DENNIS RICHMOND, KTVU: AGAIN, WE WANT TO THANK THE GOVERNOR FOR HAVING JOINED US HERE IN WALNUT CREEK. AS YOU SEE BEHIND ME, THE REPLACEMENT CANDIDATES HAVE ASSEMBLED HERE FOR THIS PART OF OUR FORUM, WE WILL TURN IT OVER NOW TO RANDY. RANDY, TAKE IT.

RANDY SHANDOBIL, KTVU: DENNIS, THANK YOU. NO MATTER HOW CALIFORNIANS VOTE ON PART ONE OF THE RECALL BALLOT, THEY STILL GET TO VOTE ON PART TWO. WHO SHOULD BECOME GOVERNOR OF CALIFORNIA IF THE VOTERS RECALL GOVERNOR GRAY DAVIS. WE OBVIOUSLY COULD NOT INVITE ALL OF THE CANDIDATES, WE INVITED THE TOP SIX CANDIDATES ACCORDING TO MOST POLLS.

WITH US THIS AFTERNOON ARE LIEUTENANT GOVERNOR BUSTAMANTE, A DEMOCRAT. NEWSPAPER COLUMNIST ARIANNA HUFFINGTON, RUNNING AS AN INDEPENDENT. FROM THE GREEN PARTY, FINANCIAL ADVISORY PETER CAMEJO, REPUBLICAN BUSINESS MAN PET YEAR UEBERROTH AND REPUBLICAN STATE SENATOR TOM MCCLINTOCK, WELCOME TO YOU ALL. AS YOU KNOW OVER THE LAST SEVERAL WEEKS WE'VE EXTENDED SEVERAL INVITATIONS UP TO ARNOLD SCHWARZENEGGER AND UNTIL TODAY WE KEPT THE SEAT OPEN FOR HIM. HIS CAMPAIGN NEVER SAID HE HAD A SCHEDULING CONFLICT, NONETHELESS, HE DECLINED TO PARTICIPATE TODAY. HOW THE CANDIDATES WERE SEATED IS DETERMINED BY LOTTERY, WHO GETS THE FIRST QUESTION, THAT IS BY LOTTERY TOO. SINCE THERE ARE FIVE QUESTIONS, WE WILL LIMIT ANSWERS TO ONE MINUTE AND REBUTTALS LIMITED TO 30 SECONDS. NO OPENING STATEMENTS TODAY. THERE WILL BE CLOSING STATEMENTS AT THE END OF THE BROADCAST.

FOR THE FIRST QUESTION, WE GO TO DAN BORENSTEIN, POLITICAL EDITOR FOR THE CONTRA COTSA TIMES, FOR SENATOR TOM MCCLINTOCK.

BORENSTEIN: SENATOR, YOU ARE MORE CONSERVATIVE THAN MOST CALIFORNIANS. DURING YOUR ASSEMBLY CAREER YOU TOOK ON YOUR OWN PARTY'S CANDIDATE WILSON FOR BACKING TAXES. YOU VOTED AGAINST BANNING ASSAULT WEAPONS, AGAINST BANNING COAST LINES FROM OFFSHORE DRILLING AND AGAINST EMPLOYMENT DISCRIMINATION PROTECTION FOR PEOPLE STRICKEN WITH AIDES, AND YOU OPPOSED ABORTION RIGHTS. BECAUSE OF THE QUIRKY NATURE OF THE RECALL PROCESS, YOU COULD BE ELECTED WITH A SMALL PLURALITY. IS IT APPROPRIATE AND SHOULD A RECALL BE A MECHANISM FOR REPLACING A GOVERNOR WITH A HARD-CORE REPUBLICAN?

MCCLINTOCK: I THINK THAT YOU FORGET I WAS THE TOP REPUBLICAN VOTE-GETTER LAST YEAR, I RECEIVED MORE TOTAL VOTES THAN ANY REPUBLICAN ON THE BALLOT LAST YEAR, AND THE CLOSEST ELECTION IN CALIFORNIA HISTORY, DESPITE THE FACT THAT I RAN AGAINST A MULTIMILLIONAIRE OUTSPENDING ME BY FIVE TO ONE.

THE DISTRICT ELECTING ME BY A DOUBLE DIGIT LANDSLIDE IN THE YEAR 2000 TO THE STATE SENATE WAS VOTING FOR AL GORE FOR PRESIDENT.

SO I THINK THAT THE -- MY FOCUS HAS ALWAYS BEEN ON THE FISCAL POLICY OF THE STATE OF CALIFORNIA. I THINK THAT THAT FOCUS IS NOW RESONATING ACROSS A BROAD CROSS-SECTION OF CALIFORNIA VOTERS. I AM THE ONE CANDIDATE WHO HAS TAKEN THE NO-TAX PLEDGE. I WILL NOT RAISE TAXES UNDER ANY CIRCUMSTANCES. THIS STATE IS ALREADY SPENDING A LARGER PORTION OF PEOPLE'S EARNINGS THAN AT ANY TIME IN HISTORY. I POINTED OUT ON MANY OCCASIONS WITHIN MOMENTS OF TAKING THE OATH OF OFFICE, I WILL RESCIND THE GOVERNOR'S ILLEGAL TRIPLING OF THE CAR TAX AND THEN ACT TO VOID THE $42 BILLION OF OVERPRICED ELECTRICITY CONTRACTS.

SHANDOBIL: SENATOR MCCLINTOCK, THAT IS IT. ARE YOU OKAY WITH THAT? OKAY. FOR OUR FIRST REBUTTAL, WE GO TO ARIANNA HUFFINGTON. YOU HAVE 30 SECONDS.

HUFFINGTON: TOM, THAT WOULD BE VERY CONVINCING TALKING ABOUT FISCAL PROPERTY. IF YOU HAD TAKEN ON THE BUSH ADMINISTRATION WHERE -- THE ORGY OF FISCAL RESPONSIBILITY GOING ON IN WASHINGTON. IT DOES NOT MAKE MUCH SENSE FOR THE REPUBLICANS TO TALK ABOUT THE FISCAL MISRESPONSIBILITY OF GOVERNOR GRAY DAVIS IGNORING THE BUDGET IN WASHINGTON BY YOUR OWN PARTY.

