Republican gubernatorial candidates Steve Poizner and Meg Whitman are looking forward to a better week, the previous seven-day period featured a bothersome news-cycle highlighting a few fiscal conflicts.

For Poizner, it became news that Commissioner Steve continues to use the California Highway Patrol to protect him while he is on the campaign trail, first reported by Dan Noyes of ABC 7 News.

Mr. Poizner is entitled to CHP protection as the Insurance Commissioner, but should he be employing them at such a high expense to the California taxpayers while the state is suffering a daily drain on its budget?

In 2008, the total cost to the state’s budget was $214,335 annually for Poizner’s CHP Patrol. 

Knowing that Steve Poizner is traveling the state for his personal interests as candidate for governor and his continual use of the CHP security detail only increases the annual rate – at a time that features the state running another daily deficit – taxpayers are beginning to ask if Steve Poizner is spending appropriately.

As a state-wide officer holder, Poizner has been very frugal with his Insurance Commission operations. He was the only office holder to reduce his opeation budget by 10-percent at the outset of 2009, and most recently it was announced that Poizner has actually reduced his budget by 15percent. Steve Poizner has supported, (He was against the governor’s furlough days), the overall reduction of government’s size and expense. In his office, he has walked that walk fiscally.

But the media believes they have found a hypocritical stance being operated by Steve Poizner. As he campaigns on across-the-board cuts, reduction of taxes and removing government waste, Poizner continues to travel with CHP protection that may triple in costs for the 2009 budget.

The first to jump was Meg Whitman’s camp. 

“California taxpayers shouldn’t be on the hook for Commissioner Poizner’s personal campaign expenses. Only a Sacramento politician would demand taxpayers foot the bill for his personal security detail at partisan campaign events while the state faces enormous budget shortfalls. If Commissioner Poizner is serious about reducing state spending, he’ll reimburse the state,” said Whitman spokeswoman Sarah Pompei.

I personally asked the Poizner Campaign about this employment and its costs, they passed the email along to the State Insurance Commissioners’ office.

“Elected officials are given protection by the CHP to ensure that their personal safety is not compromised by the decisions they make as public servants. At the Department of Insurance, one of the duties of the Insurance Commissioner is to crack down in insurance fraud. Under Commissioner Poizner, thousands of alleged criminals have been arrested in connection with insurance fraud. Because criminals who seek to harm our elected leaders make no distinction whether they appear at official events or other public events, they are protected by CHP at all times,” emailed from the Insurance Commissioner’s Communications Department.

The statement from the commissioner’s office addresses the issue of why the CHP security detail is being issued at Poizner’s campaign events, what remains is if it should continue at such a cost to the taxpayers. With Poizner attending many more events in 2009, the annual cost could be close to $500,000 for his twenty-four protection.

Should Poizner, who has called himself “the tax and spending cut candidate”, reimburse the State of California for his CHP security detail while campaigning for governor in 2009 and 2010? At this point-in-time, Steve Poizner has said no; Poizner is the Insurance Commissioner wherever he goes and deserves the security detail.

In a week that featured a statement from Meg Whitman revealing that she will not take a personal paycheck as the state’s executive officer – if she is fortunate enough to win. The Whitman Team is hoping to score a few fiscal points with Steve Poizner’s CHP detail reports, and his accepting of the high offices pay.

Steve Poizner has stated that he will draw the $170,000 annual pay as Governor of California, even though he is worth four-times as much as current governor Arnold Schwarzenegger – who has not taken a single penny from California taxpayers in the form of a paycheck.

We are left to decide for ourselves; is Steve Poizner hypocritical on message?

For Poizner fans, let not your heart be troubled, Meg Whitman had her own fiscal hiccup last week.

Whitman said she would spend close to $125 million on her gubernatorial campaign. Her comment brought charges that she is an “over-spender”. The media jumped on her current expenditures, and her desire to spend ‘as much as it takes’ to win the right of California’s Executive Office.

Poizner’s Camp was quick to pounce, “Meg is cutting million dollar checks in order to avoid basic parts of running for office like voting, debating, and talking to the press. Meg promised three debates in the fall, then refused to debate in even one. In Meg’s only press conference as a candidate, she coundn’t remember when she voted or if she voted over three decades. To cover up all her mistakes, Meg is on a spending spree which even overshadows the billions she overpaid for Skype. Meg has a long history of over-spending, which is not a good sign when voters want someone that will reduce government spending,” stated Poizner Point-man Jarrod Agen.

After eMeg’s tussle with being an over-spender,  the attention shifted to charges that Whitman’s $46 million Griffith R. Harsh IV and Margaret C. Whitman Charitable Foundation only contributed $125,000 in its first year of operation. To make matters worse, of the $125,000 of charitable contributions offered, a check for $100,000 went to the Environmentalist Defense Fund (EDF).

What followed was a media blitz on the records of Whitman’s foundation.

Late in the week the San Jose Mercury News reported Meg Whitman’s foundation contributed $3 million into a hedge fund in the Cayman Islands.

