THE ARRIVAL OF AL CHECCHI : Making the Los Angeles, Wall Street and Washington Connection

AT 40,000 FEET, on a crowded jet halfway between Los Angeles and Washington, Al Checchi puts down his newspaper, leans over and asks: “What’s the highest-ranking job that you think I could get in the next Democratic Administration?”

This question requires a little context. Alfred A. Checchi of Beverly Hills is young, smart and successful in business, and he is very, very rich. His life, until now, has been a fairly uninterrupted accumulation of achievements: treasurer of Marriott Corp. when he was 30, a partner of the billionaire Bass brothers’ Fort Worth investment operations when he was 33.

But Checchi has never held an appointive political office. He has never sought an elective office. Until a little more than a year ago, he had never even met an elected official. There is still much about the political world that mystifies him.

“Assistant secretary of the Treasury,” I say.

Checchi slumps back in his seat. He looks pensive. Then he leans forward. “I’ll tell you this: I’m not going to go in to go from low to high,” he says firmly. “I have no interest in that. It’s not title; it’s a question of substance. You’ve got in Washington probably two dozen jobs from a substantive point of view that are attractive to me, none of which I’m likely to be offered in the next couple of years. But if they came to me and said, ‘Al, you can have something else,’ even though it had a high title, I don’t think I’d want one of those jobs.”

It doesn’t seem likely that Checchi will have a chance to disappoint anyone on that score next year, but who knows? Checchi (pronounced CHECK-ee) is on his way to political influence, moving quickly along the fast track that connects Los Angeles and Washington. Right now, from where Checchi sits, suspended between the poles of his ambition, on his way to the capital for a long day of meetings with the majority whip in the House of Representatives, the present and former chairmen of the Democratic Senatorial Campaign Committee, the president of the hottest liberal think tank in the city, and the chairman of the Democratic National Committee, the possibilities look boundless. A run for the California Statehouse? Perhaps the U.S. Senate? More? Who knows?

AL CHECCHI ROLLED INTO LOS ANGELES ONE DAY last June with his wife, three children, an explosive but unfocused ambition, and enough money in the bank to qualify as a subaltern to the Forbes 400.

Like many pilgrims to California, Checchi, 38, came to start again. He wasn’t trying to pick himself off the floor--quite literally he came from the penthouse--but he was looking for a new canvas. His wife, Kathryn, is from Southern California, and on his visits to Los Angeles he had enjoyed the weather and the pulse, the city’s feverish entrepreneurial energy in banking and real estate and entertainment.

California held other attractions. Checchi told friends that he found the state’s political culture open to new faces and new ideas; it seemed to him also a microcosm of the country, a place whose trends and innovations reverberated through all 50 states.

All of which suited Checchi fine. In the world of high finance, Checchi was not an Iacocca or an H. Ross Perot, but there was a buzz around him. Now he wanted to find himself a place in California’s crowded political hierarchy, already stuffed with bright young men and women jostling for room in a very small, often fleeting limelight.

In articulating this ambition to his friends, Checchi was completing a long, leisurely circle. Checchi was raised in suburban Washington, the middle-class son of a federal Food and Drug Administration civil servant. Growing up on the fringes of the capital, Checchi was intrigued by government; he envisioned himself rolling up his sleeves with Robert Kennedy in the Justice Department, burning the lights late night after night, muscling Jimmy Hoffa and George C. Wallace with the bludgeon of the law.

Then he went to college at Amherst in Massachusetts at a time when the seams appeared to be coming out of the country, and he lost the thread; his earnest middle-class priorities suddenly seemed irrelevant. At Amherst in 1968 government was where you went if your goal was to torch villages. Checchi wandered through the end of the 1960s in a surly daze.

After college, hanging around home with nothing to do, he drifted into business at a mini-conglomerate owned by his uncle. He soon discovered he had a touch for it. After a few years learning the game, Checchi picked up an MBA at Harvard Business School and joined Marriott. There, he rose briskly; in four years, he was Marriott’s treasurer, one of its top officials, a comer. “He was a brilliant guy, a brilliant guy,” says J. W. Marriott Jr., the company’s chairman, president and CEO. “He’s one of the four or five smartest people I’ve ever met.”

At the same time that Checchi was rising at Marriott, he was being pursued by Richard E. Rainwater, the principal operative of Fort Worth’s billionaire Bass brothers--Sid, Robert, Edward and Lee. Rainwater met Checchi in 1975 when Checchi came down to Texas to try to entice the Bass brothers to invest in two hotels Marriott wanted to build. Rainwater liked the man, and every year he would call Checchi and say, “Checchi, when are you coming down here and have some fun?” Every year Checchi said no.

