Brown Leans on Wall Street, Garamendi on Labor : Politics: The two Democrats amass funds for probable gubernatorial campaigns. Wilson relies on traditional sources: big business and agriculture.

Treasurer Kathleen Brown is mining riches on Wall Street to fund her gubernatorial candidacy while her Democratic rival, Insurance Commissioner John Garamendi, turned to organized labor and longtime benefactors, campaign reports filed this week show.

Gov. Pete Wilson raised more than Brown and Garamendi, drawing heavily on traditional Republican sources: agriculture and big business, including oil, timber and movie studios, according to the reports filed with the secretary of state’s office covering the first six months of the year.

The Republican incumbent also tapped into groups that regularly do business in Sacramento, ranging from horse racing to the insurance lobby. The Democratic challengers also take money from entities that deal with the state.

Although the politicians have not officially announced their candidacies for the 1994 election, all three are holding regular fund-raisers, realizing that in order to compete, they must start now raising the huge amounts of money to be competitive next year.

In order to win, the next governor may need to spend $25 million or more, campaign aides say. The Democratic primary could cost $6 million.

The candidates show no signs of limiting the size of the donations they will accept or the amount they will spend. There are no limits under state law.

Brown, the front-runner in early public opinion polls, also is ahead in the first leg of the money race, the reports show. The treasurer is sitting on the fattest campaign bank account--$3.5 million to Garamendi’s $580,000 and Wilson’s $415,000.

In the first half of the year, Wilson raised the most--$3.4 million--but used much of it to pay off past campaign debts. Brown raked in $2.18 million in the first six months. Garamendi raised $905,000.

Brown is benefiting by being the only woman in the race. EMILY’s List, a political action committee that gives to women candidates, bundled $75,000 in small donations for Brown.

Brown also has had success tapping Hollywood circles, raising at least $192,000, and has turned to more button-down sources of money on the East Coast, particularly Wall Street.

As treasurer, Brown is the state’s chief emissary to the financial markets, and travels often to Manhattan and other financial centers to sell California bonds.

Because of the potential for conflict of interest, Brown has made it her policy not to take money directly from investment banking houses and law firms that compete for bond business or hold contracts with the treasurer’s office.

But the Brown campaign collected $6,600 from officers and employees of State Street Bank and Trust of Boston, which has won contracts worth $6.5 million a year as custodian of securities for the state’s teacher and public employee pension systems. Brown is a board member of both pension funds, which have a combined worth of $123 billion.

The company also picked up the cost of a $2,560 Brown fund-raiser this year. When a reporter pointed this out, Roy Behr, policy director for the Brown campaign, said it was a mistake. “We’re reimbursing them today.”

Her self-imposed rule does not apply to executives and employees who work for those firms. Brown was particularly active in raising money at eight investment banking houses that have done business with the state--most of them based in New York City. Individuals connected to those houses gave her $104,900.

Garamendi also turns down donations from companies that do business with his insurance department. A review of his campaign finance report turned up no money from insurance companies or people who identified themselves as insurance executives.

But Garamendi does take money from law firms that have insurance practices. Orrick, Herrington & Sutcliff gave $5,800 to his campaign. The insurance commissioner also hired the San Francisco-based law firm to represent the state’s interest in the seizure of First Capital, a San Diego insurance company.

Darry Sragow, deputy insurance commissioner, said that the law firm represents many clients other than insurance interests. “Apparently, they’re comfortable giving the money and we’re comfortable taking it. This is always an area where there is a fair amount of soul-searching.”

Garamendi is getting his share of big money: 43% comes in chunks of $1,000 or more. Less than a fourth of Wilson’s and Brown’s money comes in checks of $1,000 or more.

Although Garamendi is perceived as the underdog against Brown, organized labor, among the biggest Democratic givers, is contributing heavily to him, accounting for 17% of his total in the first half of the year. Unions, especially those representing the building trades, gave him upward of $115,000, while government employees associations donated $37,000.

Garamendi has union support in part for his stand against the proposed North American Free Trade Agreement. Many labor leaders oppose the pact, fearing that jobs will be lost to Mexico.