SHANDOBIL: LIEUTENANT GOVERNOR BUSTAMANTE, YOU NOW GET A CHANCE, 30 SECONDS. AUDIENCE, MEMBERS, PLEASE DO US A FAVOR, ACTUALLY I'M SURE ALL THE CANDIDATES WOULD APPRECIATE IT TOO, HOLD THE APPLAUSE UNTIL LATER, THERE IS MORE TIME FOR THEM TO ANSWER. SINCE THERE IS FIVE CANDIDATES, WE DO NOT HAVE A LOT OF TIME. PLEASE HOLD IT OFF FOR NOW. LIEUTENANT GOVERNOR, DO YOU HAVE REBUTTAL?

BUSTAMANTE: THE ONLY THING THAT I WOULD LIKE TO SAY IS THAT I THINK THAT THE QUESTION ILLUSTRATED THE DIFFERENCES EXACTLY BETWEEN THE CANDIDACIES AND THE PEOPLE HERE. I BELIEVE THAT I BRING A CERTAIN SET OF VALUES TO THIS POSITION. WHETHER YOU ARE GOING TO BE AGAINST OFFSHORE OIL, WHETHER YOU ARE GOING TO MAKE SURE THAT WE PROTECT AND DEFEND A WOMEN'S RIGHT TO CHOOSE, AND MAKE SURE THAT WE PROVIDE GOOD PUBLIC EDUCATION. I THINK THAT IS WHAT THE PEOPLE IN THE STATE OF CALIFORNIA ARE LOOKING FOR IN A GOVERNOR.

SHANDOBIL: THANK YOU, LIEUTENANT GOVERNOR. PETER UEBERROTH, YOUR CHANCE FOR REBUTTAL.

UEBERROTH: THE RECALL PROCESS STARTED OUT AS A DIFFERENT KIND OF PROCESS FOR ME. I DID NOT KNOW IF IT WAS A GOOD THING. I THINK IT HAS BECOME A MANDATE. I THINK THAT THE MANDATE FROM THE VOTERS SAYS THAT IT HAS TO BE CHANGED. AND WE'RE OUT OF MONEY. I DO NOT DISAGREE WITH MUCH OF WHAT TOM SAID. WE'RE OUT OF MONEY. WE'RE GETTING WORSE OUT OF MONEY. WE'RE GOING TO BE IN A LOT WORSE TROUBLE IN THE NEXT YEAR IF WE DO NOT BALANCE THE BUDGET, IF WE DO NOT START TO GET JOBS BACK INTO CALIFORNIA. AND IF WE GET JOBS BACK INTO CALIFORNIA, THE CALIFORNIANS CAN GO TO WORK.

SHANDOBIL: I'M SORRY, SIR, THAT IS YOUR 30 SECONDS. I HATE TO INTERRUPT.

UEBERROTH: ALL RIGHT.

SHANDOBIL: PETER CAMEJO, YOUR CHANCE FOR REBUTTAL.

CAMEJO: WE HAVE THE HIGHEST INCOME THAT CALIFORNIA HAS HAD OVER THE LAST FIVE YEARS, WAY ABOVE WHAT NORMALLY COMES IN, WE SHOULD BE SITTING ON RESERVES OR SURPLUS TODAY TO END UP WITH A MASSIVE DEFICIT, UNACCEPTABLE. TODAY WE HAVE THE GREATEST GROSS DOMESTIC PRODUCT IN THE UNITED STATES AND THE REPUBLICANS CREATE THE MOST MASSIVE DEFICIT. THESE TWO PARTIES ARE DYSFUNCTIONAL. WE NEED ALTERNATIVES AND FISCAL RESPONSIBILITY. THE QUESTION WAS IS IT GOOD TO HAVE SOMEONE ELECTED WITH A SMALL PERCENTAGE? IT IS WRONG.

SHANDOBIL: I'M SORRY, MR. CAMEJO.

CAMEJO: THAT IS PART OF THE PROBLEM.

SHANDOBIL: THE NEXT QUESTION IS FROM PILAR MORRERO, POLITICAL EDITOR FOR LA OPINION. HER QUESTION WILL BE DIRECTED TO PETER UEBERROTH.

MORRERO: MR. UEBERROTH, YOUR PHILOSOPHY SEEMS TO EXPECT BUSINESS TO DO THE RIGHT THING, PAY FAIR WAGES AND BENEFITS. YOU SAY THAT THE WAY TO BETTER THE SITUATION FOR WORKING PEOPLE IS TO MAKE IT EASIER FOR BUSINESSES TO MAKE PROFITS. MANY DOUBT THE ABILITY OF BUSINESS TO DO THE RIGHT THING AND SAY THAT GOVERNMENT INTERVENTION IS OFTEN NECESSARY. WHAT IS THE PROPER ROLL OF GOVERNMENT?

UEBERROTH: BASICALLY BUSINESSES PAY SALARIES. SALARIES OF WORKERS PAY SACRAMENTO. IT IS REAL SIMPLE. A JOB IS HOW SACRAMENTO IS RUN. AND WE ARE IN THIS CRISIS TIME NOW, WE'RE DRIVING JOBS OUT OF THE STATE. BUSINESSES ARE SITTING HERE, SAYING WELL, WE'LL TAKE SOME JOBS OUST THE STATE, OR THEY'LL TAKING THEIR WHOLE COMPANIES OUT OF THE STATE. AND I APPEAL TO THE PEOPLE WHO HAVE LOST THEIR JOBS, WHO HAVE NOTHING, AND SAY TO IT, LET'S CRITICIZE CORPORATIONS.

NO CORPORATION IS PERFECT. BUT THE REAL SOLUTIONS TO CALIFORNIA ARE TAKE THIS BUDGET, WE'VE OVERSPENT. I AGREE WITH PETER. WE'VE OVERSPENT AND BEEN ON A SPENDING BINGE. TIGHTEN THE BELT. IT WILL BE TOUGH. GET JOBS BACK IN THE STATE. QUIT BEING THE SECOND-LEAST FRIENDLY STATE FOR JOBS.

SHANDOBIL: THANK YOU, MR. UEBERROTH.

MORRERO: BUT EVEN DURING THE GOOD TIMES, SOME BUSINESSES -- I'M SORRY, SOME PEOPLE, SOME WORKERS WERE MAKING LESS THAN MINIMUM WAGE OR AROUND MINIMUM WAGE, WERE WITHOUT HEALTH BENEFITS. IS THE GOVERNOR ABLE TO DO ANYTHING FOR THESE PEOPLE?

