New Treasurer Quickly Looks to 1990 Election

Newly confirmed state Treasurer Thomas W. Hayes was sworn into office Friday and immediately announced the formation of a campaign organization of top Republicans to guide his effort to win election to the office in 1990.

After taking the oath of office from Gov. George Deukmejian, Hayes disclosed that he had appointed a steering committee composed of a number of close Deukmejian associates.

Among them are Steven Merksamer, the governor’s former chief of staff; Larry Thomas, his one-time campaign director and press secretary, and Orange County Supervisor Gaddi Vasquez, a former deputy appointments secretary to Deukmejian. Other members of the committee are former GOP Chairman Clair Burgener, Senate GOP leader Ken Maddy of Fresno and San Diego financier Tom Stickel.

Held No Elective Office

Help from such a committee could be crucial for Hayes, who neither held elective office nor belonged to a political party until Friday when he officially registered as a Republican. That fulfilled a commitment that he had made to Deukmejian when he accepted the nomination for the treasurer’s job.

Los Angeles attorney Kathleen Brown, a member of the Board of Public Works and sister of former Gov. Edmund G. Brown Jr., has already begun raising money for an expected run for the treasurer’s office on the Democratic ticket.

Hayes, in brief remarks to reporters after the ceremony, declined to be specific about his campaign plans. But he disclosed that in his first official act he had fired acting Treasurer Elizabeth Whitney, a protege of the late Democratic Treasurer Jesse M. Unruh. Hayes also replaced John Keplinger, an associate of Whitney who had run the Pooled Money Investment Board.

Whitney had lobbied the Legislature to block Hayes’ appointment in hopes of retaining her job so she could run for election in 1990 as the Democratic incumbent.

Hayes did not elaborate on his relationship with Whitney, but sources indicated bitter feelings remain between the two. One source said that when Whitney called Thursday to congratulate Hayes on the Legislature’s overwhelming vote to confirm him, he ordered her out of his new office in no uncertain terms.

‘Anxious to Move Forward’

“I’m very anxious to move forward (into) the new position,” Hayes said after the ceremony, adding that he will wait until next week to announce major staff changes. “The decisions we will make in California over the next decade to a large degree will dictate the quality of life we will have for our children and grandchildren over the next 100 years. I’m eager to participate in those decisions.”

In addition to being the official banker for the state and managing its $19-billion investment portfolio, the treasurer sits on dozens of boards and commissions that issue bonds for everything from hospital construction to environmental cleanup.

Through his authority to parcel out underwriting contracts and other business, Unruh built the treasurer’s office into a powerful base from which to raise campaign contributions. However, voter passage last June of Proposition 73 severely limits the amount of money that Hayes can collect from those who contract with the state or from other sources.

Hayes has also pledged to institute a more competitive system in awarding contracts, which could further diminish his powers as a fund-raiser.

Morever, while Deukmejian has offered to help Hayes with his campaign, the campaign-spending initiative also prevents the governor from giving any of his unused contributions to Hayes. Deukmejian has announced that he will not run for a third term but has not said how he will spend his remaining campaign money.