Lungren Nominated to Be State Treasurer : Deukmejian Picks GOP Congressman to Replace Unruh

Gov. George Deukmejian, after nearly four months of painstaking deliberation, Wednesday nominated Rep. Daniel E. Lungren of Long Beach to succeed the late Jesse M. Unruh as state treasurer.

Lungren, 41, is an articulate, conservative Republican who in personality and politics closely resembles Deukmejian--and is the virtual opposite of the flamboyant, liberal Democrat he was chosen to replace.

Deukmejian, in fact, was reported by his advisers to be mindful that he could be choosing a potential successor as governor as he considered the applications of roughly 20 people who sought the job. In the end, Deukmejian selected a longtime friend and fellow resident of Long Beach whom he admires for political tenaciousness and personal character--”an individual of unassailable integrity,” he told reporters.

Face Rough Battle

But Lungren and Deukmejian now face what is expected to be a rough confirmation battle in the Democratic-controlled Legislature. Many lawmakers were rooting for one of their own to be promoted to the treasurer’s post. And for weeks they have been messaging the governor that nomination of the unfamiliar five-term congressman--who is not a member of the Sacramento political fraternity--would almost certainly produce a partisan brawl.

This will be the first time the Legislature has had the opportunity to approve or reject a gubernatorial nomination to statewide office since voters granted it this power with a 1976 amendment to the state Constitution. Each house will have 90 days in which to act. If it does not, Lungren will take office automatically.

But there is a dispute between the governor’s office and the attorney general over how many houses must vote against the nominee to deny the confirmation; the governor says two, the attorney general says one. And potentially that disagreement could lead to a court case.

The Democrats’ main target in the confirmation fight is expected to be Lungren’s opposition to congressional legislation appropriating $1.2 billion in compensation to Japanese-Americans interned during World War II. Lungren advocated officially apologizing to the internees, but argued that paying “reparations” was a bad precedent. The bill passed the House and is now pending in the Senate.

After agonizing over his decision, Deukmejian concluded that Lungren really was his first choice and he did not want to be intimidated by the Legislature, aides said.

The two finalists for the post were Lungren and Senate Republican Leader Ken Maddy of Fresno, according to sources close to the governor. Maddy, 53, a popular and respected political moderate, has been a loyal ally of Deukmejian’s and was an early supporter when he first ran for the GOP gubernatorial nomination in 1982.

But Deukmejian signaled he was leaning toward Lungren three weeks ago when he told reporters that Maddy’s admission in 1978 that he had twice smoked marijuana was “obviously a factor” he had to consider. Lungren is reported by his friends to always have been a teetotaler.

Political Reasons

A more compelling political reason for not selecting Maddy, however, was Deukmejian’s reluctance to remove him from the Senate minority leadership where he is considered an invaluable asset. The governor reportedly told Maddy, “You’re a victim of your own success.”

Additionally, Republicans would have been forced to wage an expensive fight in a special election to hold Maddy’s Fresno-based Senate seat. Lungren’s congressional district, by contrast, is regarded as safely GOP.

Ironically, the tables were turned for Deukmejian two decades ago when he similarly was passed over by a governor who was filling a coveted statewide office. Deukmejian, then a state senator and important ally of Gov. Ronald Reagan, was regarded as the odds-on favorite to succeed Robert H. Finch as lieutenant governor when Finch joined the Cabinet of new President Richard M. Nixon. But Reagan chose Rep. Ed Reinecke instead.

That rejection lit a political fire under Deukmejian, intimates recalled Wednesday, and inspired him later to run for attorney general.

Maddy, who was telephoned by the governor Wednesday morning and informed that Lungren was about to become the nominee, issued a prepared statement congratulating the congressman. The GOP leader pledged his “full cooperation” in the confirmation struggle and continued “full commitment” to the Administration.

Lukewarm Reaction

Legislative reaction to Lungren’s nomination generally was terse and lukewarm at best.

Senate President Pro Tem David A. Roberti (D-Los Angeles) said the Senate “will conduct a judicious review” of Lungren and “hold public hearings which will allow for a full and fair screening of his qualifications.”

Assembly Speaker Willie L. Brown Jr. (D-San Francisco) promised that Lungren will be given “thoughtful, careful consideration without regard for political partisanship.”

Assembly GOP leader Pat Nolan of Glendale said that Lungren “will make an outstanding treasurer, combining leadership skills and a quick grasp of public policy.” He added, “I am looking forward to continuing a successful working relationship with Ken Maddy.”

One conservative Republican, Assemblywoman Marian LaFollette of Northridge, called Lungren “highly qualified,” but emphasized: “The people of California deserve more than a rubber stamp from the Legislature.” LaFollette said she looks forward to “asking tough questions” of the nominee.

The treasurer’s office is considered a political prize 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.

Lungren briefly tried to run for the U.S. Senate in 1986, but withdrew from the race--citing as the chief reason his inability to raise sufficient campaign funds. “My campaign suffered from a case of writer’s cramp. I couldn’t get enough people to write checks on my behalf,” he told reporters Wednesday.

Election Pledge

Lungren, whose parents recently moved to Sacramento and whose brother Brian is executive director of Deukmejian’s political action committee, said he promised the governor that he would run for election to a full term as treasurer in 1990. But all such commitments would be scrapped, presumably, if Deukmejian unexpectedly decided not to run for a third term and opened up a race for the gubernatorial nomination.

Deukmejian described Lungren as “thoroughly qualified, by virtue of his experience, good character and views” to become state treasurer. Lungren has served on the congressional Joint Economic Committee and on the House budget authority subcommittee. But he confessed to not knowing much yet about the state treasurer’s office.

Both Republicans praised Democrat Unruh, who died Aug. 4 after a long struggle with cancer.

For all the trouble that Lungren will have to go through to get the job, he would take a $17,000 pay cut upon moving to Sacramento. His congressional salary is $89,700; the treasurer’s job pays $72,500.