Washed It!

General Motors Co. is set to reemerge as a public company this week in one of the year’s hottest initial public stock offerings, but many American taxpayers who helped rescue the company won’t be going along for the ride.

That’s because most Americans won’t have access to the new shares of the Detroit automaker. And many of those who do are likely to be well-heeled customers at big Wall Street firms.

The situation is not much of a surprise on Wall Street, where little guys often are shut out of deals, especially coveted ones where demand far outstrips supply and where fast-rising prices usually provide quick profits to anyone getting IPO shares.

But some experts said an opportunity to reward average Americans is being wasted, even though the Treasury Department said two months ago that individuals would have “ample opportunity” to participate in the IPO.

“Wall Street thumbed its nose at” individual investors, said David Menlow, president of research firm Ipofinancial.com. “We continue to help Wall Street out, and Wall Street seldom feels the need to say thank you.”

Concern about small investors getting a piece of the action underscores the nation’s outrage over the massive bailouts of banking and auto companies during the deepest recession since the Great Depression. Even the four major banking companies handling the IPO deal were bailed out by taxpayers.

The federal government put nearly $50 billion into GM to rescue it and usher it through Bankruptcy Court last year, ending up with a 61% ownership stake in the company.

On Thursday, when the offering goes public, the new owners are likely to include a wide swath of investors from large U.S. mutual funds to foreign entities, such as sovereign wealth funds and China’s largest car company, SAIC Motor Corp.

The major underwriters are JPMorgan Chase & Co., Morgan Stanley, Bank of America Corp. and Citigroup Inc. — all of which received billions of taxpayer dollars to rescue them during the severe credit crunch in the recession.

In one twist from the ordinary IPO, a number of female- and minority-owned brokerages are involved in the deal. Among them are Loop Capital Markets in Chicago and Williams Capital Group in New York. Helping to market shares overseas are China International Capital Corp. and two Brazilian banks, Itau and Bradesco.

“There is just an inordinate amount of foreign companies in this considering this is taxpayer money,” said Bill King, president of female-owned M. Ramsey King brokerage outside Chicago. He said his firm didn’t receive the customary request for information from the Treasury Department asking it to participate.

The IPO is garnering such demand that underwriters reportedly are expected to boost the price of initial shares to more than $30 from the stated range of $26 to $29.

The automaker plans to sell 365 million shares, or roughly one-quarter of the company, in a deal currently worth about $10.6 billion.

The Treasury Department is expected to sell $7 billion to $8 billion of its holdings, reducing its position to as little as 43%. GM has repaid $7.4 billion to the government and agreed last month to repay an additional $2.1 billion by repurchasing preferred stock from the government once the IPO closes.

By some measures, individual investors could fare better than they normally do in coveted IPOs.

Underwriters are expected to allocate about 20% of the shares to so-called retail investors, more than the 15% that’s normal in IPOs, said Scott Sweet, senior managing partner at IPO Boutique.

However, Sweet said, there were rumors last week that as much as 30% of the deal would go to individuals before demand rose among large institutional investors, forcing the retail amount to be scaled back.

Discount brokerage firms such as Charles Schwab Corp. and TD Ameritrade aren’t getting shares to allocate to their customers. Those firms sometimes get IPO shares, though it varies from deal to deal.

“In general, the hotter the IPO the harder it is to get an allocation of shares,” said Ram Subramaniam at TD Ameritrade. “We’d have loved to have gotten GM’s IPO. We just don’t have it.”

Access to General Motors stock offering won’t include many of its rescuers

Shaken by Tuesday’s Republican landslide, Democratic fundraisers who felt hobbled by President Obama’s hard-line opposition to outside campaign spending are now planning to do what many groups did for the GOP — funnel millions of dollars into independent political advertising and voter mobilization campaigns.

Republican-aligned

NPR’s decision to fire news analyst Juan Williams for remarks he made about Muslims on airliners was not only roundly criticized by conservatives Thursday, but also was viewed with alarm by some Muslim American activists and scholars.

