Fund-Raising Needs Create Ethics Dilemma for Wilson : News analysis: Record shows he has intervened for big donors. Senator says he is serving public interest.

Although he has harshly criticized his opponent in the governor’s race for taking special-interest money, Pete Wilson has himself intervened on behalf of a number of political supporters with a considerable stake in federal government decisions, a review of his record in the U.S. Senate shows.

Wilson, at the request of his campaign contributors, has lobbied against banning a potentially hazardous food dye; urged a federal agency not to impose a $5-million penalty against citrus growers; fought regulators to prevent closing an Orange County investment firm; pressed authorities to reconsider their denial of a controversial railroad merger; arranged a meeting with top Justice Department officials for a longtime friend, and blocked a bill that would require stricter safety standards for industrial bolts, according to documents and interviews.

These backers have contributed to Wilson’s Senate and gubernatorial campaigns, and some have an interest in California issues that require the governor’s approval.

The Republican senator defended his actions by saying that he strives to serve the legitimate needs of his constituents.

“There is no quid pro quo in any decision. You do not (help a supporter) for campaign contributions. You do it only because it . . . benefits the public,” he said.

Wilson cited a 24-year political career built on strong campaign ethics--the same point he underscored earlier this month when he accused Democratic challenger Dianne Feinstein during a televised debate of compromising herself by accepting $150,000 from the organization that represents state Highway Patrol officers.

“Dianne, I am truly shocked that you would be so blind to such a gross conflict of interest,” Wilson said as he lectured Feinstein on the impropriety of accepting a large contribution from an organization of state employees whose salary is set by the governor.

Wilson sought the endorsement of the same CHP group but did not seek a contribution. He also solicited political and financial support from three similar organizations that represent nearly 100,000 state workers whose pay the governor also approves. Among them are California prison guards, who are gearing up to independently spend as much as $150,000 to help Wilson in the waning days of the governor’s race.

Wilson said the amount that he has received directly from state employees--at least $13,000--is not enough to pose a conflict, and not nearly on a par with the $150,000 that CHP officers gave Feinstein’s campaign. He also said he cannot be held responsible for the large sum that prison guards are prepared to spend on their own to help him get elected.

The contrast between Wilson’s public statements as a candidate and his lobbying efforts as a senator illustrates the central dilemma he faces in running for governor of the nation’s most populous state.

As Wilson continues to carefully craft the image of a politician with high ethical standards, his need to raise huge amounts of campaign money has made him vulnerable to the same kind of criticism that he dishes out at his rival.

In the real world of politics, serving constituents is a necessity for a successful politician, and so is raising a lot of money.

Herbert E. Alexander, political science professor at USC, said the problem arises because special-interest groups are the most ready source of campaign contributions. “Without public funding or more party assistance,” Alexander said, “candidates are bound to go to funding sources that may prove to be embarrassing at a later date.” This dilemma is magnified by Wilson’s prowess as the leading fund-raiser in Congress--he has collected more than $27 million over the last decade for two Senate races and the governor’s contest thus far in a state that is one of the most expensive in which to mount a campaign.

The next California governor will take office at a time when the ethical guidelines for public officials are undergoing intense scrutiny. For years, the rules governing how far lawmakers should go in helping their constituents have been fuzzy or nonexistent. But in the wake of the savings and loan scandal in Washington and the FBI’s ongoing corruption probe in Sacramento, the boundaries between elected officials and their contributors are beginning to take shape.

The issue was clearly drawn last month when a federal jury in Sacramento convicted former state Sen. Paul Carpenter on four counts of racketeering, extortion and conspiracy. The jurors relied largely on evidence that Carpenter had granted special access to his backers, regardless of whether he aided their cause.

“If you take a large amount of money,” said Charles Mathias Jr., a Maryland Republican who served on the Senate Ethics Committee before retiring in 1986, “you raise a question about your scruples whenever you do something on behalf of a contributor.”

As a vigorous defender of California interests on Capitol Hill, Wilson maintains that his job is to look after the needs of his constituents. Just because they support his campaign, he argues, is no reason to ignore their requests.

“Look, I do what I do because I think it’s right,” Wilson said in an hourlong interview. “And if you’re going to pillory someone who does something he thinks is right because he has taken a campaign contribution, then what you’re essentially saying is . . . you can’t help anybody who has a legitimate need for help.”

