Campaign Gifts Set Off Council Race Fireworks : Stevenson Brochure Links Challenger Woo to Campaign Contributions From Moriarty

Times Staff Writer

The gaudy red-and-black campaign brochure recently sent to voters in the city's 13th Councilmanic district pictured stacks of $100 bills, a brace of sizzling Fourth of July rockets and a message designed to defuse the candidacy of council challenger Michael Woo, who once again is giving the incumbent, Peggy Stevenson, a run for her money.

The title of the brochure, "Fireworks, Money & Michael Woo," highlights a reported link between Woo and W. Patrick Moriarty, the Orange County fireworks manufacturer who pleaded guilty in March to making illegal political contributions to several California politicians. Before the brochure was distributed, newspaper accounts had named Woo as one of several people, including Gov. George Deukmejian, who received laundered Moriarty contributions.

Stevenson has not offered any evidence that Woo knew Moriarty or was aware that the disputed contribution--two checks totaling $5,400 from a firm called Condo Vest--came from Moriarty.

Nevertheless, she is making the issue the centerpiece of an election strategy aimed at questioning Woo's independence from a host of influences, ranging from Moriarty to state Assemblyman Tom Hayden (D-Santa Monica) to a loose alliance of liberal Democrats often referred to as the Berman-Waxman machine, named for Reps. Howard Berman and Henry Waxman of Los Angeles.

Seeks Fourth Term

At 61, Stevenson is running for her fourth term on the council. She is trying to battle back from a disappointing primary election performance when a field of five challengers led by Woo made the race a referendum on Stevenson's record. Needing more than 50% to win in the primary, Stevenson was held to 42%. By finishing second with 35% of the votes, Woo won the chance to meet Stevenson in the runoff. Woo tried unsuccessfully to unseat her in 1981, when he lost to her in a runoff.

Woo, 33, a former aide to state Sen. David A. Roberti (D-Los Angeles), is hoping to exploit the anti-Stevenson theme that helped him in the primary. He tells local residents that Stevenson cannot be trusted except when she is courting voters at election time. "Flip-flop" is the term he repeatedly uses to describe her handling of neighborhood disputes between residents and developers.

The alleged Moriarty connection--which Woo has disavowed--has allowed Stevenson to turn the tables on Woo, who injected the issue of integrity into the race during the primary campaign. He accused Stevenson, who has received substantial contributions from lobbyists, of being a tool of real estate developers.

Moriarty became a factor in the campaign after a former business associate, Richard Raymond Keith, told reporters for The Times that Woo was one of several local candidates and public officials to receive disguised contributions from Moriarty. Keith said Moriarty's contribution to Woo was in the form of two checks totaling $5,400 from Condo Vest Inc., a firm run by Keith.

Chief Assistant U.S. Atty. Richard E. Drooyan, the prosecutor heading the Moriarty investigation, said Condo Vest was a "sham" company and nothing more than a bank account.

Woo insists that in 1981 he had no reason to believe that Moriarty was behind the Condo Vest contribution. Woo said he had spoken out against the legalization of fireworks.

Woo said he did not know who the principals of Condo Vest were and did not try to find out, even though the Condo Vest contribution was the largest he received from a source other than his father or his employer.

Further clouding the issue, Moriarty's attorney, Jan Lawrence Handzlik, said on Friday that his client contended that he "never made a contribution directly or indirectly to Mr. Woo."

Both Keith and Moriarty are awaiting sentencing after their guilty pleas to a series of federal bank, mail and tax fraud charges, including, in Moriarty's case, instances when he gave laundered campaign funds to state and local candidates. Keith and Moriarty have agreed to cooperate with investigators on other aspects of the case.

Confusion Over Details

It has been Woo's confusion over some details of the contribution that has helped keep the issue in the forefront of the campaign.

During a May 7 press conference, Woo said the Condo Vest contribution was in the form of one check two days before the 1981 election. He said that in the rush of last minute campaign activity, the origin of the check had not been scrutinized.

Stevenson later pointed out that Woo had erred. She noted that official campaign statements showed that Woo received two checks from Condo Vest, one 11 days before the election and one 10 days after the election.

In recent days, Stevenson has missed few opportunities to impugn Woo's judgment. The Condo Vest contribution, she said, "raises serious questions about Michael Woo's ethics and better judgment."

In a sense, Stevenson's strategy is a reprise of 1981, when she bounced back from a lackluster primary election performance by putting Woo on the defensive in the runoff.

She did it then by capitalizing on accusations that Woo was a tool of Asian businessmen who wanted a foothold in the district. She was widely accused of resorting to racism but was rewarded by an outpouring of support at the polls, especially from working-class, Democratic voters in the district's east end.

Critical Differences

This year, however, there are critical differences in the district, and the candidates are responding with different campaign styles. Reapportionment has replaced Stevenson's stronghold of support in the east end of the district with a cluster of expensive canyon neighborhoods just north of Hollywood, which both candidates see as crucial to victory.

Woo said he thinks he can do well in those areas by being himself--a student of city planning who warms to academic conversations about environmental protection and historical preservation.

"There is a tremendous resentment of urbanization in those canyons," Woo said. "People up there love to talk about those sorts of issues. They're more likely to engage you in a lengthy discussion of the issues than anywhere else I've been in the district. And I think they appreciate what I have to say."