Williams said Monday on Fox News‘ “The O’Reilly Factor” that he worries when he sees Muslims in traditional garb on airplanes. NPR fired Williams on Wednesday, saying that his comment violated the news organization’s ethics guidelines and undermined his credibility.

Some prominent Muslims expressed concern Thursday that his firing would widen a gulf between Muslims and non-Muslims in the United States.

“The greater American public remains unsure about Islam and very often hostile about Islam,” said Akbar Ahmed, chair of Islamic Studies at American University, who examines the divide in his new film and book, “Journey into America: The Challenge of Islam.”

Ahmed said he was disappointed by Williams’ comments. But he added that NPR’s abrupt firing “does not bring the temperature down against Muslims…. Now the debate is, are we being oversensitive to Muslims?”

The flap over Williams’ remarks is the latest example of how the topic of Islam has become a political live wire in this midterm election year.

An emotional fight over the construction of an Islamic community center blocks from the site of the destroyed World Trade Center in New York erupted into a national controversy this summer and became fodder for campaign ads that have aired in Iowa and North Carolina.

At the same time, a threat by a Florida pastor to burn copies of the Koran swelled into an international issue, drawing condemnation from leaders, including President Obama.

The latest furor began last week when Fox News host Bill O’Reilly made an appearance on ABC’s “The View” and declared, “Muslims killed us on 9/11.” That prompted co-hosts Whoopi Goldberg and Joy Behar to walk off the stage.

That was the incident O’Reilly and Williams were discussing Monday night when Williams said, “I get on a plane, I got to tell you, if I see people who are in Muslim garb and I think, you know, they’re identifying themselves first and foremost as Muslims, I get worried.” He also noted that it was not fair to cast all Muslims as extremists.

“We as a country are engaged in a very wild and wooly conversation about Islam and Muslim Americans,” said Suhail Khan, a conservative activist who is a Muslim American, noting that minorities such as Catholics, Jews and Japanese Americans have faced similar hostility throughout U.S. history. “Sometimes the conversation is thoughtful and sometimes it’s ugly.”

But Khan said NPR overreacted in letting Williams go. “While Juan’s comments may have been a little rough around the edges, he was voicing an honest opinion and trying to articulate his personal questions and struggles with perceptions in regards to Muslims,” he said.

The decision drew an avalanche of complaints against the media organization. By Thursday evening, more than 5,400 comments had been posted on NPR.org, many of them angrily accusing the organization of political correctness. Conservative leaders such as Newt Gingrich and former Arkansas Gov. Mike Huckabee called for cuts to NPR’s funding.

NPR receives no direct federal money for its operations, but between 1% and 3% of its $160 million budget comes from competitive grants awarded by publicly funded entities such as the Corporation for Public Broadcasting and the National Endowment for the Arts

Dana Davis Rehm, NPR’s senior vice president for communications, said that Williams had been warned several times in the past for comments that violated ethics guidelines that prohibit NPR journalists from participating in programs “that encourage punditry and speculation rather than fact-based analysis.”

“We felt we really didn’t have an alternative,” she said. “And it was not without regret and it was not a decision that was made lightly by any means.”

In a piece for FoxNews.com, Williams called his firing “an outrageous violation of journalistic standards and ethics by management that has no use for a diversity of opinion, ideas or a diversity of staff.” He said his discussion with O’Reilly included “no support for anti-Muslim sentiments of any kind.”

Fox News moved aggressively to turn the controversy to its advantage, signing Williams to an expanded role at the cable news network.

matea.gold@latimes.com
Prominent Muslims fear NPR analyst’s firing may fan hostility

At the age of 80, Exaltacion Divinagracia thought that life would be easier.

The petite widow still works part time at a nursery school. To keep the house she rented with her late husband, she has taken six roommates, all over 75. After church on Saturdays and Sundays, she drags a beat-up suitcase from one food pantry to the next in search of enough to eat for the coming week.

