Conflict Charges Mar Michigan Official’s Governorship Bid : Rising Black GOP Star Dealt Blow

Last May, William Lucas, the chief executive of Wayne County, Mich., suddenly switched to the Republican Party, becoming in one stroke the top black elected official in the GOP and the symbol of the party’s hopes for gains among urban black voters.

Party leaders in both Michigan and Washington widely publicized his move, and Lucas instantly became the front-runner in the race for the Republican gubernatorial nomination in 1986. Party strategists could hardly contain their glee over the possibility that the first black to be elected governor of a state might be a Republican.

But, in the last few weeks, Lucas’ rapid political rise has been dealt a setback by charges of conflict of interest within his county office.

Aide’s Ties Questioned

The charges involve Lucas’ approval of a $23-million contract last December to renovate an old county building in Detroit. Lucas has given conflicting statements about whether he knew at the time that his chief of staff, Dennis Nystrom, was part owner of a company that would handle some of the renovation work.

The Detroit newspapers have also reported that, through Nystrom’s connections, Lucas was appointed last December to the board of an Anaheim-based computer company, General Automation, and received stock options in the firm.

None of Lucas’ actions appear to have violated any laws, and he denies that there was any wrongdoing in the way he handled the county contract, stressing that Nystrom’s firm ultimately was dropped from the project by the prime contractor. He said also that he did not know Nystrom was a director of the firm until later.

But the county board of commissioners, dominated by Democrats, has ordered an investigation into the conflict of interest charges, and some Republicans are backing away from Lucas’ budding gubernatorial campaign.

Negative Impact Cited

“It has stopped people from jumping on the bandwagon” for Lucas, said Ronna Romney, a national Republican committeewoman from Michigan. She noted that, at a state party conference last weekend, “some people told me that they were about to announce for him but were holding off until they see if more comes out.”

Lucas has not ducked the controversy. “We’ve been up front about it, nobody has tried to hide anything,” he said in an interview last week.

He dismisses as insignificant the issue of his role with General Automation. He notes that the stock options he received are currently worthless because they would only allow him to buy the company’s stock at a much higher price than what it is now selling for.

Lucas is no stranger to controversy. In 1977, Lucas, a former FBI agent and Justice Department official who at the time was Wayne County sheriff, was one of the finalists being considered by the Jimmy Carter Administration to become FBI director. But, before a new director was named (eventually William H. Webster was appointed to the job), Lucas acknowledged that he had twice accepted free air transportation and hotel rooms as part of Las Vegas gambling junkets. At the time, he told The Times in an interview he believed that he had done nothing wrong in accepting the free transportation and lodging at the Sands Hotel.

Challenges to Lucas

Republican leaders say that the questions raised by the Nystrom controversy have encouraged other Republicans to make more spirited runs for the nomination against him, including Daniel Murphy, Oakland County Executive, and Richard Chrysler, a wealthy businessman.

Still, most party officials believe that Lucas will win the right to challenge incumbent Democratic Gov. James J. Blanchard if the controversy does not widen. Last week, three prominent Republican leaders from western Michigan, including one who had previously expressed some concern about the controversy, endorsed Lucas for governor.

“My suspicion is that, unless there is an unhappy ending, there won’t be a problem,” said a top Republican official. “He seems to have dealt well with it so far.”