Big Firms Contribute to Wilson Campaign for Welfare Cutbacks : Government: Most of the corporate donors said they received phone calls from the governor. Some consumer advocates question the arrangement.


Responding to a personal plea from Gov. Pete Wilson, some of the state's largest utility, banking and defense corporations have contributed thousands of dollars to help finance signature-gathering for a ballot initiative that would cut benefits for welfare families and enhance the governor's budget powers.

In financial reports filed this week, United California Taxpayers--the group chaired by Wilson that is promoting the initiative--reported it had received $249,150 in contributions from a handful of major corporations, including telephone and electric utilities.

Most of the corporate donors said their decision to contribute to the campaign to promote the initiative came after they had received personal telephone calls from the Republican governor. The contributions included $80,000 from financial institutions, $55,000 from utilities and their parent companies and $50,000 from defense companies.

Some consumer advocates criticized the ethics of Wilson soliciting contributions from companies that have a major financial stake in decisions made by state government entities, a complaint that a campaign official called unfounded.

One company, Pacific Telesis, said its corporate officers were invited to a private meeting with the governor to discuss his "agenda," and the pitch to contribute to the initiative campaign was made at that time.

George Gorton, director of the campaign to promote the initiative, said campaign officials decided they needed the governor's direct participation in fund raising because they had a very short time to gather signatures.

"When you're paying for signature-gathering, you've got to have the money immediately up front," he said. "We were just doing this really fast."

He insisted that utilities, financial institutions and defense industries were not specifically targeted, but he acknowledged the initial fund-raising efforts were not "broad-based." He said the campaign had sought out those "we thought would be most interested in giving."

Gorton said industry may have contributed more heavily than any other group because the governor had asked several corporate executives to solicit money for him. Indeed, Southern California Edison officials said the first requests for funds they received came from the California Chamber of Commerce and then were followed up by a call from the governor's office.

The corporate largess, together with a generous loan from the California Republican Party, helped the campaign to gather more than 1 million signatures, which Wilson submitted on April 27. That is expected to be enough to qualify the measure for the Nov. 3 ballot. While the campaign finance report covers only the first quarter of the year, Gorton said that as of Wednesday more than $1 million had been raised to promote the proposal.

The initiative, whose passage has become a major goal of the Wilson Administration, attempts to cut welfare costs at the same time it promotes more self-sufficiency among welfare families. It would reduce welfare benefits 10% immediately and then 15% six months later for families that include at least one able-bodied adult. Additional grants would be denied for children born to mothers already on welfare, and benefits would be curtailed for the poor who move to California from other states.

The proposal would provide incentives for teen-age mothers to stay in school and live at home with their parents, and it would allow welfare recipients to earn more outside income without losing their grants.

But the provisions that many of the corporate donors said attracted them to the proposal were those that give the governor vast new powers over the budget. The measure empowers the governor to declare a state of emergency whenever the budget is late or he deems it to be out of balance by 3% or more. During the emergency period, he has authority to cut state workers' pay by 5% and reduce the budgets of programs not protected by the Constitution.

The corporate donors insisted their campaign contributions should not be interpreted as an attempt to please a powerful governor but rather as an effort to support a measure that provided solutions they considered appealing on two critical issues--welfare and the state budget.

Although they said the Los Angeles riots did not give them second thoughts about contributing to a campaign to promote cuts in welfare benefits, each one went to great lengths to describe themselves as good corporate citizens who had each attempted to help the poor and minorities.

"We added all the things up in the initiative and said, 'Well, this looks good. We ought to be out front on this one,' " said Steve Chaudet, vice president of public affairs for Lockheed Corp. He also pointed out that Lockheed, which contributed $25,000 to the initiative campaign, had been one of the first corporations to put a plant in Watts after the 1965 riots.

"The governor believes that the existing budgetary machinery is inadequate to deal with a (budget) crisis, and he needs these additional measure to be available, and we're supporting him on that," said Lew Phelps, communications vice president for Southern California Edison, which contributed $15,000 to the campaign. He noted that his company will be "deeply committed" to making "large-scale meaningful steps" to help in the reconstruction of devastated areas of Los Angeles.

Unlike the other corporate donors, Don Lehman, director of state and local legislation for Pacific Telesis, said his company contributed $20,000 to help in the signature-gathering efforts but had not decided yet to endorse the proposal. He said company executives were persuaded by Wilson that it was important that the people have an opportunity to vote on the issue.

All the utility companies said the cost of the contributions will be borne by their shareholders and will not be passed on to ratepayers.

Several public advocates, particularly those involved in utility issues, questioned the propriety of Wilson soliciting contributions from companies who have a major financial stake in the decisions of the Public Utilities Commission, whose members he appoints. Two of five PUC members have been appointed by Wilson and a third nomination is expected soon.

"It's a total conflict of interest," said Robert L. Gnaizda, general counsel for the Greenlining Coalition, a group that attempts to address problems of the inner city by fighting discrimination against the poor by financial institutions, insurance and utility companies. "He has no business asking them for money, and they should refuse to give it."

Both Gorton and the utility companies maintained that there was no conflict of interest, that the PUC is an independent body and that the governor has never expressed an opinion to them on individual cases. Lehman said Pacific Telesis did not take a position on PUC appointments and if it did, "That would be the kiss of death."

Other companies that contributed were Bechtel, $10,000; Great Western Financial Corp., $25,000; Seaside Financial Corp., $5,000; Wells Fargo and Co., $20,000; Hughes Aircraft Co., $25,000; GTE Telephone Operations, $10,000; AT&T;, $10,000; GLA Financial Corp., $25,000; Sun World, $9,000, and H. F. Ahmanson and Co., $25,000.

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