funds

With his White House aspirations riding in no small part on the kind of Ohio voter who favors Budweiser over Pouilly-Fuissé, Mitt Romney -– like John F. Kerry before him -– has been struggling mightily to shed his image as a man of the Massachusetts elite.

This weekend, he gave it a break.

Romney took a jaunt to the most rarefied precincts of Martha’s Vineyard, Cape Cod and Nantucket on Saturday, after a Friday evening of mingling with millionaires in the Hamptons on Long Island.

It was all part of a chase, by private plane of course, for campaign money.

The former governor of Massachusetts left most of his traveling press behind. (“Bad optics,” campaign consultants call it.) Instead, he let just a small pool of reporters tag along to catch glimpses of Romney mostly from afar as he and his entourage made their way along such streets as Lily Pond Lane in East Hampton, N.Y.

“An 8-foot hedge blocked your pooler’s view of Romney exiting the house and getting into his SUV,” a journalist in the pool reported from outside the Southampton estate of hedge fund mogul Martin Gruss, where the Republican candidate stayed overnight on Friday.

Around the time of Romney’s “clambake luncheon” on Martha’s Vineyard, which included a $50,000-a-ticket VIP reception, President Obama was telling a less well-to-do crowd in New Hampshire that his rival was pushing tax cuts for the rich on the premise that “somehow prosperity’s going to rain down on all of you.”

Not that Obama, whose fundraising dinners with the likes of George Clooney have made headlines, hasn’t had optics problems of his own. Republicans trashed Obama when his campaign put out a video of Vogue editor Anna Wintour telling donors “don’t be late” to a soiree at Sarah Jessica Parker’s house on the same day that the unemployment rate notched up to 8.2%.

Romney’s weekend opened at Sebonack Golf Club in Southampton, where his motorcade rolled through the stately brick gates and up a long, winding driveway. Guests included NFL football team owners Steve Ross (Miami Dolphins) and Woody Johnson (New York Jets).

“I guess if all golf courses were like this, I can understand why the president plays so much golf,” Romney told donors at the club. “If I had a course like this near me, I think I’d probably play a lot of rounds as well. This is just gorgeous.”

On Martha’s Vineyard, Romney joined donors at a private home near the Farm Neck Golf Club, where Obama and former President Bill Clinton have played during family vacations.

Before taking off for Cape Cod, where billionaire businessman Bill Koch and his wife, Bridget, threw a reception for Romney, the candidate lamented his time spent hunting for money.

“You appreciate all the help you get,” he said. “But you wish you could spend more time on the campaign trail.”

From Cape Cod, Romney flew on to Nantucket, where Kerry’s windsurfing during his 2004 campaign for president was captured on videotape that was used in advertising by PresidentGeorge W. Bush’s reelection campaign to portray the Massachusetts senator as a flip-flopping elitist.

michael.finnegan@latimes.com

Let’s be candid about the controversy over whether film director Rob Reiner misspent public funds by raiding the child-development program created by his last ballot initiative, Proposition 10, for cash to promote his new Preschool for All ballot initiative.

Reiner’s not the only one taking advantage.

The supervisory standards set up by Proposition 10 in 1998 are scandalously lax. The program uses income from a tobacco surtax, including 50 cents per pack of cigarettes, to fund health, welfare and educational services for children up to age 5 — things like immunization and preschool.

But it has become a feeding trough for people flogging pet projects and for outside consultants of every stripe.

Proposition 10 bestowed a total lack of accountability on the bodies it established to disburse the money — the state Children and Families Commission (headed by Reiner until he took a leave of absence Feb. 24) and 58 county entities, known as “First5” commissions.

The initiative failed to provide guidance on rudimentary issues such as conflicts of interest, competitive bidding or how success should be measured. And each commission was given the responsibility to audit itself.

The sums involved aren’t trivial. The tobacco levy has produced $4 billion to date. Of this haul, 20% goes to the state commission. The rest is apportioned to the county commissions according to each county’s share of statewide live births.

For an example of how individual commissions disburse this money, let’s look at Orange County, the second-largest First5 in the state (after Los Angeles), which receives about $40 million a year. Its vice chairman, the right-wing political pundit Hugh Hewitt, is Reiner’s most vocal and persistent critic.

Back in 2003, the commission awarded a no-bid, $250,000 annual contract to a consulting firm called the White House Writers Group. What is this outfit, you ask? It’s a Washington-based gang mostly comprising former speechwriters and staff members in the Reagan and George H.W. Bush administrations. It was proposed for the contract by Hugh Hewitt, himself a former Reagan White House staffer and a personal friend of one of its principals.

Hewitt says he recommended the firm, which is essentially a high-powered PR outfit, to help the commission rectify what had become “four years of limited success in establishing the partnerships we need [in Washington] in the national health and philanthropy communities.” Whether the contract will put a single vaccine in a child’s arm he doesn’t say; I only know that $250,000 a year would buy a lot of vaccines.

Hewitt also says: “I don’t know and have never inquired about the political affiliation” of the firm’s partners and staff. Leaving aside the fatuous suggestion that a conservative Republican with his background could be unaware of the partisan coloration of such an obvious GOP nest, he doesn’t have to “inquire.” It’s trumpeted loudly on the firm’s website.

Hewitt observes that the OC commission also employs former Democratic assemblyman Phil Isenberg as its lobbyist in Sacramento, as though to prove that the commission is an equal-opportunity political piggy bank.