Wilson said he agrees with virtually every political ethics expert on one guiding principle: A public official must always act in the public interest.

The definition of public interest often is in the eye of the beholder, and some of Wilson’s actions have raised questions:

* In 1984 and again in 1988, he asked the Food and Drug Administration to delay acting on a proposed ban of red dye No. 3, a potentially cancer-causing color additive used to brighten lipstick, pistachios and maraschino cherries. The FDA issued the ban last January as required by law after finding that the dye induced cancerous tumors in laboratory rats, although the risk to humans was found to be small.

Wilson wrote the FDA in June, 1988, saying that “scientists feel the color is safe” and that a study sponsored by the food industry would “resolve any lingering doubts.” California fruit growers say the dye is critical to their livelihood because marketing studies have shown that consumers stop buying fruit cocktail when the bright red maraschino cherry is omitted.

The FDA delayed the ban because it needed time to review the industry data that Wilson cited in his letter, said spokesman Bill Grigg. Wilson, a member of the Senate Agriculture Committee, was one of many California congressmen who expressed an interest in the dye issue.

* Between 1985 and 1988, Wilson received more money from the agriculture industry--$235,755--than any other political action committee, according to a Common Cause study. While the red dye ban was one of many issues of interest to agribusiness during that period, the fruit growers most directly threatened by the issue also have contributed at least $4,800 to Wilson’s gubernatorial campaign, records show.

Asked why he lobbied to extend the ban, Wilson said, “What is red dye No. 3? I’m sure I didn’t write the letter.” When shown his signature on his official stationery, Wilson said that his staff must have reproduced his name using an automatic signature machine.

Sidney Wolfe, director of Public Citizen Health Group, which led the fight against the dye, said that Wilson joined a lobbying effort that ignored the public good. “Wilson thinks that the interests of people selling fruit cosmetics are more important than the health concerns of the public,” Wolfe said.

* Wilson urged the Federal Trade Commission in February, 1986, not to seek a $5-million civil penalty against Sunkist Growers Inc. for allegedly attempting to monopolize several citrus markets. The agency had filed a complaint against Sunkist, contending that it had illegally cornered the market on the sale and distribution of oranges and lemons in the United States and Canada, said FTC spokesman Howard Shapiro.

Sunkist was ordered to dispose of its citrus processing plant in Yuma, Ariz., by February, 1983. Sunkist, a cooperative of 6,175 individual citrus growers in California and Arizona, faced a huge fine for not selling the plant until August, 1984.

Sunkist Vice President Curtis W. Anderson criticized the FTC action, saying, “It just seemed like harassment.” Sunkist officials took their case to Wilson, who in turn wrote a letter to the FTC. The agency assured the senator that his views would be “carefully considered” before a civil penalty was imposed. Five months later, Sunkist and the FTC agreed to a $375,000 settlement.

According to Wilson aides, the senator most likely discussed the case with William Quarles, a Sunkist vice president who later raised $28,200 from fruit growers around the state for Wilson’s gubernatorial campaign, records show. Sunkist has donated an additional $6,000 to Wilson’s campaign for governor and $14,000 in Senate contributions.

The commission would not say what role, if any, Wilson’s intervention had on its decision. Said spokesman Shapiro: “It would take a lot of influence to go from $5 million to $375,000, but I am in no position to speculate.”

* In 1986, Wilson vowed to do everything within his power to prevent some members of Congress from using legislation to close Monex International Ltd., an embattled Newport Beach precious metals dealer.

Federal regulators were pushing to shut down the leverage trading industry after thousands of investors lost $100 million over four years in credit purchases of precious metals through Monex and three other firms.

“We went to bat for them,” Wilson told The Times in an earlier interview. “I thought 200 people employed in a legitimate business should not be put out of business.”

Wilson prevailed and Monex was allowed to keep operating. Later, the company’s owner, Louis E. Carabini, offered to help Wilson as an expression of gratitude, Wilson recalled. After declining financial support from Carabini, Wilson later accepted $6,000 for his Senate and gubernatorial campaigns and $1,426 in expenses for a weekend trip at a Florida resort.

