Competition Drives ‘Scrappy’ Angelides

There are no pretty strokes in Phil Angelides’ tennis game. Disarmingly gangly but unremittingly competitive, the Democratic candidate for governor relies on sheer aggression, along with slices and spins, to confound his opponents.

“He’s a scrapper,” said longtime tennis partner Bill Cody, who was ranked behind Angelides in the Northern California tennis circuit when both were boys. The strokes are not textbook perfect, Cody said, but Angelides “gets the most out of his game that he possibly could.”

Angelides’ strivings in California politics are forged from a similar mix of inelegant ambition, intense work ethic, sharp elbows and liberal idealism.

He won plaudits and racked up political chits for his well-organized effort as state Democratic Party chairman in 1992, when he helped elect Barbara Boxer and Dianne Feinstein to the U.S. Senate. But he squandered much of that goodwill two years later in a brutal primary fight for state treasurer against David Roberti, a well-liked state Senate leader whom Angelides depicted as sympathetic to abortion clinic bombers and complicit in legislative corruption.

Elected state treasurer in 1998 after three losing campaigns for public office, Angelides by most accounts has shown great creativity in leveraging the obscure position’s power, particularly through his seat on the boards of the state employee and teacher pension funds. He has focused on increasing public investment in California, encouraging affordable housing and environmental technology and pressing for changes in corporate governance.

“Phil has just an incredible energy and a curious mind,” said former state controller and fellow Democrat Kathleen Connell. “He has extraordinary passion and an astute sense of policy. He is a relentless advocate for the changes he thinks are important to California.”

But Angelides’ tenure is not universally lauded.

A 1999 pension benefit increase for government workers that Angelides supported, for example, was sold to lawmakers with the promise that it would not cost taxpayers anything more for at least a decade. Instead, the state contribution has increased nearly sixfold to $2.7 billion in this fiscal year.

“I think he was asleep at the wheel in looking out for the taxpayers and the citizens of California,” said Assemblyman Keith Richman of Northridge, who lost this year’s Republican primary to replace Angelides.

Though he has castigated Gov. Arnold Schwarzenegger for accepting money from special interests, Angelides has been unapologetic about accepting $4.5 million in donations from money managers and others seeking investments from the two public pension funds on whose boards the treasurer sits.

And Angelides has a mixed reputation for his personal style. Although praised as diligent and dedicated, he is known as a micromanager who demands much, often dwells on minutiae and is demanding of subordinates.

Since January, Angelides has shed half a dozen high-level political consultants, several of whom said privately that they were driven away by the candidate’s overbearing control. Once, when staffers were choosing a shredder for the office, two sources said, Angelides -- then traveling on the East Coast -- insisted that aides express mail him samples of minced paper to make sure they were sufficiently pulverized.

Angelides’ obsession with detail also has led him to improve esoteric parts of the treasurer’s office, often with an eye toward larger purposes. To encourage smart growth, Angelides reconfigured a program that assists the construction of low-income housing so that tax credits were first awarded to the projects that did not contribute to sprawl, such as those near public transportation. His predecessor, Republican Matt Fong, had awarded the tax credits through a lottery to avoid favoritism.

A ‘Principled’ Official

Nathan Brostrom, a former investment banker who worked with Angelides on state borrowing to deal with the energy crisis in 2000, called him “one of the most principled, hard-working, engaged officials” he has met in public office.

“I would say his strength also becomes his weakness: He is very detail oriented, almost obsessed with policy formulation and policy implementation,” said Brostrom, now an administrator at UC Berkeley. “He is so interested in it that he gets caught up in it.”

On the campaign trail, Angelides acknowledges his nerdy persona. He regularly tells audiences that unlike his opponent’s physique, “Mine is natural. It is God-given. There are no steroids.”

He has tried to counter his stiff public image by incorporating his three daughters into the campaign. Two are working full time on it, and all have appeared prominently in his television ads.

Angelides’ competitiveness, as well as his sense of whimsy, were on display in July at a stop in Merced. Plainly disinclined to show mercy no matter what the circumstances, he beat a 12-year-old boy at air hockey.

Then, before reporters, he delivered a wry warning. “Arnold Schwarzenegger, take notice,” Angelides said, according to the San Jose Mercury News. “I was down 2 to nothing and I won 3-2.”