UEBERROTH: CANNOT DO ANYTHING WITHOUT THE MONEY. WE'RE OUT OF MONEY. WE'VE PROVEN IT. WE HAVE A BUDGET THAT DOES NOT MAKE SENSE. THE VOTERS KNOW IT DOES NOT MAKE SENSE. IT IS PATCHED UP. IT IS WORRYING ABOUT THE FUTURE. THEY'RE NOT REALLY TAKING CARE OF THE BUDGET. IF WE DO NOT FIX IT, THERE WILL BE LESS MONEY FOR WORKERS, LESS MONEY FOR HEALTHCARE AND EDUCATION. AND THE ONLY WAY THAT YOU PAY THE BILLS, IS YOU PAY THE BILLS WITH JOBS.

SHANDOBIL: LIEUTENANT GOVERNOR BUSTAMANTE YOU GET THE FIRST CHANCE TO REBUT MR. UEBERROTH'S ANSWER.

BUSTAMANTE: YOU KNOW, IN THE STATE OF CALIFORNIA, IF YOU WALK OUTSIDE OF THIS BUILDING, IF YOU ARE HELD UP AND THE PERSON TAKES YOUR WALLET, THAT PERSON GOES TO JAIL. IF YOU ARE ABLE TO HOLD UP 34 MILLION PEOPLE, SOMEHOW THAT IS GOOD BUSINESS. I DON'T THINK SO. I THINK THAT THE ENERGY CRISIS, I WAS THERE AT THE TIME, I VOTED FOR IT. IT WAS A MISTAKE. THE DEREGULATION OF ENERGY HAS BEEN A MISTAKE AT EVERY SINGLE STATE. WE NEED TO ENSURE WE HAVE THE KIND OF LEGISLATION TO PROTECT UTILITIES AND BASIC SERVICES FOR CALIFORNIA AND FOR THE PEOPLE OF CALIFORNIA. AND IF THEY DO NOT DO IT, THEN WE HAVE TO MAKE SURE TO IMPOSE THAT ON THOSE EMPLOYERS.

SHANDOBIL: YOUR TIME IS UP. THANK YOU. PETER CAMEJO, REBUTTAL?

CAMEJO: CORPORATIONS ARE HAVING A MASSIVE CRIMINAL PROBLEM. WE HAVE THE ENRONS AND THE WORLDCOMS. THERE IS SOMETHING BREAKING DOWN. THE RULE OF LAW IS BREAKING DOWN. IN CALIFORNIA WE HAVE LOWERED THE TAXES ON CORPORATIONS ON A STRAIGHT LINE DOWN. THEY ARE PAYING HALF OF WHAT THEY WERE PAYING JUST 16 YEARS AGO. THE RICHEST PEOPLE IN CALIFORNIA, TAXES ARE LOWERED WHILE YOUR TAXES ARE GOING HIGHER, THE AVERAGE PERSON. WHERE IS THE MONEY TO SOLVE THIS PROBLEM? (UNINTELLIGIBLE)... IN THE CORPORATIONS AND AMONG THE RICHEST PEOPLE PAYING THE LOWEST TAX RATES (UNINTELLIGIBLE)... YOU ARE WILLING TO GO THERE, YOU CANNOT BALANCE THE BUDGET.

SHANDOBIL: THANK YOU. ARIANNA HUFFINGTON, IT IS NOW YOUR TURN.

HUFFINGTON: I FIND IT SURPRISING THAT PETER UEBERROTH WOULD NOT MENTION THE FACT THAT THERE ARE SO MANY CORPORATE THANKS LOOPHOLES RIGHT NOW THAT BASICALLY ABOUT $5 BILLION OF REVENUE COULD COME TO THE STATE OF CALIFORNIA IF ONLY AS GOVERNOR ONE OF US WOULD CLOSE THOSE LOOPHOLES. AND ALSO IT DOES NOT SURPRISE ME THAT THIS IS HIS POSITION, GIVEN THAT PETER HAS MAXED OUT TO THE BUSH CHENEY REELECTION COMMITTEE. I MEAN, HOW DUMB IS THAT ON A SCALE OF ONE TO TEN?

SHANDOBIL: UNFORTUNATELY YOU WILL NOT GET A CHANCE TO ANSWER THAT QUESTION. NOW TO SENATOR TOM MCCLINTOCK FOR YOUR REBUTTAL.

MCCLINTOCK: THIS DISCUSSION AMAZING ME. WE'VE LOST NEARLY A THIRD OF A MILLION JOBS IN THIS STATE, WHEN SOME INSURANCE COMPANIES ANNOUNCED THEY WERE MOVING TO JACKSONVILLE WITH 400 JOBS, THEIR CEO WAS INTERVIEWED ON TELEVISION, SAYING THIS IS NOT A COMPLICATED DECISION. THE SALES TAX IS 6%, AND IT COSTS $40 TO REGISTER YOUR CAR. IF WE WANT TO BRING JOBS BACK, WE HAVE TO REDUCE TAXES. I DISAGREE WITH THE GOVERNOR WHO SAID THAT HE FELT THAT TAXES WERE MODERATELY LOW IN THIS STATE. THAT IS HORSE MANURE.

SHANDOBIL: SENATOR, THAT IS TIME. SORRY. NEXT QUESTION FOR PETER CAMEJO, COMING FROM JOHN MYERS, THE SACRAMENTO BUREAU CHIEF OF KQED-FM.

MYERS: SIR, YOU PROPOSED THAT THE STATE TAX GO FROM (UNINTELLIGIBLE) FOR THE WEALTHY THAT IS A BIG JUMP TO MAKE IN ONE YEAR, FROM 9% TO 14.3%. HOW DO YOU JUSTIFY THAT INCREASE? IF IT IS WEALTHY TODAY, COULD IT BE THE MIDDLE CLASS TOMORROW?

