Checchi Resigns From Northwest Airlines

Clearing the decks for a probable run for governor, Al Checchi resigned Friday as co-chairman of Northwest Airlines but said he will continue to hold a major stake in the company.

Checchi, a Democrat, said he left the position because it was “not appropriate” to continue there, given a potential conflict between his political leanings and Northwest’s dealings with the federal and local governments.

The move seemed to clearly signal that he will run for governor. Indeed, asked whether he would be quitting if he did not plan to run for governor, Checchi said no.

Yet he still declined to formally enter the race.

“I reserve the right to make that decision at the end of the summer, when I have satisfied myself that . . . I can stand before people and have a program we can implement and make a difference,” he said. “And I’m not there yet.”

Checchi’s resignation came at the airline’s board of directors meeting in New York. His co-chairman and investing partner, Gary Wilson, was named chairman of the airline firm. Checchi said he will hold on to his 10% stake in Northwest.

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Checchi and Wilson took over the company in a 1989 leveraged buyout. Their tenure has been a roller-coaster ride, encompassing several troubled years, a near-bankruptcy and, in recent years, solid economic performance.

The resignation was the latest in a series of steps by Checchi to place himself closer to the Democratic contest for the governorship, which is being vacated by Republican incumbent Pete Wilson.

Last December, he publicly expressed interest in the race. Since then, he has hired a team of political consultants, deposited $3 million of his own money in a campaign bank account, given a few high-profile speeches and traveled widely to meet with business and community leaders. Officially, he says a race is “probable.”

Checchi faces an uphill battle for the nomination, since he is unknown to most Californians and has never been elected to office. His shadow campaign has been rocky, with admissions that he has failed to vote in most recent state elections and occasional displays of confusion about statewide issues.

But his wealth, estimated conservatively at $550 million, could give nightmares to other candidates. On the Democratic side, the only announced candidate is Lt. Gov. Gray Davis. Others, including U.S. Sen. Dianne Feinstein, former White House Chief of Staff Leon E. Panetta and state Controller Kathleen Connell, are considering the race.

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Republican Dan Lungren, currently the state attorney general, is the only Republican candidate so far.

Checchi said he was concerned about remaining co-chairman because of the possible conflicts of interest even though he has not had a day-to-day role with the airline for some time.

“Northwest Airlines is a public company and the company does a great deal of business with the federal government and local governments,” he said. “At this stage, given my level of activity and interest [in the governor’s race], it’s not appropriate to continue in both roles.”

He also said that he will not return as co-chairman if he fails in a gubernatorial campaign.