Schwarzenegger's role in GM getting flex-fuel contract questioned

A California Senate committee is demanding Governor Schwarzenegger's officials show up to a hearing Tuesday to answer questions about his role in getting GM a flex-fuel contract. So far, the governor's office is resisting the request. What's the problem? California law says you have to seek competitive bids for big contracts. When the state wanted to use flex-fuels, they had a private meeting with GM, did a pilot program with GM, invited no other car maker to do pilot programs, and then let other car makers bid for the contract. GM won because the other carmakers did not meet the state's qualifications. Does that smell a little funny to you?
So what was Arnold's role in all this? Turns out there was a policy on the books that said the state couldn't buy flex-fuel cars at all because there were not enough ethanol pumps in the state. Arnold may have tried to get that policy squashed so the deal with GM could get the go ahead. In 2005, the state contracting manager sent an e-mail saying the flex-fuel cars were added "per the Governors request." A spokesperson for the governor says the manager must have gotten that from his public statements about going green because Arnold did not talk to anyone. Besides, GM was the only car company certified to sell flex-fuel vehicles by CARB, the California Air Resources Board.

The funny thing about that is CARB's lawyer had concerns about the GM deal. In 2005, CARB's lawyer even wrote that two of Schwarzenegger's own officials were concerned it had the "appearance of this being a noncompetitive bid project." Also, in 2005 a spokesperson for California's General Services had concerns that GM's press release about the flex fuel pilot program "appears to create the impression that the outcome of a solicitation currently in process has been preordained."

Schwarzenegger has strong financial ties with GM, and he helped GM bring the Hummer to market. The flex-fuel contract with California was for 1,300 cars and worth $17m. There's some background information in the posts below, and we will keep you informed as this story develops.

[Source: San Jose Mercury News]

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