Los Angeles Times Interview : Kathleen Brown : The Brown Charm Continued: But She’s on the Hot Seat Now

Kathleen Brown, just a year into her first term as state treasurer, is one of those rare politicians, someone pleasant to be around. She laughs a lot and always seems to be in a conversation, her hazel eyes staring directly at a questioner, relaxed but alert. Brown watched first her father, Edmund G. (Pat) Brown, and then her brother, Edmund G. (Jerry) Brown Jr., jump from statewide offices--attorney general and secretary of state, respectively--to the governorship of California. Many believe it is only a matter of time before she becomes the third member of the Brown clan to run for the state’s highest office. But if Kathleen Brown feels any pressure, she doesn’t show it. She frequently drops references to her father and brother into conversation, and happily accepts the role thrust on her.

For now, Brown says she is content to keep her eyes focused on the treasurer’s office. She is responsible for earning top interest rates on a portfolio of more than $20 billion in funds held for state and local governments. She also administers the sale of billions of dollars worth of state bonds to build schools and other public facilities. Along with the office goes membership on dozens of state boards and commissions involved with safeguarding the public’s money.

Brown, a lawyer, won her first elective office in 1975, when she took a seat on the Los Angeles Board of Education. She was reelected in 1979, but resigned to move to New York with her husband, Van Gordon Sauter, a television executive who took a top job with CBS. She practiced law in New York, then returned to Los Angeles when her husband left the network. She was appointed to the Los Angeles Board of Public Works by Mayor Tom Bradley in 1987, and served there until beginning her campaign for treasurer in 1989. By mutual agreement, she and her husband decided it is now “her turn” to pursue her career.

She and her husband share five children from previous marriages. At 46, Brown awaits the births of her first grandchildren, expected to be twins. Brown, who maintains a home in both Los Angeles and Sacramento, spends roughly one-third of her time in Los Angeles, one-third of her time in Sacramento and the rest traveling. In conversation, Brown is open and engaging, like her father, Pat Brown, with only a little of the cold, hard edge of her brother, Jerry.

Question: How do you answer the governor’s top fiscal adviser and the chairman of the Assembly committee responsible for bond measures who recently criticized you for your comments about Gov. Pete Wilson’s proposed budget?

Answer: I am elected as treasurer to be, in part, the state’s fiscal watchdog and to advise the state Legislature and the governor and the public about the state’s credit worthiness. When the credit-rating agencies unanimously indicate to me that a prudent reserve is required for a AAA budget, and the governor announces a budget with a reserve of less than one-quarter of 1%, the alarm goes off.

Q: Is there something structurally unsound with the California budget? Are we on a course where every year we will be forced to spend more money than the state’s tax system produces?

A: The structural imbalance, as it has been described, has been growing over the last decade. In a sense, the deficit from (last) year was a balloon payment that had to be made because no one was dealing with that problem. . . . It’s my belief that, unless California can become more competitive in the job-creation arena, we will have serious problems in the years to come.

Q: During your campaign, you said voters wanted more than a green eyeshade. You argued that Californians were looking for someone with a vision to see the future and invest in it. What is your vision?

A: This is a critical time in our state’s history. We’ve moved from being a state that was land-rich and people-poor, with all that that implies, to a state that is people-rich and land-poor. How we manage our way through this new era of exploding population and through the dwindling of our natural resources is what the challenge is.

If I had a vision for California it would be that we prevailed, we managed our resources well and wisely, that we took charge of the problems that we are facing, and that we were once again able, as a state, to do what each generation before us has done--which is to invest in our future, whether it’s in education, or whether it’s in infrastructure, or whether it’s in the environment that is so extraordinary here in California. So my vision would be one of investing in people and in resources so that California can enjoy this new era that we are entering.

Q: Your father was identified with some classic concrete-and-steel achievements--the state water project, the dramatic growth of the University of California. Do you envision a future with those kinds of achievements or are you talking about other ways of doing things?

