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CALIFORNIA ELECTIONS : In State Race, Banking May Not Be Boring : Treasurer: Candidates for the job evoke Vietnam battlefields, GOP heroes and family ties to spice up election campaign for California’s chief financial officer.

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TIMES STAFF WRITER

It’s a long stretch, even for politicians, to tie the state treasurer’s office and AAA bonds to Hollywood and the jungles of Vietnam.

But at this early stage in the primary race for the treasurer’s office, that is what happens just about every time one of the candidates hits the campaign trail.

Speaking to a standing-room-only crowd of Republican activists at a GOP convention in Santa Clara recently, incumbent Treasurer Thomas W. Hayes--a decorated ex-Marine--spiced up an otherwise dry speech about his track record as treasurer with an emotional reference to Californians who died in Vietnam, some advice he once got from his platoon sergeant, and a generous sprinkling of battlefield metaphors.

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His opponent, Angela M. (Bay) Buchanan, who seemed to have as many placard-waving supporters in the room as Hayes, talked about Hollywood, true-blue Republican conservatism, Ronald Reagan, and never got around to bond ratings or investment policy.

As for the leading contender in the Democratic primary, Kathleen Brown, she has a seemingly effortless ability to breathe color into the gray world of government finance. Brown, hoping to carry on a family tradition that has already produced two California governors, has been trailed by a national network television crew in a display of national interest unheard of in a state treasurer’s race.

What it all adds up to is the most interesting campaign for treasurer in years.

Hayes--a non-politician and the state’s auditor general until he was appointed by Gov. George Deukmejian in late 1988 to fill the unexpired term of the late Jesse M. Unruh--is using his Marine background to partially blunt efforts by his opponents to portray him as a green-eyeshade bureaucrat who is ill suited for a high-visibility political office.

Buchanan is a former U.S. treasurer and banker for two of Ronald Reagan’s presidential campaigns. Her added claim to fame is that she is the “little sister” of political commentator and conservative firebrand Patrick J. Buchanan.

Brown, daughter of former Gov. Edmund G. (Pat) Brown and sister of ex-Gov. Edmund G. Brown Jr., is a veteran officeholder in her own right.

She has ignored her Democratic primary opponent, Compton City Treasurer Wesley Sanders--who lacks her name recognition, organization or fund-raising ability--and focused on Hayes. Sanders, the elected treasurer of Compton for the last 17 years, said he is running because California is in “need of an experienced state treasurer.” Sanders contends that the treasurer’s office is drifting under Hayes and says that he wants to bring back Unruh aides Hayes dismissed.

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As far as Brown is concerned, Hayes’ experience in government is a shortcoming because he spent so many years following the orders of political officeholders. “We need a treasurer who will fight bureaucrats and be responsive to voters. We do not need a bureaucrat as treasurer,” she said recently.

Hayes disagrees: “People are looking for a competent money manager.”

To cultivate his image as a money manager, Hayes has been inviting reporters into his office to monitor the treasurer’s sophisticated investment operations. Using computers and--beginning at dawn--negotiating with New York investment bankers by phone, Hayes and his staff can invest hundreds of millions of dollars in minutes. He boasts that last year he earned the state $1.6 billion and got a better return on investing tax dollars than any other state.

And he doesn’t mind being portrayed as a non-politician. “After you cut out all of the baloney, you have a politician running against a competent money manager,” he said.

Buchanan, who considers herself an underdog in the Republican primary, is relying on her background as U.S. treasurer, her iden tification with Reagan’s presidential campaigns, and her famous brother to catch on with GOP voters in the June election.

She laces her public comments with references to well-known Republicans who have helped her campaign, including longtime Reagan political adviser Lyn Nofziger, former Reagan Secretary of State Alexander M. Haig and even Iran-Contra scandal figure Fawn Hall. But it is her brother she talks about the most.

Buchanan, if she can win the GOP primary, sees a match-up against Brown as “the battle of the little sisters.”

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Even without the attention that comes from a competitive primary race, Brown seems to be able to generate more excitement than Hayes or Buchanan. She was trailed to her junior high school by a good turnout of reporters--including a crew from CBS’ “60 Minutes”--and enough aides, supporters and family members to put on a good party.

Once there, Brown, a former elected member of the Los Angeles Board of Education and appointed city public works commissioner, charmed seventh- and eighth-graders by recounting how her father enrolled her in Sutter Junior High School after he was elected governor in 1958.

As for issues in the race, Brown criticizes Hayes for not issuing $7.4 billion in bonds approved by voters in recent elections. She says the money could be used to build schools and water projects that the state badly needs.

Hayes responds that in 1989 he sold a record $1.6 billion in bonds and in 1990 will sell another $2.2 billion worth. He argues that voters are approving bonds so fast--more than $5 billion in 1988--that they cannot be sold all at once. To do so, he said, would flood the bond market, leading to higher interest rates and jeopardizing the state’s AAA credit rating.

Brown also criticizes Hayes for being too late in drawing attention to investments in junk bonds by the Public Employees’ Retirement System and accuses him of being slow in warning of the dangers involved in a $25-million unsecured loan to Drexel Burnham Lambert, the failed Wall Street firm that popularized junk bonds.

Hayes, who has urged the Public Employees’ Retirement System to halt all junk bond investments, said the Drexel loan was made long before he was appointed treasurer and there now is little he can do about it.

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Buchanan, meanwhile, criticized both Hayes and Brown for accepting campaign contributions from investment houses and Wall Street firms that do business with the treasurer’s office.

Hayes, so far, has been reluctant to fire back, sticking to his role as a strait-laced auditor somehow above the political fray. Brown has said the criticism is just off-base and accuses Buchanan--who has raised money for other Republican candidates--of a “midnight conversion” on the issue of fund raising.

A recent Los Angeles Times poll showed that Hayes had the support of 24% of those surveyed and Buchanan 12%, with 63% undecided.

BACKGROUND

The treasurer is the state’s chief banker, depositing monies and clearing checks drawn on the state treasury. The treasurer invests an average of $350 million a day in state tax and bond funds and supervises annual sales of about $6 billion worth of state bonds and notes. In addition, the treasurer heads or belongs to 43 authorities, boards and commissions and runs an office that employs 240 people. The salary is $72,500 a year.

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