Bulk of Simon’s Donations From Out of State

Two weeks before the Republican primary election, gubernatorial candidate Bill Simon Jr. had raised less money from Californians than he did from wealthy donors in more than a dozen other states, an analysis of his campaign reports shows.

The multimillionaire businessman has raised $2.2 million outside of California, or about 56% of his funds. He raised another $4.4 million in loans to his own campaign and contributions from his family.

Most of the out-of-state money came from investment bankers and brokers in New York, where Simon lived for five years in the 1980s, and New Jersey, where the Simon family investment business has an office. Simon also received large donations from Colorado, Wyoming and Connecticut.

In contrast, Simon’s two major rivals in the Republican primary have raised almost all their campaign money from within California. Former Los Angeles Mayor Richard Riordan, also a multimillionaire, has tapped the wealthy for much of the $9 million he has raised, but about 98% of that came from within the state. Secretary of State Bill Jones, who has fallen far behind in total contributions, has not raised substantial funds outside his San Joaquin Valley stronghold.

Gov. Gray Davis has collected $3.4 million outside of California, but that was only about 20% of the $15.8 million he raised altogether in the last 14 months.

The Riordan and Jones campaigns both criticized Simon’s large out-of-state contributions Friday, saying they illustrate his tenuous connection to the California electorate.

“I think that just shows that Bill Simon hasn’t been involved in California politics,” said Beth Pendexter, spokeswoman for the Jones campaign. “He has no experience in California politics and has no basis on which to ask people to give him a donation.”

“It really shows that he’s a novice,” said Mark Chapin Johnson, state finance chairman for Riordan. “Obviously Dick Riordan’s support comes from California and Bill Simon’s does not.”

A spokesman for the Simon campaign said the reliance on money from family and business associates around the country was a necessity brought on by the candidate’s relatively recent first venture into the state’s political life.

“It’s not that he’s been inactive” in the decade he’s lived in California, said Sal Russo, Simon’s political consultant. “It’s that his focus has been more on charitable activities in the way he manifests his public concerns.”

When he decided to enter the governor’s race last year, Simon recognized he would have to be his own largest donor in the early going, Russo said. He also knew he would need help from friends and family around the country.

“That’s where you raise your early money, which he did,” Russo said.

Russo said Simon has worked hard to cultivate California donors.

“It is very clear we will be able to raise the $30 million, $40 million we will need for the general [election],” Russo said.

For advocates of campaign funding reform, the disproportionate share of out-of-state money in the Simon campaign isn’t particularly alarming, although they acknowledged that it raises questions about outside interests exercising influence in California.

“There will be people who would be bothered by it, but it doesn’t bother me,” said Bruce Cain, director of the Institute of Governmental Studies at UC Berkeley. “I think California is such an important state it doesn’t shock me at all. It testifies as to how important we are.”

Campaign finance reformer Robert M. Stern, the author of California’s contribution disclosure law, said he is more concerned about Simon’s loans, now totaling about $3.7 million.

The problem with a candidate loaning his own campaign money, Stern said, is that if the candidate wins, he will then be seeking campaign contributions that will go directly into his pocket.

Stern, president of the Center for Governmental Studies in Los Angeles, said post-election donations thwart campaign disclosure laws.

“You don’t see until after the election who is making those contributions,” he said.

Loans such as those Simon has made to himself will not be legal in the next gubernatorial election, Stern said. Proposition 34, the 2000 statewide campaign financing reform initiative, already prohibits candidates in legislative races from carrying loans over $100,000.

The same provision would have applied to the current gubernatorial race, Stern said, except that Davis threatened to veto the initiative’s enabling legislation unless its campaign finance limits were postponed until after his reelection campaign.

Donations from the Simon family and personal friends are far less troublesome than the loans, Stern said.

“The main problem is what do people want for their money,” he said. “When a relative or a personal friend gives, they are usually not asking for favors in return. But when a corporation gives, the corporation has to justify the contribution saying this is for business purposes.”

Simon’s far-flung network of out-of-state donors is made up largely of business people.

Among his largest donors, for example, are Foster Friess of Jackson, Wyo., founder of a mutual fund management firm; the Anschutz Corp. of Denver; Edmund B. Ross, a private investor from New Jersey, and William R. Grant, a New York venture capitalist.

“It could be companies that did business with him or his father, or it could be companies that want to do business in California, as well,” Stern said.