CAMEJO: THE RAISE I'M PROPOSING FOR THEM WOULD MAKE THEM EVEN WITH WHAT THE POOREST PEOPLE PAY. WHAT ABSOLUTELY AMAZES ME IS THAT PEOPLE ARE WILLING TO SEE THE POOREST PEOPLE IN CALIFORNIA, MAKING $15,000 A YEAR, PAY 11.3% OF THEIR INCOME IN TAXES BUT SAY THAT THE RICH SHOULD HAVE TO PAY IT. THE FACT IS I'M FOR A FAIR TAX, WHICH IS THAT THE WEALTHIEST PEOPLE IN CALIFORNIA SHOULD BE PAYING THE SAME THAT YOU ARE, THE AVERAGE PERSON. THAT WOULD BALANCE THE BUDGET. THAT IS WHERE WE HAVE TO GO. WE ALSO HAVE TO GET RID OF WASTE AND THE LOOPHOLES THAT ARIANNA HUFFINGTON REFERRED TO. BUT THERE IS NO WILL. THE DEMOCRATS AND REPUBLICANS ARE AT THE SERVICE OF THE PEOPLE WHO FUND THEM. THAT IS THE DIFFICULT PROBLEM THAT WE NOW FACE. THAT IS, THEY ARE ALLOWING THESE CRISES TO HAPPEN AND THEY ARE CUTTING EDUCATION, HEALTHCARE AND ALL OF THE SERVICES THAT WE NEED. PEOPLE HAVE TO CHOOSE. WHAT DO YOU WANT? LOWER THE TAXES FOR THE RICH? GIVE THEM EVERYTHING? OR ALLOW THESE SERVICES TO CONTINUE AND PROTECT EDUCATION IN CALIFORNIA?

MYERS: BUT MR. CAMEJO, HOW DO YOU GET REPUBLICANS LIKE MR. MCCLINTOCK TO VOTE FOR THAT?

CAMEJO: I WILL STAND WITH CRUZ BUSTAMANTE ON THIS, HE HAD THE COURAGE TO SAY IF WE CANNOT GET THE RIGHT KIND OF TAX STRUCTURE, LET'S GO TO THE PEOPLE. I WILL TELL YOU WHO WILL VOTE FOR A FAIR TAX IN CALIFORNIA, THE PEOPLE IN CALIFORNIA. IT IS ABOUT TIME. WE HAVE ONE THIRD OF 1% OF THE PEOPLE OF CALIFORNIA GET 20% OF THE INCOME, 200 BILLION DOLLARS AND THEY PAY LOWER TAXES THAN YOU DO. THAT IS NOT RIGHT. AND THE DEMOCRATS AND REPUBLICANS HAVE ALLOWED THAT TO HAPPEN. THAT IS WHY WE HAVE TO HAVE THE GREEN PARTY HERE AND A VOICE HEARD TO CHALLENGE THE CORPORATE DOMINATION AND THE MONEY DOMINATION OF OUR POLITICAL SYSTEM.

SHANDOBIL: THANK YOU. WE NOW GO TO REBUTTALS. THE FIRST GOES TO PETER UEBERROTH, TO ALL CANDIDATE, LET'S TRY TO REBUT THE ANSWER, NOT SOMETHING ELSE THAT YOU WANT TO TALK ABOUT. MR. UEBERROTH.

UEBERROTH: WELL, I, YOU KNOW, TAXING THE RICH, I'VE BEEN FORTUNATE IN CALIFORNIA THAN I MADE MORE MONEY THAN I THOUGHT THAT I WOULD. I WILL NOT ARGUE MUCH ABOUT THAT. WE TALKED ABOUT CORPORATIONS. EVERY RECOVERY EVER IN THIS COUNTRY, EVER, EVER, EVER IN THIS STATE OR ANY OTHER STATE, COMES ON SMALL AND MEDIUM-SIZED BUSINESSES. AND YOU WANT TO KNOW THAT THOSE ARE CALLED CORPORATIONS. AND THAT IS WHAT THEY'RE DOING. AND WE'RE -- WITH WORKERS COMP ALL OF THE THINGS AT THAT WE'RE DOING, THE BURDENS THAT YOU WANT TO PUT ON THE PEOPLE, THEY ARE TAKING THEIR JOBS AND LEAVING THE STATE.

SHANDOBIL: THE NEXT REBUTTAL TO STATE SENATOR MCCLINTOCK.

MCCLINTOCK: THIS STATE IS NOT SUFFERING A REVENUE PROBLEM. THIS STATE SPENDS A LARGER PORTION OF YOUR EARNINGS THAN ANY TIME IN ITS HISTORY AND DELIVERS LESS WITH THAT THAN ANY TIME IN THE HISTORY. IN THE FOUR YEARS OF ADMINISTRATION, WHILE INFLATION AND POPULATION HAVE GROWN 21%, THE REVENUES HAVE GROWN 25%. IT IS NOT A REVENUE PROBLEM. THE EXPENDITURES ARE GROWING 40% IN THE SAME PERIOD. WE HAVE NOT SEEN THE INCREASE IN SCHOOL PERFORMANCE, ELECTRICITY, WATER STORAGE, ALL OF THE THINGS THAT WE PAY THROUGH THE NOSE FOR THIS GOVERNMENT TO PROVIDE.

SHANDOBIL: LIEUTENANT GOVERNOR BUSTAMANTE YOUR REBUTTAL.

BUSTAMANTE: ONE OF THE PROBLEMS THAT WE HAVE, WE HAVE COMPANIES LIKE WAL-MART WHO, AT THE SAME TIME THEY HIRE PEOPLE, THEY GIVE THEM A PIECE OF PAPER AND SAY HERE IS THE WAY THAT YOU CAN APPLY FOR FOOD STAMPS AND PUBLIC HEALTHCARE BENEFITS. PEOPLE HAVE ALREADY PAID BECAUSE WE HAVE A SOCIAL CONTRACT HERE IN THE UNITED STATES. THAT SOCIAL CONTRACT IS THAT BY THE TIME YOU GET TO THE END OF THE WEEK, YOU OUGHT TO HAVE ENOUGH TO BE ABLE TO TAKE CARE OF YOUR FAMILY AND NOT WORRY ABOUT A SICK CHILD EITHER. I THINK IT IS PUTTING THE RESPONSIBILITY ON EMPLOYER'S LIKE THAT. WHETHER YOU TAKE MONEY OUT OF THE TAXPAYERS FRONT OR BACK POCKET, IT IS STILL OUT OF THEIR POCKET.