A: It’s a new era, and we need new tools and new approaches. But we have to make the investments in concrete, just because of the numbers, whether it’s concrete in schools, or roads or rapid transit. . . . The need for that investment is greater today than it has ever been, in part because we haven’t made adequate investments over the last decade.

Q: During the last election, voters turned down a large number of bond issues. How did you read the election results?

A: The voters were very smart in November of 1990. They saw a state ricocheting out of control, with no plan for these bond programs, and they didn’t see any kind of plan in sight. They were confused. I think that they were frustrated, and I think at that point they were also scared, because of the recession beginning to percolate and the fact that we had just embarked upon the Desert Storm operation. . . . It’s up to the political leadership to make a case for the investments that we have to make. I think we go back next time with a capital plan in place, with a debt-affordability plan in place and with a very concrete proposal for the voters.

Q: Where do you think the greatest need is for capital expansion?

A: Schools are at the top of my list. To me it goes right to the heart of investment in the future. You can’t talk about educating the next generation of citizens if you can’t even get them into a classroom where they have a seat and a desk and they can have a full day of education. Beyond that I think you have to strike a balance between all the other needs that are out there.

Q: Last year when you ran, did you feel your brother’s record hurt you in any way? How do you see his race for President?

A: I don’t think people support me or don’t support me because of my brother or because of my father. I think they are curious about me because of them, but I have to earn their support on my own. . . . I don’t think that my brother’s campaign for President will hurt or help me. I think we are regarded as separate individuals in a family that is deeply committed to public service.

Q: California has never had a woman governor. Do you have that in the back of your mind--that you might run for governor some day?

A: I think my father does. . . . I don’t think that far into the future. . . . If I do a good job, I figure that the future will take care of itself.

Q: California has had only one other woman treasurer. What has your election meant?

A: A lot has been written about the so-called glass ceiling in corporate America that has been a barrier to women. By dint of having been elected treasurer, I was given a pass behind the glass ceiling by the people of this state. So I have an opportunity--as treasurer--as I work with and traffic with corporate America to demonstrate my capabilities and my expertise, which then translates into an openness to bring more women in. In addition to that, by virtue of my being here, I can encourage and help bring forward qualified women and minorities into the financial marketplace. So it’s a plus, in that regard, in a dramatic way.

Q: What have you done to bring that about?

A: Well, first we’ve published, for the first time, our underwriter guidelines that set out quite clearly what the previously mysterious process of underwriter selection will be. In so doing, we have expressed our intention to, first of all, get the best deal for the state of California--that’s what everyone will be measured against, be they majority, minority or female participants. And secondly, we have set forth our intention to comply with the spirit, as well as the letter, of the law that requires us to set goals for the participation of women-owned firms, and minority-owned firms. We have further inquired of majority firms what their breakdown is in terms of the personnel that service the state’s account and that work in their business, so we get a picture of how they are doing in terms of the diversity of their work force. . . . The goal here is qualified. I’ve said I don’t support quotas. I think they are demeaning, I think they are distracting and I think they are destructive. But that isn’t to say there isn’t a range of extraordinarily qualified women-owned firms, minority-owned firms, and we want to give them an opportunity to serve the state.

Q: When you ran in 1990, you raised a substantial amount of money from Wall Street interests--the same people your office deals with on a daily basis. What are your rules about accepting campaign contributions from people who do business with the treasurer’s office?

A: The reality is that if you are going to run for office statewide in California, it takes a large sum of money. Consequently, from my personal perspective, my rule is to ensure that I have as large and as diverse a donor base as is possible, so that there’s no one group, or no one individual who dominates. . . . I will have no one in my office doing fund raising for me. I think there should be a Chinese wall, if you will, between those fund-raising functions, which are part and parcel of having to run for public office, and the duties of the treasurer’s office. . . .

Q. Some people wonder why anybody would spend $4 million to win a relatively quiet office that pays a salary of about $90,000.

A: This is an extraordinary opportunity for me to make a little difference in this state. I am going to be a grandmother, and I want this state to be as good a place for my grandchildren as it was for me.