High-Powered Fund Raising Is Paying Off for Brown : Campaign: But rivals fault past practice of taking money from those doing business with treasurer’s office.

Few politicians are as prodigious at fund raising as state Treasurer Kathleen Brown, now on a quest to become governor.

Assembly Speaker Willie Brown--no slouch himself when it comes to raising campaign money--speaks of her as a “fund-raising machine.”

Over evening cocktails or morning coffee, at $500-a-plate lunches, in cross-country calls from her car phone, at gala banquets, Brown tirelessly uses her charm, family connections and disarming directness to perform a job that some politicians view with disgust--raising money, lots of it.

“She’s not afraid to ask the question,” said Brown’s East Coast fund-raiser, Susan Torricelli. “She is able to say directly to people, ‘I need money from you.’ She can do it on the phone and do it in person. Many people are uncomfortable doing it.”

The result: After three years of fund raising, Brown has more cash--$5 million--than incumbent Republican Gov. Pete Wilson or either of her Democratic rivals, Insurance Commissioner John Garamendi and state Sen. Tom Hayden.

But Wilson and Garamendi have found plenty to criticize in the treasurer’s fund-raising performance. In particular, their campaigns fault Brown for money she has raised from investment bankers and others who do business with her office.

Brown denies that the contributions have influenced her decisions as treasurer, and she stopped taking money from the investment bankers last year. By that time, she had collected more than $800,000 from employees of bond houses and attorneys with law firms that oversee the sale of billions of dollars in state bonds.

A review of Brown’s fund-raising records and interviews with dozens of her contributors show the broad reach of her fund-raising efforts and the varied reasons donors have for giving.

Among her contributors are traditional Democratic interests, such as labor unions and trial lawyers, eager to end 12 years of GOP control of the governor’s office. There are also friends and appointees of her father, former Gov. Edmund G. (Pat) Brown Sr., and brother, ex-Gov. Edmund G. (Jerry) Brown Jr. She also has received contributions from Hollywood figures such as actor Kevin Costner and entertainment mogul David Geffen.

Even more significant, perhaps, is a nationwide network of women, many of them professionals, who would be happy to see a woman become chief executive of the nation’s most populous state.

Missing from the list, for the most part, are large corporate donors and trade organizations. But these will come later, Torricelli said, if Brown can win the Democratic primary and emerge as a possible winner in the fall.

“Keep in mind, if not now, but post-primary, any smart business entity is going to give to both sides if both sides look plausible,” Torricelli said.

The contributions from those who have done business with the treasurer’s office are proving to be an irresistible target for Brown’s opponents.

Dan Schnur, spokesman for the Wilson campaign, said: “There is an overall pattern of firms receiving bond business from Kathleen Brown’s treasurer’s office after having contributed to the Kathleen Brown campaign. (The campaign) recognized it, and moved to correct it, albeit after three years.”

Schnur said that Brown’s acceptance of those contributions is different from Wilson’s taking payments from major California industries that have interests in matters on Wilson’s desk. “The governor of the state of California has responsibility direct or indirect over almost every aspect of life in this state,” Schnur said.

Brown refused to be interviewed on fund-raising issues, but her aides emphatically deny that she has ever allowed a contribution to influence a decision as treasurer.

“The contracts (to bankers) do not follow contributions,” said Brown campaign spokesman Michael Reese. “Firms that gave considerable amounts in many cases got very little business. Firms that gave little or no contributions got quite a lot of business.”

Moreover, Reese argued, Brown was the first state treasurer in the country to stop taking contributions from those that do business with her office.

But before cutting them off, records show, Brown built a solid foundation of cash to launch her campaign and convince potential challengers that she was the Democratic front-runner.

In January, 1992, Brown stopped accepting checks from the investment banking firms that package sales of state bonds. But she continued to take sizable contributions from individual investment bankers who worked for the firms.

However, in 1993, charges of improprieties began to erupt in states including New Jersey, where aides to the former governor are under investigation for allegedly improperly benefiting from bond sales. “We wanted to step out from the shadows cast in those states,” Reese said. “At that point we extended the restrictions to individuals.”