Woo's most effective tactic may be the finishing touch he often puts on campaign appearances.

"Just look around you," he tells his audience. "And ask yourself: Is this district in good shape after 10 years of Peggy Stevenson?"

It is a question meant to evoke the most squalid images of Hollywood, of prostitutes, runaway children, impoverished refugees, dirty streets and crime. The image is not altogether fair. The crime rate is down in the district and redevelopment of Hollywood is, at least, in the planning stage.

Could Hurt Stevenson

But the image of squalor is a common perception and one that could hurt Stevenson, her campaign manager, Allan Hoffenblum, conceded.

"We are working on that perception problem," Hoffenblum said recently. "But it's hard. People don't really believe that the crime rate is down."

Hoffenblum ought to know. While his new Audi was parked beside Stevenson's headquarters recently, it was burglarized and the radio was stolen.

"What am I supposed to do, blame that on Peggy Stevenson?" Hoffenblum asked. "Unfortunately, some people probably would."

Hoffenblum's presence in the campaign--he is new since the primary--is the key to Stevenson's runoff strategy. Hoffenblum, a former political director of the California Republican Party, knows how to appeal to conservative voters.

The race is a nonpartisan one and Stevenson, like Woo, is a Democrat with a liberal outlook on social issues such as abortion, rent control and gay rights. Yet Stevenson is gambling that, by portraying herself as less liberal than Woo, she can persuade Republicans who did not vote for her or Woo in the primary to come out for her in the runoff.

More From Republicans

To date, she has sought and received substantially more financial support from Republicans than Woo has. Each candidate has raised about $320,000 since early 1984; 44% of Stevenson's donors are Republican, against 24% for Woo.

Besides hiring Hoffenblum, Stevenson is putting together an extensive network of Republican supporters headed by Ted Knoll, who ran unsuccessfully last year for the Assembly against incumbent Democrat Mike Roos.

"In an ideal world, Republicans would choose a more conservative candidate than Peggy Stevenson," Knoll said.

"But Woo's partisan endorsements raise some real concerns among Republicans. To have the Berman-Waxman machine come into the district is just not acceptable."

Woo has been endorsed by a number of prominent Democratic officeholders. They include several politicians associated with the Berman-Waxman group, including Los Angeles Dist. Atty. Ira Reiner, state Sen. Gary Hart of Santa Barbara and Assemblyman Burt Margolin of Los Angeles. Four years ago, Woo was endorsed by the Campaign for Economic Democracy, a group organized by Assemblyman Hayden.

Enemy Territory

Stevenson is looking for conservative backing, partly because her staff admits that traditionally liberal neighborhoods, such as Silver Lake, are enemy territory. Her staff concedes that voters there are angry over Stevenson's handling of development in the area.

"She's having serious problems in Silver Lake," said one of her campaign aides.

Clearly stung by accusations during the primary campaign that she had turned her back on local residents, Stevenson has in the last few weeks sponsored a flurry of proposals to temporarily ban new commercial building in neighborhoods north of Hollywood and to protect historic buildings in the area.

On many of the issues, the candidates appear to be in agreement. Each favors a proposed City Charter amendment that would raise taxes to pay for more police. Each has endorsed a proposed rent control ordinance that would restrict annual rent increases to 65% of the consumer price index. And each has called for a local domestic partnership law, sought by gay rights advocates, that would offer employee health and pension benefits to unmarried couples.

The candidates go to the runoff with impressive lists of supporters, with local legislators lining up on both sides of the race. Los Angeles Mayor Tom Bradley has allowed his name to be used on fund-raising dinner invitations for both campaigns, without endorsing either candidate.

Sources of Money

Each candidate is preparing to raise between $200,000 and $300,000 more. With major fund-raising affairs planned at the Los Angeles Athletic Club and at Ma Maison, one of the city's most fashionable restaurants, Stevenson is relying heavily on the downtown business community, on real estate and entertainment executives for her financial support.

The largest source of Stevenson's campaign funds has been the real estate industry, which has provided more than 30% of her financing. Woo's biggest backer has been his father, banker-businessman Wilbur Woo, who, through gifts and loans, has accounted for about 50% of his son's financing.

STEVENSON VS. WOO--MONEY In an effort to compare contributors to the campaigns of City Councilwoman Peggy Stevenson and her challenger, Michael Woo, the Los Angeles Times Poll surveyed 713 donors who gave $100 or more in 1984 and early 1985. The data is based on a response rate of 55% of Stevenson's donors and 64% of Woo's donors.

Stevenson Woo Category Donors Donors % PARTY AFFILIATION BREAKDOWN Democrat 36% 56% Republican 44% 24% % AGE BREAKDOWN 18-29 4% 5% 30-44 34% 47% 45-64 49% 40% 65 and over 13% 8% % RACIAL/ETHNIC BREAKDOWN White 93% 30% Asian 2% 67% Black 0% 0% Latino 3% 1% Other 2% 2% % INCOME BREAKDOWN Up to $80,000 30% 57% $80-200,000 35% 36% More than $200,000 34% 7% % CITY DEALINGS Do business with city? 54% 27%

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