04/21/2010 05:12 am ET | Updated May 25, 2011

The Biggest Spending Race In America Is Underway! (Well, Sort Of)

The biggest spending race in America is fully underway! Or not.

That would be the California governor's race. With billionaire Meg Whitman, the ex-eBay CEO and national co-chair of the McCain/Palin campaign, spending like a Russian oligarch, it's inevitable that this will be the most expensive race in the country. But aside from Whitman blanketing the state for months with her robotic ads, it's not there yet.

Asked the last president she voted for, billionaire California gubernatorial hopeful Meg Whitman tells Fox News that it was Ronald Reagan. Then she says it was George Bush. Whitman has been blanketing the state with ads for months.

Her trailing Republican primary rival, super-rich state Insurance Commissioner Steve Poizner, figuring that the primary election is in June, is sitting on a near $20 million campaign warchest. He hasn't come close to running an ad. State Attorney General Jerry Brown, the storied maverick Democrat who won his party's nomination by quietly clearing the field last year, is sitting on the $13 million he's raised. And Democratic independent expenditure committees, launched with a flourish last week -- complete with press reports of $40 million in advertising about to be unleashed against Whitman -- are, in reality, still getting organized.

Which hasn't stopped the Whitman campaign -- trailing Brown, used to trying to control everything and, faced with a much diminished state press corps, used to getting away with it -- from looking rather rattled. For one thing, the aloof former Goldman Sachs board member, no doubt painfully aware that super-rich business people are not exactly wildly popular and that she in no way fits the Scott Brown profile for success in a largely Democratic state, is going to a Nascar race to show her common touch. For another, her operatives reacted to the ballyhooed emergence of what are actually nascent Democratic committees as though they'd been jabbed by a hot poker.

California, incidentally, years ago led the way into the future of campaign finance now faced by the rest of America in the wake of the U.S. Supreme Court decision allowing unlimited spending by corporations, individuals, and unions on political campaigns. That's long been allowed in state elections in California, so long as there is no coordination between the official campaign and the independent expenditure committee. (In fact, one such IE, as they are called, enabled Democrat Phil Angelides to narrowly defeat Whitman's former eBay colleague Steve Westly in the 2006 Democratic gubernatorial primary. Mega-developer Angelo Tsakopoulos, who was finance chairman of the Angelides campaign, spent the $10 million that led to the defeat of the first eBay executive to run for California's governorship.)

Meg Whitman's business mentor, Mitt Romney, sings her praises. Whitman was national finance co-chair of his 2008 presidential campaign.

It's a fascinating little situation. One group of consultants, called Level The Playing Field 2010, using the San Francisco Chronicle to promote its existence, announced its existence last week. Which triggered another group of consultants, called California Working Families 2010, to also go public. Each said it intended to raise $20 million. Which neither is close to actually having. Not that that stopped former Governor and Senator Pete Wilson, Whitman's campaign chairman, from claiming that the Democrats were suddenly coming after Whitman and Poizner had to get out of the race for the good of the party.

As one well-known wag put it: "How does it work that Pete Wilson gets to claim that Brown supporters are spending $40 million against Whitman and it's only $1 million?"

For that's all that's actually been raised, as of late Thursday, in pledges.

The reality is that I've been hearing about these groups being in the works for months. Along with a project of the Democratic Governors Association, which was actually announced in December, helping gubernatorial candidates in a variety of races around the country.

California Democratic Party chairman John Burton, not referring to the Democratic Governors Association which is operating on its own track as it does every election cycle, looks rather askance on these efforts, seeing them as a bonanza for consultants, doubting they will have the money they claim. Which I think is a too harsh view.

I've talked with principals of each independent expenditure committee. Each has top-notch operators involved. Level The Playing Field 2010 has raised $1 million in pledges and is working to raise the rest of the famous $20 million. Aside from the promotion in the San Francisco Chronicle, they've produced two radio ads and held a press conference. The latter included leaders of the nurses, painters, and college faculty unions, none of which is among the big union contributors in the Democratic Party.

