California’s Show-Me-the-Money Governor

SACRAMENTO

Gov. Gray Davis has pocketed political money from some of the biggest, baddest names in the corporate corruption scandals.

WorldCom $109,000. Adelphia $52,500. Enron $120,000. Global Crossing execs $120,050. Arthur Andersen and its parent $54,000.

Does anybody care?

Republican rival Bill Simon Jr. has been hammered politically for using offshore tax shelters that the Internal Revenue Service contends may be illegal. Davis, it turns out, received $86,500 from the accounting firm that recommended the shelters. The firm, KPMG LLP, is being sued by the IRS.

Other rich businessmen who used the shelters are major Davis bankrollers. They include Maurice Marciano, CEO of clothier Guess?, $125,000, and Richard J. Heckmann, former chairman of U.S. Filter Corp., $40,000.

Times reporter Dan Morain dug up this donor data and laid it on my desk. Does it interest anybody? Should it?

Simon’s political sin, after all, has been refusing to release his tax returns, thereby inviting the question: What else is he hiding?

By contrast, Davis isn’t hiding anything, says Garry South, the governor’s political strategist. Davis released his tax returns. The law requires him to report his campaign contributions. They’re out there, South notes, “for everyone to see and make whatever they want to of them.... They’re subject to a lot of interpretation.”

Yes they are.

One question that Davis invites is why doesn’t he return the money given him by some of his more smelly donors, like WorldCom and Enron. Many politicians have. When asked about keeping Enron’s offerings, Davis said the energy company was the bad actor; why reward it with money.

But the governor did return $25,000 that Oracle gave him days after it signed a no-bid, overpriced, $95-million software contract with his administration. That donation was too odorous, fueling the perception that political money sways Davis policy.

Indeed, Capitol lobbyists believe they must “pay to play.”

“It’s a commonly accepted theory that with this administration, the more you give the better you’re treated,” says one government relations consultant.

There are too many suspicious examples to flatly reject the notion:

* Davis signed legislation during the growing budget crisis to give prison guards a 34%, $1-billion pay raise by 2006. He also fulfilled their wish by proposing to close five private prisons. Weeks later, the guards union gave him $251,000--on top of $411,000 they already had donated or raised for his campaign. In 1998, they spent $2.3 million on his election.

* The governor was in the Capitol discussing education policy with leaders of the California Teachers Assn. when he suddenly blurted: “I need $1 million from you guys.” Nobody responded, but he apparently was seeking a repeat of their 1998 generosity when they kicked in $1.3 million.

The list is long.

“Nobody’s going to accuse Davis of saying, ‘Give me the money or I won’t do this,’ ” says political reformer Bob Stern, president of the Center for Governmental Studies. “It’s more the fear that if you don’t give him the money, no telling what he might do. And I’m sure he cultivates that.”

Davis is an obsessive money grubber who says he’s merely protecting himself from super-rich, self-financed rivals. As of June 30, he had $31.6 million stashed.

Do voters sniff a stench? Sure.

A Field poll 18 months ago found that two-thirds of Californians believed that Davis was influenced by campaign money. A recent Field survey showed him with a negative job performance rating: 41% approval, 49% disapproval.

The two are linked. It was Davis’ initial handling of the energy crisis that caused his job rating to plummet. But it’s the “integrity” issue that keeps the rating negative.

Is the stench strong enough to repel voters from Davis in November? Enough to elect Simon? Probably not yet. (Davis leads by 7 points in the Field poll.)

“The simple truth is that most voters think all of us in the political process are corrupt. It’s an eye-roller,” says Democratic consultant Darry Sragow. “My advice always is to take the money because if you don’t, you’re broke.”

Simon strategist Sal Russo says the voters’ “esteem” for Davis is lowered by his incessant money soliciting. But its impact on their voting, he adds, will hinge on the size and reaction of two groups: angry “lovers scorned” who think he has taken corporate money and sold out the liberal agenda, and mainstreamers who believe he’s preoccupied with fund-raising and has neglected his job.

Ferocious fund-raising is Davis’ biggest strength and it’s also his biggest weakness.

He’s got money to attack Simon on TV about tax returns and business ventures. He knows that to win, this must be a Davis vs. Simon race. If it’s the good Davis vs. the bad Davis, Davis loses.