Divinagracia takes home less than $13,000 a year, including public benefits. But according to the government’s income standards, she is not impoverished. To get that designation a single person must live on $10,830 a year or less.

Experts say the standard — which is used nationwide to assess need, determine eligibility for aid and measure the effectiveness of public programs — has little to do with reality, particularly in places like Los Angeles, where housing costs are high.

A recent UCLA study found that most older Californians, those 65 or older, need at least twice the income calculated by the federal government to make ends meet — $21,763 a year on average for a single person renting a one-bedroom apartment, or $30,634 for a couple.

“There is this whole hidden group of adults in need,” said Susan Smith, program director at the Insight Center for Community Economic Development, which commissioned the research.

In California, Smith said, many more people seek help from food pantries and other services than are officially recognized as living in poverty. An earlier UCLA study found that in 2007, 47% of older Californians — about 1.76 million people — did not make enough to cover basic needs, although just 8% fell below the federal poverty level that year.

“One size does not fit all,” said Steven P. Wallace, associate director of the UCLA Center for Health Policy Research and lead author of the two studies. “California’s high costs make a single national income standard … totally inadequate for seniors.”

Divinagracia’s husband, a teacher from the Philippines, was already retired when the couple were offered the opportunity to come to the U.S. and become citizens in the 1990s because he had fought alongside U.S. forces in World War II.

They rented a run-down house in Westlake. But since his death six years ago, Divinagracia has struggled to pay the $1,800-a-month rent. She earns just $215 a month working as a “foster grandparent” and gets the maximum cash aid for elderly and disabled people: $845 a month in Supplemental Security Income.

America “is a nice place for the young,” she said. “But for the old, it is no good.”

Her home has the cramped feel of student digs. The extra bedrooms are occupied by two widows and a couple who also participated in the naturalization program for World War II veterans from the Philippines. Another veteran and another widow are squeezed into the living room, with a curtain between them for privacy.

Each person’s space overflows with bits and pieces collected over a lifetime — part of an old uniform, sheets of scripture, family photographs. None of them takes in enough money to live independently.

In the evenings, the kitchen is so crowded that Esther Neri, 83, prefers to cook fish for her 89-year-old husband, Vance, on a hot plate in their room. She serves the meal on a child-size school desk. The bed is so narrow that they sleep head to toe.

Until a few months ago, they had their own apartment. It came with the job of managing a building. But the building was sold and they were told to leave. They now survive on less than $20,000 a year in Supplemental Security Income and a small pension.

“It’s OK for us,” Esther Neri said, surveying her new surroundings. “We are already poor.”

The government’s official poverty measure has been criticized for years because it is based on spending patterns from the 1950s, when about a third of a family’s income went toward food.

The official threshold was first calculated using the cost of a nutrition plan described by the U.S. Department of Agriculture as the bare minimum needed to survive an emergency. It is adjusted annually for inflation. But it does not take into account changing standards of living, regional cost differences or public benefits and tax credits.

“We don’t spend a third of our income on food,” said Gerald McIntyre, a directing attorney at the Los Angeles office of the National Senior Citizens Law Center. “If we did, we’d have no place to live.”

For the elderly, poverty level doesn’t cut it

Long before Arnold Schwarzenegger began a routine of heavy legislative lifting in Sacramento, the governor popularized the sport of bodybuilding in his 1977 cult classic film “Pumping Iron.”

And when the paparazzi descended on Schwarzenegger and fellow celebrity bodybuilders in the film’s wake, the place where he went to work out in private was World Gym, the no-frills Santa Monica haven founded by weightlifting guru Joe Gold. The place became a second home for Schwarzenegger, Lou Ferrigno and other famed iron men.

On Wednesday, the three-story building at 2210 Main St. is slated to go to auction through AuctionPoint, an online outfit. In addition to World Gym, the building for a time housed Schwarzenegger and Ferrigno in an apartment with a surprising amount of girlie-man pale pink tile.

The starting bid for the former weightlifting den: $3.1 million.