But as Checchi rose higher at Marriott, his resistance to Rainwater dropped. He aimed to be rich by 40, and he wasn’t sure he would make it in the hotel business. The work itself was enervating; living on airplanes, racing from coast to coast negotiating deals, he rarely saw his wife and children. So, after years of laughing off Rainwater’s offers, in 1982 Checchi accepted one and left Bethesda for Fort Worth, where the rewards were exponentially greater and the pace more genteel.

THE BASS BROTHERS compound in Fort Worth looks like its own postage-stamp-size kingdom. It seems to function that way, too. It has its own security force, its own catering service, a state-of-the-art gym, and a restaurant and a club, both hushed and discreet. The Basses operate out of an impassive, 32-story black-glass office building connected by a walkway to an otherwise identical 38-story building. Neither tower is bustling; it’s said in Fort Worth that this is a family so wealthy it could afford to build itself a spare office building. The health club is rarely used, and you can always find a table at the restaurant. Next door, the Bass brothers have refurbished a sprawling hotel to create an elegant stopover for their visitors. It’s all as if the Basses, too rooted to leave Texas for New York, simply brought a square block of Manhattan to Texas.

Upon his arrival in Fort Worth Checchi was offered a role that effectively made him chief operating officer to Rainwater’s CEO and Sid Bass’ chairman of the board. The titles imply more order than existed. “It was like a free-for-all,” Checchi says. “It was like nothing I had ever seen.”

In fact, the operation was unlike anything anyone had ever seen. In the decade before Checchi arrived, Rainwater and Sid Bass had parlayed the family’s original oil fortune into a multibillion-dollar web of investments stitched across the national economy. They bought companies, sold companies, stockpiled real estate, plunged into the stock market, and created a dense orbit of other investment vehicles--a venture capital firm here, a limited partnership there, all spinning off projects of their own. Checchi brought to the mix his negotiating talents and, more important, a facility for attracting huge sums from banks and insurance companies to finance the deals. His skill at raising capital permitted the Basses to undertake larger, more lucrative deals than ever before: the leveraged buyout of the Arvida Corp. in Florida, the acquisition of a 10% stake in Texaco Inc. Capping it all, the Basses accumulated a huge holding in Walt Disney Productions and used it to help the company fight off raiders Saul P. Steinberg and Irwin L. Jacobs and eventually usher in the new management that restored Disney’s luster.

But the relationships among Checchi and Rainwater and the Basses began to fractionate even as the group reached its greatest success with the Disney deal. After the Basses acquired almost a quarter of that company, Checchi came to Los Angeles for six months to consult on financial operations with the new top management, Michael D. Eisner and Frank Wells. When Checchi finished his stint in the fall of 1985, he returned to Fort Worth, but his heart was no longer in it. With the remarkable rewards produced by the Disney investment, he had achieved independent wealth. He had learned a lot from Rainwater, but Checchi could be the student for only so long; in searing flashes of ego, both were outgrowing their relationship.

“Alfred and Rainwater are a perfect combination,” says Robert I. Small, who worked with Checchi at Marriott and now manages the Basses’ hotel in Fort Worth. “The only problem the two of them probably had was their immense egos.”

For most of those on the pinnacle of the financial world at which Checchi was operating, there is no life beyond the game--the frantic chase after riches so large that they become abstractions, like the distances between stars. Checchi jumped into the race as intently as any of them; when he completed one of his first deals for the Basses, he was staying at a hotel that Small managed, and he burst into Small’s office, jumped on the desk and shrieked, “I’ve just made a million dollars! I’ve just made a million dollars!” But over time he felt the chase wearing on him; it was as if he had ascended so high into the stratosphere that there was no longer enough oxygen to sustain rational thought.

CHECCHI NEEDED a challenge; he wanted to move into a new game: his first love--politics. But first he had to learn new rules. As Checchi prepared to leave Texas, he plunged himself into a postgraduate tutorial on the making of a modern political career. A decade in the business world had provided Checchi not only with money, but also with friends--lots of friends, with influential friends of their own. He asked his friends in business to introduce him to their friends in politics. “There are zillions of elected officials, county commissioners, state legislators, everyone, a long line,” Checchi says, “but I figured like business, like anything else, when you get to the top, there are only so many players and I could find out who they are, figure out who I needed to make the introduction, and meet them.”

