Foes Remain on the Offensive

Democratic gubernatorial rivals Steve Westly and Phil Angelides each tried to raise new doubts about the other’s integrity Monday as they scurried to Memorial Day campaign stops hundreds of miles apart.

After paying tribute to the war fallen at San Francisco National Cemetery in the Presidio, Westly opened the day’s ethics clash on a bus ride across the Bay Bridge to Oakland. He told reporters that Angelides “should be embarrassed” over running a TV ad that attacked Westly for taking campaign money from a “corrupt Chicago businessman,” when Angelides sought donations from the same man, Chicago attorney Joseph Cari.

“For him to stand up and hit me with a TV ad seems dishonest at best,” Westly said, reacting to a story in The Times on Monday that revealed Angelides’ overtures to Cari.

Angelides, the state treasurer, refused to answer questions after his morning stop at a Memorial Day tribute at Green Hills Memorial Park in Rancho Palos Verdes. But in a telephone interview later from his car, he defended seeking contributions from Cari, who is awaiting sentencing on criminal charges in an Illinois pension fund scandal.

He said Westly’s wrongdoing was not in seeking the money from Cari, but in pushing state pension-fund investments in Cari’s company.

“What’s relevant here are Steve Westly’s activities after that point on behalf of Joe Cari,” Angelides said. “That’s why it’s a relevant issue.”

As The Times reported in April, Westly urged the staff of the state employee pension fund in 2003 to consider investing in a Cari partnership.

Within a year, Cari and his partners had helped raise more than $50,000 for Westly’s campaign coffers. And the company had secured a $5-million investment from the pension fund.

Angelides and Westly, the state controller, both serve on boards that invest billions of dollars in pension assets for retired government workers.

Angelides said he had deferred to pension fund staff on investment decisions, and his policy was “not to pursue matters over the objections of staff.”

“What happened is that Steve Westly interceded,” Angelides said.

With the June 6 election only a week away, polls show that the race remains a tossup with more than one in four likely Democratic primary voters still undecided on whether to nominate Angelides or Westly to challenge Republican Gov. Arnold Schwarzenegger in November.

The charges and countercharges over ethics are part of a ferocious effort by each candidate, mainly through TV commercials, to define his rival as untrustworthy. At public events, both continue to promote their largely similar agendas, including higher school spending and broad environmental protections. But TV ads are the main tool for reaching voters statewide, and both candidates have all but stopped running positive commercials about themselves.

Asked about the impact of the campaign’s relentlessly negative tone, Angelides said he was focusing on policy. Westly “unleashed a barrage” of attack ads, he said, and “I’m going to stand up for myself.”

On the bus ride to Oakland, where he greeted voters at a ribs-and-corn-muffins buffet lunch, Westly called the tenor of the campaign “unfortunate.”

“I didn’t want to be here,” said Westly, who earlier this month broke his written pledge not to be the first to attack his rival by name in a TV ad. “We’re hoping we can get to a point where we can get some positive ads back up on the air, down the stretch. We’ll see.”

Angelides spokesman Brian Brokaw rejected Westly’s call to yank the ad on his ties to Cari, saying that it raised “very serious allegations.”

“There seems to be a growing pattern of Steve Westly misusing his office to do favors for campaign contributors, like Joe Cari and Barnes & Noble,” Brokaw said.

The Times reported Saturday that Westly aided bookseller Barnes & Noble in its fight to avoid a multimillion-dollar California tax bill at the same time that he was arranging a fundraiser at the chain’s East Coast headquarters. In a March 2004 e-mail, Westly told one of his fundraisers that barnesandnoble.com President Marie J. Toulantis was pleased by his efforts on the tax matter, which made it a good time to ask for her help in raising campaign cash.

Westly, whose promises to extract money from tax cheats are a centerpiece of his campaign, said there were “arguments on both sides” of the Barnes & Noble tax case, but defended his effort to parlay his official state action in the case into campaign money.

“I don’t think it’s inappropriate to ask people for support after you’ve made decisions based on what you think is right,” he said. “Sometimes they contribute, sometimes they do not.”

Asked whether it might appear that official decisions in such cases were based on the potential for generating campaign cash, he said, “Look, whenever we felt there was an appearance, we typically give the money back. We’re looking at this case now.”

Westly conferred with advisors later at his Palo Alto campaign headquarters, then told reporters that there was no reason to return money raised from Barnes & Noble. But, he said, he would propose a “minimum time period” between decisions by state tax board members, such as the controller, and requests for political contributions from donors affected by those decisions.

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Times staff writer Cathleen Decker contributed to this report.