This got me thinking: Why in heaven’s name does a county commission, with a guaranteed revenue stream and representation in the capital by the statewide First5 commission and by a separate association of county First5 commissions, need its own Sacramento lobbyist?

Hewitt says it’s to keep the Legislature “mindful of the difference between the state commission and the local initiatives.”

What’s the cost of teaching legislators the difference between “state” and “county”? Since 2002, the OC commission has paid Isenberg’s current and former lobbying firms $340,762. That would probably cover the wages of a few school nurses.

Finally, let’s consider the OC commission’s featured new health initiative. This is an avian flu preparedness program, to which it allocated $2.3 million in November. Orange County is the only First5 commission that has established such a program, according to its executive director, Michael Ruane.

As it happens, the avian flu is an issue dear to the particular heart of Hugh Hewitt, who writes incessantly on his weblog about the imminent threat of an avian flu pandemic. Hewitt acknowledges that he “urged the Commission to consider and adopt” the avian flu plan. Reading between the lines, it sounds like his baby.

But at the moment, a large-scale threat to human health from the avian flu is entirely conjectural. Though the virus is spreading rapidly from Asia outward (it hasn’t reached North or South America), the threat is still largely to birds and, to a much smaller degree, farmers and other humans who come in direct contact with the infected animals.

The few known cases of human-to-human transmission — a prerequisite for a pandemic — resulted from extremely close contact with an infected person, such as between mother and child. Experts say the virus would have to mutate to become freely transmissible among humans, and although they don’t rule out the possibility, it hasn’t happened. The federal Centers for Disease Control don’t even recommend that Americans avoid travel to affected regions.

Hewitt defends the program by arguing that children will be “among the most vulnerable groups to the deadly virus.” But that can be said about almost any transmissible disease. Hewitt doesn’t explain why he believes that federal, state and local authorities will be so overmatched by the avian flu that the First5 commission, which has countless other ways to spend its money, needs to step up to the plate.

The irony is that spending on consultants and pet projects like these sends conservatives bouncing off the ceiling when they catch liberals at it. A Wall Street Journal editorial Hewitt quotes approvingly in his weblog commented pointedly, citing the Los Angeles Times, that First5 money “has found its way into the bank accounts of public relations and advertising firms, some of which are run by friends of Mr. Reiner.”

But sweetheart deals and personal hobbyhorses that divert money from children’s programs know no partisan boundaries. How are the friends of Mr. Hewitt doing?

Golden State appears every Monday and Thursday. You can reach Michael Hiltzik at golden.state@latimes.com and view his web log at latimes.com/goldenstateblog.

Dec. 12 (UPI) — Russia’s Central Bank has filed suit against the Belgian bank that holds about $217 billion in frozen Russian state assets to stop the European Union from using that money to make a large loan to Ukraine.

Most of Moscow’s frozen cash is held in Belgian bank depository Euroclear. The EU wants to extend a loan to Ukraine, which is running out of money to fight the Russian invasion of the country. But Russia wants to block that loan and accuses the EU of theft.

The Central Bank filed the suit in the Moscow City Arbitration Court as a warning to the EU. It said in a statement that Euroclear was participating in “unlawful activities” and that it filed the suit because the EU’s executive was “considering proposals for direct or indirect use of Bank of Russia assets without authorization.”

“A Moscow court cannot force Euroclear to comply, and any ruling would be unenforceable abroad,” said Alexandra Prokopenko, a former Russian Central Bank official and a fellow at the Carnegie Russia Eurasia Center, told The New York Times.

“But it is not meaningless: It creates formal documentation of Russia’s legal claims and serves as a political signal ahead of international litigation.”

Prokopenko also said an investment protection agreement exists between Russia, Belgium and Luxembourg that requires any loss to be compensated. That means Moscow could use that in future international arbitration against Belgium. So Belgium is worried about being left responsible in the future.

EU leaders will discuss the potential loan at a meeting Thursday in Brussels of leaders of all 27 member states. Belgium’s Prime Minister Bart de Wever was in London to meet with British Prime Minister Keir Starmer on Friday. The frozen assets were on the agenda, British officials have said.

European countries have been pushing Belgium to agree to the plan, but it’s trying to convince other countries to share the risk. Although most of Russia’s cash is at Euroclear, but smaller amounts are held in other European countries.

The loan plan would use the frozen assets to back a $106 billion loan to Ukraine, meted out over the next two years. Ukraine would only have to pay it back if Russia pays reparations.

Ukraine’s President Volodymyr Zelensky said about the funds, “It’s only fair that Russia’s frozen assets should be used to rebuild what Russia has destroyed — and that money then becomes ours.”

The loan plan could also cause a clash with Washington. In the U.S.-created peace plan that is still being negotiated, that frozen money was to be used to help rebuild Ukraine. But EU officials argue that if Ukraine falters financially, it will be in a weakened position in peace negotiations.

Using the frozen funds could “destabilize the international financial system,” Euroclear chief executive Valérie Urbain said.

“Belgium is a small economy,” Veerle Colaert, professor of financial law at KU Leuven University, told the BBC. “Belgian GDP is about [$661.5 billion] — imagine if it would need to shoulder a [$216.5 billion] bill.” She also said the loan may violate EU banking rules.

“Banks need to comply with capital and liquidity requirements and shouldn’t put all their eggs in one basket. Now the EU is telling Euroclear to do just that,” Colaert said.

“Why do we have these bank rules? It’s because we want banks to be stable. And if things go wrong it would fall to Belgium to bail out Euroclear. That’s another reason why it’s so important for Belgium to secure water-tight guarantees for Euroclear.”