Checchi took to the new game with passion. In the late fall of 1985, committed to a career in politics but unsure exactly what that meant, Checchi began meeting politicians, trying to sort through his options. Through friends he arranged a dinner with California Assembly Speaker Willie Brown, the first elected official he had ever met. “I asked him a lot of questions,” Checchi says. “I even asked him ‘how-to’ questions: How do you build a constituency? Where do you start? He was very candid, and he didn’t try to point me anywhere.”

Soon after, Checchi met Robert S. (Bob) Strauss, who gave him more precise direction. Strauss is one of the larger-than-life figures who swagger through Texas politics. He’s been chairman of the Democratic National Committee, Jimmy Carter’s special envoy to the Middle East, a Cabinet-level special trade representative, and a good-ol’-boy lawyer in Washington and Dallas. He’s raw, foulmouthed and agile, and probably the closest thing the national Democratic party has to an eminence grise , a man sought out by politicians in both parties for his honeyed counsel.

Early last year, Strauss recalls, “I had a call from an attorney named Dee Kelley in Fort Worth whose judgment I respect very much, and he said to me, ‘Bob, there’s a young man I’ve been associated with through the Bass brothers and he’s a Democrat and he really wants a public service career. He’s bright, he’s earnest and he’s got only one weakness: He thinks exceedingly well of himself. But he’s got a right to. Even if he’s only half as good as he thinks he is, you should talk to him.’ ”

So Strauss sat down with Checchi in Dallas one February afternoon and listened to him spill out his dreams and hopes: statewide positions, top agency jobs, a West Wing office with a window. Strauss found Checchi bright, articulate and eager to the point of naivete. “He thought he could say, ‘Here I am,’ and everybody would snap him up,” Strauss says. “Well, that’s bull. You can’t just announce for governor; you can’t just go out and announce for the legislature.”

Because he thought Checchi’s future worth cultivating, Strauss felt that they would both be better off if Checchi came to understand that, too. A few weeks later Strauss invited Checchi and his wife to a fund-raiser in Washington for a liberal political action committee founded by Pamela Harriman, the widow of W. Averell Harriman. At the dinner, Strauss introduced Checchi to Rep. Tony Coelho (D-Merced), at the time the chairman of the Democratic Congressional Campaign Committee. Like Strauss, Coelho always has an eye out for new talent and new checkbooks. Within a week he had invited Checchi to a retreat he was holding that summer in Yosemite National Park for a few confidants.

Checchi was now cutting closer to the core. Coelho put him in a tent with Michael S. Berman, a stout Washington attorney and fund-raiser who was the treasurer of Walter F. Mondale’s 1984 presidential campaign, and L. Kirk O’Donnell, a lanky aide to former House Speaker Thomas P. (Tip) O’Neill Jr., who now runs a liberal think tank called the Center for National Policy. There wasn’t any agenda other than talking and hiking and enjoying the sights, and Checchi ate up all of it.

To his more seasoned bunkmates, Checchi seemed a bit wide-eyed, intent on bounding impetuously into the first possible worthwhile election. Over the three days, they tried to slow him down. Coelho says: “What we started doing was to educate him; not to turn him off, because he is the type of guy you really want in the process. But there’s an education process, which is essentially exposing him to reality. You can’t turn people like him off by telling him it’s impossible to do X, Y and Z. It is possible. But you have to be realistic, and that means time.”

Sobered but still eager, Checchi kept exploring the possibilities through the fall campaign. The usual route into politics for people with money is money--giving it and raising it--and the Democratic fund-raising establishment sniffed out Checchi almost as soon as he poked his head out of Fort Worth. In late 1985, while accompanying Willie Brown to a fund-raiser for Gov. Mario M. Cuomo in New York, Checchi met Nancy Pelosi, a San Francisco activist who was the chief fund-raiser for the Democratic Senatorial Campaign Committee in the last election. Pelosi invited Checchi to mingle with others of means at big-donor events, and eventually he made a $15,000 contribution to the committee. Then, last October, he hosted a cocktail party for the committee’s big givers at his home in Beverly Hills.

As the campaign ran out, Checchi was swimming with big fish, but he was still swimming in circles. He volunteered to help Alan Cranston’s campaign, but he never found a significant role and had only mixed success at the job they assigned him of organizing business supporters for the senator. “In some ways,” one campaign aide says, “they were looking for something for him to do.”