By the time Brown cut these sources off, in July, 1993, she had accepted $450,000 from the bond houses and their employees.

Atop the list is First Boston Corp. and its bankers, who gave Brown $52,750 since she became treasurer.

The biggest single contributor, with $10,000, was First Boston’s chief executive, Archibald Cox Jr., now managing director of Tiger Management Corp.

Cox said his contribution had nothing to do with First Boston’s business dealings with the treasurer. “I did it purely myself because I think very highly of her.”

As part of her self-imposed rule, Brown also has been refusing money from the law firms hired to provide the required legal opinions on bond sales. But she continues to take contributions from individual attorneys with those firms. In three years in office, she has collected more than $350,000 from attorneys with the law firms she does business with.

One of these is the law firm where she once worked as an attorney, O’Melveny & Myers. In the past three years, O’Melveny and its attorneys have given her $52,900.

“She is like family, one of us,” said Gilbert Ray, the O’Melveny lawyer who oversees the firm’s donations.

Ray said he has never felt pressure to contribute from Brown or any other politician. “We have never had a politician infer that there was a ‘pay-to-play system,’ ” he said.

Brown’s gubernatorial campaign has also taken more than $50,000 from waste disposal companies, utilities and other firms that benefited from bond sales. And she continues to accept checks from employees of securities firms and law offices that do business with the state’s massive pension funds--the Public Employees Retirement System and the State Teachers Retirement System. As treasurer, Brown serves as a trustee for both systems.

Campaign spokesman Reese said that in these cases, Brown is only one member of a decision-making board or commission--in many cases sitting side by side with representatives of Wilson and state Controller Gray Davis.

Brown’s fund raising extends far beyond those with whom her office does business.

She has held fund-raisers at the homes of Sen. Jay Rockefeller in Washington, and financier Jerome Kohlberg in rural New York state. She appeared at a two-for-one event in New York City with Texas Gov. Ann Richards--netting $90,000 for each campaign.

Richards also appeared at a series of fund-raisers in California for Brown--attracting 4,000 contributors who paid more than $500,000 to see them in October.

Brown has followed Richards’ example in reaching out to women, who provide a significant part of her support.

“Early money is like yeast,” Brown has repeated to early backers--quoting the signature phrase of EMILY’s List, a national organization dedicated to electing women to public office. Over the past two years, the group has collected an estimated $400,000 for Brown from individual contributors nationwide.

The treasurer also has shown an ability to connect in Hollywood.

Warren Beatty introduced her at a $1,000-a-plate dinner at the Beverly Hilton Hotel in December and told a story about the time the two went out on a date. The yarn was apocryphal, but the event was a success, taking in more than $1 million.

Many supporters open their homes for dinners or receptions. Last year, Brown stopped in on 50 smaller events each raising at least $10,000, said campaign finance director Ann Hollister.

Records show that Brown also is tapping into traditional Democratic Party stalwarts such as organized labor. Her critics charge that Brown only captured labor backing after she reversed her early support for the North American Free Trade Agreement, a pact opposed by much of organized labor.

In the first half of last year, when Brown was supporting NAFTA, her union donations were lagging. After her reversal, the contributions started rolling in--$240,000 in the second half of the year, quadrupling what she had taken in during the first half of 1993.

Hollister, Brown’s fund-raiser, attributed the increase in labor contributions to the seasonal nature of fund-raising efforts, and not to Brown’s stand on NAFTA. “It’s reflective of the campaign for governor heating up at that point,” Hollister said.

In interviews, Brown contributors give a range of reasons for sending checks to her campaign.

Some donors are longtime Democrats who see her as the hope for unseating Republican Wilson. A number enjoy rubbing shoulders with political luminaries. Some say they just like Brown personally. And several wanted to discuss specific issues with a possible future governor.

Magazine publisher Stephen Adams, chairman of the Affinity Group, gave Brown $12,500 and then was introduced to her at an intimate dinner last month, arranged by a business associate--a high school classmate of Jerry Brown.