SHANDOBIL: FOR THE FINAL REBUTTAL TO THIS QUESTION, WE GO TO ARIANNA HUFFINGTON.

HUFFINGTON: ONE OF THE PROBLEMS WE HAVE IN CALIFORNIA IS WE RELAY ON INCOME TAXES AND SALES TAXES SO MUCH AND NOT ENOUGH ON PROPERTY TAXES. AS GOVERNOR, I WILL TAX THE ELECTRIFIED WAY OF PROP 13 AND WHILE PROTECTING CITIZEN, HOMEOWNERS, FIXED INCOME AND SENIORS, I WOULD MAKE SURE THAT WEALTHY HOMEOWNERS PAY THEIR FAIR SHARE. WARREN BUFFETT SUGGESTED IT, I'LL TAKE HIS ADVICE.

SHANDOBIL: WE'RE NOW GOING BACK TO DAN. DAN, IF I'M NOT MISTAKEN, YOU HAVE A QUESTION FOR MS. HUFFINGTON.

BORENTSTEIN: YES, IT IS A PERFECT TRANSITION INTO THAT QUESTION, MS. HUFFINGTON. YOU HAVE SAID "WE OUGHT TO STOP THE WAY THAT PROPOSITION 13 IS BEING USED TO ARTIFICIALLY LOWER THE TAX BURDEN ON CORPORATIONS AND WEALTHY HOMEOWNERS." SPECIFICALLY HOW WOULD YOU CHANGE PROPOSITION 13 TO RAISE PROPERTY TAXES FOR THOSE TWO GROUPS?

HUFFINGTON: WELL, FIRST OF ALL, DAN, WHEN IT COMES TO COMMERCIAL PROPERTY TAXES, IT WOULD NOT BE RAISING THEM. IT WOULD BE FAIRLY ASSESSING COMMERCIAL PROPERTIES, CLOSING THE LOOPHOLES THAT ALL OF THOSE INTERESTS HAVE ACTUALLY BOUGHT BY BUYING POLITICIANS. AND AS A RESULT, MAKE SURE THAT AT THE TIME OF PURCHASE THEY ARE FAIRLY ASSESSED. AND ALSO, WHEN IT COMES TO HOMEOWNERS, AS I'VE SAID EARLIER, WHILE PROTECTING THE INTENT OF PROP 13, WE NEED TO ROOT OUT THE ABUSES, THE ABUSES MAKING IT POSSIBLE FOR SOMEONE LIKE WARREN BUFFETT TO HAVE A $4 MILLION HOME AND PAY $2,000 IN PROPERTY TAXES. I BELIEVE THAT IS WHAT THE CALIFORNIA PEOPLE WANT. AND THEY WANT A INDEPENDENT LEADER WHO WILL ACTUALLY SPEAK TO THAT, INSTEAD OF SIMPLY PANDERING AND WATCHING THE OPINION POLLS AND REFUSING TO TELL THE PEOPLE THE TRUTH.

BORENSTEIN: I'M NOT SURE I HEARD IN YOUR ANSWER HOW YOU WOULD DO IT, ESPECIALLY WITH REGARD TO THE WEALTHY HOMEOWNERS, I DID NOT HEAR A SPECIFIC--

HUFFINGTON: I WILL DO IT BY APPOINTING A COMMISSION TO LOOK AT WHAT THE CUT-OFF LEVEL WOULD BE, AT WHAT LEVEL OF THE PURCHASE PRICE OF THE HOUSE, AND THE INCOME OF THE HOMEOWNER. BECAUSE WE NEED TO TAKE BOTH INTO ACCOUNT SO THAT WE NEVER AGAIN GET INTO THE SITUATION WHERE PEOPLE ON FIXED INCOMES, OR SENIORS HAVE TO SELL THEIR HOMES IN ORDER TO PAY THEIR PROPERTY TAXES.

BORENSTEIN: ARE YOU SAYING TIE PROPERTY TAXES TO INCOME?

HUFFINGTON: I'M SAYING THAT IT WILL BE A COMBINATION OF THE PRICE OF THE HOUSE, THE INCOME OF THE HOMEOWNER AND MAKING SURE THAT THOSE AT THE TOP PAY THEIR FAIR SHARE OF TAXES.

BORENSTEIN: OKAY.

SHANDOBIL: WE'RE NOW GOING TO MOVE ON TO REBUTTALS, AND STATE SENATOR TOM MCCLINTOCK YOU GET THE FIRST CHANCE AND MY HUNCH IS YOU DISAGREE.

MCCLINTOCK: I DO. I'LL LET YOU IN ON A SECRET ABOUT BUSINESS TAXES, BUSINESSES DO NOT PAY TAXES, THEY PAY TAXES THROUGH YOU AS A CONSUMER IN HIGHER PRY PRICES THROUGH YOU AS AN EMPLOYEE THROUGH LOWER WAGES OR THROUGH YOU AS A INVESTOR IN LOWER EARNINGS, POST INVESTORS ARE NOT FAT CATS, THAT IS MOM AND DAD'S RETIREMENT FUND WE'RE TALKING ABOUT. IF YOU WANT TO KNOW WHAT PROP 13 HAS DONE, TO SAVE YOUR HOME, MULTIPLY THE VALUE OF THE HOME BY 2.6%; THAT IS THE PROPERTY TAX BILL IF THEY ALLOW PROP 13.

SHANDOBIL: NOW TO PETER UEBERROTH.

UEBERROTH: I AGREE WITH TOM ON THE FACT THAT WE HAVE A SPENDING BINGE. THE PEOPLE IN CALIFORNIA KNOW IT. WE WILL NOT SOLVE IT BY LETTING TAXES EAT -- THE TAX -- THE TAX PEOPLE EAT AT PROPOSITION 13. THOSE PEOPLE IN CALIFORNIA WANT TO HAVE A MOVEMENT. 57% HAVE. BUT THAT IS WHERE THEY BUILD THEIR VALUE FOR THEIR FAMILIAR FAMILY. SOME OF THEM WILL LOW INTEREST RATES ARE STARTING TO BORROW ON THAT. I'LL PROTECT THAT WITH EVERY OUNCE I'VE GOT. CALIFORNIA HOMES CANNOT BE TAXED LIKE EVERYTHING ELSE THAT WE DO. EVERYTHING ELSE IS TAXED.

