The news about extra money in some of the state’s special funds has reminded me of one of those stories of the early Schwarzenegger era in California politics: the audit.
When he was running for governor, Schwarzenegger promised a “line by line audit” of the state’s books. He said he would bring in an independent accounting firm to do it. And the results would be published so “all the people can see.”
I had to cover the campaign and the new administration, and I never doubted for a moment that the audit was a dodge – a way for Schwarzenegger to deflect questions over what he’d do with the budget deficit once he got into office. Schwarzenegger’s critics across the spectrum said the same thing, and that the state’s finances weren’t that much of a mystery. But Schwarzenegger maintained he was just being honest; he didn’t know what he would do because he didn’t have the information that an audit would uncover—that was the argument.
Even after he was elected, the governor, a better actor than he’s given credit for, continued to trot out the audit promise with total conviction. This performance was so compelling that, while covering his speeches, it became hard not to laugh, out of respect for his commitment to a talking point that seemed so totally bogus.
Over time, however, the story changed. First we were told the audit would be delayed. Then that it would happen in phases. Then there would be no independent accounting firm – his finance director or the California Performance Review, we were told, would perform the audit. By the end of his first year, he and his team stopped talking about the audit all together. No audit was ever released.
Schwarzenegger and his aides didn’t pay much of a price for that, beyond stories that would list the audit as among promises the governor made but didn’t fulfill. But no one was outraged. After all, the state government’s finances weren’t all that much of a mystery, everyone thought. The broken system made it nearly impossible to balance a budget. But we knew where the state’s cash was – it was in all those hundreds of accounts. And you could just count it, right?
As we’re learning now, things are even more complicated than that. I wonder if Schwarzenegger and his critics (including us reporters) had taken the audit seriously, and pursued the forensic thing, if these discrepancies in special funds might have been identified much earlier.