CALIFORNIA ELECTIONS / CONTROLLER : Candidates Vow to Use Obscure Office to Slash Waste

To hear the candidates tell it, the state controller of California is the one elected official who can sweep away waste in government, eliminate red ink budgets and make the economy bloom again.

All it takes, these candidates say, is the political willpower and the application of lean and mean business practices to make state government more productive for taxpayers.

They talk of “performance audits,” consolidation, leveraging pension funds and clearing away governmental regulatory restrictions that impede economic recovery.

If this is the election year when the term business is supposed to have a special attraction to recession-weary California voters, the race for the relatively obscure office of state controller abounds with candidates who offer themselves as business-oriented.

One runs her own financial consulting firm. Another is a venture capitalist and son of the founder of a national department store chain. A third is a retired legislator who wants to slash state spending 20%, and a fourth is an incumbent legislator who also operates a dairy farm.

In all, nine contenders are seeking their party’s nomination June 7 to succeed two-term Democrat Gray Davis as chief accountant, keeper of the state’s checkbook and custodian of unclaimed bank deposits. Davis is running for lieutenant governor.

The office is often characterized as performing mere ministerial functions of government. However, the controller also belongs to a variety of powerful boards and commissions whose actions can decide the outcome of issues ranging from prohibiting offshore oil drilling to investing billions in public pension funds.

But it is the auditing function of the controller’s office, the so-called watchdog role, that candidates have seized upon as a tool of reform to sweep away government waste.

Because the controller’s powers are largely determined by the governor and the Legislature, his or her discretion in selecting audit targets of opportunity is limited by statute and budget. About 90% of all controller audits are mandated by state law and the federal government.

Democratic candidates Kathleen Connell, Rusty Areias and Don Perata and Republicans John Morris and Tom McClintock are pounding away at the theme that state government is awash in waste and the controller can make a difference.

Connell, Areias and Morris advocate business-style “performance audits” of state agencies that would examine how government is managed, measure achievement and recommend elimination of unproductive functions.

Connell, 46, a financial consultant who served as a housing director in Los Angeles Mayor Tom Bradley’s Administration in 1977-83, estimated that a stem-to-stern performance audit could produce $5 billion to $6 billion in savings next year, roughly the equivalent of the state’s projected budget deficit.

Connell, who holds six licenses for handling security transactions, is seeking public office for the first time. Last fall, she switched her registration from “decline to state” to Democrat and has loaned her campaign $1.1 million.

Areias, 44, is a six-term member of the Assembly and managing partner of a family-operated dairy in the San Joaquin Valley. He argues that in addition to performance audits the controller can use his “bully pulpit to shut off the spigot to programs that do not work.”

Areias was a member of the “Gang of Five” Assembly Democrats who joined with Republicans in an unsuccessful 1988 attempt to oust Speaker Willie Brown (D-San Francisco). He helped spearhead the legislative effort to provide emergency relief and recovery assistance to victims of the 1989 Loma Prieta earthquake.

Perata, 49, the third Democrat, is a veteran Alameda County supervisor whose campaign solicits examples of “stupid government tricks” and publishes lists of the worst offenders. Perata cites the proliferation of local government districts with often overlapping functions as examples of waste he would eliminate.

On the Republican ballot, former Assemblyman McClintock of Thousand Oaks is opposed by Morris, a Los Angeles investor in shopping centers and son of the founder of Mervyn’s department stores. Morris says his experience as a businessman will enable him to implement sound business principles in government.

Morris, 36, is seeking office for the first time and has loaned his campaign $500,000.

McClintock, 37, was one of the most fiscally conservative members of the Legislature and broke with GOP Gov. Pete Wilson in 1991 when the governor advocated increased taxes to help balance the state budget. Instead, McClintock demanded deeper cuts in government services, which were rejected by Wilson and the Legislature as unpalatable.

McClintock, who won a court fight to list himself as “taxpayer advocate” on the ballot, heads the Center for the California Taxpayer, a research organization. He has proposed reducing the state budget by an ambitious 20%, or $11.5 billion, including about $4 billion in health and welfare cuts.

The other candidates are Nathan E. Johnson, a San Diego bus driver, who is unopposed for the American Independent Party nomination; Libertarian Cullene Marie Lang of Sacramento, and Peace and Freedom Party contenders Elizabeth Nakano, a Los Angeles social worker, and Richard D. Rose of Long Beach, an organizer for people with disabilities.