Davis Aides Allegedly Used State Time for Campaign

At least seven legislative employees of state Controller Gray Davis improperly worked on the former assemblyman’s 1986 election campaign while on state time and using state facilities, according to an investigative report released Thursday by Atty. Gen. John K. Van de Kamp.

However, the attorney general decided against prosecuting Davis because investigators could not prove that the controller “knew his employees’ campaign-related time was being paid for by the state,” the report states. Instead, Van de Kamp agreed to accept a civil settlement requiring the Davis campaign to reimburse the state $28,000.

The amount is a total of state funds used for campaign staff time, telephone use, office space and computer time, the attorney general’s report said.

In deciding not to prosecute Davis, Van de Kamp concluded “that there is insufficient evidence to justify the filing of criminal charges against Mr. Davis.”

Both Davis and Van de Kamp referred inquiries to spokesmen.

Davis’ attorney, Joseph Remcho, issued a statement on behalf of the controller’s campaign committee that said the “committee voluntarily reimbursed the state for $28,000--about one-half of 1% of the total campaign expenditures of more than $5 million.

“The majority of this was paid as a result of the committee’s own investigation, well before the attorney general concluded his investigation,” the statement said. “Reimbursement was made to remove any possible cloud over the actions of the committee.”

The 17-page report, compiled in the course of a 20-month investigation that included more than 200 interviews, left unresolved the question of whether Davis and key campaign officials knew that his Assembly staff was working on his successful election while on state time.

“We do not make a finding that they knew or did not know,” Chief Assistant Atty. Gen. Steve White said. “We simply tell you, we cannot prove that they knew.”

The deliberate use of public facilities and state-paid staff for campaign purposes is illegal in California.

Van de Kamp and Davis are both regarded as potential rivals for the Democratic nomination for governor in 1990. The lengthy investigation has added to the strain between the two statewide officeholders, sources in both camps have said.

Van de Kamp’s report noted that two of Davis’ employees--his top Assembly assistant in Southern California and his press secretary--told investigators that Davis must have known that his state-paid staff was working on the campaign while on the public payroll and in state offices.

Davis’ former administrative assistant and Southern California campaign fund-raiser, Joann Ruden, admitted working only three hours a day on state business for four months during the campaign while drawing a full-time state salary.

When asked whether Davis knew that she and others were conducting campaign business on state time, Ruden told investigators: “Well--would he know it?--I assume he would know it.”

His one-time press secretary, Melba Muscarolas, told investigators that she raised the issue of “state employees working on the campaign” with Davis.

According to the report, Muscarolas told investigators that Davis told her that “everyone allowed state employees to work on campaigns, so why shouldn’t he?”

Both Muscarolas and Ruden were questioned under oath, after being promised immunity from prosecution, as were several of the other employees.

The report noted that Davis at times worked closely with his legislative employees during a period when they were devoting substantial amount of their time to campaign activities.

“While a fair reading of the facts would be that Mr. Davis knew that these persons were doing campaign work, we cannot establish that he knew this time was being paid for by state funds,” the report said.

The attorney general’s investigation was launched in March of last year, after a Times story airing allegations from state employees that Davis had used a bank of state phones set up in a state office building in Sacramento to solicit campaign contributions to erase the deficit from his controller’s campaign.

Van de Kamp’s investigators interviewed 99 of those called from the state office and found only one instance where it could be shown that the phone bank was used to solicit a campaign contribution.