SHANDOBIL: THANK YOU. MR. CAMEJO, YOUR CHANCE TO REBUT.

CAMEJO: PROPERTY TAXES ARE NOT THE -- THE PRESENT LAW IS NOT WORKING. WE HAVE SOME PEOPLE PAYING A VERY HIGH PERCENTAGE OF THEIR INCOME FOR THE PROPERTY TAXES, A YOUNG COUPLE GOES OUT, BUYS A NEW HOME AND THEY WILL PAY 20 TIMES THE RATE OF TAXES THAT WARREN BUFFETT PAYS AS A BILLIONAIRE, AND I THINK THAT HE DID US A SERVICE FOR POINTING IT OUT AND ARNOLD SCHWARZENEGGER TOLD HIM TO SHUT UP. I SAY GIVE THE MAN A MICROPHONE. lET'S HEAR MORE FROM HIM. THIS IS UNJUST. WE HAVE TO PROTECT, AND LOWER PROPERTY TAXES TO MAKE IT FAIR.

SHANDOBIL: I HAVE TO BE THE BAD GUY AGAIN, YOUR TIME IS UP. CRUZ BUSTAMANTE, YOU GET THE FINAL OPPORTUNITY TO REBUT THAT QUESTION.

BUSTAMANTE: I OPPOSE AN INCREASE IN PROPERTY TAXES. I BELIEVE THERE IS AN EQUITY DEVELOPING OVER THE LAST MANY YEARS WITH THE PROPOSITION 13, AND THAT IS THAT THE LARGEST AMOUNT OF PROPERTY TAXES NOW BEING PAID ARE BY RESIDENTS. AND THAT THE COMMERCIAL PROPERTIES, BECAUSE OF THE -- NOT CHANGING OWNERSHIP, IT'S BEEN DONE THROUGH SOME KIND OF A SHARE EXCHANGES OR OTHER KINDS OF MECHANISMS WHERE THE OWNERSHIP DID NOT CHANGE, AS A RESULT MANY OF THOSE PROPERTIES NEVER GOT REASSESSED AND THERE IS A -- LESS MONEY BEING PAID ON THE COMMERCIAL SIDE THAN ON THE RESIDENTIAL SIDE NOW.

SHANDOBIL: YOUR TIME FOR REBUTTAL IS UP. BUT THE NEXT QUESTION GOES TO YOU, AND IT COMES FROM ME.

BUSTAMANTE: OKAY.

SHANDOBIL: JUST YESTERDAY A SOUTHERN CALIFORNIA INDIAN TRIBE ANNOUNCED THAT IT WAS GOING TO GIVE YOUR CAMPAIGN AND COMMITTEE SUPPORTING YOUR CAMPAIGN $2 MILLION, IN ADDITION TO $1.5 MILLION THAT OTHER TRIBES HAVE GIVEN YOU OVER THE YEARS. AND THE TIMING IS INTERESTING, BECAUSE JUST LAST WEEK AFTER MEETING WITH TRIBES, YOU TOLD SOME REPORTERS THAT YOU COMPARED TRIBAL CASINOS TO HEWLETT-PACKARD, I'LL READ A QUOTE. YOU SAID "WE DO NOT PUT A LIMITATION ON HEWLETT-PACKARD, WE DO NOT SAY THAT YOU CAN ONLY SELL SO MANY COMPUTERS."

MY QUESTION IS ARE YOU SAYING THAT YOU WOULD ALLOW TRIBES TO OPEN NEW CASINOS AND EXPAND SLOTS?

BUSTAMANTE: I'M VERY, VERY PROUD, FIRST OF ALL OF THE SUPPORT THAT I'VE RECEIVED FROM TRIBAL GOVERNMENTS. TRIBAL GOVERNMENTS, I'VE BEEN INVOLVED WITH THEM FOR OVER 20 YEARS. I VISITED RESERVATIONS WHEN THEY LIVED IN SHACKS, IN ABANDONED CARS, THERE WAS 95% POVERTY, GAMING HAS BEEN AN OPPORTUNITY TO FOR THEM TO EXPAND OPTIONS, PUT PEOPLE TO WORK, PUT THEIR KIDS THROUGH SCHOOL. SO I WAS WITH THEM MANY, MANY YEARS BEFORE THEY ARE IN THEIR PRESENT CONDITION. SECONDARY, MORE IMPORTANTLY I THINK, I WILL BE A HEAD, THE HEAD, IF I GET A CHANCE TO BE, THE HEAD OF THIS GOVERNMENT. AND I WILL GIVE THEM THE RESPECT THAT THEY DESERVE IN WORKING OUT ARRANGEMENTS. THE RULES ARE SET. ONLY FEDERALLY RECOGNIZED TRIBES AND FEDERALLY RECOGNIZED LAND IS ELIGIBLE TO HAVE GAMING, AND BOTH THE VOTERS OF THIS STATE HAVE TWICE AGREED TO DO THAT.

SHANDOBIL: WELL, THE GOVERNOR DOES HAVE SOME DISCRETION OVER SOME DECISIONS INVOLVING TRIBES. AND SURELY YOU HAVE TO RECOGNIZE THAT IF YOU WERE GOVERNOR, THE FIRST TIME A DECISION INVOLVING THE TRIBES CAME UP, YOU WOULD REMEMBER THEY GAVE YOU $2 MILLION.

BUSTAMANTE: YOU KNOW, THE TRIBES ARE, I BELIEVE, THEY ARE SHOWING THE SAME RESPECT THAT I SHOWED THEM DURING THE TIME WHEN THEY HAD NOTHING. WHEN THEY HAD NOTHING. AND I REMEMBER GOING TO THOSE RESERVATIONS, THAT I MENTIONED EARLIER, WHEN THEY HAD NOTHING. AND NOW THAT I'M RUNNING, I THINK THAT THEY ARE SHOWING THEIR FRIENDSHIP BY HELPING ME IN TRYING TO BASICALLY LEVEL THE PLAYING FIELD. LEVEL THE PLAYING FIELD BY THOSE CANDIDATES WHO ARE MULTIMILLIONAIRES. I DO NOT HAVE THAT KIND OF WEALTH. AND I HAVE THE OPPORTUNITY NOW TO BE ABLE TO LEVEL THE PLAYING FEEL BY HAVING A TREMENDOUS NUMBER OF PEOPLE, BOTH FROM THE CALIFORNIA INDIAN TRIBES, AS WELL AS LABOR TO HELP ME.

