CALIFORNIA ELECTIONS / BOARD OF EQUALIZATION : Indictment No Death Blow in Tax Board Race

Paul Carpenter is seeking reelection to the State Board of Equalization saddled with a politician’s worst nightmare--an indictment.

But to a small gathering of the West Hollywood Democratic Club where he has come to hawk his candidacy on a warm weekday evening, he appears unruffled and self-assured. Speaking in a tone so casual that he could be talking about the weather, Carpenter meets the issue head-on.

“I am the incumbent in this office and the primary is being fiercely contested because I’ve had the misfortune this last month of being indicted,” he says softly. “I find this is a very unusual situation because frankly until this year I’ve never even known anybody who’s been indicted so to be indicted really shocks me.”

Although Carpenter was a close political ally of Louis J. Cella, a campaign financier indicted in 1976 and convicted for conspiracy and tax fraud, his audience knows only that he appears pained by his “misfortune.” Some smile compassionately as he hurries on to other subjects, drawing laughter when he tells a joke about Vice President Dan Quayle or nods of approval as he talks of the need for more “taxpayer education.”

Minutes later an opponent, Gary Gillan, tries to bring attention back to Carpenter’s legal troubles.

“He (Carpenter) was indicted for racketeering, extortion and conspiracy,” he says. “I got into this race because I believe there are ethical problems on the board and that Paul represents some of the worst aspects of the ethical problems.”

There is little reaction. Carpenter has already won the sympathy of the gathering.

For the five candidates running against Carpenter in the Democratic primary the scene illustrates a lingering frustration--their inability to exploit the indictment of the ex-legislator and one-term board member. As the June 5 primary approaches, most of them acknowledge that the criminal proceeding has not dealt the death blow to his candidacy that they had hoped.

“I believe a majority of the people who work their way through a lengthy June ballot are going to come to the Board of Equalization and find an incumbent with a very familiar name,” says Warren Harwood, a Long Beach city councilman who is running against Carpenter. “The name identification thing alone, I think, is going to blow us all away.”

Says Tim Mock, a Torrance city councilman running in the same race: “I think the average voter, if you were to ask him, probably wouldn’t know who Carpenter is, much less that he’s been indicted. And I think that’s what Paul’s counting on.”

Board of Equalization members are elected from four districts, each with a population of roughly 7 million. A fifth seat on the board automatically goes to the state’s controller.

This year, reelection is being sought by three incumbents: Ernest Dronenburg, a Republican representing an eight-county district in Southern California; William Bennett, a Democrat representing a 33-county area in Northern California; and Carpenter who represents a wedge of land that encompasses the populous southern and central portions of Los Angeles County.

Six Democrats and two Republicans are vying for a fourth seat now held by Conway Collis, who is running for insurance commissioner. Collis’ district covers the rest of Los Angeles and 16 other counties. In all, 32 candidates are seeking seats on the board.

Despite the size of the districts, for most voters the races for Board of Equalization seats are the best-kept secrets of the political year. The offices have such low profiles that candidates can’t attract the hundreds of thousands of dollars in campaign contributions they need to get their own message to 7 million people much less publicize the foibles of their opponents.

“Nobody has the resources to reach a quarter of the state,” says Mock.

The low visibility of the races belies the overall importance of the Board of Equalization in state government. As the agency that administers the state’s sales, gasoline, alcoholic beverage and cigarette taxes and handles appeals of income tax cases, the board, in one way or another, touches the life of nearly every taxpayer in California.

Yet nearly all the candidates running for office say tax issues have nothing to do with who gets elected. “You’d have to be giving out free turkeys to get people to come out and listen to candidates for the State Board of Equalization,” says Carpenter.

Elections are won, says Brad Sherman, a Democratic candidate for Collis’ seat, with newspaper endorsements, slate mailings and ballot designation. Sherman, a tax attorney-accountant, has already scored a coup by getting approval to be shown on the ballot as “CPA/taxpayer representative.”

In a race where no one has enough bucks to buy television time or finance massive mailings, Carpenter says the real competition is for positions on the slates. While nonprofit labor and professional groups often send out mailings urging their memberships to vote for a particular slate of candidates, it is those by political consultants and activists that are the most sought after.

In the Democratic primary in previous years, the slate with the biggest impact has been that produced by West Los Angeles political consultants Michael Berman and Carl D’Agostino. On the Republican side, candidates clamor for inclusion in a slate organized by party activists Allen Hoffenbloom, William Thornbury and Edward Cross. Sherman has already won a slot on the Berman-D’Agostino slate while Claude Parrish, a Republican running for the same seat, will appear on the Hoffenbloom, Thornbury, Cross slate.