Meg Whitman, who wants to roll back Arnold Schwarzenegger's trademark climate change program, gushed last year about controversial environmental advocate Van Jones after meeting him on a cruise ship.

California Working Families 2010, which announced its existence only after the the first group made its splash and is taking a lower key approach, has just filed as a committee and is working on raising $20 million. LA businessman Ron Burkle, a great friend of former President Bill Clinton, is involved with this group. He is not in charge of it, however. It's the brainchild of Obama media consultant and former Gray Davis campaign manager Larry Grisolano, who I believe barely knows Brown, if at all.

The two groups are in a bit of a competition at this point. Both may flourish. One may emerge as dominant. Or another committee may emerge.

The still unsettled nature of the the likely future opposition didn't stop the Whitman campaign from responding with notable alarm.

Whitman communications director Tucker Bounds -- known in the 2008 presidential race as the "Baghdad Bob" of the McCain campaign for his penchant for asserting nonsensical things while being beaten up on cable news shows -- very amusingly claimed that the first Level The Playing Field radio ad, which was a sort of teaser for PR purposes that aired some during conservative radio shows, was a clear attempt by Democrats to help Poizner.

Since the ad attacked Whitman for advocating a rollback of California's landmark climate change program, hardly a big negative for likely Republican primary voters, Bounds' bounding claim was less than boundless, though nonetheless amusing.

The group's second radio ad, for which it says it is paying $200,000 to $250,000 per month, is the real ad. And this one draws some Whitman blood. Here's the script:

Billionaire Meg Whitman thinks she can outwit the people of California.
She's threatening to spend one hundred and fifty million dollars to crown herself governor.
But Meg Whitman won't debate her opponents . . .
. . . and she refuses to release her tax returns.
What's Meg Whitman trying to hide with her $150 million campaign?
Why won't Meg Whitman explain the twelve million dollars a year she claimed in cash and bonuses when she was in charge of EBay?
Twelve million dollars while laying off hundreds of workers, including 70 employees right here in California.
Maybe she's afraid she'll have to explain why she billed shareholders millions for her personal use of the corporate jet. [KAAA-CHING! fx]
It's time for Meg Whitman to level with Californians.

Paid for by Level the Playing Field 2010.
Because there shouldn't be a "buy it now" button on the California Governor's Office.
This committee is not authorized by a candidate or a committee controlled by a candidate.

This ad prompted the Whitman campaign to hire big-time political lawyer Tom Hiltachk to file a formal complaint with California's Fair Political Practices Commission charging collusion between the independent expenditure committee and Jerry Brown's campaign. The Whitman camp's evidence of this collusion and coordination? That consultant Ace Smith and fundraiser Michelle Maravich, who last worked for Brown in 2006, are still working with him.

Well, actually, that would be no.

The reality is that none of the founders of the Level The Playing Field committee have been working with Brown any time at all recently. Smith, a storied opposition research expert, was the principal consultant in Brown's landslide win as state attorney general in 2006. But he decided that Los Angeles Mayor Antonio Villaraigosa, whose re-election campaign he managed, was going to be the next governor.

Which did not, let's say, amuse Jerry Brown.

Meg Whitman avoids press availabilities in favor of more easily controlled TV interviews, like this fawning session on The Today Show.

Another of the group's founders, former top Gray Davis aide Jason Kinney, a partner in the ubiquitous corporate consulting firm California Stategies headed by Whitmanite Bob White, drew Brown's ire last year for his efforts to promote another Brown rival who decided to pull out of the race, San Francisco Mayor Gavin Newsom. Kinney raised money from clients to pay for a splashy hip hop concert at last year's state Democratic convention. Featuring Wyclef Jean and ostensibly sponsored by the penniless College Democrats, the event was astroturfed to demonstrate Newsom's supposedly growing youth movement.

