Governor Raising Funds at Record Rate

In his first six months in office, Gov. Gray Davis collected an unprecedented $6.1 million from a wide array of business interests in fund-raising geared to an election still more than three years away.

The tally of the new Democratic governor’s prodigious money raising came as he prepared to file a required disclosure statement Monday, outlining contributions dominated by special interests with a stake in administrative decisions and pending legislation.

The report showed Davis, who spent $34.8 million on his gubernatorial campaign and took office with a $3.1-million surplus in the bank, collected more money and held more fund-raising events than any other new governor in California history.

His predecessor Pete Wilson, who was deeply in debt after he first won election in 1990, reported raising only $1.2 million in his first six months in office--a record at that date.

Garry South, Davis’ campaign director, said the governor has raised a total of $8 million since his November election victory. Davis has amassed his huge campaign reserve--discouraging potential challengers except those with significant wealth--at a time when a lawsuit has put on hold a voter-approved initiative that would severely limit fund-raising by a sitting governor.

“For an incumbent to raise large sums of money from special interests . . . this early is very dangerous,” said Robert Fellmeth, director of the Center for Public Interest Law at the University of San Diego, “because it means those with a short-term profit stake in public policy” might have undue influence on some issues.

Davis’ time-consuming quest for political dollars comes as the governor is under fire for playing too small a role in the legislative process and failing to make dozens of appointments for administrative posts and state boards.

Describing Davis as one of the most active governors in recent decades, his spokesman, Michael Bustamante, said it is unfair to suggest that his fund-raising has taken valuable time away from gubernatorial duties.

In his short tenure, Bustamante said, the governor has traveled to Mexico, passed a series of education measures, dealt with a citrus freeze in the Central Valley, helped get a budget approved on time and gotten raises for state employees.

“This administration has been one of the most productive of any,” Bustamante said.

Much of Davis’ money was collected at events where contributors paid $1,000 to $25,000 for an opportunity to shake hands with California’s chief executive at a gala reception, golf with him at prestigious courses such as Pebble Beach or join intimate dinners or cocktail parties with the governor, who was sometimes joined by his wife.

Some events attracted a cross-section of business and professional interests; others were geared to single business groups such as the hospital, timber and managed-care interests.

Ralph Nader, the consumer activist who has been pushing HMO reform, said in an interview that fund-raising from specific business groups is problematic.

“It is very unusual,” he said, “because it places an incumbent in a vulnerable position to be charged with a quid pro quo--making decisions affecting that industry that are influenced by contributions.”

Davis was the guest of honor at a fund-raiser with the logging industry in early July, just as his administration was proposing tighter timber harvesting regulations that are still pending. Although the industry opposed the new regulations as being too strict, environmentalists complained that they were too lax.

The same week, he attended a fund-raiser in his honor sponsored by executives of health care companies. Three days later he asked lawmakers to slow down bills that would toughen regulations on health care providers.

Earlier, Davis and his wife attended a fund-raising dinner with less than a dozen hospital executives at the home of Duane Dauner, president of the California Healthcare Assn. The dinner netted an estimated $100,000 in donations for Davis; the contributors got 2 1/2 hours of uninterrupted conversation with the governor.

“It was just an informal discussion,” Dauner said. “We don’t talk policy at those kinds of things, or legislation. This was really more of a social event. He talked about his goals and probably spent more time discussing education than anything else.”

Hospitals have a huge stake in legislation soon expected to reach the governor’s desk that would require a certain ratio of nurses to patients.

In recent months, Davis has hopscotched from fund-raiser to fund-raiser, attending more than a dozen since April and sometimes several in one week. Although Monday’s disclosure requirements apply only to money raised from Jan. 1 to June 30, Davis continued to attend events in July and many more are on his schedule for August and September.

He has appeared as the guest of honor at a small reception of Chamber of Commerce members where more than $200,000 was donated, at a fund-raising golf tournament at Pebble Beach sponsored by the state prison guards union and at a dinner at the Manhattan Beach Country Club hosted July 28 by Cadiz Inc., an agricultural and water development company.

Although collecting funds was the purpose of the events, each of the sponsors described them as purely social and said they were attended by a broad group of interests.

“It was just mainly chitchat, a chance for the governor to get to know people better,” said California Chamber of Commerce President Allan Zaremberg. “We had a variety of people there, representing everything from insurance to utilities to oil.”

Fiona Hutton, spokeswoman for Cadiz, said her company regularly joins with other industries to help provide financial support to politicians they favor. She said the company has supported Davis since the Democratic primary in the spring of 1998.

The Pebble Beach golf tournament was the second fund-raiser to take advantage of Davis’ avid interest in golf. At that event, held on a day when lawmakers were passing a flurry of bills as they got ready to recess for summer vacation, Davis joined participants in a round.

“He’s an excellent golfer,” said Don Novey, president of the California Correctional Peace Officers Assn., the prison guards group. “He plays to the level of the competition.”

One of Davis’ appointees, Transportation Commission member Jeremiah Hallisey, was selected to help organize some of the affairs, including a June 17 cocktail reception attended by hundreds of contributors at San Francisco’s Sheraton Palace Hotel.

Nader said participation by appointees in fund-raising efforts exposes them to potential problems, especially if they approve contracts involving businesses that contribute to the governor’s campaign.

Hallisey said he has been careful to avoid any conflicts. “I’ve been involved with the governor for 30 years, putting together various fund-raisers and helping him out from time to time,” he said. “[But] I’m not raising money from people with issues before the Transportation Commission.”

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Times staff writer Dan Morain and Times political writer Mark Z. Barabak contributed to this story.