By Jack Chang
Sacramento Bee
September 7, 2010

Republican gubernatorial candidate Meg Whitman was leading a triumphant rally at the state GOP convention last month when she announced that New Yorkers were excited about the California governor's race.

At a fundraiser she held in New York, Whitman said she met with people who "have suffered the financial reforms that are going to crimp our ability to raise capital, and they want California to turn the corner."

Whitman's Democratic rival, Jerry Brown, and his supporters pounced on the remark, saying it proved that "Wall Street Whitman" was looking out more for captains of industry than the average Californian toughing out the recession.

Democrats have long accused Republicans of being beholden to big business, but the rhetoric is extra loud this year because Whitman, the former CEO of online auction firm eBay, claims longtime ties to the nation's financial sector.

She made more than $1 billion, largely from eBay stock, and spent more than a year on the board of investment bank Goldman Sachs, for which she received $475,000 in stock and options.

Now the financial industry has lined up behind her gubernatorial campaign.

According to a Bee estimate, investment banks and firms, private investors, financial advisers, venture capitalists and even the chairman of the Federal Reserve in San Francisco have poured $4.7 million into her effort, more than a fifth of total outside contributions she's received. Whitman has also given her campaign $104 million of her own money.

The industry has been less generous to Brown, who has received about $1 million from the sector.

As Whitman hinted during the state GOP convention, she's held fundraisers in New York, Chicago, California and elsewhere attended by finance industry leaders.

Mill Neck, N.Y.-based hedge fund manager David Knott said many in the business world see Whitman as an ally who appreciates the burdens government places on companies. Last week, the California Chamber of Commerce officially endorsed Whitman for governor.

Knott, a frequent Republican donor, gave $25,900 to the Whitman campaign and said he attended a lunch in New York City earlier this summer where Whitman spoke to supporters.

"She understands what turns people on in the business world when it comes to locating a plant or doing business in the state," Knott said. "You need some return to fiscal sanity, and Meg Whitman has run eBay. She knows what the problems are."

Whitman has trumpeted her time working for industry giants such as the consultancy Bain & Co. and has staked out positions friendly to the sector.

She's called for elimination of the state capital gains tax, which would provide a boon for Californians with lucrative investment portfolios. She's also criticized the financial regulation overhaul passed by Congress and made streamlining government regulations on businesses a central part of her job creation agenda.

Her spokesman Darrel Ng pointed out that while investors are supporting Whitman, the unions have spent millions supporting Brown. The Bee estimates that Brown has received $4.2 million from labor organizations. Unions have also funded independent expenditure committees that have spent more than $10 million, mostly on ads targeting Whitman.

"One hundred percent of the money spent on advertising in support of Jerry Brown thus far has come from unions. We know that they will expect a healthy return on their investment," Ng said.

"On the other hand, less than 3 percent of the total contributions to Meg Whitman's campaign have come from what The Bee has defined as Wall Street. Those who contribute to Meg support her because they know she is the only candidate with a plan to create 2 million jobs in the next five years and return California to prosperity."

The risk of being tarred as a finance industry lackey is high this year, as many continue to blame Wall Street misdeeds for persistently high unemployment and foreclosure rates.

During the Republican primary, Whitman saw her poll numbers plummet when rival Steve Poizner aired TV ads highlighting her ties to Goldman Sachs.

"Jerry Brown needs to prime that anger" to win, said University of California, San Diego, political science professor Thad Kousser. "Their goal is to make sure every voter associates Meg Whitman not with Silicon Valley and eBay but with Wall Street and Goldman Sachs."

Brown has, in fact, slammed Whitman's financial industry ties while blaming Wall Street for sinking the country into recession.

"She wants to put everyone into the loving embrace of Wall Street," Brown said at a Service Employees International Union meeting in March. "That's how she got her billion. And she thinks it might work for everybody else. I don't believe that."

Sen. Barbara Boxer, D-Calif., has taken the same tack with her Republican rival Carly Fiorina, the former CEO of tech giant Hewlett-Packard. During their debate Wednesday, Boxer repeatedly equated Fiorina with Wall Street while chiding her for sending Hewlett-Packard jobs overseas.

Richard Rock, a former eBay vice president who's now an investment adviser, said he's backing Whitman because he believes she'll restore predictability to what's been a topsy-turvy state business climate.

Rock has given the campaign $30,900 and said he attended a Silicon Valley fundraiser with Whitman and other former eBay employees.

"What we're looking for more than anything is certainty on how we're going to move forward, and there's so much uncertainty now," Rock said. "We're interested in having trust that who's in the governor's office has a fair vision of business."