CALIFORNIA ELECTIONS TREASURER : Buchanan Attacks Hayes on Fund-Raising Activities

Republican candidate for treasurer Angela M. (Bay) Buchanan, in her sharpest attack yet on incumbent Treasurer Thomas W. Hayes, on Thursday accused her opponent of taking “the ethical low road” by inviting bidders on a lucrative state bond issue to attend a private, $1,000-a-plate campaign lunch.

Buchanan, a former U.S. treasurer challenging Hayes in the June 5 GOP primary, said her opponent is “holding out the carrot on state business with one hand while he asks for campaign contributions with the other hand.”

Donna Lucas, director of public affairs for Hayes’ office, said there was “absolutely” no connection between the lunch, held Thursday in Los Angeles, and the bidding to underwrite the $150-million bond issue being put together to build a prison in Madera.

Lucas said the selection of a firm to head the bond deal is decided “on a strictly competitive basis” that does not involve Hayes until a staff of top officials in the treasurer’s office winnow the proposals and make a selection based on the merits of the individual bid. She said bids were still being studied.

The lunch, hosted by Los Angeles attorney Karl M. Samuelian and Lodwrick (Lod) Cook, board chairman of Arco, was held in Security Pacific Bank’s 53rd-floor executive dining room at Security Pacific Plaza. Gov. George Deukmejian attended.

Samuelian, who has been an active fund-raiser for Deukmejian as well as Hayes, did not return telephone calls Thursday.

For months, Buchanan has criticized Hayes for accepting campaign contributions--she has counted at least $250,000 so far--from Wall Street investment firms, bond brokers and their lawyers, who each year bid for the right to manage the sale of California bonds.

Buchanan said the lunch Thursday is “the best example” yet of a fund-raising practice she contends is riddled with obvious conflicts.

“Bond brokers and banks were actively solicited for the event,” she said.

Buchanan said several investment officials have complained personally to her that they felt their arms were being twisted to attend the luncheon.

“I am getting phone calls from people who are feeling the pressure--people who were invited and are out there waiting to hear if they will be in line for deal,” she said.

Brian Lungren, Hayes’ campaign manager, asserted that Buchanan, who has admitted having difficulty raising money, was making the charge because “her campaign is on the brink of disaster.”

Lungren said Buchanan was attempting “to create an issue where one does not exist. It shows Buchanan’s lack of knowledge and respect for the treasurer’s office and how it works.”

Richard Warner, executive vice president for public affairs at Security Pacific Bank, attended the lunch for the bank. But he called “ridiculous” Buchanan’s charge that is was unethical for Hayes’ campaign supporters to invite Security and other firms to the fund-raiser.

“Security Pacific, as the second-largest bank in California and the fifth-largest in the country, does a great deal of business with a wide variety of government agencies,” Warner said.

One bond broker invited to the lunch, who asked to remain anonymous because of fear that his firm might be hurt, said he felt the invitation put him “in a very difficult situation. I’m not sure whether it is right to go; I’m not sure whether I can afford not to go.”