To get on those slates, candidates not only have to be selected but also have to be willing to fork over thousands of dollars as their share of its cost.

“Obviously the guy with the most money who can buy the slates is the favorite,” says Josef Colman, a Collis deputy who is running for his boss’ seat. “It’s a shame that money is the name of the game. It’s a shame that money buys the attention.”

Like many of Carpenter’s challengers, Harwood says he got into the race believing that he could defeat the incumbent because neither the slates nor the Democratic Party would want to endorse someone who was indicted. What happened instead, he said, was that the party at Carpenter’s urging declined to endorse anyone and now many of the slates may do the same thing.

“In the absence of endorsements I believe we are going to have Mr. Carpenter again,” Harwood says angrily.

This year the obscurity of the races has also hidden some of the best political theater of the election season. There has been scandal, intrigue, a personal grudge match and controversy.

In the race to fill Collis’ seat, candidate Louis Papan accuses opponent Sherman of trying to buy the election because he has pumped $355,000 of his money into the campaign. Sherman counters that Papan, a former chairman of the powerful Rules Committee in the state Assembly, has plenty of political connections but no qualifications to sit on the board of a tax agency.

At the same time he campaigns for reelection, Bennett is also campaigning for the abolition of the very office he is seeking. He contends that both the Board of Equalization and the Franchise Tax Board, which administers income tax, should be replaced by a state department of revenue run by appointed officials.

“We’re the only state with an elected tax board,” Bennett tells his audiences. “It’s a conflict per se because some of us take contributions from people who appear before us. There is no way one can be objective taking large money from large corporations.” Bennett himself refuses to collect campaign contributions.

In Carpenter’s race most of the five challengers use every opportunity to spotlight the fact that he was indicted in mid-March by a federal grand jury. Carpenter, whose strategy has been to keep a low profile during the campaign season, has denied charges that he illegally sought campaign contributions when he was in the state Senate, maintaining he is seeking reelection only because he is confident of acquittal.

Carpenter’s challengers complain that he has tried to orchestrate the outcome of the election by persuading Fred Chel, a former assemblyman from Long Beach and a friend, to get into the race. They note that simply by his presence on the ballot Chel would take Long Beach votes away from Harwood. Both Carpenter and Chel deny the accusation.

But the sniping between candidates masks an even bigger behind-the-scenes battle between Carpenter and Bennett, who each represent different factions on the board. On most major issues Carpenter is part of a ruling majority, and Bennett, a 19-year veteran of the board, is usually in the minority.

Carpenter sees the split as a struggle between new board members who believe taxpayer education should be the agency’s first priority and an old guard that views the agency as sort of a taxpayer KGB whose chief mission is to catch those who have misstated their tax liabilities.

Bennett, on the other hand, contends that the so-called new philosophy is really Carpenter’s excuse for favoring big corporate interests--some of whom have made large donations to his political campaigns--in tax cases involving millions of dollars.

Although both are Democrats, their dislike for each other is so intense that each is openly trying to engineer the defeat of the other. For months, Bennett has been drawing attention to every case before the board that involved a contributor to Carpenter’s campaign. A few weeks ago, he endorsed one of Carpenter’s opponents, Tim Mock.

Carpenter, meanwhile, has been helping Joseph F. Micallef, a former board auditor who is running against Bennett, get slate endorsements and plan his campaign. When Micallef provided evidence earlier this month that Bennett had collected thousands of dollars in reimbursement for travel expenses that other state records showed he didn’t incur, Bennett immediately charged that Carpenter was behind the accusation.

Carpenter acknowledges that an incident in August, 1988, led him to suspect that there might be irregularities in Bennett’s travel accounts and “I was happy to communicate those suspicions to his (Bennett’s) opponent.”

Shortly after it became public knowledge that the FBI was investigating Carpenter but long before there was an indictment against him, Carpenter says he attended the annual conference of the Western States Assn. of Tax Administrators in Vail, Colo. One evening when he returned to his hotel from a round of meetings, he says, he was greeted by an embarrassed desk clerk who handed him a message saying, “Your office called. You’ve been indicted.”

But Carpenter said he confirmed in a quick call to his staff that the message was a hoax. Later, Carpenter says he checked Bennett’s telephone credit card receipts and discovered the state was billed for a call to the Vail hotel from Bennett’s home at exactly the same time the desk clerk said she received the indictment message.

“So if Mr. Bennett gets hung for cheating it’s really something that he brought on himself, which I think is ironic,” Carpenter says.

Bennett denies that he ever made the phone call.