2008]

You will have to dig deep into history's archives to find a more offensive comment uttered by an elected political official.

Schwarzenegger's platitudes are not only meaningless but they are infuriating to the hordes of homeowners who have been crippled by the market's collapse, for example me.

What Schwarzenegger failed to mention during his paean to "the American dream of homeownership" is that banks aren't lending to anyone. No new "dreams" will be realized anytime soon.

And if you— like me— own a California home and want to sell it, your "dream" has turned into a nightmare for the same reason: federal stimulus money went into the banking system but it never came back out.

I personally would consider myself lucky if I could unload my Lodi home for its purchase price twenty years ago.

Except for Schwarzenegger, who's playing out his gubernatorial string, I have no idea what's become of my fat-cat dinner companions from a few years back. We didn't exchange business cards.

I suspect they're all doing pretty well. That's kind of the way it works in the high-flying financial world: make money, move on, and never look back at the bodies strewn in your wake.

I've also moved on to a new but undesirable, headache-filled and not particularly lucrative career—absentee landlord.

Well, as the age-old saying goes, life is an adventure. But must it be such a painful one?

Joe Guzzardi [email him] is a California native who recently fled the state because of over-immigration, over-population and a rapidly deteriorating quality of life. He has moved to Pittsburgh, PA where the air is clean and the growth rate stable. A long-time instructor in English at the Lodi Adult School, Guzzardi has been writing a weekly column since 1988. It currently appears in the Lodi News-Sentinel.

Print Friendly and PDF