Jones’ War Chest Barely Tops Davis’ Interest Earnings

Forget those venture capitalists and billionaire tycoons hosting lavish fund-raisers from La Jolla to Manhattan. The single biggest donor to Democratic Gov. Gray Davis’ campaign fortune now happens to be Gov. Davis’ campaign fortune itself.

A fund-raising snowball, Davis’ treasury is so big it’s gaining heft just by rolling forward.

It’s earning almost as much in interest as his potential rival, Secretary of State Bill Jones--the GOP’s only statewide elected official--reported in overall collections, although Davis has been raising money far longer.

A review of Davis’ latest campaign finance statements show he declared $907,215 in “miscellaneous increases to cash”--which was mostly interest on his $30.5-million war chest. Jones, who didn’t begin raising money until April, collected $960,000 for the same six-month disclosure period that ended in June.

“This is unprecedented,” said Bob Stern, president of the Center for Government Studies in Los Angeles and an author of the state Political Reform Act. “Davis is raising money like a president. We watch football and baseball while he raises money.”

Last week’s campaign disclosures sharpened the rhetoric for an election that is still more than a year away and could be a clash of financial titans.

The Jones camp railed against Davis for putting fund-raising ahead of governing and for fueling the public perception that government can be bought.

“The people of California should be outraged,” said Rob Lapsey, Jones’ campaign manager. “I believe they understand on a gut level that California is for sale.”

Although he has some statewide name recognition, Jones is not Davis’ biggest rival on the financial front. A lesser-known Republican, Los Angeles businessman William Simon, reported $3.3 million in contributions, much of it from his family fortune. Simon also began accepting contributions in April. And, as with Jones, he has criticized Davis for spending more time fund-raising than governing.

The wild card in any handicapping of the governor’s race is former L.A. Mayor Richard Riordan, who has not declared whether he will run but has begun raising funds. Riordan hopes to raise $2.5 million within a month, and his great personal wealth could neutralize Davis’ efforts. Riordan did not have to file a financial disclosure report because he started raising money after June 30.

“It’s unfortunate that the governor is intent on making this a $50-million race,” said Riordan’s press secretary, Carolina Guevara. “But if the mayor decides to throw in his hat, we are confident he’ll be able to match him.”

The governor’s staff defends the fund-raising practices, denying any favoritism to donors and saying they are fighting against what they called a coordinated and well-financed national Republican Party campaign to unseat the governor.

“They are trying to find moneybag candidates who can put millions of dollars into the race to augment what the Republican apparatus is planning to deploy to take the governor out,” said Garry South, Davis’ senior political advisor.

South said the governor is seen as a potential contender for the presidency who successfully and publicly sparred with the Bush administration over energy price caps.

As for the criticism that Davis spends too much of his time working the fund-raising circuit, South said the governor has a professional campaign staff that does most of the work, and that Davis himself devotes little time to it.

“The governor does not sit on the phone for hours on end making fund-raising calls,” said South. “What the governor basically does is show up.”

While he does, his treasury is becoming an economic force on its own. His PaineWebber money market accounts earned about $770,000 in interest over the first six months of the year. Increases in the value of treasury bonds account for much of the remainder of the $907,215 reported on Davis’ finance report.

But one issue may overshadow all the political spin money can buy.

“If we have blackouts and brownouts next September, it may not matter how much money he has,” Stern said.

He said all that campaign money can create a nice “security blanket” but does not guarantee victory. Indeed, in the 1998 primary, Davis’ two Democratic opponents, airline tycoon Al Checchi and Rep. Jane Harman (D-Redondo Beach), vastly outspent the then-lieutenant governor and lost.

Stern wondered why, if Davis won in 1998 with less money than two independently wealthy rivals in the primary, he is so worried about the same scenario in next year’s general election.

South responded that, unlike 1998, the governor has been targeted by millions of dollars’ worth of ads against him.

For example, he said, Silicon Valley venture capitalist Tim Draper turned his Proposition 38 campaign for school vouchers into a $15-million to $20-million attack on Davis, who opposed the voter initiative. And Republican-funded groups have launched a radio campaign against Davis over his actions in the energy crisis.

South said the campaign may cost about $60 million or so for each candidate, about twice what was spent on the last election.

“If we get a vow of poverty from Richard Riordan or Bill Simon that they aren’t going to reach into their pockets and put millions into the campaign, this would be a different story,” South said.