“I think this is the right time because we’ve seen the value go from $6 million to $4.75 million,” building owner Jerry Breeden said recently. “Quite honestly, I have many uses for the profit margin we’ll derive.”

Until about three years ago, the building held the offices and sample rooms for Breeden’s Aviva Group, a manufacturer of pricey handbags and Swarovski crystals. It also was home to Breeden and his wife, Maggie, who shared the ocean-view penthouse that Gold occupied for many years. Their daughter’s family lived in Schwarzenegger’s former quarters on the Main Street side. And their son and his family occupied a second-floor apartment. (Breeden is now based in Rancho Santa Fe, Calif.)

Gold, a close friend and mentor of Schwarzenegger, died in 2004 at age 82. He served in the Navy during World War II and was badly injured when his ship was torpedoed in the Philippines. After the war, he joined the merchant marine and sailed the world, lifting weights and building a remarkable physique.

He became a Muscle Beach regular and opened Gold’s Gym in Venice in 1964, developing workout machines that went beyond dumbbells and barbells.

“In 1968, when I first came to America, Gold’s Gym was the gym where I first went to work out,” Schwarzenegger wrote in a public statement after Gold’s death. Although the Austrian by then had become the youngest Mr. Universe at age 20, Gold nicknamed him “Balloon Belly” and put him to work toning his abs. “Joe looked after me and encouraged me,” Schwarzenegger said.

Gold sold Gold’s Gym about 1970, but got back into the business in 1976 when he opened the first World Gym at 2210 Main St. The chain grew to more than 300 locations. The machines and buff bodies of Main Street are long gone, replaced in part by Alchemy Wellness, which offers “raindrop therapy.”

Tom Corte, the agent handling the listing, said Schwarzenegger’s love of Santa Monica was fostered at the location. Schwarzenegger later bought a building nearby.

martha.groves@latimes.com
Former Santa Monica weightlifting haven up for auction

Although Jonathan Franzen’s novel “Freedom” came out only on Tuesday, it has been the subject of impassioned debate for the better part of a month now, both in the review pages of most major media outlets — he is the first living writer to appear on the cover of Time magazine in a decade — and in the more ethereal corridors of the digital world.

Well before publication, novelist Jennifer Weiner organized a Twitter campaign, under the hashtag “franzenfreude,” to gather negative reaction to the book, which tells the story of a middle-American family in slow collapse.

Weiner’s label is a variation on “schadenfreude,” or pleasure taken in the misfortune of others: “Franzenfreude,” she told NPR late last month, “is taking pain in the multiple and copious reviews being showered on Jonathan Franzen.”

Yet in an irony noted by several Twitter commentators, Weiner tangled up the reference. “Franzenfreude,” one Tweet suggests, “would translate to pleasure in Franzen”; apparently, it would have been more accurate to call it “schadenfranzen.”

Word games aside, Weiner is incensed about what she perceives as the engrained sexism of mainstream media, especially the New York Times, which showers coverage on male writers such as Franzen while leaving women out.

That’s a valid concern; this week, Slate reported that, of 545 works of fiction reviewed in the Times between June 29, 2008, and Aug. 27, 2010, only 207, or 38%, were written by women. Even more, of the 101 books to receive two reviews during that stretch (one in the daily paper and the other in Sunday), just 29 were by female writers.

The numbers are probably similar at most major newspapers, including this one. It’s exactly the kind of issue we should be discussing. But none of this, really, is what the uproar over “Freedom” has been about.

With 300,000 copies in print, “Freedom” is No. 1 at Amazon.com; it has received critical raves and even the president is said to be reading it. The furor over its success smacks of gossip, envy, a mean-spirited approach to literary life. It’s personal, people reacting to a writer they don’t like.

An Aug. 26 Newsweek piece made that point explicitly, calling Franzen “the writer we love to hate.” For writer Jennie Yabroff, the issue isn’t Franzen’s writing, which she acknowledges is, at best, “fantastic,” but his position in the culture, his “peevishness,” which, she believes, “undermines the humanistic intentions of his work.”

