Davis Takes Fund-Raising Nationwide

Exploiting California’s economic and political might, Gov. Gray Davis has turned his reelection effort into a nationwide campaign, raising millions of dollars from out-of-state corporations and Democrats with a stake in Sacramento.

CitiGroup Inc., which has concerns ranging from insurance regulation to privacy rights, has given Davis at least $250,000, making the Manhattan-based financial firm, its executives and subsidiaries among his biggest backers. Verizon, the New York telecommunications giant, has also donated more than $200,000.

Bernard Rapoport, a retired Waco, Texas, insurance executive and major Democratic Party donor, has contributed $16,300 and tapped fellow Texans for thousands more--part of an effort to keep the governorship of the nation’s biggest state in Democratic hands.

“I’ve raised money for Gray Davis from people he’s never met,” Rapoport said. “Some [givers] don’t even know who the governor of California is.”

The bottom line: Davis has collected $7.6 million from outside the state so far, or roughly 20% of the $39.5 million in contributions the governor reported raising through mid-December.

“That’s one of the differences between the governor of California and the governor of Wyoming,” said Garry South, the chief architect of Davis’ reelection strategy. “Nearly everyone is vested in California in some fashion or another.”

Davis has used the state’s pull to much greater advantage than his predecessor, Republican Pete Wilson.

In three years, Davis has gathered more out-of-state money than Wilson raised in eight years. Wilson--one of the premiere fund-raisers of his time--collected roughly $6.3 million elsewhere, or about 14% of the $46 million he took in during his two terms in Sacramento.

High Goals, Few Restrictions

Davis has set a fund-raising goal of $50 million for his first term alone; during one fortnight in December he was taking in more than $159,000 a day. Unlike federal candidates who operate under certain campaign finance restrictions, candidates for statewide office can accept unlimited sums.

While Davis has been been far more aggressive than Wilson in scouring the country for contributions, he has also benefited from unique political circumstances. Of the nine most populous states in the nation, only one--California--has a Democratic governor. That lessens Davis’ competition in the party’s fund-raising circles.

Moreover, California is crucial to any Democrat seeking to win the White House in 2004. Even if Davis’ presidential prospects have dimmed as a result of the electricity crisis, that makes his reelection a priority for Democrats nationwide.

“Raising money for governors has taken on a whole new importance after what happened in Florida,” said David Rosen, a Democratic fund-raiser in Chicago. He noted that Republican Gov. Jeb Bush of Florida marshaled key support for his brother George W. Bush’s presidential campaign and the extended battle to declare a victor in the deadlocked state.

“People understand what it means to be the governor of a state and how it can impact a presidential election in terms of [political] infrastructure, get out the vote and the communications process up and down a state,” Rosen said.

At the same time, Davis benefits from California’s trend-setting reputation, which makes the state something of a proving ground for policy--and an attractive place to try to sway the national political debate.

Davis is seen around Sacramento as a cautious incrementalist who shies away from sweeping policy prescriptions. But outside California, the view is somewhat different.

Take health care, for instance. Democrats, touting their domestic agenda, cite the so-called “patients’ bill of rights” Davis signed into law in 1999 and his support for expanding programs for children to cover the health needs of their parents.

The plan is on hold in California because the Bush administration has not agreed to help pay for the expansion. But backers in other states point to Davis’ support and prod their lawmakers to follow his lead.

“As California goes, so goes the nation,” said Dennis Rivera, head of the Service Employees International Union in New York, which has raised more than $200,000 for Davis. The union has persuaded allies to give to Davis as well; the Greater New York Hospital Assn., for one, donated $50,000.

“He can do absolutely nothing for us,” Rivera said. “But he can set an example.”

Although aides describe Davis as a reluctant and nervous flier, the governor averaged one out-of-state trip a month in 2001, routinely mixing official business with personal fund-raising.

In December, for instance, he traveled to Washington, D.C., for roughly 24 hours. He met with Homeland Security Chief Tom Ridge at the White House and urged the federal government to help pay the state’s added security costs since Sept. 11. He also attended a union-hosted fund-raiser, collecting $421,602.

