Huffington Wins Bid to Challenge Feinstein : Senate: Lopsided victory over GOP rival sets stage for fall race that is likely to set a record for campaign spending.

Democrat Dianne Feinstein will defend her U.S. Senate seat in November against a wealthy freshman Republican congressman, Michael Huffington, who easily won the GOP nomination Tuesday night with a campaign financed from his personal fortune.

Huffington (R-Santa Barbara), a former executive in his family’s Texas petroleum company, spent as much as $8 million of his own to turn the Republican primary into a one-sided romp over his nearest GOP rival, William E. Dannemeyer.

Throughout the primary campaign, Huffington hardly acknowledged Dannemeyer, whose support did not appear any better than it was two years ago when he lost the GOP Senate primary to appointed incumbent John Seymour.

But, with about two-thirds of the votes counted, Dannemeyer was winning in Huffington’s home county of Santa Barbara, where the congressman sparked a controversy by abandoning his House seat for the Senate campaign just months after he won it.

Barely an hour after the polls closed Tuesday, both candidates spoke to cheering crowds at the state Republican Party campaign celebration in Los Angeles. Dannemeyer hinted that he may run for office again and Huffington aimed his sights squarely at the upcoming race against Feinstein.

“I am in the right place, right?” Huffington asked his jubilant supporters. “This is the Dianne Feinstein retirement committee, isn’t it?”

Both Feinstein and Huffington are recent arrivals in Washington, but the Republican has indicated he will make an issue out of his opponent’s 24-year record in politics as a local government official in San Francisco and a two-time statewide candidate.

“Dianne Feinstein says government is her life,” Huffington said. “Well, maybe it’s time for her to get a life.”

Huffington shouted to be heard over a crowd that punctuated each line with a cheer, finally erupting into a chant: “Get a life!”

In contrast, Feinstein stayed in Washington on Tuesday and retired to her home before the California polls closed. She did not plan any celebration and suggested that her presence in Washington and nose-to-the-grindstone dedication was a notable contrast to her Republican challenger.

“I am trying to get the job done for California, to create jobs, to reduce violence and to stop illegal immigration,” she said Tuesday evening. “If you compare records, I have produced much more for California than Michael Huffington. . . . He doesn’t know California. He is a Texan by and large.”

The primary results set the stage for a fall Senate race that is likely to set a new high for campaign spending and is sure to be one of the most closely watched in the nation.

The stakes are unusually high because Democrats are fighting to keep control of the Senate and the Republicans would get a big boost if they stole an unexpected seat in California. Also, if the Democrats lost in such a key state, it would send an ominous signal to the White House about President Clinton’s chances for reelection in 1996.

But the heightened awareness about this race is recent. Just a few months ago, Washington insiders and many California Democratic leaders were counting on Feinstein’s reelection as one of the surest bets of 1994. She is still considered a formidable incumbent who would be difficult to unseat. But today, the campaign observers regard her race as a serious one.

That’s the way Feinstein campaign headquarters has been treating the contest ever since Huffington entered the race last fall.

Her advisers studied the way Huffington, as a virtually unknown businessman and newcomer to California, had upset a veteran congressman in 1992. Huffington pounded his surprised opponent with negative commercials and spent more than $5.2 million of his own money to set a national record for spending in a House campaign.

Feinstein’s staff expects to see the same this summer and fall. When the polls tightened in the last few weeks, Feinstein broke out of her campaign’s low profile with a sharp television attack ad that sought to convince voters that Huffington was a Texas carpetbagger who once dodged his California taxes.

The charge stemmed from the fact that Huffington and his wife, Arianna, claimed separate residences from 1988 to 1991. Huffington said he remained in Texas, where there is no state income tax, until the 1990 sale of his family’s oil and gas company was finalized. At the same time, his wife and two daughters lived in the couple’s new Santa Barbara mansion.

Feinstein’s campaign said they had no proof of wrongdoing, but they suggested that the state Franchise Tax Board should conduct an investigation into whether Huffington’s Texas residency was legitimate.

Huffington, however, seemed prepared for the attack. His campaign responded quickly with a new television commercial that shot back, charging that Feinstein was also a millionaire and that she did not pay federal taxes for three years.

Huffington’s campaign acknowledged that it had no proof of wrongdoing and that its source for the information was the income tax returns that Feinstein had made public during her 1990 race for governor. Those returns also indicate that the reason Feinstein did not owe taxes for two years--1978 and 1979--was that her first husband was dying of cancer and the family was saddled with huge medical bills as it lost an income.

One outcome of the exchange is likely to be an ongoing effort by Feinstein’s campaign to insist that Huffington disclose his income tax returns. Feinstein’s staff contends that details about Huffington’s fortune are especially pertinent because the candidate is using his own money to pay for his campaign.

Based on his last campaign finance report and on recent television purchases, Huffington was expected to spend as much as $8 million of his personal money on the primary. If so, that is already close to the record for the most personal money ever spent in a Senate race, set by West Virginia Sen. Jay Rockefeller’s $10 million in 1984.

Feinstein has raised at least $6 million, meaning the candidates together are more than halfway to a record for the most expensive Senate race in history. The current record is $25.9 million, set in the race won by Sen. Jesse Helms (R-N.C.) in 1984.