In the age of the Internet, Yabroff insists, it is “difficult to separate how you feel about an author’s personal life from how you respond to his work, despite your best efforts to read the writing, not the writer.”

She continues: ” ‘Freedom’ comes from the man who dissed Oprah, complained that the Tony-winning musical ‘Spring Awakening’ was a bastardization of the 1891 Frank Wedekind play (which Franzen himself had recently translated from the German), called [New York Times] book critic Michiko Kakutani ‘the stupidest person in New York,’ and claimed such affectations as writing in an earmuff-and-blindfold-equipped sensory-deprivation chamber.”

Really? Is that where we are now, framing the discussion over literature in terms of public image rather than language and narrative? What does this have to do with the quality of Franzen’s work?

Writers have always been eccentric, outspoken, unpleasant, even dangerous — it’s an inevitable side effect of a profession that requires you, to steal a line from sportswriter Red Smith, to “sit down at a typewriter and open a vein.”

Norman Mailer brawled and bragged his way to literary celebrity, stabbing his second wife, Adele Morales, at a party, and writing about himself in mock-heroic terms.

Hemingway was unbearable, Celine a Nazi sympathizer, Dorothy Parker a maudlin drunk. It’s all irrelevant to their writing, which sings and screams with a music of its own.

This is true of Franzen’s work as well. He is the most ambitious novelist of our moment — not for who he is, but for how he writes, his willingness to explore the emotional depths and complexities of the most apparently mundane lives.

At heart, the tempest over “Freedom” reveals a fundamental immaturity in our collective thinking, a child’s eye view of the way art and culture works. This is not a new thing, but it’s distressing to see it so widespread.

Rather than a discussion of what gets covered and how, we have a campaign of personal invective, turned against a single author. Rather than a consideration of the book, we have a conversation about the writer’s image, as if that matters in our reading of the work.

In his 1968 book “Miami and the Siege of Chicago,” Mailer described his ambivalence about a youth culture that seemed to him as much of a threat as the conservative status quo. He did not want “to lose even the America he had had” because “it had allowed him to write…. He had lived well enough to have six children, a house on the water, a good apartment, good meals, good booze, he had even come to enjoy wine.”

Had Twitter existed then, Mailer probably would have been pilloried for his counter-revolutionary sentiments, but all these years later, his observation rings with the weight of truth.

What he is talking about is the difficulty of being a grown-up, the necessity of looking inward, at our contradictions, and reconciling them as best we can.

That’s the message of “Freedom” also, as it was of Franzen’s previous novel “The Corrections,” and it stands as a powerful rebuke to those who judge the novel — or any novel — on terms other than its own.

david.ulin@latimes.com

Critic’s Notebook: With Jonathan Franzen, judge the novel, not the man

Bill and Beverly Osborn still can’t bring themselves to erase the phone message from their son Ben. He had called from Afghanistan in June to assure them that he was safe. Four days later, he was killed in a Taliban ambush.

The Osborns long ago accepted the risks faced by their son, an Army specialist. But what they can’t accept now are the military rules of engagement, which they contend made it possible for the Taliban to kill him.

“We let the enemy fire first, and they took my son from us,” Beverly Osborn said of the rules, which in most instances require U.S. forces to identify an enemy threat before firing, and to withhold fire if civilians are close by. The rules also place restrictions on close air support and artillery, prompting complaints from some service members that their lives are put at risk against an enemy that fights by no rules at all.

As American combat deaths have reached record levels this summer, public support is eroding for the 9-year-old conflict. Several recent opinion polls found that more than half of those surveyed oppose the war, with the high casualty rate among concerns most often cited. American combat deaths reached 60 in June, 65 in July, and 55 in August, according to icasualties.org. That is by far the highest three-month total of the war.

