In Earnings, Feinstein Has a Big Lead

Candidate for governor Dianne Feinstein and her investment banker husband, Richard Blum, reported earning nearly $7.4 million last year and paid $2.5 million of it in combined state and federal taxes--putting them in the rarefied top 0.02% of California money-makers.

The two, who are financing a large share of Feinstein’s campaign, released their 1989 tax return Thursday, and then permitted their accountant to speak publicly about previous years.

This financial information has been keenly awaited in political circles because until now the extent of the couple’s considerable wealth has only been the subject of conjecture.

How considerable? If spread over a five-day work week, the former mayor of San Francisco and her husband took home $18,878.95 per day in 1989.

Blum, who enjoys mountain climbing, said 1989 was the best year of his career. “I’m in the investment business. It’s like the Himalayas--maybe that’s why I like it--there are extreme peaks and extreme valleys.”

In past years, the earnings were not quite so spectacular. In 1988, Blum reported $2.7 million in income and paid 20% or $569,000 in taxes. The year before, he earned $1 million and paid only 8% or $80,849 in taxes.

“Neither of them has been a shelter investor to my knowledge,” said accountant Robert Bunje. “But we worked hard to minimize their taxes--so they didn’t pay more taxes than they had to.”

In 1985, because of losses associated with investments in Farrell’s Ice Cream parlors and with a hotel property the couple owned, they reported a net loss of $112,000.

The source of the couple’s income, the clients and holdings of their San-Francisco based investment banking business, has also been kept more or less private until recently in the campaign. Now, they have disclosed some holdings as required by law but others remain private.

The interest in Feinstein’s wealth is greater than for other candidates because she and Blum have lent her candidacy $1.3 million, according to the latest filing. This is about half of all the money she has raised. It is expected that between now and the June 5 primary, the couple is prepared to provide her with more, perhaps much more, to meet the high costs of a full-blown television advertising campaign.

State law forbids individuals from giving more than $1,000 annually to candidates, but self-financing is not regulated. Only Feinstein among the major contenders has so far used large amounts of her own family wealth in this campaign.

Her Democratic rival, John K. Van de Kamp, California’s attorney general, is scheduled to release his 1989 tax return on Monday. In recent years, he has shown earnings in the $250,000-to-$300,000 range. Republican candidate Pete Wilson, the U.S. senator, will disclose his 1989 taxes today. He has reported earnings of from $206,000 to $300,000 in past years.

Feinstein’s 1989 return shows that more than half of the couple’s income--$4.6 million--came from capital gains. Other earnings included $894,125 in income, $245,693 in interest, $177,000 in dividends.

In a separate conflict-of-interest filing made to state officials, Blum listed his corporate clients and personal holdings. He did not, however, identify those individuals for whom he makes investments. Campaign officials said state disclosure law did not require this information.

Data provided in such accountings are sketchy, listing only the name of the investment, the type of business, and whether the value of the holding is less than $10,000 or more than $100,000 or somewhere in between. An initial review of the reporting showed that Feinstein and Blum own considerable stock, have real estate investments, share in broadcasting properties and manage capital for several investment partnerships.

The range of stock investments with a value exceeding $100,000 includes Shanghai-Pacific, an import-export business with real estate holdings; Thortec International, an architectural and engineering firm; Alcide Corp., a drug company; and National Education Corp., which is in the video training business.

The couple is involved in managing the investments of several partnerships valued at more than $100,000, including their own Richard C. Blum & Assoc.; Northwest Airlines; KOVR, an ABC-affiliate television station in Sacramento, and many others.

Property holdings by the couple include the Hotel Carlton, a 165-room hotel in San Francisco, their home in the Presidio Terrance and a condo in Tahoe City. An aide said the two also own a home at Stinson Beach.

Feinstein was listed on the tax return as Dianne Blum and signed it Dianne Feinstein Blum, which a spokeswoman said is her legal name.

Times political writer Cathleen Decker contributed to this account.