In Campaign, Westly Seeks an Insider-Outsider Balance

State Controller Steve Westly, a candidate for governor, was befuddled by a man he met on a recent walk between campaign stops in this Sierra foothills town.

Convicted of assault with intent to do great bodily harm, the man had stayed out of trouble for years and now was seeking “special approval” to buy a gun, Westly told reporters a moment after the encounter. Asked the obvious question -- should California let such a man own a gun -- Westly dodged. “We’re going to take a look at this,” said Westly, a Bay Area Democrat opting for caution in a region where hunting is popular.

Hours later, after consulting with advisors, Westly took a firm stand. “I just don’t believe people who have committed violent felony crimes should be allowed to have guns, and I just wanted to clarify that,” he said.

Westly’s belabored response illustrated a central dilemma of his quest for the Democratic nomination to challenge Gov. Arnold Schwarzenegger.

In some respects, Westly is a veteran politician --calculating, averse to risk, calibrating public remarks to maximize personal appeal. In others, he is a novice -- too inexperienced as a candidate to maneuver sure-footedly through a day of campaigning.

A 49-year-old dot-com mogul who built his fortune at EBay, Westly hopes to show Californians he is both a pro and a neophyte -- not too much of a political insider, but not too much of an outsider either.

Westly, a man of relentlessly sunny demeanor, casts himself as an ideal blend: an entrepreneur who has put his business smarts to work in three years as controller, saving the state billions by clamping down on tax cheats. He also plays up his part-time teaching stint in the early 1990s at Stanford’s Graduate School of Business to attest that he can draw from personal experience to fix California’s ailing public schools.

Given voters’ sour mood, Westly has good reason to portray himself as a fresh face in Sacramento. Yet running as an outsider carries risk. Schwarzenegger used that approach successfully in the 2003 recall, but his rough transition from the film business to the state capital has led some strategists to suggest voters could opt to replace him with a politician more seasoned in day-to-day government.

For Westly, it will take a deft sales job to strike the right balance.

“I’ve spent my life creating thousands of jobs in the private sector,” he said in an interview recently during a two-day swing through Butte and Yuba counties in the upper Sacramento Valley. “I’ve been a classroom educator and I’ve been a tough fiscal watchdog, and my opponent has been a career Sacramento insider.”

That would be state Treasurer Phil Angelides, Westly’s rival in the June 6 primary. Angelides has opened himself to such attacks by trumpeting his wide support among the party’s establishment, including labor unions and U.S. Sens. Barbara Boxer and Dianne Feinstein.

Yet Westly’s roots in Democratic politics are as deep as his opponent’s. For 26 years, Westly has been climbing the ranks of state party volunteer jobs, reaching vice chairman in 1987. He lost a race for state party chairman in 1989, two years before Angelides won that job. For 14 years, Westly served on the Democratic National Committee.

At Stanford, as an adjunct lecturer, Westly trained future executives on “how to deal with special interest groups, how to deal with the media, how to deal with regulation, how to deal with legislation, labor, the works,” the controller said.

His government work dates to 1978, starting as a Capitol Hill aide to Bay Area Rep. Leo Ryan just before the congressman’s assassination in Guyana. He held low-level energy posts in the administrations of President Carter and Gov. Jerry Brown. For four years, he worked for the city of San Jose as an economic development aide.

However Californians ultimately size up his political know-how, personality is likely to be key to the Democratic primary, given the nearly identical stands of Westly and Angelides. Both support abortion rights, gay marriage and driver’s licenses for illegal immigrants. Both stress plans to lower fees at public colleges and universities. Both support the death penalty and describe themselves as tough on fiscal matters.

At public events, Westly keeps a smile etched on his face. He also favors goody-two-shoes language, including “darn,” “heck” and “good heavens.”

“Hot dog,” he responded to a lunch invitation during a guided tour of barley-and-hops vats at the Sierra Nevada brewery in Chico.