Between courses at a Los Angeles restaurant with the treasurer and her news executive husband, Van Gordon Sauter, Adams was able to voice his concerns about the high cost of workers’ compensation insurance, which has forced him to shift jobs out of state.

“I expressed my view,” Adams said. “I don’t think she had many arguments with it.”

After the meal, Adams sent the campaign a check for another $12,500. There are no limits on the size of contributions in state races.

In Southern California, the Brown campaign has organized a group of 40 women, each pledged to raise $25,000 before the June primary.

Among the members of this women’s campaign cabinet is lawyer Roberta Bennett, a lesbian activist who has raised $60,000 by filling tables at various fund-raisers.

Bennett said she wants “more appointments for the gay and lesbian community,” more funding to combat AIDS, and a review of ROTC programs on college campuses in the state, which “are discriminating against gays and lesbians in violation of university and college bylaws.”

Brown has not given her a commitment, but does hear her out on these and other issues, Bennett said.

George Hedges, who runs a law firm in Downtown Los Angeles and contributed $10,000 to Brown, explained why many of his legal colleagues are contributing to Brown: “Part of your cachet as a lawyer is that you can say to a client, ‘Let’s get Kathleen on the phone.’ ” And he observed that “a lot of lawyers want to be judges.”

Many of Kathleen Brown’s donors are friends of her father, or were appointees of her brother.

One such supporter of Pat Brown is Fred Furth. A Northern California lawyer, he owns the Chalk Hill Winery and was counselor to Democratic presidential candidate George McGovern. He was not a fan of Jerry Brown.

“Tell me you’re not just a retread of Moonbeam,” Furth recalled telling Kathleen Brown in their first conversation. “What hurt Jerry was that he was an antiseptic person.”

Furth became convinced when the new Brown told about her three children, a divorce, and her career as a lawyer. He has given her $25,000.

Her largest single contribution came from John and Rebecca Moores of Sugar Land, Tex.

Brown met the couple through Mark Caddell, a Houston lawyer she saw on a fund-raising jaunt through Texas. A trustee of the Democratic National Committee, Caddell concluded that Brown has “the potential to have national stature.” He wrote her a check for $5,000 and promptly introduced her to the Mooreses.

John Moores made his fortune, estimated by Forbes magazine at more than $400 million, by founding BMC Software Inc., in Sugar Land. He is retired and devotes much of his time to philanthropic pursuits. The couple own a home in Carmel.

Last year, the Mooreses gave Brown a ride to one of her appointments on their private plane. At the end of the flight, they “pulled out a checkbook and wrote out a check,” Caddell said. The amount: $105,000. The Moores could not be reached for comment about why they gave her the money.

A future story will examine the fund raising of gubernatorial candidate John Garamendi.

Kathleen Brown’s Top Contributors

State Treasurer Kathleen Brown may need to raise as much as $25 million to compete in the primary and general elections for governor. Here are her top contributors since 1991.

John Moores, retired Texas software executive, and his wife, Rebecca, a philanthropist, $105,000

Southern California District Council of Carpenters, union, $90,000

Roll International, holding company (Teleflora, Franklin Mint), $60,885

Andrew Jerrold Perenchio, Hollywood investor and producer, $56,000

Orrick, Herrington & Sutcliffe* law firm, (firm and individuals), $54,825

O’Melveny & Myers* law firm, (firm and individuals), $52,900

First Boston Corp.* bond underwriters, (firm and individuals), $52,750

Cox, Castle & Nicholson* law firm, (firm and individuals), $48,500

Latham & Watkins* law firm, (firm and individuals), $46,600

Goldman, Sachs & Co.* bond underwriters, (firm and individuals), $43,300

Swat Inc. clothing manufacturer, (firm and executives), $41,537

Smith Barney* bond underwriters, (firm and individuals), $30,100

* Firms that do business with the treasurer’s office

Source: Kathleen Brown campaign committee reports