NEWS ANALYSIS : Lungren Gambled, Lost in Gaming Panel Vote : To gain backing, the attorney general agreed to let Democrats name two of the five members. The move angered Gov. Wilson, who lobbied for defeat of the proposed commission.

The Legislature’s failure last week to approve a comprehensive gambling control bill represents a setback for Atty. Gen. Dan Lungren at the hands of his fellow Republican, Gov. Pete Wilson.

If Lungren had prevailed, he would have enhanced his November reelection campaign by touting the creation of a five-member commission to control California’s booming card room industry.

Instead, in the protracted, high-level negotiations that went to the final hours of the just-concluded legislative session, Lungren agreed to a key concession that pleased Democrats but alienated Wilson, and in the process put him in the unusual political company of liberal Sen. Tom Hayden (D-Santa Monica).

In stitching together a compromise, Lungren’s representatives agreed to go along with demands to give Assembly Speaker Willie Brown and the Senate Rules Committee two of the commission’s appointments. Wilson objected to the power-sharing deal, steadfastly holding out for authority to appoint all members.

But the dispute over appointments was not the only reason the delicately balanced compromise fell apart in the whirlwind of the final day of the session. In the end, Brown, whose antagonism toward Lungren was an undercurrent throughout the negotiations, assailed the attorney general in an unusual public rebuke.

Among the reasons for the bill’s failure were policy objections raised by Brown and Senate President Pro Tem Bill Lockyer (D-Hayward); an unwillingness to pass a bill that might seem like an expansion of gambling, and a suspicion that the bill was laden with special provisions, both for a proposed Downtown Los Angeles card club and existing card club operators.

The measure would have set up a Nevada-style commission with tough conflict-of-interest restrictions to license the state’s 265 card clubs, where $7.5 billion is wagered annually. It also would have created a division in Lungren’s office to investigate card club applicants.

The proposal, which attracted wide early support despite steady sniping from Brown and Lockyer, became bogged down in the details.

“The problem is that the governor’s office didn’t enter the negotiations until the eleventh hour and then it was to say they were . . . drawing their line in the sand” on appointments, said Assemblyman Curtis Tucker Jr. (D-Inglewood), a key participant in the negotiations.

“For the governor to have closed the door on him (Lungren) couldn’t have brought the attorney general and the governor any closer,” Tucker said.

Senate Republican Leader Ken Maddy of Fresno, who also was part of the negotiations, said Lungren may have been so focused on creating a gambling commission that he misread Wilson’s determination to name all five members to such a powerful policy-making panel.

“He (Lungren) also has to consider the governor’s thoughts about this issue, particularly when we’re in the same party,” Maddy said.

Lungren conceded that he had agreed with Wilson about the makeup of the commission. But Lungren spokesman Dave Puglia later said the attorney general couldn’t give Wilson everything he wanted and still win approval in the Democratic-controlled Legislature.

Several sources close to the behind-the-scenes talks suggested that Lungren believed Wilson would have signed the measure had it reached his desk.

It remains unclear what Wilson would have done. But intense lobbying on Wilson’s behalf prompted the Senate Rules Committee late last Tuesday to deadlock 2 to 2 on the issue of appointments, keeping the bill from reaching the Senate floor.

Under pressure from Maddy and the Administration, Republican Sens. Robert Beverly of Long Beach and William Craven of Oceanside opposed the bill, while Democrats Lockyer and Ruben Ayala of Chino favored it. The committee’s fifth member, Nicholas Petris (D-Oakland), declined to vote, saying he needed more time to study the issue.

In the Administration’s view, the commission would have been an arm of the executive branch and as such, Wilson should have the right to name all five members, subject to Senate confirmation.

“There was no compromise to be had here,” said Sean Walsh, Wilson’s press secretary. “It’s the governor’s privilege to appoint these individuals and the governor can hold them directly accountable and responsible.”

In a prepared statement, Lungren blamed legislative leaders for killing the compromise proposal crafted with Hayden’s help.

“Without any formal opposition . . . this proposal failed because the leadership of the California Legislature refused to allow the elected representatives of the people to vote,” Lungren said. “It died in the dark without any accountability.”

Among the victors this time around was Brown, who repeatedly assailed the measure, in part because of a variety of concessions, including one allowing Hollywood Park to operate its own card room. Earlier this year, Brown helped derail another version of the bill.

While the behind-the-scene debate was intense, the acrimony triggered by the issue was rarely publicly displayed. But late last Wednesday, with the Assembly close to adjournment, Brown lashed out at Lungren, interrupting an otherwise mundane talk in which the Speaker thanked Assembly staffers for a good year’s work.

Brown vehemently condemned Lungren for having sent an investigator to determine whether illegal gambling took place at Brown’s annual “bash” held last Tuesday at a Sacramento hotel and which attracted many lawmakers.

Brown, denying anything improper, accused Lungren of harassing him because of his opposition to the gaming bill. Complained Brown, in end-of-session hyperbole: “I guess it was last done in Nazi Germany.”

In a letter to Brown, Lungren said his office was checking on reports from several party-goers about illegal gambling devices at the party, especially slot machines, and that the outcome was still pending. Lungren said he did not order the inquiry made by his office, and learned of it only afterward.

One reason for the bitterness may be that much is at stake.

“What everybody is building for,” said Maddy, “is the potential that this thing is going to explode one of these days and we’ll get full-scale casinos.”

So, even though the issue is dead for now, that’s why all sides expect a new wave of gaming bills to be pushed next year in the Legislature.