After three years in elected office, however, Westly has a speechmaking style that remains shaky. Like Angelides, he has taken private lessons from renowned public-speaking coach Michael Sheehan. But Angelides has learned to stir up a roar among Democratic crowds; Westly has not. In back-to-back speeches at a recent party meeting in Manhattan Beach, Westly drew tepid applause, then Angelides brought the crowd to its feet, cheering. There and elsewhere, Westly’s elaborate gestures (clenched fists, outstretched arms, Nixon-style goodbye waves) have struck many listeners as overly polished.

“It seems like he was trying a little too hard to be professional, like with the Clinton thumbs-up,” said Daniel Lappa, 19, a Chico State student who attended a Westly question-and-answer gathering on campus.

Westly has spent most of his life in the Bay Area. He grew up in Menlo Park, his father supporting the family with a series of jobs selling beer and wine. Now, Westly lives just a few miles away in Atherton with his wife, Anita Yu, and their two children, 4 and 6.

Westly also attended college nearby, earning a bachelor’s degree and a master’s of business administration from Stanford. He has spent the bulk of his career as an investment banker and executive at high-tech firms in the Silicon Valley, most notably EBay. The Internet auction giant produced vast wealth for Westly --more than $200 million, according to his tax returns.

When he was hired in 1997 as a vice president, EBay was still an upstart with an informal culture and fewer than 100 employees, said Jeff Skoll, the company’s founding president. Westly’s suit-and-tie formality struck co-workers as “a little bit of an alien form,” but his presence was EBay’s “first step toward creating a more professional, disciplined company,” Skoll said.

In the race for governor, EBay is a top asset for Westly. “It’s a leading kind of good-guy-on-the-Internet company,” said Democratic strategist Michael Terris, a former Angelides advisor, now unaligned, who expects Westly’s EBay background to play “extremely well” with voters.

Westly advisors hope it will also contrast favorably with Angelides’ history as a Sacramento developer. In a backhanded slap at Angelides, Westly strategist Garry South called EBay “a very clean company -- doesn’t pollute, doesn’t screw up the land or the water.” (Senior Angelides advisor Bob Mulholland declined to comment on Westly, though the campaign has taken shots at him for working with Schwarzenegger on 2004 budget measures, suggesting Westly lacks spine.)

“I love EBay,” Westly told Democrats at a steak-and-baked-potato dinner recently in Yuba County, “because it gave the little guy a chance to compete with the biggest companies in the world on an even playing field.”

A potential downside, though, is the money Westly made on initial public offerings of stock in hot new companies. In the interview, Westly confirmed a San Jose Mercury News report that bankers trying to curry favor with EBay executives let Westly invest in the IPOs at prices lower than what average investors had to pay on the open market. Westly said the investments were “completely legal,” and compared his insider advantage to frequent-flier miles.

“I fly a lot, and by gosh, they give me preferred seating,” he said.

Still, the income that EBay produced for Westly gives him a distinct edge over Angelides: He has already dumped $20 million into the race, more than enough for extensive statewide television ads -- and nearly $3 million more than all the cash in his rival’s campaign coffers at the end of 2005.

Westly’s financial standing was apparent recently in the large size of his traveling entourage. Crammed into a Chico bicycle shop for a Westly news conference that drew not a single television camera were his campaign manager, policy director, field director, political director, videographer, press secretary, two communications consultants and two advance men.

In the end, Westly’s political future could hinge on how he markets himself in the television ads that will consume most of his campaign money. He won the 2002 controller’s race by just a fraction of 1%, and he wondered later whether shortcomings in his marketing led to the near-loss.

“I ran as a businessman,” he said. “That was my ballot designation, ‘Businessman-Educator.’ And the summer before the election, we had Enron and Adelphia and WorldCom. And all of a sudden, we wished we had a different ballot designation than ‘businessman.’ ”

He smiled and added: “It is what it is.”

This is the second of two stories on the Democratic candidates for governor.