Pressure Mounts on Simon

Republican Bill Simon Jr. faced increased pressure Friday from GOP leaders and some of his own campaign advisors to release his tax returns in hopes of defusing what has become a major distraction in his bid for California governor.

But the candidate’s chief strategist said Simon was still inclined to keep his tax records private, and the candidate ignored the issue altogether in an appearance before a San Francisco gathering of national party leaders.

The internal wrangling came as several of Simon’s fellow Republicans weighed in on the tax matter, urging full disclosure. Most prominent among them was state Sen. Jim Brulte of Rancho Cucamonga, the top Republican in the Legislature, who urged businessman Simon in a private e-mail this week to divulge his tax history in light of the current public focus on corporate ethics.

“Unless there is something in your tax returns that would clearly disqualify you from serving as governor or destroy your marriage, you should rethink your position on not releasing them,” Brulte wrote in the e-mail, a copy of which was provided to The Times by a source who had read the communication.

The candidate’s new campaign manager, Rob Lapsley, has also spoken privately in favor of releasing the tax returns, according to campaign insiders, as have other Simon advisors.

But Simon himself, who was the featured luncheon speaker at Friday’s Republican meeting on Nob Hill, continued to resist the calls for disclosure, campaign officials said.

For three months, Gov. Gray Davis has demanded that his wealthy GOP challenger release his returns to prove he “paid his fair share” of California income taxes. The Democratic governor has pounded him especially hard since the Internal Revenue Service named Simon last week as a beneficiary of a tax shelter that it says might have been illegal.

In a speech Friday to about 350 GOP loyalists, Simon avoided the topic of his tax returns but told them he expected to face “one of the most negative campaigns in political history.”

“I can promise you that just as mightily as Gray Davis tries to distract the people of California from his own failures in so many areas, I will not be deterred,” Simon said. “We’re going to stay on message.”

But signs of the continuing tax distraction were evident nevertheless. Before his speech, Simon aides told reporters that he would take questions afterward, but the candidate instead ducked through a kitchen door to avoid a fifth straight day of grilling on the tax issue.

Outside the hotel, television news cameras captured the scene of a dozen Democratic Party protesters carrying signs saying, “No More Tax Shelters” and “Secretive Simon: What Are You Hiding?”

“Pay your taxes, Simon,” a man shouted through a bullhorn.

While the orchestrated Democratic criticism was predictable, it is the unsolicited advice of fellow Republicans that suggested the issue is beginning to unsettle Simon’s backers.

Among the Republicans urging Simon to release his tax returns was former Rep. Tom Campbell, the party’s U.S. Senate nominee from California in 2000. “When you run for office, you’ve chosen to become a public official, whether you win or not,” Campbell said in an interview this week with KTVU-TV in Oakland. Calling himself a friend and supporter of Simon, he added: “I always disclosed. My advice: Disclose. Show the public, because the risk politically is far greater if you don’t.”

With no consensus inside the campaign, Simon advisors are weighing their options, sources familiar with the discussions said. They range from sticking to Simon’s refusal to disclose any returns to releasing his complete federal and state returns since 1990, when he moved to California.

Simon told reporters earlier this week that he was not “rethinking” his decision. On Friday, Sal Russo, Simon’s chief strategist, said that in a political campaign, “everything is on the table,” but added: “Our decision is not to release them. We could choose to, but we don’t intend to.”

Russo said he spoke to Simon’s accountants during the Republican primary about what was in the returns but did not review them personally until this week.

“There’s nothing in them, and I’ve always known there’s nothing in them,” Russo said. “It’s merely respecting privacy for him, his brother and his sisters, because they invest as a family. It discloses information about them.”

But given the current political climate, with headlines dominated by accounts of corporate chicanery and fast-and-loose accounting practices, several of Simon’s fellow Republicans said resisting the calls for disclosure was untenable.

“The days when you could say, ‘It’s none of your business’ and ‘My finances are my own private matter’ are gone,” said Mike Hellon, a Republican National Committee member from Arizona. “It clearly deflects attention from Gray Davis’ tenure in office, which it seems to me is what the Simon people would want to be talking about.”