SACRAMENTO, CALIF. ? Gov. Arnold Schwarzenegger on Wednesday took the first step to shaking up his administration after his resounding special election failure, appointing a longtime Democratic activist as his chief of staff.

The move to replace Patricia Clarey had been widely expected since voters defeated all four of the governor’s “year of reform” measures Nov. 8. Clarey was campaign manager for the effort.

But the announcement of state Public Utilities Commissioner Susan Kennedy as Clarey’s replacement caught many Republicans and Democrats off guard.

Kennedy, 45, was Cabinet secretary to former Gov. Gray Davis, who was ousted in the 2003 recall election that brought Schwarzenegger to power. She also is a former director of an abortion rights group and one of the highest-profile gays in state politics, making her appointment a risky one for the Republican governor.

Kennedy’s appointment could help regain the support of Democrats and independents the governor lost in the past year, but it also jeopardizes his standing among conservatives, his only reliable supporters.