SHANDOBIL: WE'LL HAVE TO GO TO REBUTTAL, I'M SORRY.

BUSTAMANTE: OKAY.

SHANDOBIL: PETER CAMEJO, YOU HAVE THE FIRST CHANCE TO REBUT.

CAMEJO: YOU KNOW, CASINOS, I WOULD NEVER ACCEPT MONEY FROM CASINOS, TOBACCO COMPANIES OR ENERGY COMPANIES, WHATEVER. ONCE YOU ACCEPT MONEY FROM THEM, THERE IS A COMPROMISE THERE. THE TRUTH IS, CASINOS ARE NOT A GOOD THING. THEY ARE A REGRESSIVE TAX. OF COURSE, DEEP INSIDE ME, I HAVE TO FEEL SOME SYMPATHY FOR THE NATIVE AMERICANS WHO HAVE FINALLY FOUND A WAY, BUT IT IS THE WRONG WAY, PREADING CASINOS OVER AMERICA, EVERY COMMUNITY, IT IS DAMAGING TO OUR SOCIETY, NOT HELPFUL.

SHANDOBIL: ARIANNA HUFFINGTON, YOUR CHANCE TO REBUT.

HUFFINGTON: IT IS NOTHING BUT LEGALIZED BRIBERY, YOU HAVE MADE A MOCKERY OF CAMPAIGN FINANCE LAWS BY USING A LUDICROUS LOOPHOLE TO GET THAT MONEY INTO YOUR CAMPAIGN AND BYPASS THE LIMITS AND IT IS REALLY ABSOLUTELY ABSURD AS GOVERNOR OF CALIFORNIA YOU WOULD CONTINUE TO DEPRIVE OUR GENERAL FUNDS OF TAXES.

BUSTAMANTE: TELL ME HOW YOU REALLY FEEL.

HUFFINGTON: I WILL.

SHANDOBIL: I'M SORRY, WE HAVE TO MOVE ON. I'M SURE THAT YOU WOULD LIKE TO RESPOND. HOWEVER, WITH SO MANY CANDIDATES, DO YOU NOT GET A CHANCE SENATOR TOM MCCLINTOCK, YOUR RESPONSE.

MCCLINTOCK: ON THE POLICY, I BELIEVE THAT WE MADE A PROMISE TO THE CALIFORNIA INDIANS A CENTURY AGO THAT THEY WOULD HAVE SOVEREIGNTY ON THEIR RESERVATION LANDS, AND IT MEANS THAT LOCAL AND STATE JURISDICTIONS END AT THE RESERVATION BOUNDARY BUT I AGREE WITH ARIANNA RECEIVING MILLIONS OF DOLLARS THROUGH A SUSPECT HOLE IN THE LAW CIRCUMVENTS THE WILL OF THE PEOPLE IN ESTABLISHING CAMPAIGN FINANCE LAW IN THE LAST ELECTION. THAT IS WHAT I ON TO. TECHNICALLY I HAVE THE SAME KIND OF COMMITTEE. OUR PEOPLE BELIEVE IT IS ILLEGAL. IF IT IS LEGAL, IT IS ON THE SHADY SIDE OF THE LAW.

SHANDOBIL: TIME IS UP. FINALLY, WE GO TO PETER UEBERROTH.

UEBERROTH: IF HE WANTS TO ACCEPT MONEY FROM ANY SPECIAL INTEREST GROUP, I'M NOT GOING TO CRITICIZE HIM. HE WILL DO WHAT HE WILL DO. BASICALLY, WE'RE AVOIDING ISSUES AND NOT TALKING ABOUT THE REAL STUFF. JOBS ARE WHAT ARE REAL STUFF. THAT IS HOW WE PAY THE BILLS IN SACRAMENTO. IT TAKES SALES TAX AND THE PAY CHECK TO PAY THE BILLS HERE. WE'RE DRIVING JOBS OUT WITH ALL OF THE SPECIAL INTERESTS, AND WE DO NOT -- WE WILL NOT SUCCEED IF WE DO NOT STOP IT AND BALANCE THE BUDGET. SIMPLE AS THAT.

SHANDOBIL: THANK YOU, MR. UEBERROTH. WE'LL NOW SEGUE A LITTLE BIT AND BREAK OUT OF OUR QUESTION, ANSWER AND REBUTTAL MODE AND FOR A FEW MINUTES WE'LL ASK A SERIES OF QUESTIONS DESIGNED TO GET SHORT ANSWERS FROM YOU. A SERIES OF QUESTIONS ON A NUMBER OF IMPORTANT ISSUES. THE QUESTIONS SHOULD BE SIMPLE ENOUGH FOR EACH CANDIDATE TO GIVE AN ANSWER IN 15 SECONDS OR LESS. NO TIME FOR RATIONALIZATIONS, JUST A QUICK YES, NO OR EXPLANATION OF YOUR POSITION. NOW, EACH CANDIDATE WILL GET THE SAME QUESTION. AND THE FIRST ONE COMES FROM PILLAR.

MORRERO: THIS IS TO ALL OF YOU. IN 1994 DID YOU VOTE FOR OR AGAINST PROPOSITION 187, WHICH RESTRICTED HEALTH AND EDUCATION BENEFITS FOR UNDOCUMENTED IMMIGRANTS AND WOULD YOU DO THE SAME TODAY?

SHANDOBIL: PETER UEBERROTH, YOU GET THE FIRST CRACK, 15 SECONDS OR LESS.

UEBERROTH: THE FEDERAL GOVERNMENT DECIDES WHAT WE DO ON OUR BORDERS, THEY DECIDED TO BRING ILLEGAL IMMIGRANT NOOSE OUR COUNTRY, INTO OUR STATE. AND THEY HAVE TO PAY FOR IT. SO I'M NOT FOR TAKING EDUCATION AWAY OR ANY HEALTHCARE AWAY. BUT WE HAVE THE BORDERS. WE HAVE TO GET THE FEDERAL GOVERNMENT TO PAY FOR IT.

SHANDOBIL: 15 SECONDS, BELIEVE IT OR NOT. ARIANNA HUFFINGTON.

