Businessman Checchi Enters Governor’s Race

Mega-millionaire businessman Al Checchi launched the biggest takeover bid of his career Tuesday, declaring his candidacy for governor by promising a less political approach to political office.

Checchi, who built a vast personal fortune plying his financial wizardry in the corporate world, styled himself as a campaign insurgent removed from the ways of Washington and Sacramento.

“My experience outside politics is precisely why I’m running,” the 49-year-old former Northwest Airlines executive told members of a Sacramento civic group, who served as extras for his announcement. “You don’t have to be a politician to succeed in government. And the truth is that for too long, politicians leading our government have failed.”

Touting his “real-world experience,” the Democrat said, “I reject the conventional politics that evades hard choices, that obscures controversial issues and seeks to offend no one except the powerless and marginal.”

He pledged to “tell the people of this state exactly where I stand and, during the months ahead, to set forth real and specific proposals for change.”

To wit, Checchi said that as governor he would cut the state bureaucracy by 10% to raise $5 billion more for education, boost the state cigarette tax by 25 cents a pack to expand health care for the uninsured, and require statewide competency testing of both students and teachers.

Further, Checchi called for expansion of the death penalty to include serial rapists and repeat child molesters, offered a ringing endorsement of affirmative action, endorsed abortion rights and promised to outline a “major” gun control proposal in the months ahead.

“As you can see, my positions aren’t cut to fit any ideological pattern,” Checchi said in his 18-minute address to about 200 members and guests of the Comstock Club, who interrupted his speech with sporadic applause. “The test for me is simple: What will meet the needs of California and move it forward, not what will satisfy the political establishment or big campaign contributors.”

Checchi’s independence comes at no small personal expense. The former airline executive (whose name is pronounced CHECK-ee) has vowed to spend as much as $30 million of his own money to finance his campaign.

His long-expected decision to enter the contest follows a months-long period of study--a sort of California 101 crash course--in which he met with scores of experts, from civic leaders to special pleaders, to learn about everything from agriculture to the impact of welfare reform.

Venturing forth from his gated Spanish-style mansion in Beverly Hills, Checchi visited about 50 cities and met with about 350 individuals as part of his tutorial. A few of the everyday people he met--including a Central Valley farmer and a San Fernando Valley man, Blinky Rodriguez, who lost a son to gang violence--were among those who attended Tuesday’s speech and were cited in Checchi’s remarks.

Such Reagan-like theatrics aside, Checchi’s lack of political sophistication has shown through more than once.

Despite his ambitions, Checchi conceded earlier this year that he failed to vote in four of the last six statewide elections, including the last governor’s race. Tuesday, chastising himself, he said he was simply too busy.

Another time, at a spring gathering of major California water officials, Checchi acknowledged that he didn’t “know anything about water.”

“Before preparing for this meeting, I thought the delta was an airline,” the former Northwest co-chairman joked.

In his speech Tuesday, Checchi predicted that he would probably make more “rookie mistakes” like that between now and the June primary. But all such humility aside, Checchi is no political naif.

Over the years he has contributed hundreds of thousands of dollars to assorted candidates and political causes, occasionally tip-toeing into the gray area that shrouds the political-finance system.

He also demonstrated his ample skill moving legislative levers when he persuaded--bludgeoned, critics say--lawmakers in Minnesota to approve hundreds of millions of dollars in tax breaks and other concessions to help rescue Northwest from bankruptcy in the early 1990s.

Raised in suburban Washington, the son of a high-level bureaucrat for the Food and Drug Administration, Checchi went to work for the Marriott Corp. straight out of college, putting his Harvard MBA to work in a series of creative and highly lucrative ventures.

In 1982, he joined the Bass Brothers investment firm and played a major role in helping save the then-struggling Disney Corp. Checchi and his family moved to California in 1985.

Four years later, he made his biggest financial play--and a financial killing--with a $3.65-billion takeover of Minneapolis-based Northwest.

After narrowly averting bankruptcy, the company thrived as the airline industry came soaring back from recession. Checchi’s relatively small investment--the Dutch airline giant KLM put up most of the cash for the deal--helped him build a fortune today estimated in excess of $550 million.

Checchi continued to lead Northwest as the airline’s co-chairman until stepping down in April to focus full time on preparing for the governor’s race.

He enters the contest as a mere asterisk in the polls and a phantom to most California voters. A random sampling of audience members before Checchi spoke showed that most people knew he was involved in the airline industry, had a lot of money and was interested in high office.

Beyond that--what airline, what position he held, what office he sought, even which party he belonged to--were a mystery.

“He seems to be successful and seems to have his own stash,” said Maxine Milner-Krugman, who knew that much about Checchi but confessed that she couldn’t properly pronounce his name.

More than a few compared him to Republican Michael Huffington, the former Santa Barbara congressman who narrowly lost the 1994 Senate race to Democrat Dianne Feinstein after spending $29 million of his fortune.

Asked later if he was concerned that voters would perceive him as another wealthy dilettante trying to buy his way into office, Checchi professed not to worry. “Most people don’t object to someone spending their own money,” he told reporters.

With Tuesday’s announcement, Checchi became the second declared Democrat for governor, joining Lt. Gov. Gray Davis, who made clear his intention to run a few months after taking office in 1995. Last week, state Sen. John Vasconcellos (D-Santa Clara) launched an exploratory effort to determine whether to mount a full-blown campaign.

Feinstein, the front-runner in the polls, is still trying to make up her mind whether to run and has said a decision may be months away. Coincidentally, one of Checchi’s major co-investors in the 1989 Northwest deal was Feinstein’s husband, financier Richard Blum, who sank $100 million into the deal--five times Checchi’s personal investment.

On the Republican side, state Atty. Gen. Dan Lungren is running unopposed for his party’s nomination. Gov. Pete Wilson, who has served two terms, is ineligible for reelection.

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Profile: Alfred A. Checchi

Al Checchi seeks to parlay his success in business into a desk in the California governor’s office. Checchi, 49, is no newcomer to politics, having donated almost $325,000 to various political campaigns over the years. But the 1998 race for governor will mark the first bid for elective office for the Democrat.

* Born: 6/6/48, in Boston.

* Residence: Beverly Hills

* Education: Undergraduate degree in economics and American studies from Amherst. MBA from Harvard Graduate School of Business.

* Career highlights: He rose through the ranks at the Marriott Corp., directing one of the nation’s largest real estate development businesses, then became a principal with the Texas-based Bass Bros. Enterprises. There, he worked on the firm’s acquisition of a major stake in Disney. In 1989, he and his longtime associate Gary Wilson engineered the purchase of Northwest Airlines. Checchi resigned as co-chairman of the airline last April to pursue his bid for governor. He retains a 10% stake in Northwest.

* Interests: Reading, golf

* Family: Married to attorney Kathryn Checchi, three children.

* Quote: “I reject the conventional politics that evades hard choices, that obscures controversial issues and seeks to offend no one except the powerless and the marginal.”