The Iger Sanction?

Wednesday, February 10, 2021
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California’s gubernatorial recall election hasn’t yet materialized—much less been certified or scheduled for a vote—and we already have a casualty: Chamath Palihapitiya, a Silicon Valley billionaire who has sunk $100,000 into the effort to force a referendum on California governor Gavin Newson and who reportedly has flirted with the idea of throwing his hat in the ring, only to inform a podcast audience last week that his heart (and his business sense) just wasn’t in it.

There are two ways to interpret this bit of news, the first being that a 2021 recall election in a western state once again could be a wild, wild west of gubernatorial wannabes.

Eighteen years ago, a recall vote produced no fewer than 135 challengers to the governor at the time, Gray Davis. That soup-to-nuts cast of characters included—from the world of entertainment alone—a movie action hero, a former TV child actor, a porn publisher, and a porn starlet who proposed taxing breast implants and making lap dances a tax-deductible business expense.

Your “what does this say about California?” moment of reflection: those four candidates finished first, seventh, eighth, and tenth in the field.

It’s the sixth-place finisher—a nationally acclaimed businessman based in Southern California—in that recall election of yore that brings us back to the second takeaway regarding Chamath Palihapitiya’s non-candidacy: why does private-sector success not translate to political achievement in California?

It’s a question that’s arisen often in the Golden State over the past 25 years.

In 1998, airline executive Al Checci spent $40 million in that year’s Democratic gubernatorial field only to finish a distant second to . . . the eventually recalled Davis. In 2010, former eBay CEO Meg Whitman spent a staggering $144 million, only to be thumped by Jerry Brown. Two other business luminaries who also sought higher office in California—Republicans Bill Simon and Carly Fiorina—also came up short in their respective runs for governor and US senator in 2002 and 2010.

In 2003, the recall election’s sixth-most popular choice as an alternative to Gov. Davis was Peter Ueberroth, a successful travel industry executive who went on to greater fame as a Major League Baseball commissioner and president of the 1984 Summer Olympics (for which he was he honored as Time magazine’s Man of the Year).

However, Ueberroth received just 25,134 votes—a mere 1/167th of Arnold Schwarzenegger’s winning total and almost the same exact sum as the combined votes for child actor Gary Coleman and porn starlet Mary Carey.

What did Ueberroth in was the realization that sober reflection couldn’t compete with star power. It wasn’t long after the political press corps ignored a Ueberroth job-fair campaign event in favor of the spectacle of Schwarzenegger working a crowd that the former “Man of the Year” came to the conclusion that he couldn’t compete with Arnold’s mega-wattage. A month after entering, Ueberroth exited the race—with the election still a full month from being decided.

The question in the California of 2021, if a recall election should occur: is it the time right for a business heavyweight to enter the race with the promise of coming to California’s rescue—even if the past suggests that California voters are bored by board-room titans?

One possibility comes to mind: Robert Iger, the executive chairman of the Walt Disney Company and the chairman of its board of directors—and reportedly under consideration to be the next US ambassador to the Court of St. James in London.

Here are two reasons why an Iger recall run might resonate.

The Company. Mitt Romney challenged a sitting Democratic president in 2012 and was promptly branded a “vulture capitalist” by the rival camp. In California, a similar path to wealth would be problematic (one interesting aspect of the Palihapitiya recall run that never was: his resume includes a stint at Facebook).

Were Iger to run, a threatened Newsom operation might try to make Disney’s operations an issue. But how so, given that it’s a quintessential California success story? Up to this point, Newsom hasn’t deemed Disney a toxic entity—he made Iger a centerpiece of his economic task force (Iger’s frustration with the prolonged closure of his company’s theme park reportedly tied into his decision to abruptly leave that task force back in October).

Sure, Team Newsom could try to make the argument that “the mouse” is more a monstrosity. But keep in mind: they’d also be trying to change the minds of children of all (including voting) ages who like to frequent “the Happiest Place on Earth.”

He’s a Democrat. Back in 2019, Iger reportedly mulled a presidential run. Asked by Laurene Powell Jobs what his campaign theme might encompass (Iger was promoting a book at the time), he said the following: “I think that America is gravely in need of optimism, of looking at the future and believing that so many things are going to be all right, or that we as a nation can attack some of the most critical problems of our day.”

Iger went on: “And that could be the environment, that could be income disparity, that could be the technology’s impact on the world from a disruption perspective. It could be the cost of education, availability of affordable housing, healthcare. You name it. And I don’t think there’s a collective belief in America today that we will be successful in addressing those issues.”

Whereas Schwarzenegger ran in 2003 on a very traditional Republican platform (with the late George Shultz dispensing economic advice), the same wouldn’t be true of an Iger candidacy. If the goal is to peel off Democrats and independent voters, that 2019 would-be presidential message would seem a good starting point for a 2021 recall candidate—and make it difficult for the governor’s defendes to argue that an Iger administration would be a radical departure from the Newsom agenda.

The Timing. What issues were prime drivers in the 2003 recall election? Try: rolling blackouts and an increase in California’s annual vehicle license fee. The former is deadly serious (ask anyone on home dialysis); the latter, not exactly life threatening unless one has a particularly weak constitution for higher government assessments.

What the tripling of the “car tax” did provide Schwarzenegger: a chance to make a policy choice cinematic—dropping a wrecking ball on a junked auto to show what he aimed to do to the vehicle license fee increase; waving a broom at a State Capitol rally while promising to “clean this house, sweep out the special interests and sweep out Gray Davis.”

Unlike the circus atmosphere of 2003 and its flamboyant cast of candidates, a 2021 recall election would be deadly serious affair—as one might expect, given that a pandemic claiming the lives of more than 44,000 Californians to date is what opened the door to questions of Newsom’s competency and leadership.

Sure, some candidates might jump into the race looking to capitalize (and cash in) on what brief attention they might cultivate (keep in mind, Instagram product placement wasn’t a thing in 2003). However, in the end, the outcome will center on whether California’s confidence in its current governor is undermined to the point where the electorate wants a change in leadership.

But so much so that it’s willing to turn to the corporate sector for relief?