Political Novice Confounds the Experts : Hayes Won Treasury Appointment Despite Criticizing Governor

A good politician generally does not go about getting a plum job appointment by criticizing the Administration of the man doing the appointing. That is especially true when the man doing the appointing is Gov. George Deukmejian, who many say has a thin skin.

But then, Auditor General Thomas W. Hayes, a political novice who is Deukmejian’s surprise choice to fill the vacant state treasurer’s job, has never considered himself to be a good politician. And he was not thinking about an appointment when he made a direct hit on the Deukmejian Administration in 1986 for its handling of toxic waste contracts.

In one of the best-known of the hundreds of audits bearing Hayes’ name, the auditor general--an employee of the Legislature--lambasted the Deukmejian Administration for mishandling toxic waste cleanup projects and paying contractors more than they deserved.

“The state has paid for questionable costs, has made excessive payments and has jeopardized federal funding because the Department of Health Services has not adequately procured and managed the state’s contracts for toxics-related services,” the report began, setting the tone for the detailed analysis that followed.

Deukmejian, who had asked for the audit, praised the report as “professional and constructive,” even though it proved embarrassing to him in his reelection campaign that year against Los Angeles Mayor Tom Bradley.

Showing he had no hard feelings, Deukmejian on Sept. 15 pulled the 42-year-old Hayes out of the gray ranks of the state bureaucracy to fill the post left vacant since the death of Jesse M. Unruh more than a year ago.

When he got the appointment, which had been coveted by several Republican officeholders because it is one of the state’s top elective offices, Hayes said he was as surprised as anyone.

“It is something I never considered doing until the governor called and asked me to do it,” the treasurer nominee said during a telephone interview last week from Manila. He was in the Philippines to discuss a training program that he has helped organize for Filipino civil service officials.

Although Hayes has been auditor general for nearly 10 years, his signature, because it has been affixed to so many audits, is far better known than his face around the Capitol. When Deukmejian escorted him into a press conference to announce his nomination, veteran Capitol reporters did not recognize the auditor.

“I never held press conferences. I wanted to let the audits speak for themselves,” Hayes said in the interview.

Right now, Hayes is virtually unknown beyond the tiny perimeter of the state Capitol. “He’s dull as oatmeal,” said a friend, B. T. Collins, former chief of staff to ex-Gov. Edmund G. Brown Jr.

But one Republican who is close to the governor, said: “If you’re looking for someone who is qualified to do the job--and I realize we don’t look for those things anymore--he is extremely well qualified.”

Never Ran for Office

A combat Marine officer who won a commendation medal for service in Vietnam in 1968, Hayes worked in the legislative analyst’s office and then as assistant auditor general before being appointed in 1979 to the post he now holds. He has never run for an elective office, nor even considered it. Nor has Hayes even registered as a member of a political party, though he has promised the governor he will become a Republican.

In choosing Hayes, Deukmejian wanted to avoid a replay of the partisan confirmation fight that led to the rejection of his first nominee for treasurer, Rep. Daniel E. Lungren of Long Beach.

Hayes, who owes his career to the Legislature and is widely respected for his tough-minded, nonpartisan audits, should have a much easier time of it during confirmation hearings than Lungren.

Senate President Pro Tem David A. Roberti (D-Los Angeles), who was instrumental in blocking Lungren’s nomination, called Hayes “competent, professional and nonpartisan.” Roberti said he will begin confirmation hearings for Hayes in December or January.

Getting ready for the 1990 election should be tougher. Some Republicans publicly--and many privately--were strongly critical of Deukmejian for choosing someone who not only was not a member of the party but someone who had no background in politics.

“I just don’t understand what the governor was thinking,” said Assemblyman Gil Ferguson, a Newport Beach Republican and strong Deukmejian supporter. He said the governor might just as well have picked a nominee “from out of the telephone book.”

‘Slap in the Face’

Assemblyman Ross Johnson (R-La Habra), who plans to vote against Hayes’ confirmation, said the appointment is “outrageous,” “incomprehensible” and “a slap in the face to thousands of dedicated Republican activists, people who have labored years on behalf of George Deukmejian. It is essentially saying there is no Republican who is both qualified and confirmable.”

Hayes said he understood the reaction, but “I hope they change their mind once they get to know me.”

David Townsend, a veteran campaign manager who handles Democratic candidates, called Hayes “a total rookie.” Townsend predicted that the auditor general will be “a tough sell” politically for Republicans because he has only been a “numbers cruncher.”

“The reason we elect someone treasurer is for policy leadership,” Townsend said, noting that Hayes has always deferred on policy questions to the Legislature.

The campaign manager added, “He is going to have to rely very heavily on Deukmejian. He has got no organization, no political background, no political alliances. He is not even a Republican.”

