Whitman Invents Tale About Regulations Stifling Business To Push Her Deregulatory Ideology

One of the key parts of Republican gubernatorial candidate Meg Whitman’s plan for reviving California’s economy is eliminating and streamlining regulations. “Every small business that I have seen in California — and I’ve done 600 different events in almost all 58 counties — tell me that regulation is killing them,” she said on Fox News this week.

One of the former Ebay CEO’s favorite stories about burdensome regulations stifling business has to do with Ebay subsidiary PayPal. Here’s what Whitman told Fox News’ Neil Cavuto:

The permitting process, the competing agencies that try to regulate — we built a building in Sunnyvale for PayPal, two-and-a-half years to break ground. We had to hire three consultants to navigate the labyrinth of California regulations.

And lest we think this was a one-off story, BusinessWeek noted that Whitman “raises the issue repeatedly on the stump.” “Two and half years of trying to get permission, 25 permits, three consulting firms to navigate the labyrinth of regulations. This was for a building that was to house 3,000 white-collar workers. You would think the State of California would have been my best friend on this,” Whitman says.


There’s just one problem. None of it ever happened. CalBuzz contacted the city of Sunnyvale to see if there was any truth to the story, and City Manager Gary Luebbers responded:

We have taken considerable time trying to ferret out this assertion. In fact our research shows absolutely no record of ANY contact with PayPal. I think she may have just pulled Sunnyvale out of thin air. PayPal is in San Jose.

So the trail moves to San Jose, where the Mercury News found that the city “processed eBay’s development application in record time and that fulfilling all the city’s requirements took just 11 months.”

In fact, Whitman has had nothing but kind words for the business development infrastructure in San Jose. “Our partnership with the office of the mayor, the city council, the city staff and the office of economic development is a testament to San Jose’s status as a world class place to grow and operate a business,” she has said. “The City of San Jose has always been extremely flexible in helping to anticipate and meet our rapidly changing needs.”

So the story that Whitman relies on to push her deregulatory ideology is nothing but a fantasy. As UC Berkley economist Michael Reich has pointed out, Whitman’s claim that California is over-regulated doesn’t hold water, and the analysis that she says proves the negative effect regulations have on the Golden State’s job creation is based on discredited shlock science. Her plan to gut regulations — including eliminating overtime pay for workers — would transfer $1 billion from workers to employers.