Brown called Kinney personally to read him the riot act over this.

Another principal in the group, who Brown says he doesn't know, former Clinton White House spokesman Chris Lehane, appeared to be boosting Newsom in his abortive campaign against Brown.

Lest it look like the first group is the only one with principals who have drawn the ire of the Democratic nominee for governor, California Working Families spokesman Roger Salazar launched fierce attacks on a daily basis against Brown on behalf of Brown's vanquished 2006 primary opponent, LA City Attorney Rocky Delgadillo. So much so that I mischievously introduced Salazar, Gray Davis's former press secretary, to Brown in front of a group of people at last year's state Democratic convention, causing Brown to describe him, in his edgily jousting, rather good-natured fashion, as "a hornet."

Meg Whitman, seeking to look a little more like Scott Brown, is going to a Nascar race. But "The Observer," from the Fox TV show Fringe, has long preceded her.

None of which is to say that Jerry Brown has anything like an active dislike of these folks. Simply to point out that the notion that these IEs are run by Jerry Brown pals is a fanciful notion.

While the Democratic IEs get it together, Whitman continues her advertising blitz. I wonder if Californians are going to get tired of her. She's not anyone's idea of an engaging person. Nor does she enjoy mixing it up, having skipped all debates last year, continuing to avoid media interactions she can't control, working hard to get Poizner and her now departed rival Tom Campbell out of the primary race. There is a reason why, as I've reported, her 22 potential introductory TV ads tested so poorly last month with her focus group participants.

The inconclusive early exchange between the Whitman campaign and the Level The Playing Field group did tease out what looks like a likely prime Whitman theme, if voters don't tire of her campaign and she does make it to the general election. Her line is that she is a "job creator" and Brown is a "job killer."

I've looked at the background on both sides of that claim and I think she is going to have real trouble making either stick.

Brown himself is amused if not daunted by the spectacle of Whitman's spending.

"I've got $13 million in the bank, well, it's more than that now," he told me. "Since there are contribution limits, that takes a long time to raise. This lady, she can write a check for that in 12 seconds. But you know what, it's a long campaign. It's a long campaign."

Though Brown has essentially already won the Democratic nomination, he hasn't actually announced his candidacy yet. When will he do that? "Very soon."

Once the Democrats sort themselves out on the independent expenditure front, the impact in California on the Republican opposition can be highly effective.

Governor Arnold Schwarzenegger was mobbed by well-wishers as he helped open the 2010 Winter Olympic Games, carrying the Olympic Torch through Vancouver's Stanley Park.

I talked with consultant Gale Kaufman, who works with a number of the big unions and won the National Campaign Manager of the Year award from the American Association of Political Consultants for her role in smashing my old friend Arnold Schwarzenegger's 2005 special election initiative agenda.

Schwarzenegger, a long-established global icon who won a landslide election to the governorship in the 2003 California recall election which also ousted Davis, entered that 2005 campaign with a record high job approval rating. He left it with plummeting popularity and four decisively defeated initiatives. He also left it with the determination to dramatically change his political team, which was then headed by consultant Mike Murphy. Who, as fate would have it, is now Meg Whitman's chief strategist.

Kaufman is working on some initiative and candidate campaigns and is not involved on the IE front or in the governor's race. She called Jerry Brown "an excellent candidate for these times."

Looking back at her experience in taking down Arnold Schwarzenegger, Kaufman noted that he was a far better known and much more genuinely popular and established figure than Whitman, who is only known for having been head of eBay. She also noted that Schwarzenegger is a much better fundraiser than Whitman, who took all of last year to raise less money from people other than herself than Schwarzenegger raised from people other than himself in his two-month 2003 recall campaign.

Schwarzenegger, as Ace Smith noted when I talked with him, is "a people person," someone very comfortable in a wide variety of social settings. If he were going to a Nascar race, as Whitman is, he wouldn't have to fake an interest in auto racing to show a common touch.

This is going to be interesting.