Volunteer Consultant

Hayes missed an opportunity recently to build bridges to Republican activists when he passed up the state GOP convention in order to keep a commitment to fly to the Philippines, where he is a volunteer consultant to the government.

Hayes works on a program sponsored by the San Francisco-based Asia Foundation, in which middle-level financial officers with the Philippine government are brought to California for internships in various state agencies. Hayes screens potential interns in the Philippines. He does not receive a salary, but the Asia Foundation pays his expenses, which amounted to $4,185 in 1987.

Hayes and his wife of 20 years, Mary, live with their two teen-age daughters in the nearby suburban community of Carmichael. Once the owner with her husband of three T-shirt shops in Sacramento and Chico, Mary Hayes recently passed a state examination to become a certified public accountant and has just taken a job as an auditor with a Sacramento firm.

Hayes’ father is retired Air Force Maj. Gen. William Hayes, former commanding officer at Beale Air Force Base northeast of Sacramento.

Rather than follow his father into the Air Force, Tom Hayes joined the Marines, entering as a lieutenant and emerging as a captain. In Vietnam, Hayes was a combat engineer in charge of a platoon responsible for moving ahead of the infantry and sweeping roads for land mines.

Not ‘a War Hero Type’

“He wasn’t a war hero type. He just wanted to get out of there alive, like the rest of us,” said San Diego lawyer Ron Stout, a longtime friend who went to Marine officer school with Hayes and served with him in Vietnam.

Collins, also a Vietnam combat veteran, said of Hayes: “He is not a political guy, but maybe that is his best strength. When the public gets to know this guy and his personal characteristics, maybe they are going to say, ‘Do we need a professional politician in this job?’ and pick him.”

Collins is a vice president for Kidder Peabody & Co. in Sacramento, specializing in municipal bond sales. As treasurer, Hayes would be responsible for making billions of dollars in financial transactions for the state, including bond sales and investment of state surplus money.

But Collins, who has worked with Hayes to raise money for the California Vietnam Veterans War Memorial, said he does not expect any new business to be thrown his firm’s way merely because of the friendship. “He’s such a straight arrow that he’ll bend over backwards to make sure that I don’t get preferential treatment,” Collins said.

Another Hayes friend is Richard Robinson, a former Democratic state assemblyman who is an executive specializing in municipal bonds for the investment firm of Bear, Stearns & Co. Hayes owes his job as auditor general in large part to Robinson.

Change in Requirement

The former assemblyman played a key role in reshaping the auditor general’s office in the late 1970s. Until the Legislature passed Robinson-backed legislation, the auditor general was required to be an accountant. Hayes has a master’s degree in business administration from San Jose State, but he is not an accountant.

Hayes said Robinson was not directly involved in his hiring and he thinks he owes him no favors.

As for Robinson, he said he thinks Hayes’ political skills will surprise some people. “He took an office that was in a shambles and turned it around, and he survived for 10 years in the Legislature, winning friends on both sides of the aisle. That takes some political skills,” Robinson said.

In addition to the toxics audit, Hayes in recent years has issued strongly critical reports on a number of Deukmejian Administration programs.

An audit detailing shortcomings of the Administration’s victims-of-crime program led Deukmejian to a rare concession that one of his programs needed improvement.

Critical Study on Prison Site

A highly critical review of Deukmejian’s proposal to build a state prison near downtown Los Angeles came at a time when the governor was embroiled in a fight with the Legislature over the location.

Although the site was ultimately approved by the Legislature, Hayes noted that the proposal did not follow established procedures for locating a prison and was too close to a property contaminated by hazardous waste. He also warned that the Administration appeared willing to pay a price for the property that was too high.

Other audits pointed up deficiencies in the state’s asbestos cleanup program, the Administration’s slowness in assisting victims of the 1986 floods in Northern California, and mismanagement of employee overtime and travel in the Department of Transportation.

Collins remembers getting a call from Hayes after one audit. The audit had been highly critical of the California Conservation Corps, which Collins then headed, and Collins had attacked the findings in print.

‘Been Friends Ever Since’

“I didn’t know him at the time. He called up and said, ‘I resent the remarks that you made about my staff, and I think we should get together and talk.’ We met, had a couple of beers, and we’ve been friends ever since,” Collins said.

While Hayes describes himself as a “fiscal conservative,” financial disclosure records on file with the state show that during 1985 he traded heavily in stock market options, considered by stock market analysts to be among the riskiest investments there are. Hayes lost money, “several thousand dollars,” he said, in what he describes as “a fling.”

“I only traded in them for a month or two and would never make an investment like that with the public’s money,” he said.

Records show that since 1985 Hayes has confined his investments mostly to blue-chip stocks, bonds and mutual funds.

Times staff writer Carl Ingram contributed to this article.