Ties to Builder at Issue in Gov. Race

The man whose family real estate empire has spent nearly $12 million promoting the political career of gubernatorial hopeful Phil Angelides has a direct stake in matters before California’s chief of state, including restraints on building new suburbs on cropland and vacant hillsides.

The builder, Angelo K. Tsakopoulos, owns vast tracts of land in the Central Valley and Sierra foothills that are ripe for home construction. A longtime nemesis of environmentalists, he pays lobbyists to propose, block or modify land-use bills that move through the Legislature to the governor’s desk.

In one case, a bill written by a Tsakopoulos lobbyist passed the Legislature and was signed into law by Gov. Gray Davis a few months before voters ousted him. It speeds payments to developers of new subdivisions for building roads, sewers and other public works.

In another case, Tsakopoulos got a top lawmaker to sponsor a bill that would have radically overhauled the state’s rules on rezoning farmland for home construction. That bill did not pass.

From Central Valley city halls to the White House, Tsakopoulos has long maintained deep political ties with elected officials at every level of government. But now, his spending on the gubernatorial effort of state Treasurer Angelides has made Tsakopoulos a source of controversy in the June 6 Democratic primary.

That $12 million is probably the most that any family donor group has spent on one candidate for public office in U.S. history, said Edwin Bender, executive director of the Institute on Money in State Politics, a national nonpartisan research group. He called the builder’s spending on Angelides “startling.”

“To have someone rely so heavily on one person for so much money, it’s a red flag waving, and I do hope voters pay attention,” Bender said. “This is either an amazingly good friendship, or they have an idea that someone’s going to get something out of this.”

The money spent on Angelides comes from Tsakopoulos, his real estate businesses and his relatives. Over the last decade, they have given $3 million to Angelides’ campaigns for treasurer and governor. Since April, the Tsakopoulos group has spent an additional $8.7 million on TV ads and mailers promoting Angelides.

State Controller Steve Westly, who is running against Angelides in the primary, has used his rival’s ties to Tsakopoulos to attack his environmental record, citing the builder’s history of running afoul of pollution regulators. Westly’s campaign has also ascribed dark motives to Tsakopoulos’ spending on behalf of Angelides, suggesting it is part of a pattern by the builder to promote politicians who advance his real estate interests.

“He pretty much owns the Board of Supervisors in Sacramento County and the Sacramento City Council,” said Westly strategist Garry South, who calls Tsakopoulos a “sultan of sprawl.”

“So why not buy a governor as well? Why not go all the way to the top?”

Ben Davidian, a Tsakopoulos lawyer, said the developer would not answer questions about his political donations or real estate holdings.

“Phil Angelides is a lifelong friend of the Tsakopoulos family,” Davidian said. “They don’t wish to comment any further.”

Angelides, a former Sacramento developer, is a longtime Tsakopoulos investment partner. In 1984, Tsakopoulos hired Angelides, then a legislative aide, as president of his main real estate company, AKT Development Corp. Later, he and Tsakopoulos invested together in housing and commercial projects around Sacramento. Since taking office as treasurer in 1999, Angelides has collected $488,000 in personal income from Tsakopoulos under some of those investment deals. In his campaign for governor, Angelides has taken multiple trips on the builder’s private plane.

In an interview, Angelides said he did not feel beholden to Tsakopoulos, adding that he would “do the right thing for the people of California” if he needed to make decisions as governor that would affect him.

“All my assets will be in a blind trust, and what I’ll do, as I’ve always done, is I’ve assiduously followed the laws,” Angelides said. “I recuse myself when that’s legally required, and I do that always with the abundance of caution.”

Asked to explain the developer’s spending on his campaigns, Angelides said: “Whether it was Michael Dukakis or Paul Sarbanes or Paul Tsongas, he’s always been extraordinarily supportive of Greek Americans of quality seeking elective office.”

Tsakopoulos, who in addition to his spending on Angelides has made more than $4 million in state and federal campaign contributions since the late 1980s, has often called on politicians to protect his interests. (He controls about 40,000 acres of Central Valley land, according to the Sacramento Bee.)

In 1997, he told The Times that he had complained to President Clinton at a White House coffee klatch that bureaucrats were “going wild,” blocking development of prime California real estate to save wetlands and preserve fairy-shrimp habitat. At the time, Tsakopoulos was battling federal agencies over accusations that his “deep ripping” -- plowing earth as much as 10 feet below ground -- of vineyard land was violating the Clean Water Act. The Times reported that Tsakopoulos, also one of Clinton’s Lincoln bedroom sleepover guests, won some accommodations from federal agencies by using his pull at the White House.

In Sacramento, the builder’s AKT Development Corp. has spent just over $205,000 on lobbyists since January 2003. Among them are former Sacramento Mayor and state Assemblyman Phil Isenberg, a close friend and advisor to Angelides. Lobbying reports filed with the state are required to list bills of interest.

One bill that sparked AKT lobbying last year was a sweeping groundwater-rights measure vetoed by Gov. Arnold Schwarzenegger, who found it would have placed “a significant burden on property owners.”

The sponsor, state Sen. Sheila Kuehl (D-Santa Monica), said Tsakopoulos had not lobbied her on that measure, but had once complained to her about another bill after it was enacted: It required builders of projects with more than 500 units to identify an available water supply. “He really didn’t like that bill and kind of lectured me about it,” she recalled.

Another bill on the watch list of his lobbyists would restrict home building along veins of naturally occurring asbestos, a potential health hazard in some Sierra foothills areas where the developer owns land.

Perhaps most significant, however, was a farmland preservation bill sponsored in 2003 by Democrat John Burton of San Francisco, then state Senate leader. On the surface, its purpose seems at odds with the builder’s history of converting cropland into housing tracts. But a farmland preservationist who monitored the bill said it could have created a new avenue for Tsakopoulos to make money -- and still build more homes.

The bill would have put new restraints on local officials in rezoning cropland for home construction. In some cases, it would have required builders to permanently preserve four acres of cropland for every one acre they develop.

Isenberg, a Tsakopoulos lobbyist who pushed the bill, said the builder’s motive was farm preservation. “Angelo’s always had an attraction and a fondness for growing things,” he said.

John McCaull, who was California director of the American Farmland Trust preservation group when Tsakopoulos was pushing the bill, said he was surprised that the builder had proposed it, but welcomed it. He said it would have amounted to a “sea change” in suburban encroachment into farmland. “This was an epic,” he said.

But the bill set off an uproar among other developers, who succeeded in killing it.

McCaull said the bill could have created a vast new marketplace for Tsakopoulos and other owners of large tracts of farmland that is still too far outside existing suburbs to be ready for development. The owners could have continued to reap income on their crops, but also could have sold permanent-preservation easements to builders who needed them to meet the new 4 to 1 rule -- or used those easements themselves to offset their own new developments on farmland. McCaull estimated the value of those easements at $250 million a year.

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Times researcher Maloy Moore contributed to this report.