Curb Borrows $925,000 to Cure ‘Cash Flow’ Ills

Republican Mike Curb has borrowed $925,000 from conservative supporters in his campaign to win back his old office from Lt. Gov. Leo T. McCarthy, new financial reports on file with the secretary of state show.

Curb, formerly a major national fund-raiser for the GOP, reported receiving nine loans of $100,000 or more. The loans were used to pay for television advertising because of what his campaign manager, Fred Karger, described as a “cash flow” problem.

“Basically, we put the loans together to get us over the hump of having to come up with cash to pay for our television commercials. Many stations require cash up front and we didn’t have it,” Karger said.

Including funds he raised last year, Curb, a millionaire recording industry producer, has taken in $3.2 million in his bid to recover the lieutenant governor’s office, which he held from 1979 to 1983. Between July 1 and Sept. 30, the period covered in the latest reports, Curb raised nearly $1.9 million, almost half of it in loans that he pledged to pay back at 8% to 10% interest. He also reported $798,000 in the bank at the close of the reporting period.

Campaign reports show that Democrat McCarthy entered the final weeks of his reelection campaign with relatively few debts and a hefty $726,000 in cash. Overall, McCarthy has raised nearly $1.7 million.

In a reversal, it is now Curb, not McCarthy, who seems most concerned about being able to keep up with his opponent in the all-important closing weeks of the campaign.

McCarthy ran unopposed in the June Democratic primary, allowing him to stockpile more than $800,000. Curb had opposition in the GOP primary, and spent about $1.3 million to defeat state Sen. H. L. Richardson of Glendora, leaving Curb’s campaign almost broke when the general election campaign began.

“We had to borrow the money to make up for McCarthy’s lead (in contributions) coming out of the primary,” Karger said.

He said, “We’re confident we can pay these loans back in the course of next year,” but offered no explanation of how Curb would do that.

Raising campaign contributions has been regarded as one of Curb’s chief political strengths. After running unsuccessfully for governor in 1982, losing in the primary to Gov. George Deukmejian, he moved to Washington, where for three years he headed national fund-raising efforts for the Republican Party.

Curb’s largest loan, $200,000, came from Harry Cooper, described in the report as an executive with CalTex Plastics. In addition, Curb received $100,000 loans each from investor David Murdock; Galpin Ford; the William Lyon Co.; Lester B. Korn, president of Korn Ferry International; Kilroy Industries; United Packaging Co. of Industry; Rich Snyder, president of In-and-Out Burger, and retired businessman Manuel Leitao.

Despite the relatively low visibility of the office, McCarthy received major contributions from organized labor, which traditionally has supported him. The California Labor Federation, AFL-CIO, contributed $40,200 to McCarthy, while the California Teachers Assn. gave him $19,960.