HUFFINGTON: I VOTED AGAINST IT. BUT I DID NOT SPEAK OUT AGAINST IT. BECAUSE AT THE TIME I WAS A CANDIDATES WIFE RATHER THAN A CANDIDATE. I MUCH PREFER BEING A CANDIDATE.

SHANDOBIL: LIEUTENANT GOVERNOR BUSTAMANTE.

BUSTAMANTE: I VOTED AGAINST PROPOSITION 87. AND SINCE THAT TIME HAS PROVEN THAT THE PREMISE WAS WRONG. TODAY IMMIGRANTS PAY 1400 DOLLARS MORE A YEAR THAN THEY RECEIVE IN BENEFITS.

SHANDOBIL: PETER CAMEJO, 15 SECONDS.

CAMEJO: I'M OPPOSED TO 187. I VOTED AGAINST IT, CONSIDERING IT UNCONSTITUTIONAL, VIOLATION TO U.N. CHARTER, A DENIAL TO CHILDREN TO GO TO SCHOOL, PUNISH THEM FOR THE ECONOMIC PROBLEMS THEIR PARENTS SUFFERED.

SHANDOBIL: SENATOR TOM MCCLINTOCK.

MCCLINTOCK: I VOTED FOR PROPOSITION 187, I CAMPAIGNED FOR IT, IT NEVER HAD A FAIR DAY IN COURT BECAUSE THIS GOVERNOR REFUSED TO DEFEND IT. I INTEND TO SEE THAT IT GETS THAT FAIR DAY IN COURT.

SHANDOBIL: THE NEXT QUESTION COMES FROM JOHN MYERS.

MYERS: AND BACK TO THE BUDGET IF WE COULD QUICKLY, AN INITIATIVE THAT COULD BE ON THE MARCH BALLOT WOULD MAKE IT EASIER TO PASS BUDGETS AND RAISE TAXES IN THE LEGISLATURE BY GETTING RID OF THE TWO-THIRDS VOTE REQUIREMENT. DO YOU SUPPORT OR OPPOSE?

SHANDOBIL: THE FIRST CHANCE GOES TO LIEUTENANT GOVERNOR BUSTAMANTE.

BUSTAMANTE: I SUPPORT THE PROPOSAL FOR 55% TO PASS THE BUDGET.

SHANDOBIL: PETER CAMEJO.

CAMEJO: ONLY THREE STATES HAVE THE SYSTEM WE HAVE. I'M AGAINST IT. I SUPPORT THE PROPOSAL TO LOWER TO 55%.

SHANDOBIL: TOM MCCLINTOCK.

MCCLINTOCK: I OPPOSE IT. IF YOU LOWER THE REQUIREMENT FOR TAX INCREASES IT WILL BE KATIE BAR THE DOOR.

SHANDOBIL: FINALLY ARIANNA HUFFINGTON. EXCUSE ME, PETER UEBERROTH. I WENT OUT OF ORDER.

UEBERROTH: I AGREE WITH TOM. IT WILL BE ANOTHER WAY THAT PEOPLE CAN SPEND CRAZY. THAT IS WHAT IS HAPPENING IN THIS STATE. WE WILL SUFFER FOR IT FOR THE YEARS TO COME.

SHANDOBIL: FINALLY ARIANNA HUFFINGTON.

HUFFINGTON: I SUPPORT IT. IN FACT, I THINK IT SHOULD BE A SIMPLE MAJORITY, MAJORITY RULES IS GOOD ENOUGH FOR THE FOUNDING FATHERS, IT SHOULD BE GOOD ENOUGH FOR PASSING A BUDGET IN SACRAMENTO.

SHANDOBIL: WE HAVE ONE MORE QUESTION DESIGNED FOR A SHORT ANSWER, COMES FROM DAN.

BORENSTEIN: LAST YEAR GOVERNOR GRAY DAVIS SIGNED LEGISLATION DECLARING A WOMEN'S DECISION ABOUT BIRTH CONTROL AND ABORTION ARE FUNDAMENTALLY PRIVATE CHOICES PROTECTED UNDER STATE PRIVACY RIGHTS LAWS. THAT PROVISION ADVOCATES SAY WOULD KEEP ABORTION LEGAL IN CALIFORNIA, IF THE LANDMARK US 1973 ROE V. WADE DECISION WERE ONE DAY OVERTURNED BY THE U.S. SUPREME COURT. WOULD YOU HAVE SIGNED OR VETOED THE BILL THAT THE GOVERNOR SIGNED.

SHANDOBIL: ARIANNA HUFFINGTON.

HUFFINGTON: I WOULD HAVE SIGNED THAT BILL. AND AS GOVERNOR I WOULD OPPOSE ANY RESTRICTIONS TO A WOMAN'S RIGHT TO CHOOSE.

SHANDOBIL: SENATOR MCCLINTOCK.

MCCLINTOCK: I WOULD HAVE VETOED THE BILL. WHEREVER WE STAND ON THE ISSUE, WE CAN AGREE THAT PARTIAL BIRTH ABORTION THE PROCESS OF STABBING A INFANT AS IT IS BEING BORN IN THE BACK OF THE HEAD IS SIMPLY BAR BARRACK AND OUGHT TO BE STOPPED.

SHANDOBIL: PETER.

CAMEJO: I'M PRO CHOICE AND I BELIEVE THAT THE ISSUE IS ROOTED IN SEPARATION OF CHURCH AND STATE. EVERYONE HAS THE RIGHT TO THEIR OPINION, SHOULD BE RESPECTED, THE GOVERNMENT SHOULD NOT INTERFERE.

SHANDOBIL: ARE YOU SAYING THAT YOU WOULD HAVE SIGNED IT?

CAMEJO: YES.

SHANDOBIL: LIEUTENANT GOVERNOR, 15 SECONDS.

BUSTAMANTE: I WOULD HAVE SIGNED IT, I BELIEVE IN A WOMAN'S RIGHT TO CHOOSE, IT IS BETWEEN HERSELF, HER DOCTOR AND HER GOD.

SHANDOBIL: PETER UEBERROTH?

UEBERROTH: WELL, I WOULD NOT HAVE SIGNED IT. BUT I BELIEVE IN THE WOMAN'S RIGHT TO CHOOSE. I HAVE THREE DAUGHTERS. AND I WOULD NOT HAVE SIGNED IT.