Republicans accuse Davis of using taxpayer funds to spur his reelection effort. “It is disingenuous,” said Rob Stutzman, a spokesman for the state GOP. “If you’re going to raise money, tell people why you’re going. Don’t use your office as a ruse to go on fund-raising trips.”

But South said all of Davis’ travels outside the state are financed by his campaign committee, not taxpayers. (However, Davis’ staff, including security and press aides, travel at state expense.)

Corporate Money Flows Into Campaign

“The governor of California doesn’t need to invent a reason to go anywhere,” South said. “He is the governor of the largest state in America, with 34 million people, and the fifth-largest economy in the world. He travels when he thinks it’s necessary to do so.”

That said, most out-of-state contributions don’t require Davis to personally fetch a pile of checks. The bulk of the money he receives nationally flows into his campaign from corporations around the country, virtually all of which have significant commercial interests in the state.

Contributors such as CitiGroup and Verizon Communications as well as AOL Time Warner Inc., AT&T; Corp., Microsoft Corp., Wal-Mart Stores Inc., 3M, Bristol-Myers Squibb Co. and BP give the governor’s campaign-finance statements the flavor of a blue-chip investment portfolio.

“One thing that’s important to us is . . . maintaining a reasonable and good business climate in California,” said Peter Bear, head of state government affairs for 3M, the Minnesota-based firm that has given $26,500 to Davis. “We think, considering a lot of adversity that’s occurred in recent times, he’s done a pretty good job of that.”

Many out-of-state companies give through their California subsidiaries, or send representatives to Davis’ in-state fund-raisers. Kemper Insurance Cos., for example, dropped off a $10,000 check in December at one of the governor’s two Northern California birthday bashes.

The company, headquartered in Long Grove, Ill., did $500 million in underwriting business in California in 2000, according to spokeswoman Linda Kingman. “It’s not unusual for us to make contributions in states in which we have significant business,” she said.

Similarly, Neighborcare Pharmacies of Baltimore contributed $25,000 to Davis on the same December day. The company’s parent, Genesis Health Ventures Inc., has extensive operations throughout California and an important stake in health care policy and government regulation of the nursing home industry.

Other companies have more specific interests. Wal-Mart, the retailer based in Bentonville, Ark., has contributed more than $30,000 to Davis’ reelection. John T. Walton, a company board member and an heir to the Wal-Mart fortune, has given an additional $12,525.

Wal-Mart spokesman Rob Phillips said Davis has “supported issues that are important to business in general and Wal-Mart in particular.” Specifically, he cited Davis’ 1999 veto of legislation that would have curtailed operations of so-called “big box” discount stores such as Wal-Mart, Costco and Kmart.

Davis has consistently said there is no correlation between the campaign contributions he receives and his actions as governor. In fact, aides have used his prodigious fund-raising to make the case; because he raises money from so many sources, South says, it leaves him beholden to no one.

Of course, not every donor is motivated by financial or commercial interests. For many Democrats across the country, the fact that Davis is a Democrat is reason enough to give.

Rapoport, the insurance magnate, figures he gives $300,000 to $350,000 each year to assorted Democratic candidates. He refers to former President Bill Clinton and Senate Majority Leader Tom Daschle of South Dakota as “friends,” along with “virtually every Democrat in the Senate.”

Davis is also a friend, Rapoport said, going back many years. Rapoport guesses he has contributed $40,000 to $50,000 to Davis over his long political career. Lately, the entrepreneur has been urging his Texas friends to give as well, as much as a personal favor as any testament to Davis’ accomplishments.

“There are a lot of people who will call me and ask me to do something. Then I call them and ask them to do something,” Rapoport said of the back-scratching among millionaires. “It’s just sort of a roundabout game.”

And then there are contributions that come mostly by happenstance.

Northern Illinois Glazing Contractors donated $1,000 to Davis last summer because one of its important Chicago-area customers asked. The owners of the fix-it firm thought the favor might result in more work in the future, said office manager Cindy Hardwick.

As for Davis, “No one here knows him.”