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San Francisco Leads Charge to Boycott Arizona, But Calls Could Spark Backlash

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San Francisco Mayor and candidate for Lieutenant Governor Gavin Newsom greets a delegate across an escalator at the California Democratic Convention in Los Angeles Saturday, April 17, 2010. (AP)

Sanctuary city San Francisco is leading the charge in pressing municipalities and groups to consider a boycott of Arizona over its law that will allow police to ask people their immigration status.

Mayor Gavin Newsom this week suspended all non-essential travel for city employees going to Arizona, meaning no conference in Scottsdale next weekend for members of the city's housing authorities. The city's Board of Supervisors also has taken the first step toward an economic boycott, a move that could result in the suspension of existing contracts with Arizona-based companies and a ban on new ones.

But Newsom also has formed an "Arizona Boycott Workgroup” to analyze if and how an economic boycott could backfire on San Francisco businesses. For instance, the city does business with a company that accepts and processes payments in Arizona. There's concern if the boycott is made uniform, 2,500 San Franciscans could lose their jobs.

Groups like the San Francisco Convention Bureau and the city's restaurant lobby also worry about a reciprocal backlash.

"Would Arizona and other states that are more conservative than San Francisco retaliate and stop sending conventions to San Francisco?" asked Kevin Westly of the Golden Gate Restaurant Association. "Certainly in a recession, we don't want any retaliation."

Boycott talk is moving beyond San Francisco to other cities, like Los Angeles, where City Councilwoman Janice Hahn, who is running against Newsom for the California lieutenant governor's seat, is organizing against Arizona.

And California State Senate President Darrell Steinberg is suggesting the state end contracts until the Arizona law is repealed. But California Gov. Arnold Schwarzenegger has expressed concern about the impact of a boycott, which would affect one of the state's biggest contracts -- a deal with a private firm that houses thousands of California inmates in Arizona. The deal is worth millions of dollars, and Schwarzenegger is looking to expand it.

Boycott supporters also seek to encourage major sports organizations, like the NBA and NFL, to move their games out of Arizona.  Arizona-Boycott.org has launched online targeting prominent companies like GoDaddy, PetSmart and U-Haul, all based out of Arizona. The group is also organizing rallies around the country against the Arizona law.

Opponents of the legislation say Arizona has put itself in this position because it wants to go back to the era of slavery.

"We cannot go back to the slave trade, slave patrol era, where ... free men or African Americans that were free were arrested, put in jail and then sent back to the plantations," said Juan Carlos Ruiz, advocacy director of the Latino Federation of Greater Washington.

But Arizonans – even those opposed to the legislation, like Phoenix Mayor Phil Gordon – say a boycott is not in anyone’s interest. The Arizona Hotel and Lobbying Association launched a Facebook site noting that Arizona's tourism industry had nothing to do with enacting the law and is experiencing a fragile recovery that could be devastated by a boycott.

"The Tourism Industry was not part of the development of this legislation, but unfortunately is certain to experience the unintended consequences of the economic backlash," reads a talking points paper produced by the association. "Instead of driving our state’s economy even further into decline and punishing the 200,000 families who rely on tourism for their livelihoods, we proudly ask all Arizonans’ to support the diverse and global workforce that comprises the Tourism Industry and to invite friends, family, associations and businesses to visit and experience Arizona firsthand."

It won the backing of the American Hotel and Lodging Association, which reportedly will not cancel its June meeting in Scottsdale, although the Conference of Immigration Lawyers did cancel its August meeting in Scottsdale.

Arizona state Sen. Ron Gould, a Republican, said he doesn't think a boycott will have any effect.

"You're already seeing the governor of California rethink his position because it's beneficial to the taxpayers of California to do business with Arizona," he told Fox News.

Proponents on both sides of the issue acknowledge that Arizona was hurt by a boycott in the 1980s when the state declined to honor the Martin Luther King Holiday. It lost the Super Bowl at that time.

The issue was resolved when voters went to the ballot to weigh in on the decision. Opponents of the law may not like that option, however, since 70 percent of Arizonans support the legislation, polls show.

Fox News’ Claudia Cowan contributed to this report.