After he was questioned by The Times last December, Wilson returned all of the money. “It turned out to be an enormous pain in the ass,” he said recently.

* Wilson asked the Interstate Commerce Commission to reconsider its denial of a controversial merger between the Santa Fe and Southern Pacific railroads in September, 1986, at a time when a railroad official involved in the deal was one of his biggest fund-raisers.

The ICC rejected the merger in 1987 because of concern that it could limit competition and drive up shipping prices for Central Valley farmers. Wilson, in urging a reversal, wrote a letter in which he cited concerns about Southern Pacific’s “deteriorating financial condition.”

Benjamin F. Biaggini, an architect of the merger and a board member of the Santa Fe holding company, estimated that he helped Wilson raise “between $300,000 and $400,000” for his 1988 Senate reelection campaign.

Biaggini, who left the holding company in 1988, said he never approached Wilson regarding the merger. Wilson said he was “certainly aware” of Biaggini’s position with the struggling railroad when he wrote the ICC letter. Wilson said he intervened because it was the right thing to do, and that Biaggini’s involvement had no bearing on his support.

* Wilson arranged and attended a meeting in January, 1987, with top U.S. Justice Department officials in hopes of obtaining FBI help to investigate a fire that destroyed a Puerto Rico hotel owned by a longtime political supporter and personal friend.

The friend, wealthy Los Angeles businessman Brian Corbell, told Wilson he wanted the FBI to provide security for his employees in the weeks after the deadly fire at the Dupont Plaza Hotel and to determine the cause, which he believed was arson linked to labor unrest.

Ninety-seven people were killed and 140 injured in the fire on New Year’s Eve, 1986. Corbell and his partners stood to lose a fortune. So far, more than $100 million in legal settlements has been awarded, said attorneys familiar with the case.

Corbell said he was relieved when the Justice Department, which had already shown an interest in the case, agreed to increase the FBI’s visible presence around the hotel and reasserted its commitment to investigate the fire. A Democrat who has supported Wilson for years, Corbell said he has contributed at least several thousand dollars to Wilson’s various political campaigns and solicited at least several thousand more through friends and associates.

Wilson said he would have provided the same service for a total stranger. “Hell, I thought he was entitled to all of the law enforcement help he could get. That’s why we went to the FBI,” he said. “I was approached by a man who said, ‘I am dealing with gangsters. I am frightened. I need help.’ ”

Richard Brown, a San Francisco attorney who represents 60 hotel employees injured in the fire, called Wilson’s intervention highly improper.

“If a private citizen could use the influence and power of a federal investigative agency like the FBI or IRS for his own civil protection . . . I think it would be an impermissible use of the government,” Brown said.

Justice Department officials said that such meetings with top law enforcement authorities are not routinely requested by senators. The officials said they did not regard the incident as unusual, particularly because Corbell was offering to cooperate with investigators.

Three former hotel employees pleaded guilty to arson and were sentenced to prison terms of up to 99 years, but union officials have denied any involvement in the blaze.

* Wilson came under criticism this month for holding up legislation that advocates claim would ensure the quality of heavy-duty bolts that have been found at fault in a number of construction and aerospace accidents.

Wilson took the action after his staff received a call from Ron Cedillos, a Long Beach supporter, who said he wanted the bill strengthened with amendments that would require testing of industrial fasteners by outside firms. Cedillos operates a firm that does this testing.

Cedillos was host of a fund-raising event at his plant last year that yielded $140,000 for Wilson’s gubernatorial campaign. Officials of other Southern California firms that support the legislation said they have been unable to reach Wilson. “We’ve never had a call returned,” said Mary Ann Langholtz, a fastener industry lobbyist.

Wilson, who maintained that his sole intention was to pass a tougher bill, said he was unaware that his office had failed to return calls from the fastener lobby.

The California senator has told his Washington staff that he is willing “to take the heat” for appearing to bail out a large campaign contributor “as long as the decision is right on its merits,” said aide Ira Goldman.

In his defense, Wilson said his decisions frequently run counter to the wishes of even his biggest contributors. He cited a recent study by consumer advocate Ralph Nader that linked major contributions by the oil and auto industry to Senate votes on environmental legislation. While many of the leading fund-raisers in the Senate were rated “poor” on clean air issues, Wilson voted “correct” 100% of the time, the Nader study found.

