Deukmejian’s List for Treasurer Down to Two

Gov. George Deukmejian apparently has pared his “short list” of potential nominees for state treasurer to two finalists--Rep. Daniel E. Lungren (R-Long Beach) and state Sen. Ken Maddy (R-Fresno).

And the edge seems to be with Lungren, based on signals that the governor has been sending for the last two weeks.

This was the consensus Thursday of several politicos interviewed by The Times on condition they not be identified. The governor’s top aides would not join in the speculation, which has been rampant in California political circles in recent weeks. And Deukmejian was saying little, publicly or privately.

“He (Deukmejian) plays political decisions closer to the vest than anyone I know,” said Lungren in a telephone interview after meeting privately with the governor in Washington on Wednesday.

The five-term congressman said he was “very encouraged” about his prospects for being selected by Deukmejian. But Lungren insisted that the governor did not tell him who the nominee would be or even that he had made up his mind.

Deukmejian, other sources said, intends to announce his selection next Wednesday, thereby ending several months of political jockeying for the nomination that began even before Treasurer Jesse M. Unruh died Aug. 4 after a lengthy illness.

The treasurer’s office is one of the most coveted in state government for at least two reasons: It decides or influences the awarding of billions of dollars in state bond and investment business to financial concerns that often wind up contributing campaign funds to the treasurer. And, for the right politician, the job could be a springboard to higher office, such as governor or the U.S. Senate.

Deukmejian’s previous “short list” of potential nominees, advisers privately confirmed, consisted of Lungren, Maddy, Sens. Marian Bergeson (R-Newport Beach), Robert G. Beverly (R-Manhattan Beach) and William Campbell (R-Hacienda Heights) and Tom Stickel, a San Diego financier and Deukmejian political backer.

Deukmejian himself hinted strongly to two reporters in Washington on Tuesday that he had pared his list to two. Counting the two reporters, the governor quipped, he had reduced his list to four. A top aide later acknowledged that the governor was not joking idly and did indeed mean to suggest that the list was down to two.

Other political sources on Thursday said they had concluded from conversations with gubernatorial advisers and various candidates for the job that Deukmejian had narrowed the field to Lungren and Maddy.

And the signals pointed to Lungren, they said.

Two telltale signs were cited: The first was Deukmejian’s statement two weeks ago to a group of reporters that Maddy’s admission in 1978 that he had twice smoked marijuana was “obviously a factor” that he had “to consider” in view of the national controversy over then-Supreme Court nominee Douglas H. Ginsburg’s disclosure that he had occasionally used the drug. The second sign was Deukmejian’s two private meetings with Lungren while in Washington.

According to gubernatorial advisers, Lungren’s assets--in Deukmejian’s view--are that he is relatively young (41), bright, articulate and a good political campaigner, and potentially he could become a strong candidate for governor or the U.S. Senate. Beyond that, Deukmejian has been a friend of Lungren’s for years, they both are from Long Beach, and the governor rates high the congressman’s personal character.

But Lungren’s political deficits are that, unlike Maddy, he likely would face a tough confirmation battle in the Democratic-controlled Legislature. Legislators--Democrats and Republicans alike--told The Times that while they feel a special fraternal bond with Maddy, they have no political kinship with Lungren.

May Be ‘Unconfirmable’

In fact, Republican members of the Assembly have privately advised Deukmejian that Lungren may be “unconfirmable,” sources said. Among other things, they are afraid of an intramural bloodletting that could develop if Assemblymen Gerald N. Felando (R-San Pedro) and Dennis Brown (R-Signal Hill) battled each other for Lungren’s congressional seat, as expected.

“People (Republicans) are working against the Lungren appointment because it would put Dennis Brown and me in a primary against each other,” Felando said.

Democrats have served notice privately that they would attack Lungren on the basis of his opposition to paying $1.2 billion in federal compensation to Japanese-Americans interned during World War II. Lungren advocated apologizing to the Japanese-Americans, but argued that paying “reparations” would set a bad precedent. Congress passed the bill over Lungren’s objection.

Deukmejian is said to be prepared for a rough confirmation battle if he chooses Lungren.

“The question the governor has to ask himself,” one adviser said, “is whether he wants to be ‘the Compromising Duke’ or ‘the Iron Duke.’ He’s never hurt himself with the public by being the Iron Duke. This is a very, very tough call for him.”

Compromise Choice

A compromise choice would be the popular Maddy, 53, who always has been strongly supportive of Deukmejian and, like Lungren, backed him in his initial race for the GOP gubernatorial nomination in 1982. Maddy is a proven statewide vote-getter who finished third in a hard-fought 1978 GOP gubernatorial primary.

But a major drawback for Maddy, gubernatorial aides point out, is that his Fresno-based Senate district is strongly Democratic. And if he were to become treasurer, Republicans very well could lose that seat. Beyond that, Maddy just this year was elected Senate Republican leader and is regarded as a valuable ally of the governor.

On the other hand, Maddy supporters and gubernatorial aides alike concede that if the Fresno lawmaker is passed over by Deukmejian and remains in the Senate, he may not feel so inclined in the future to go all out for the governor on crucial issues.