Lots of people were happy to keep Checchi busy raising money. But the more he saw of Los Angeles’ campaign cocktail circuit, the less it attracted him. For national Democratic politicians, Los Angeles serves a single function: They come here to collect as much money as they can, as quickly as they can. The city’s political culture revolves around fund raising, and anyone in Los Angeles who plays a significant role in national politics raises money.

But Checchi didn’t like raising money, and he wasn’t eager to play host again. What he wanted, almost peevishly, was politicians to want him even if they couldn’t have any of his money. “I don’t look at myself as a dollar sign,” he says, and he didn’t want politicians to see him that way either.

In refusing a finance role, Checchi was walking a narrow line. He wasn’t naive enough to think that prominent politicians would be so interested in him if he couldn’t write large checks. But he had, shrewdly, come to understand that money was a political ghetto. The dark secret of political money is not how much influence most fund-raisers have over policy but how little. In a politician’s mind, a good fund-raiser’s fingers are best employed dialing the phone, not tapping out papers on the future of floating exchange rates that no one has time to read.

As the invitations to fund-raising events filtered in throughout the fall, Checchi found himself contemplating almost enviously the unaffluent 30-year-olds grinding out policy papers on Capitol Hill and in Washington think tanks, freed by their meager resources from any responsibility to feed the insatiable campaign treasuries. “In some ways,” Checchi says, “I came to think that because I had achieved comparative affluence it was going to be harder to be viewed as someone who could participate on the policy level.”

In fact, as the campaign season ended, Checchi faced a complex situation: If a man of his wealth persistently refused to contribute, he’d be seen as a dilettante and a flake, no matter what else he had to offer; but if he became defined primarily as a fund-raiser, he’d find it difficult to ever crawl out of that hole.

CHECCHI BEGAN formulating his solution to the conundrum --or at least, a temporary solution--on a January afternoon after having had tea in New York with William Paley, the patriarch of CBS. A friend on whose board of directors Paley sat made the introduction, and Checchi was enthralled as Paley explained how he had built CBS.

“I looked at this man and thought: This guy made an industry, he had a profound impact on society, and he never served formally in the government,” Checchi said a week later, walking back and forth across the sleek white library of his Beverly Hills home. “Then I started thinking about Ralph Nader. If Ralph Nader had joined the Department of Transportation, he would have accomplished virtually nothing. Or Martin Luther King Jr.--if he had joined the Office of Economic Opportunity we never would have heard of him, and he never would have accomplished what he did.”

The answer, Checchi thought, was to find a way to move in and out of government--and to help other people of like mind move in and out, taking on jobs that fit their skills and then getting on with their lives, entering the system but maintaining their independence from it. What was needed, he decided, was a forum for young entrepreneurs to interact with politicians, to allow both sides to scout for opportunities and talent. And he thought he knew how to provide the opportunity: by organizing an elite club, an exclusive national organization that would recruit several dozen of the wealthiest and most talented of his generation and present them to the Democratic Party like a crack Marine unit, ready to be deployed.

When he returned from New York, Checchi began sounding out friends. Almost immediately he solicited the help of Robert L. Burkett, a savvy political operator who works for Ted Field, the Los Angeles-based heir to the Marshall Field fortune and a huge contributor to Democratic causes. Even more than Checchi, Burkett understood how much power such a group could command in the Democratic Party. He quickly signed on.

In the meantime, Checchi had been refining the idea. “We could get together a couple of times a year. And we could bring in ‘fellows’ to talk about politics and government: Jimmy Carter and Bob Strauss, Coelho and Sen. George J. Mitchell (D-Me.). Maybe a Bill Moyers, an Averell Harriman-type or even a Norman Lear,” he said. “Since fund raising is so important to the politicians, we could charge an initiation fee of as much as $25,000, and that will be our gift to the Democratic Party. And we could have scholarships for people who couldn’t afford it.”

Most of his contemporaries in business, Checchi said, had tuned out of politics 20 years ago, but if he could help them find a meaningful role, he was certain that some of them would hear that “echo” from the 1960s and dive back in. “If I can start to involve large numbers of interested, talented people, they will find something to do,” he said. “Some will go to the far left. Some will go to the middle; some will go to the right. Some may pick a presidential candidate to work for. Some may run for office themselves. Until there is a national leader calling forth people with a vision of service, we’ll have to do it ourselves.”

