In Visit to State, Cheney Is Mum on Backing Simon

In a one-day swing through California to raise money for state Republican candidates, Vice President Dick Cheney spoke out about the recent wave of corporate misdeeds, defending the majority of business leaders as forthright and upstanding.

But the vice president did not lend a word of public support for GOP candidate Bill Simon Jr., whose gubernatorial campaign has been struggling to contain the fallout from a $78-million verdict against his family’s investment firm.

Cheney and Simon were scheduled to attend a private state party fund-raiser in Burlingame on Wednesday night. But they did not appear in public together--even though they spent the morning just miles apart in the Bay Area. In a morning address to the Commonwealth Club of California at a hotel here, Cheney steered clear of the governor’s race, speaking instead about the economy and terrorism.

Outside the hotel, more than 300 raucous protesters called for the impeachment of the vice president, who formerly led a Texas energy firm, Halliburton Co., which is under investigation by the Securities and Exchange Commission for accounting irregularities.

Cheney declined to comment on practices at the company, citing the ongoing probe. At the same time, across the bay, Simon told members of the Oakland Metropolitan Chamber of Commerce about his plan to increase the state’s stock of affordable housing.

He said he is confident that the White House supports him and that President Bush still plans to appear with him at fund-raisers this month.

“The White House is still totally behind us,” he said in a San Francisco radio interview.

By not publicly voicing his support for Simon during his California visit, the vice president lent weight to speculation that the White House would like to put space between a president trying to craft an image of toughness against corporate malfeasance and a Republican candidate with business problems, some political analysts said.

“The administration is between a rock and a hard place ... because they want to still be competitive in California,” said Jaime Regalado, executive director of the Pat Brown Institute of Public Affairs at Cal State Los Angeles.

“I think Cheney’s action is highly symbolic of an administration that is rapidly trying to distance itself from a very poorly run campaign.”

Publicly, the White House maintained its support of Simon’s candidacy.

“This administration believes Bill Simon will improve California schools, fix the economy and improve the quality of life for all Californians,” Bush spokesman Ken Lisaius said Wednesday.

But a Republican source familiar with the administration’s discussions said the verdict against Simon’s firm has caused consternation at the White House.

“They’re in a lousy spot,” said the source, who spoke anonymously to preserve relations with the White House. “There is no way for them to cancel without dealing with accusations that they’re writing off the race and writing off California.”

Cheney aides said a public appearance with the gubernatorial nominee was never intended for this trip, during which the vice president also attended a Central Valley fund-raiser for state Sen. Richard Monteith (R-Modesto), who is seeking to fill the seat of Rep. Gary Condit (D-Ceres).

The vice president’s day had been “set up this way for a while,” said spokeswoman Cathie Martin, noting that Bush soon will attend three fund-raisers to benefit Simon’s campaign.

Some Republican observers said that visit will be closely watched.

“If the president later this month doesn’t show up, then I think that might be cause for concern,” said GOP strategist Mike Madrid.

As for Cheney, some questioned whether a joint public appearance would have helped Simon, given the vice president’s own association with alleged misconduct.

“If Cheney with Halliburton and Simon with his problems came together on the same stage, the political cartoonists would have a field day,” said Larry Gerston, a San Jose State political scientist.

In his speech Wednesday, Cheney said Bush is taking a firm stand on corporate integrity because he recognizes that the country’s economic system is rooted in its faith in business leaders.

“All of us recognize that the vast majority of men and women in the business community are honest and aboveboard,” the vice president said before his speech was interrupted by five protesters, who chanted “Cheney is a corporate crook!” and “No war in Iraq!” before they were taken from the Fairmont Hotel ballroom.

“Acts of fraud and theft are outside the norm in corporate America, but when those acts do occur--where corporate greed and malfeasance cause honest people to lose their jobs, life savings and pensions--people’s confidence in the system is undermined and wrongdoers must be held to account,” the vice president said.

Later, Cheney was asked how the record of Halliburton would stand up to corporate integrity standards now being espoused by the Bush administration.

After calling Halliburton a “fine” company of which he was proud, Cheney said he could not comment because of the SEC’s probe of the firm’s accounting practices.

“There are editorial writers all over America poised to put pen to paper and condemn me for exercising undue, improper influence by saying too much about it since this is a matter pending before an independent regulatory agency,” he said.

Simon, meanwhile, sought to change the subject Wednesday. He told Oakland business leaders that California suffers from a severe shortage of affordable housing, noting that the state’s homeownership rate is the third-lowest in the nation, just ahead of New York and Hawaii.

“Homeownership is the cornerstone of family security, stability and prosperity,” Simon said.

The investment manager laid out a plan to increase the availability of homes, proposing to loosen land-use restrictions on housing developments, roll back prevailing wage laws and restructure how local governments finance developments.

“With your help and guidance, California can be a state that stands for limited government and unlimited opportunity,” he added.

After his speech, Simon fielded more questions about last week’s jury verdict, which stemmed from a business deal between his family’s firm and a Los Angeles pay phone company owned by Paul Edward Hindelang Jr.

The jury found that the Simon investment group defrauded Hindelang by hiding from him its plan to quickly load the company with debt and take it public. The company ultimately was seized by its lenders.

“There are judgments occasionally that are outlandish, and this happens to be one of them,” said Simon, who repeated his belief that the verdict will be overturned. “It’s not supported by the facts.”

In an earlier interview with a San Francisco radio station, Simon called the verdict “silly” and “outrageous.”

“It’s what’s wrong, honestly, with our legal system, in terms of some of these crazy verdicts,” he said.

“I’ve talked about stopping harassing lawsuits on the campaign trail, and now I find myself a victim of one.”

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Times staff writer Michael Finnegan contributed to this report.