Brown has collected only $65,000 from unions. Labor leaders have attacked her for what they see as her softer stand on the proposed agreement, and picketed a Brown fund-raiser in June in San Francisco.

Wilson, meanwhile, is using the power of incumbency, drawing on donors who do business with the state and have a major lobby presence in Sacramento.

Firms involved in manufacturing, including oil, aerospace and timber, accounted for his biggest single source--more than $300,000. Corporate Hollywood, including studios, cable television and producers, gave him $178,000.

The insurance industry is another such interest group, giving Wilson at least $150,000. The Assn. of California Insurance Companies helped by holding a fund-raising dinner for him at the Sutter Club in Sacramento at a cost of $47,256.

The affair came as the governor and Legislature negotiated over a package of bills since signed into law to overhaul the workers’ compensation system. The association was among the most active groups in the workers’ comp battle.

“It gave our executives an opportunity to spend 10 or 15 minutes with the governor,” said Robert Gore, the association’s spokesman. “Unfortunately, gubernatorial politics are expensive.”

Early Fund Raising in 1994 Governor’s Race

Though the election is more than a year away, the three leading candidates for governor have been busy for months soliciting funds to finance their campaigns--and supporters have responded. Here are the results for the first six months of 1993:

GOV. PETE WILSON Total raised: $3,445,827 * Total spent: $3,024,939 Cash on hand: $415,406 **

Top contributors: Sam Bamieh, president American Intertrade Group, a Bay Area import-export firm, $85,000 Assn. of California Insurance Cos., $47,256 Louisiana Pacific, lumber company, $50,000 Paramount Pictures, $50,000 California Assn. of Health Underwriters, $30,000 Irvine Corp., land developer, $29,500 Atlantic Richfield, oil and gas, $28,100 Alex Spanos, owner of San Diego Chargers, $25,000 Albert Broccoli, television producer, $25,000 Bank of Stockton, $25,000 John Rosenkrans Jr., Kransco of San Francisco, $25,000 Contributors who gave more than $100: 2,383 Of those, the number who gave more than $1,000: 495

KATHLEEN BROWN Total raised: $2,187,594 * Total spent: $744,526 Cash on hand: $3,516,378

Top contributors: Roll International Corp., owns Franklin Mint, Telafloral, agricultural production, $50,000 35 East Corporation, New York real estate holding company, $27,000 Steven Jobs, co-founder, Apple Computer, $25,000 Peg Yorkin, Hollywood producer, $25,000 Zenith National Insurance, $25,000 Women’s Political Committee, Los Angeles, $25,000 Alexander Papamarkou, New York investor, $20,000 Chase Mitchell Mishkin, TV writer, $20,000 F. Warren Hellman, San Francisco investment banker, $12,500 Patricia M. Cloherty, venture capitalist, $11,000 California State Employees Assn., $10,500 Contributors who gave more than $100: 2,891 Of those, the number who gave more than $1,000: 609

JOHN GARAMENDI Total raised: $905,287 * Total spent: $322,136 Cash on hand: $580,149 **

Top contributors: Martin Harmon, Sacramento-area nursing home developer, $105,500 (including a $100,000 loan Janet and Ron Burkle, owners of Food 4 Less stores, $80,500 (including a $50,000 loan from Janet Burkle) George Marcus, Marcus & Millichap, real estate development firm, $36,000 Gersten Construction, $30,000 Vahan Chamlian, Fresno businessman, $25,000. Robert J. Abernathy, American Standard Development, $25,000 Guess?, clothier, $20,000 Los Angeles Council of Carpenters, $15,000 Winner/Wagner and Associates, a political and public relations firm, $15,000 California State Employees Assn., political action committee, $14,124 Contributors who gave more than $100: 551 Of those, the number who gave more than $1,000: 240

* Total cash and in-kind contributions Jan. 1-June 30, 1993. ** Does not include campaign debt.

Note: Total raised minus total spent does not automatically equal cash on hand because of beginning balances included in cash on hand.

Source: Reports filed with secretary of state.