NOW, SIX WEEKS later, 40,000 feet in the air, Checchi is on his way to Washington to see if he can enlist the leadership of the Democratic Party behind his idea. For all of his fascination with politics, Checchi hasn’t abandoned business. After a day in Washington, he’s flying to New York for meetings about a new company he’s establishing with a few young, equally affluent partners--a sort of modern merchant bank that will advise on mergers and invest its own capital. It’s a huge, typically ambitious undertaking that consumes much of Checchi’s energy. But as he gets closer to Washington, his desire to make a mark in the political world becomes almost palpable. Checchi doesn’t want to make the cocktail-party chatter that rich people make with a politician who’s sneaking glances at his watch. He wants Washington to care what he thinks.

He’s been thinking quite a bit. “Domestic policy interests me more,” he says over the drone of the engines, “and there’s a lot to do. Over the last eight years you have had an increase in the disparity between haves and have-nots; number two, the people who’ve really suffered have been children, and we’ve really underinvested in human capital. Education is deteriorating, housing is deteriorating, racism is on the rise. A great society that in the 1960s was calling forth a vision of service has basically been telling people that it’s every man for himself. The effects are showing, with the bodies that you walk over, the people in the streets, the literacy rates dropping.”

Ascending beyond the bounds of conversation, Checchi is now heading toward a speech. “This government has been very short-term oriented, and it has defense myopia. We’re stockpiling all these armaments and we’ve destroyed the economy--with all this capital being diverted to defense instead of investing it in human resources--and now we’re going to pay for it. In the long run, that’s where the war is being lost. We haven’t lost ground to the Soviet Union in the last 10 years. We’ve lost ground to Japan, to Korea, to Taiwan.”

Marriott, his ex-boss, calls Checchi “very creative and very imaginative.” “The challenge he faces,” Marriott continues, “is that brilliant people, to be effective leaders and effective politicians, have got to be able to hide their brilliance. That’s hard to do. But can he translate the human side of himself he needs to project--humility and listening and letting others take credit? Al Checchi does not suffer fools gladly. I’ve told him that I think this is the area in which he would have the most difficulty.”

The next day Checchi did a lot of listening. From a year of patient networking, Checchi had accumulated the contacts to guarantee a hearing for his idea at the highest level of the Democratic Party. Together with Burkett, he made the rounds, starting with Democratic National Committee chairman Paul G. Kirk Jr. and, four meetings later, mulling over the reaction at dinner with former Sen. John C. Culver of Iowa, who is married to Checchi’s cousin.

The Democratic leaders received the idea with excitement, curiosity and some reservations. All of them recognized that the group could become an important resource for the party, both financially and as a new kind of talent bank. Coelho thought that Checchi was moving at just the right time: a moment of generational transition, when many of the baby boomers who had checked out of politics after Vietnam and Watergate were drifting back in, and the party was turning to younger candidates to reach them.

At the same time, Checchi was told, the group would inevitably attract suspicion if it looked like the means for a wealthy elite to wire the top jobs in government. The key to the group’s success, one of the Democrats said, is that “it can’t be seen as the landing boat for the next Democratic Administration. You don’t want to become the Democratic Trilateral Commission.”

Checchi understood the criticisms, and none were fatal; everyone they spoke with wanted him to move ahead. By the end of the day he and Burkett were already thinking about changes to meet the objections: lowering the entrance fee to dilute the impression that this was a club for the rich; and directing the group toward more specific goals, perhaps by funding fellowships to send some of the entrepreneurs to Washington to work in government for six months or a year.

In truth, these were just tactical problems. More important to Checchi was that he had found himself a place at the table--and a reason to be there. Checchi’s political ambition was still protean: He wasn’t sure what job he ultimately wanted, or how to get it, or whether he would really want it if he got it. But with the prospect ahead of organizing a new best and brightest, he had a focus, a worthwhile cause, a job suited to his skills.

In a certain circle in Washington, as in a certain circle in Los Angeles, the buzz had begun.

Darry Sragow, Alan Cranston’s campaign manager last fall, says, “There is always room for new players in L.A. Checchi could make a very big difference if he wants to. I think he does.” Michael Eisner, chairman of Walt Disney Productions, who worked with Checchi during the restructuring of the company in 1985, says, “Like a sponge, Checchi has absorbed an enormous amount of information about politics. And anyone who is that motivated and that smart is going to have an impact.”

Bob Strauss, as usual, gets the last word: “The son of a bitch is smart. He’ll adapt.”