CALIFORNIA ELECTIONS : STATE TREASURER : Confident Fong Awaits Campaign Ad Barrage by Aggressive Angelides

With relaxed confidence, Matthew Fong leans back in his chair and jokes that he has two secret weapons in the state treasurer’s race: his mother and O. J. Simpson.

O. J. helps him because the famous defendant’s murder trial will so capture voter interest that fewer people may pay attention to a last-minute barrage of anti-Fong television ads from his Democratic opponent, Phil Angelides.

“My strategy?,” he quips. “I’m rooting for O. J. Simpson. . . . The more O. J.’s in the news, the better it is for me.”

And Fong’s mother helps because she is March Fong Eu, California’s former secretary of state. Maybe, he says laughing, voters will associate his name with hers and not notice that they have different party affiliations.

But Fong admits that the real test of his candidacy and of his chances to become the second Asian American ever elected to statewide office in California rests neither with his mother nor with Simpson. It depends on the effectiveness of his campaign in the final days before the election, when voters typically focus on down-ballot races.

His opponent, Angelides, a take-no-prisoners campaigner who beat former state Senate President Pro Tem David A. Roberti in a ferocious Democratic primary battle, says he has the two things he needs to win again: the ability to raise mega-dollars for an effective media campaign and the moxie to run ads that go for the jugular.

“I will always speak hard truths,” says Angelides.

In the primary, he aired an ad that strongly implied that Roberti, who opposes abortion, had condoned the murder of an abortion doctor in Florida. Critics were outraged, but the ad is credited with helping him win a lopsided victory over the longtime officeholder.

In the general election, Angelides is well positioned to give Fong the run of his political life. He has squirreled away $2.5 million for an advertising assault which he says will be a mixture of negative ads targeting Fong and positive spots designed to improve Angelides’ name identification with voters. He does not rule out the possibility of another hit on abortion, an issue on which Fong refuses to take a position, contending that it is not relevant to the state treasurer’s office.

Fong, who has put aside more than $1 million for his counteroffensive on the airwaves, acknowledges that he, too, is likely to resort to negative ads.

“Roberti has raised some things in his campaign dealing with my opponent’s past and that, to me, is fair game,” he said.

By the time the election is over, the money spent by the two candidates will have been enough to run a governor’s race in many states. Since election season began last year, Angelides has amassed $5.8 million; Fong, who skated through the primary without opposition, has collected $1.8 million.

In California, the state treasurer’s job has little to do with public policy-making, but the candidates promises rise to gubernatorial heights. They campaign on platforms of cutting state spending, erasing budget deficits and creating jobs--no matter that there is little a treasurer could do to deliver.

Fong travels the state hawking a plan for slashing state government spending by $2.2 billion that mirrors many of the reductions Gov. Pete Wilson has been pushing for years. Only when pressed does he acknowledge that the real power to cut spending rests with the Legislature.

Angelides uses campaign and television appearances to promise that he will be the first state treasurer to say “no” to the governor and the Legislature if they come to him seeking financing for more debt. “It’s the biggest hand that I have to play and I intend to play it forcefully and constructively,” he says. However, he does not say exactly where he will draw the line on borrowing.

Despite their expensive battle, Angelides and Fong have much in common. Nearly the same age--Angelides is 41, Fong 40--both have strong ties to ethnic communities. Greek Americans have contributed heavily to Angelides while Asian Americans have donated hundreds of thousands of dollars to Fong.

Fong’s introduction to politics came from his mother, who chose her son to run her third statewide campaign in 1982. In 1988, he moved out of her political footsteps and joined the Republican Party, saying he felt more comfortable with Republicans. “She was shocked,” he recalls.

Angelides’ path in politics began in the Administration of former Gov. Edmund G. (Jerry) Brown Jr. and then took him to the Legislature, where he became chief of staff for former Assembly Majority Leader Michael Roos.

Both proved their party loyalty by taking top posts in presidential campaigns, Fong in George Bush’s two races for President and Angelides in the campaigns of Michael Dukakis and Bill Clinton. Fong was rewarded with a 1991 appointment by Wilson to the Board of Equalization, the state agency that collects business taxes. That same year, Angelides rose to become state Democratic Party chairman.

Both, too, built portfolios in the business and professional world. Fong started a export-import business and then worked for a law firm. Under the tutelage of a Sacramento land development powerhouse, Angelo K. Tskopoulos, Angelides made a fortune as a developer.

Both candidates also have liabilities that leave them open to attack.

In 1991, after assuming his seat on the Board of Equalization, Fong exercised his prerogative to move his office by selecting--without bid--a new site in the Crossroads Business Park in the City of Industry. After the state reached an agreement with Majestic Realty Co. to rent the property for him for $8,090 a month, he was given additional space, free of charge, by the company for his campaign office. His campaign reports show the value of the space over the years has amounted to about $50,000. Majestic has also donated $11,500 to his campaign.

Both Fong and an official with the realty company insist there was no quid pro quo. Fong said he did not know he was going to be offered the free campaign space when he picked the office. “I know the appearance looks bad . . . (but) I have nothing to hide,” he said. “I didn’t see any problem accepting free (campaign) space after a third party (the state General Services Department) negotiated the cost of the lease.”

To outdo Fong in fund-raising, Angelides, has amassed a debt of $2.3 million--the very thing he has campaigned to prevent elected officials from doing. Most of his loans--$1.5 million--have come from his personal funds.

Angelides’ campaign has also received contributions and loans from Tskopoulos and his family totaling $303,412, an amount that critics contend makes him beholden to the millionaire developer. Angelides maintains that if he faces any conflict between his state duties and the interests of his longtime friend and mentor, “I will recuse myself instantly.”

Likewise, Angelides has received $10,000 in contributions from the Catellus Development Corp., a company in which the Public Employees Retirement System has a 41% interest. If elected treasurer, Angelides would sit on the retirement system’s board and make judgments on the performance of Catellus’ management. He insists the contribution will not influence his decisions.

As the campaigns race to the wire, both sides are expecting that their advertising will decide the election. Angelides figures the dollars he has to spend will lead to victory. Fong says his own ads will enable him to withstand the assault.

“With the O. J. factor in my favor, I don’t think he can do it,” he joked.