From early on, Angelides’ ambition was clear. He first ran for elective office when he was 19, even before he had graduated from Harvard. That 1973 effort to unseat a councilwoman in his native Sacramento failed, as did another council bid four years later.

For eight years starting in 1975, Angelides worked in the Capitol, developing the reputation of a policy wonk. He ran the research and policy department in then-Gov. Jerry Brown’s housing agency, and then was a top aide in the Democrat-led Assembly.

In 1983, newly married and starting a family, Angelides approached one of Sacramento’s biggest developers, Angelo Tsakopoulos, a fellow Greek American whom Angelides had enlisted to help support his first City Council campaign.

“I want the experience, I want to make some money,” Tsakopoulos recalls Angelides telling him.

Tsakopoulos hired Angelides and, impressed with his intelligence and hyper-energetic work habits, soon promoted him to running his office.

In 1986, Tsakopoulos helped him start his own development firm, and within a few years, Angelides was a multimillionaire and a player in national Democratic fundraising, including for Michael Dukakis’ 1988 presidential bid.

The friendship with Tsakopoulos continued, and the mentor and his family became Angelides’ biggest financial backers. They gave $2.7 million to his 1998 and 2002 state treasurer’s races, and since last year have given $11 million to his gubernatorial campaign, the state party and a committee backing Angelides.

A $5-million infusion at a critical point in last spring’s Democratic primary is widely considered to have rescued Angelides’ then-flagging campaign against Controller Steve Westly.

Angelides impressed many when be became party chairman in 1991 and the party ended a losing streak in statewide elections.

“He got very high grades for being organized and having a clear focus and leaving behind a party that was far stronger than the one he inherited,” said Darry Sragow, a Democratic lawyer and strategist.

Angelides ran for state treasurer in 1994 but lost to Fong, who is now a business consultant. Four years later, the political climate was more hospitable to Democrats and Angelides won the job, beating Curt Pringle, now a lobbyist and Anaheim’s mayor.

Over eight years, Angelides has tried to deploy the billions of dollars in public funds that the treasurer has influence over in ways that earn more money -- the primary charge for the treasurer -- but also offer benefits for Californians.

“I took an office that in normal parlance is considered a political backwater, and I turned it into a force to help families and to help communities and to build the economy,” Angelides said in a recent interview at his campaign office in Sacramento.

As a director of the boards that oversee the pension funds of state employees and teachers, Angelides pressed for more investment decisions to include not only financial but social and moral calculations.

In 2000, he persuaded directors at both funds to divest $800 million in tobacco stock, arguing that the health implications of smoking were so severe that those companies should not be considered stable long-term investments.

After the Enron and WorldCom scandals, Angelides campaigned to use the clout of the state pension funds and other large institutional investors to expand disclosure and conflict-of-interest rules for investment banks, and to limit executive pay for corporate executives.

Nell Minow, editor of the Corporate Library, a watchdog group that monitors corporate governance, praised Angelides for approaching such decisions in an analytical, “green eyeshade way” that was “not based on emotion but on risk assessment.”

“He didn’t get caught up in the politics of it for either good or bad,” Minow said. “He selected very significant issues, and he coordinated with people in other states.”

But Angelides has not always been on the reformers’ side. In 2002 he blocked a proposed California State Employees’ Retirement System campaign to make companies include the cost of stock options as regular expenses.

The pension fund staff said such a move was important to accurately reflect the financial state of investments. But the idea was opposed by some of Angelides’ biggest donors in the Silicon Valley.

Many of Angelides’ efforts have been aimed at investing public money in California ventures: depositing money at community banks and credit unions, increasing loans to small businesses and pouring pension funds into real estate in California’s poorer inner cities.

This approach is part of his “double bottom line” philosophy: that investments can both provide solid returns for pensioners and expand economic opportunities in the state.

The CalPERS investments in California urban real estate have earned 23% annual returns over the last five years -- something Angelides trumpets. Although Angelides takes credit for $350 million that the California State Teachers Retirement System has invested in poor urban and rural areas of the state, only three of eight investment funds the pension fund has backed have turned a profit in their first few years.

