This is one very weird sense of humor. The New York Times has this:
When Mr. Axelrod was asked how involved he was in the selection of Bo, he jokingly answered that he “only got called in for the final three.”
But as Mr. Axelrod was trying to set the record straight – he actually was not consulted – Mr. Sagal asked about the two runner-ups.
“One was Miss California,” Mr. Axelrod cracked to the audience’s laughter.
Obama advisor, David Axelrod, suggests naming Obama family dog "Miss California"
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