“You can find cases where he went against people who were fund-raising supporters,” said Otto Bos, Wilson’s campaign director. “If you make decisions based on merit, you don’t run into this problem.”

To avoid any appearance that his votes or influence are for sale, Wilson has taken certain precautions over the last two decades: He has been a strong supporter of limits on individual contributions; has formed a special committee to screen campaign donations for potential conflicts of interest, and has placed his personal assets in a blind trust to avoid knowingly participating in issues that could affect his pocketbook.

As mayor of San Diego, Wilson enacted what he called the state’s toughest campaign finance law, which made it a criminal offense to accept a campaign contribution in excess of $250--a point he emphasized during the Oct. 7 debate with Feinstein.

During the gubernatorial campaign, Wilson has sent back about $40,000 in contributions, including money from the toxic waste industry, Bos said. The Wilson camp was concerned about how the political transactions would look for Wilson as well as for contributors who could become the subject of Feinstein attacks, Bos said.

Wilson also returned $17,500 in Senate campaign contributions last year to Charles H. Keating Jr., who faces charges of securities fraud in the sale of junk bonds at branches of the Irvine-based Lincoln Savings & Loan.

Yet, Wilson’s efforts to insulate himself from criticism have not always worked:

* He chastised Feinstein for taking advantage of a court ruling that overturned individual $1,000 limits on campaign contributions and, at the same time, began soliciting large donations himself. Only later, after two more court rulings, did he publicly announce that he would accept such contributions.

* He returned $6,000 in contributions after going to bat for Monex. However, Wilson later kept $50,000 raised by Hollywood executives a month after arranging a meeting at their behest with top Justice Department officials--an action that prompted a critical article in the Wall Street Journal.

* He set up a blind trust to shield his assets, then put his best friend in charge of managing his investments.

Wilson acknowledged that he has no policy for deciding when it is appropriate to accept a campaign donation or lobby on behalf of a major contributor.

“There are no hard and fast rules,” he said. “Obviously, it’s a question of judgment.”

During the recent campaign debate, Wilson narrowed these guidelines when he attacked Feinstein for taking money from the California Assn. of Highway Patrolmen. His claim that Feinstein would be compromised by the CHP money is drawing charges of hypocrisy.

Tom Noble, president of the CHP group, said Wilson flew from Washington twice during the summer in an effort to win the group’s endorsement. While the subject of money was not discussed, Noble said, Wilson should have expected to receive financial support. The officers’ association was prepared to make a $5,000 donation and pump up to $300,000 into an independent advertising blitz on behalf of their chosen candidate, said Noble.

“ Hypocritical is a good word,” said Noble, a patrol officer assigned to the San Francisco office.

Wilson said he was only interested in the patrol officers’ endorsement. “I never asked them for a dime,” he said.

Campaign records and interviews show that the Republican candidate asked for and received a more modest $13,000 from two other associations representing office workers, administrative law judges and attorneys--all state employees whose salaries the governor must approve.

The state’s prison guards, whose salaries are also set by the governor, have endorsed Wilson. Don Novey, president of the 22,000-member California Correctional Peace Officers Assn., said the group intends to launch an independent campaign for Wilson that will be competitive with the Highway Patrol officers’ contribution to Feinstein.

For Wilson or any other statewide candidate to campaign on ethics is open to question, said Jim Wheaton, former executive director of California Common Cause, a public-interest group that lobbies for ethics reform.

“It is difficult to distinguish who is more beholden to the special interests. All candidates for all state offices are in an arms race for dollars and, understandably, the people who are the easiest to go to are those with a pocketbook interest in what happens in Sacramento,” said Wheaton, who heads the Proposition 131 campaign, which calls for term limits and public financing of political races.

The growing public cynicism over campaign fund-raising, Wilson said, is part of a strategy by reformers such as Common Cause to drive honest people from politics because of “insults to their integrity.”

Said Wilson: “They want to make life so unpleasant for people . . . that they will finally create a climate in which people will finally throw in the towel and say, ‘Aw, the hell with it. Let’s have public financing. I’ve had enough of this.’ ”

Times staff writers Sara Fritz, Gregory Crouch and Ronald J. Ostrow also contributed to this article.