Criticism is mounting among military families too. An antiwar group of families of service members in Afghanistan and Iraq has called for an end to the Afghanistan war. At the same time, families like the Osborns, who describe themselves as conservative, are questioning the way the war is being waged.

After Bill Osborn publicly criticized the rules of engagement just before his son’s wake, he said, other families of service members killed or serving in Afghanistan contacted him to express similar concerns. They don’t want to end the war, Osborn said, but to change the way it’s being fought.

“Our soldiers are forced to fight with one hand tied behind their backs. They’re not allowed to take care of business — and they know it,” Bill Osborn said in his living room, where his son’s Bronze Star, Purple Heart and campaign ribbons are on display.

Debbie Morris of Arnold, Calif., who lost her son in Afghanistan on June 10, said the rules of engagement protect Afghan civilians at the expense of American troops. She blames the rules, in part, for the death of her son, Marine Lance Cpl. Gavin Brummund, 22, from a roadside bomb.

If the rules prevent troops from aggressively pursuing Afghan militants who plot attacks against them while posing as civilians, “then the rules aren’t working, and why are we even there?” Morris said.

Brummund’s widow, Michaela, said Marines in her husband’s unit told her they were frustrated by the rules. Protecting civilians, many of whom are hostile to U.S. forces, “isn’t worth our guys’ lives,” she said.

On June 27, the Osborns wrote an impassioned e-mail to Gen. David H. Petraeus, the U.S. commander in Afghanistan. They described how Ben, 27, volunteered to man the machine gun on an armored vehicle headed out on a patrol in Kunar province on June 15.

Their son’s unit of 20 men was ambushed by a Taliban force of 70 to 100 fighters, the e-mail said. According to the Osborns, who said they talked with members of their son’s unit, Ben had to wait to return fire until ordered to do so. He got off 10 rounds before he was shot and killed, they said.

The rules of engagement “led to the demise of our son … and other warriors like him,” the e-mail said. The Osborns asked Petraeus to revise the rules and lift restrictions.

“Winning the hearts and minds of the Afghans is not what’s best for America,” they wrote. “We are at war. The rules of engagement must be to empower our soldiers, not to give aid and comfort to the enemy.”

Petraeus responded within minutes, the Osborns said. His e-mail offered condolences, and noted that “commanders have a moral imperative to ensure that we provide every possible element of support to our troopers when they get into a tight spot.”

The general added: “And I will ensure that we meet that imperative.”

Petraeus, who wrote the military’s counter-insurgency doctrine with a focus on minimizing civilian casualties, has said he is reviewing the rules of engagement. Petraeus assumed command July 4 after the ouster of Gen. Stanley A. McChrystal, who had tightened the rules when he took command in June 2009.

Military Families Speak Out, the antiwar group, has long demanded an end to the war in Iraq but for years refrained from demanding an end to the Afghanistan conflict — which many members considered “the good war.” After U.S. combat deaths in Afghanistan rose early last year, the group formally called for ending that war and bringing troops home.

More families have joined the group since casualties jumped this summer, said Nancy Lessin, the organization’s co-founder. Military Families Speak Out, founded in 2002, represents 4,000 military families, with 25 to 30 chapters nationwide, Lessin said.

The group has no formal position on the rules of engagement, said Paula Rogovin, whose son is a Marine captain who served in Iraq. But bringing the troops home would eliminate any dangers they face as a result of the restrictions, she said.

By contrast, the Osborns say they believe the war in Afghanistan must be fought — and won. But they want it waged more aggressively.

Soon after Ben deployed in April, he began telling his parents that the rules of engagement were too restrictive and were putting him and his fellow soldiers at risk.

“He said he felt more like a Peace Corps worker than a warrior,” his father said. After Ben’s death, his comrades told his father they had the same concerns.

“I don’t know that if Ben had been able to fire spontaneously, he’d be alive today,” Bill Osborn added. “But I do know that he would have had a much better chance of surviving by being able to defend himself quickly.”

“It almost appears that our civilian leaders and military command think more of the natives than our own troops,” he said. “That’s a disturbing thought, and I don’t want to believe it.”