Such funds rarely show positive results so soon, and investment experts say it will be a while before it is clear whether those ventures have been a success. The same is true of some of Angelides’ even more recent efforts to invest pension funds in companies with strong environmental records and firms that create “green” technology.

Praise From a Colleague

William Dale Crist, a retired professor who was president of the CalPERS board until 2003, said Angelides was a sincere progressive voice and “one of the best” elected officials who sat on the board during his 11-year tenure. (The state controller also sits on the 13-member board.)

“He was not pushing something because it makes good press,” Crist said. “If he doesn’t believe it, then he won’t advocate for it. That’s different from others in the past.”

Angelides has always had close ties to labor unions. Of $44 million in donations to his campaigns, more than $8 million came from unions. Angelides supported a 1999 CalPERS proposal to boost retirement benefits. CalPERS told the Legislature that the pension fund was in such good shape that state taxpayers would not have to pay anything more for “at least the next decade.”

That optimism proved wrong. After the stock market plunged in 2000, the state’s annual contribution to the pension funds rose from $463 million in the year lawmakers raised the benefits to more than $2.6 billion in the current fiscal year, which began July 1.

Angelides insisted that he was the most skeptical of the CalPERS trustees and pushed the staff to provide hard figures behind its proposal. “I was the only trustee who posed the questions, asked them to do the analysis, pushed the system to put the numbers out there,” he said.

He said he believes that the benefits increase was warranted, especially if the state wants to attract and retain talented employees.

Richman, who joined Schwarzenegger last year in trying to abolish the state’s traditional pension plans, said Angelides should have done more.

“When the treasurer had the opportunity to provide fiscal oversight on what is probably the most important fiscal issue of the state, he just didn’t do it in a fiscally responsible way,” Richman said. “The treasurer’s lack of fiscal prudence on that decision is going to cost California taxpayers tens of billions of dollars.”

Angelides has continued to defend public pensions. He strongly opposed Schwarzenegger’s proposal last year to change the state’s pensions from ones with guaranteed monthly payments based on experience to 401(k)-style plans.

Yet Angelides’ support of public employee unions has not been automatic. In 2003, he balked at a union-backed proposal that would have limited CalPERS’ ability to invest in private companies that did work for governments. The board ultimately accepted a substantially scaled-back proposal.

“I think some of his positions his consultants don’t agree with, but he knows what’s right,” said Frances Gracechild, who runs a Sacramento group helping the disabled, which Angelides has assisted over the years. “What I see in this day of politicians, when someone decides to be governor, they get managed. Nobody manages Phil.”

Angelides’ competitiveness is legendary around Sacramento. At the tennis club where he has played since his youth, he is known for yelling on the court, usually at himself for not performing as well as he wanted to.

One club member last year observed Angelides joking to his partner that he focused on his game by imagining that the tennis ball was Westly’s head. When traveling on vacations, Angelides seeks out professionals to play, said longtime friend Nancy Miller.

She insists there is more to Angelides than a hunger for the fray. “Many times I don’t think the warmth of him comes through in newspaper articles or on TV,” Miller said. “He has a great sense of humor. He’s a very loving father. That’s something you can’t fake.”

But she does not dispute the primacy of Angelides’ drive. “He was just born striving, yearning, seeking, trying,” she said. “That’s what Phil’s all about.”

Next

A profile of Arnold Schwarzenegger’s governorship.

jordan.rau@latimes.com

Times staff writers Mark Z. Barabak and Dan Morain contributed to this report.

*

(BEGIN TEXT OF INFOBOX)

Phil Angelides

Party: Democratic

Occupation: State treasurer

Age: 53; born in Sacramento.

Residence: Sacramento

Personal: Wife, Julie; three children.

Education: Bachelor’s degree in government, Harvard University, 1974.

Career highlights: Employed in state government, 1975 to 1983; private developer, 1984 to 1998; chairman of the California Democratic Party, 1991 to 1993; state treasurer, 1999 to present.

Platform: Cut taxes for middle class and increase taxes on couples making more than $500,000 a year; lower tuition and fees at Cal State and University of California schools; regulate salaries of health maintenance organization executives; require large companies to provide health coverage for employees.

Los Angeles Times