That made for some controversial news; here is eMeg, trying to shore up the conservative vote in the GOP and her foundation has contributed to EDF and into an offshore hedge fund in the Cayman Islands.

The words environmentalists and hedge fund alone bring a jaundiced eye. There have been numerous political scandals surrounding offshore hedge funds, but most of the scandal involves the politician and not the hedge fund operation. That fact seems to be lost on the average Joe and Jane Citizen.

From Richard Rahn of  The Washington Times:

“What Cayman and some of its competitors provide is a place for large companies and financial institutions to consolidate funds – in electronic form – without being taxed or subject to unnecessary costly regulation, until these funds are productively reinvested throughout the globe [which can be as little as a matter of seconds].”

“Most of the money that flows into Cayman is invested in the United States. Something on the order of $1 trillion now flows through Cayman each year, but this money does not physically reside in this little island, nor do the locals own it. [The locals make their money from providing first-rate legal, accounting, financial and tourist services.] The money is owned by the millions of people who are investors in both American and foreign companies and who, for the most part, are unaware their retirement incomes are being both protected and enhanced because part of their investments are continuously being repackaged in Cayman as they go off to higher and better uses.”

“It is not well understood that the world would be poorer and there would be more people in poverty if places, such as Cayman, did not exist. In the modern world, economic growth is highly dependent on capital investment. Financial capital is necessary to build new plant and equipment, to fund research and development, including medical breakthroughs and to provide the funds to hire workers. Many countries have very heavy taxes on capital, which means lower rates of investment and slower job creation.”

A hedge fund is best understood by describing it as a “rich man’s/woman’s” mutual fund.

It’s not illegal, but a radically risky investment that in this case has 100-percent of the profits headed back into the charitable foundation. Meg’s hedge fund investment is purposed to be a “nickle-to-dime”, 100-percent return for the foundation alone.

I asked Whitman’s Co-manager Tucker Bounds about the foundation, and its goals.

“The foundation’s long-term focus is on philanthropic giving in the areas of education, religion, art, health care, conservation and research.”

Would Meg Whitman, or her husband, ever draw a paycheck from any profits made with the $3 million hedge fund in the Cayman Island’s; I was assured that the Whitman’s are not receiving – nor do they have any plans to receive – a paycheck from the foundation.

Is this an act on Meg’s part to avoid tax liabilities?

“No, that’s a ridiculous suggestion as this is a not-for-profit investment portfolio. Meg and her charitable foundation have fulfilled every single tax obligation and are invested in a way that is entirely consistent with the industry standard for a large non-profit foundation.”

Why did Meg Whitman contribute to EDF?

“Meg is a Teddy Roosevelt Republican who believes we should be smart advocates for sensible resource policy. On issues ranging from providing more water to the Central Valley to opposing hasty implementation of carbon emissions regulations, Meg has been the only candidate consistently on the side of jobs, people and common sense resource policies.”

The life and times of Steve Poizner and Meg Whitman; not your average candidates these two.

Charitable contributions are nothing new for eMeg, or Steve for that matter. And Whitman’s charitable contributions have been largess, but proven to be full of integrity and purposed in the past.

E-Commerce reported in 2001, “EBay has launched a campaign to raise $100 million in 100 days for relief efforts in New York City through charity auctions on eBay.com, reports The Wall Street Journal. The campaign, called Auction for America, was expected to be publicly announced in New York on Monday by eBay CEO Meg Whitman, New York Mayor Rudolph Giuliani and New York Gov. George Pataki, an eBay spokesman said.”

The Associated Press reported in 2002, “Using a $30 million gift from the head of online auction site eBay, Princeton University will substantially expand its undergraduate ranks for the first time since it began admitting women.”

It is even commonplace for colleges and universities to invest in hedge funds for a higher return on the investment. Since Meg’s husband is an educator associated with Stanford University, this may be the insentive behind her efforts in the Cayman Islands.

“Billions of dollars in untaxed, offshore investments by college endowments could be subject to taxation under a proposal being considered by the leaders of the U.S. Senate Finance Committee. The proposed change, which is aimed at hedge funds, a popular investing strategy for many colleges, would affect the largest college endowments, including those at Duke, Harvard, and Yale Universities. Small college endowments, also heavily reliant on hedge funds, could see new taxes on one of their most lucrative sources of income,” reported Paul Fain and Brad Wolverton in their 2007 piece called ‘Offshore Investments By Colleges Draw Scrutiny’.

Enough to say that it was a fiscally stressful week for the millionaires Meg Whitman and Steve Poizner.

Around-the-clock police protection, decisions on whether, or not, to take a six-figure paycheck, and millions of dollars restng in a charitable foundation, featuring $3 million in a hedge fund in the Cayman Island; just your average day on the campaign trail for the gubernatorial candidates and your average day as a self-made millionaire running for public office.

The problem, how to communicate these annoying fiscal issues to millions of California citizens who don’t have a two nickels to rub together.