Ben left behind three brothers, a sister and a widow, Nicole, whom he had married in February.

“It’s too late for us and for Ben,” Bill Osborn said, sitting next to photos of his son in uniform. “But there are other families out there, and if we can help save just one soldier, it’ll be worth it.”

david.zucchino@latimes.com
As U.S. deaths in Afghanistan rise, military families grow critical

Democratic gubernatorial nominee Jerry Brown argued Thursday that his experience makes him the only candidate who can right California, and he slashed at Republican rival Meg Whitman by calling her a neophyte who has run an ugly and inaccurate campaign against him.

“Everything I’ve done in my life has prepared me for this moment in time, to do what I can to protect the state I love,” said Brown, the former two-term governor and current attorney general, standing in front of a vat of sulfuric acid after touring New Leaf Biofuel in San Diego.

“I’m confident at the end of the day, though it’s going to be a close race, people are going to vote for change, they’re going to vote for integrity, and they’re going to reject the negativity and the carpet-bombing of deceptive commercials we’ve been facing these last two months.”

More than 100 miles north, at a rivet manufacturer in the City of Industry, Whitman argued that the state would be ill-served if it elected a career politician who “has not delivered” in the past. Faced with a query from a worker about whether she could be any more effective than another political novice, Gov. Arnold Schwarzenegger, Whitman said the business skills she developed as EBay’s chief executive would ease her path in Sacramento.

Schwarzenegger “did a number of good things … but he had not run and managed and led large organizations” as she has, Whitman told an audience gathered on the factory floor of Allfast Fastening Systems. The next governor, she said, “has to be very tough-minded.”

“We cannot afford a third term of Jerry Brown,” Whitman said. “And I am going to give Jerry Brown the toughest fight he has had in his 40-year political career.”

The events marked a rare moment in the general election campaign so far — one in which the two gubernatorial candidates were actually campaigning at the same time.

Although Whitman has kept a brisk pace traveling around the state, airing ads and reaching out to voters since she won the GOP primary in June, Brown, who lacks his rival’s deep pockets, has spent much of his time raising money while juggling his duties as the state’s attorney general.

Organized labor has propped up his campaign with television ads over the summer, but until Wednesday it had been nearly a month since the candidate held a campaign event. Brown has said he was biding his time and would spend $25 million to $30 million in the fall, when voters would be paying attention.

“There are two things that are unprecedented in American political history,” he said Thursday. “One, the $100 million plus that Whitman has paid on her campaign, most of it from her own pocketbook, and two, the virtually no effect it’s had. This is basically a tie race.”

Brown, who picked up the endorsement of Planned Parenthood and NARAL Pro-Choice America on Thursday, appeared to be gearing up for the start of the general election battle. He headlined a rally in front of 800 people in Santa Rosa on Wednesday night, followed by the Thursday morning tour and news conference.

Those events offered Brown the chance to respond to several attacks Whitman has launched against him in recent weeks, including questions about his recent use of a state plane after he bragged about eliminating such luxuries during his prior time as governor. Brown dismissed a query as a “Whitman-fed” question.

“I fly it so little, really, compared to commercial flights,” he told reporters in Santa Rosa. “By the way, sometimes funerals are very important to go to, for fallen officers.”

Whitman’s newest television ad, unveiled Thursday, charged Brown with hypocrisy for touting his frugality even though he used a state plane 10 times since he assumed the attorney general post in 2007. The ad says that Brown used a Beechcraft King Air turboprop for trips to a conference at the La Costa Resort and Spa and a reception in Pebble Beach. “It’s your money — not his,” the announcer says.

Whitman, who received the endorsement of the National Federation of Independent Business on Thursday, was fending off her own attacks from the state’s nurses‘ union and the Courage Campaign, which used the anniversary of women’s suffrage vote to protest the candidate and her spotty voting record at a Sacramento rally.

