CALIFORNIA ELECTIONS / U.S. SENATE : Huffington Sticks With Silence as His Policy on Tax Disclosure

Can a candidate for major office win election in California today without revealing his or her personal income taxes?

The question appears likely to be tested in this year’s U.S. Senate race, in which Republican candidate Michael Huffington contends that voters are more concerned about how a lawmaker will behave in office than about personal bank accounts.

Disclosure is not required by law, but experts are divided about whether it is required to win. Trust is not an abundant commodity in politics these days, they say, especially when almost nothing--including private diaries, sexual behavior, college antics and particularly money--seems beyond public inspection.

As a result, most candidates for U.S. Senate and governor in California have come to treat income tax disclosure as routine.

Still, Huffington, a freshman congressman from Santa Barbara, said he is confident that voters want to grant a degree of privacy to their public officials. So far, he seems willing to suffer the tauntings of his Democratic opponent, Sen. Dianne Feinstein, over the issue.

“I have no plans to release (income tax records) because it is not required . . . to run for the Senate,” Huffington said. “I think it is something that is not relevant to the campaign. . . . The tax issue people care about is whether a politician is going to raise their taxes or lower them.”

Feinstein, who was pressured into revealing 16 years of her and her husband’s income taxes during the 1990 governor’s race, has continued the practice since. She has challenged Huffington in a radio commercial to release his returns or “get out of the race.”

She and other Democrats contend that Huffington warrants even more scrutiny than most candidates because he is using his personal fortune--estimated at more than $70 million--to finance an extraordinarily expensive campaign.

“In your case Mr. Huffington, full disclosure is especially compelling,” state Democratic Chairman Bill Press wrote to the Republican nominee in a letter last month. “You have publicly committed to spending as much as $20 million to win the general election. In the history of the entire country, no one has ever spent that much in personal funds running for the United States Senate. . . . Surely, you will recognize this request as simply the price you must pay to earn the public trust.”

So how much of an issue is this likely to be?

Looking at past races is not a good indicator. In the 1978 New York governor’s race, for instance, it dominated the campaign debate. In other races, such as a 1992 California U.S. Senate campaign, it scarcely made a ripple.

In the Senate race, Republican Bruce Herschensohn declined to release his taxes, but offered to make the disclosure if Democratic rival Barbara Boxer agreed to a statewide televised debate. “It showed we had nothing to hide (and) it showed that she was more afraid of debating than she was interested in Herschensohn’s taxes,” said Ken Khachigian, who managed the GOP campaign.

In most races, however, when taxes are released, they scarcely gain any attention. Both candidates in this year’s race for governor in California have made their tax returns public without creating major headlines.

“Sometimes people think all politicians are crooks,” said George Gorton, campaign manager for Gov. Pete Wilson. “Pete’s always felt that he should do it . . . just to be cleaner than clean.”

Mervin Field, an independent pollster in San Francisco, said there is no California polling data regarding voter attitudes on the question because so many candidates provide the information.

Nationally, the question has been asked in polls, but not recently. In 1987, 65% of the respondents in a Times Mirror study said income tax information should “almost always” be reported by candidates. In 1988, a Roper poll of women found 72% saying they would not consider a candidate who did not release tax information.

Even without the state data, Field said he expects Huffington will be forced to disclose the information or seriously damage his campaign.

“I can’t see him winning without revealing his income taxes,” Field said. “ . . . And the longer he delays, the greater the speculation that there is something he is trying to hide.”

Political analyst Sherry Bebitch Jeffe also warned that Huffington must beware of sending a message that he is above conventional rules.

“It’s not a question of right or wrong,” she said. “It’s a question of arrogance. It’s a question of hubris . . . . I think the major reason that voters would argue for disclosure is that he is putting himself above everyone else.”

Huffington supporters and strategists said they do not expect the issue of tax returns to become a problem for the GOP nominee. In the past, they said, it has become a major issue only if the electorate develops suspicions about the candidate.

“I’d say this was a non-issue,” said Khachigian, who also is advising Huffington.

Republican political consultant Sal Russo agreed that voters usually will respect a candidate’s financial privacy and that it may not be a major issue for Huffington. But he also acknowledged that it is easier for an opponent to raise suspicions about a relative newcomer such as Huffington than about a veteran.

“If this was Ronald Reagan, people would say leave him alone,” said Russo. “I think it has more effect when you use it against somebody who people don’t know very much and who is wealthy. So if you are looking for a person who could be a victim of this kind of attack, Huffington could be that kind of victim.”

Feinstein’s campaign already has tried to plant the seeds of suspicion in the electorate that they hope will grow into a public demand for disclosure. In her current radio commercial, Feinstein asks about Huffington’s fortune: “Where did all this money come from? Secret Indonesian oil deals? Cozy family stock transfers? And are you paying your fair share of taxes?”

A point of contention between the campaigns--one that tax statements might address--has been whether Huffington’s fortune is the result of skillful business deals, as he has claimed, or the birthright of the son of a hugely successful Texas oilman.

Feinstein’s campaign argues that income tax statements would confirm Huffington’s claim that he purchased his share in the family’s petroleum company at a market rate.

On the campaign trail, Huffington says his fortune is proof of the American dream because it is the product of a $1,000 investment he made in a financial services company shortly after college. The candidate also says his family connections did not give him any special preference when he later joined his father’s company, the Houston-based Roy M. Huffington Inc., which was sold in 1990 for an estimated $600 million.

Because the family enterprise was privately held, there are few public records that show what took place within the company.

“There is no deep, dark secret about how he got it,” Khachigian said. “The company was sold and the returns to his dad and to himself were, I gather, substantial. There is very little to learn about Mike Huffington and the source of his wealth.”

Huffington also drew attention to his private finances last month when he charged in a television commercial that Feinstein did not pay income taxes in 1978, 1979 and 1985--based on the statements she released during the governor’s campaign--while he has always paid his.

Feinstein explained that she did not owe taxes for two of those years because her former husband was dying and the family was forced to pay major medical bills at the same time it was without his income. She paid no taxes the third year because of a major business loss, she said.

But Huffington’s claim that he has paid all of his taxes opened the door for Feinstein campaign manager Kam Kuwata to ask: “How do we know?”

Huffington declined to say in an interview whether there have been any years he did not pay income taxes. “You can ask,” he said. “You can ask about someone’s sex life. But they don’t have to talk about it.”

He also sought to turn the issue back at Feinstein, saying it proves she is not interested in talking about issues that are more important for voters.

“It means they can’t find anything real to talk about,” he said. “Career politicians focus on the funniest thing. They don’t want us to focus on their record, so they don’t focus on ours.”