More than 1,000 people gathered on the west steps of the Capitol, ostensibly to honor the 90th anniversary of suffrage. Labor leaders, led by the California Nurses Assn., hammered Whitman for her poor voting record and painted her as a corporate elitist who plans to cut 40,000 state jobs, slash pension benefits and curtail the political influence of unions.

“She may not have voted,” said Rose Ann DeMoro, executive director of the nurses’ union, “but we will.”

Whitman countered that the protest appeared to be driven by “union bosses trying to distract from the fact that I will go to Sacramento and I will change Sacramento.” But she once again apologized for her past voting record: “I have said I should have been more engaged and I was not. But I am all in now.”

seema.mehta@latimes.com

maeve.reston@latimes.com

Times staff writer Michael Mishak contributed to this report from Sacramento.
Brown and Whitman spar in sync

Just days after U.S. auto safety regulators stepped up a probe into the risk that more than 1 million Toyota Corolla and Matrix vehicles could stall because of defective electronic engine control units the Japanese automaker announced a recall of the vehicles.

Toyota Motor Sales U.S.A. Inc. said Thursday that it would recall 1.13 million 2005 to 2008 model year Toyota Corolla and Corolla Matrix vehicles sold in North America to address a problem with an electronic component called an engine control module that may have been improperly manufactured. No other Toyota or Lexus vehicles are involved in this recall.

This latest action brings the number of vehicles Toyota has recalled in the last year to about 10 million worldwide, a figure that is now approaching the total number of vehicles that will be sold by all manufacturers in America this year. The quality issues have hurt the automaker’s once sterling reputation for reliability and dependability and affected it sales position. Through the first seven months of this year, Toyota’s U.S. market share has dropped to 15.2% from 16.3%, dropping it to third place in the U.S. auto market behind No. 1 General Motors Co. and Ford Motor Co.

Toyota has been plagued by a rash of quality problems involving faulty gas pedals, floor mats, brakes, electronic stability control systems, steering systems and other defects.

In the Corollas, Toyota said there is a crack that may develop either at various points on or in the component. When this happens, the check engine light may go on and the driver may experience harsh shifting. The engine might not start and in some instances the engine can stall while the vehicle is being driven. Toyota said there are three unconfirmed accidents alleged to be related to this condition, one of which might have resulted in a minor injury.

Toyota plans to replace the module on all of the recalled vehicles at no charge to owners. It will mail notice of the recall to owners starting in the middle of September. People will be told to bring their cars to dealers as replacement parts become available. Owners who have already experienced the problem and paid for the repair will be instructed on how to collect reimbursement.

People with questions can go to http://www.toyota.com/recall and or call Toyota at (800) 331-4331.

On Wednesday, safety regulators began an engineering analysis of stalling in Corolla and Matrix cars.

The National Highway Traffic Safety Administration had received 26 complaints of vehicles stalling when it opened a preliminary evaluation in November. It reported 163 complaints when it opened the engineering analysis.

“The engine can stall at any speed without warning and not restart,” NHTSA said on its website.

jerry.hirsch@latimes.com
Toyota recalls Corolla, Matrix models due to an engine defect

After backing down from a contentious proposal to demolish the Hyatt Regency Century Plaza hotel, the owner has unveiled plans to construct a high-rise real estate development next to the Space Age landmark that would transform the tenor of Century City’s streets and dramatically alter the skyline.

The $1.5-billion proposal calls for two 46-story skyscrapers holding hundreds of condominiums and offices to be built behind the renowned hotel on Avenue of the Stars. Nearly half of the guest rooms would be replaced by luxury condos as part of a top-to-bottom makeover.

A large portion of the lobby would be hollowed out and left open in a move to connect the new buildings, shops and plazas with nearby streets and improve the flow of pedestrians. Planning and construction are slated for completion by 2014.

The proposal represents a turnabout by Los Angeles developer Michael Rosenfeld, who has earned support from preservationists who once opposed him. Rosenfeld has also won a tentative nod from the mayor and a key city councilman for his revised plans.