Bush Helps Simon on Oil Issue

WASHINGTON -- Moving on two fronts to bolster California’s Republican candidate for governor, the Bush administration on Wednesday gave Bill Simon Jr. a national stage to assert leadership on the issue of offshore oil drilling even as it forced the ouster of a top Simon campaign aide.

The administration, which has been criticized for its close ties to the oil industry, also tried to raise doubts about Gov. Gray Davis’ commitment to protecting the coastline from drilling--picking up a theme that Simon has been promoting for the past two weeks.

With Simon dropping in at the White House, aides to President Bush gave him a letter from Interior Secretary Gale A. Norton in which she said that Davis had played a role in approving 193 offshore oil wells. Davis aides said the governor had no legal discretion to block the drilling.

Simon then emerged from that session to tell reporters he had won administration support to open talks on getting rid of oil rigs along the California coast.

“The bottom line really is that the Bush administration is willing to sit down and talk about these issues,” Simon said.

The White House’s actions were welcomed by some GOP strategists, who saw them as an indication of new-found engagement and interest in California, where Bush has scrambled to find a toehold since losing the state in a landslide in 2000.

“It reflects the reality that a lot of Republicans really do think Simon can win and that opportunity wasn’t being maximized,” said one GOP strategist in Sacramento.

But aides to Davis dismissed the White House visit as a political stunt. In response, they noted that Simon has invested in companies that drill offshore and that the Bush administration has extensive ties to the energy and oil industries. “I’m not so sure that Californians want an oil-and-gas man like Bill Simon and an oil-and-gas administration negotiating on offshore drilling in California,” said Davis reelection campaign spokesman Roger Salazar.

“The most unfortunate part is that you have in the Department of Interior an agency that seems more interested in scoring political points for Bill Simon than it does in dealing with this issue directly.”

Shake-Up of

Sacramento Staff

As Simon made the rounds Wednesday in Washington, a behind-the-scenes shakeup was quietly taking place back at his campaign headquarters in Sacramento. As with the Washington tour, that move was orchestrated by the White House.

Ron Rogers, the strategist in charge of the campaign’s day-to-day operations, was ousted in favor of John Peschong, a veteran California Republican Party operative and close ally of Gerald Parsky, the Westside businessman who acts as Bush’s chief political emissary in the state.

Sal Russo, Simon’s top strategist and Rogers’ partner in a Sacramento consulting firm, described the move as a long-planned change and denied any tensions with the White House, or between factions within the Simon campaign.

“The one thing everyone’s united on is how important it is to win,” Russo said.

But others, including some working for the GOP nominee, said the move was forced on the Simon camp; one likened it to “a coup d’etat from Washington.”

White House political operatives, including chief strategist Karl Rove, have been privately critical of the Simon campaign, echoing widespread concerns in GOP circles--shared, most critically, by some of the party’s biggest financial supporters.

They complain that Simon has moved too slowly to build support beyond his conservative base and is too passive in exploiting Davis’ perceived weaknesses. They also criticized Simon for failing to respond immediately when Davis launched a multimillion-dollar ad blitz two weeks ago.

Simon began airing his first TV spots earlier this week, but those ads are airing exclusively on Spanish-language television.

Doubts About Progress

of the Campaign

“There’s not a lot of confidence in the White House with the campaign,” said one Republican strategist, who has discussed the race with White House officials and described their concerns about “money, message and the messenger.”

Bush, who helped Simon raise millions of dollars at a pair of events in April, has agreed to return to California in August to help raise more money.

“But first their confidence level in the campaign has to be higher,” said the strategist, who described the shakeup as part of a “carrot-stick approach.”

After his visit to the White House, Simon said, “I expect them to pull out all the stops.”

The backdrop of the oil-drilling dispute is a federal court fight over the 36 leases off the coast of Ventura, Santa Barbara and San Luis Obispo counties.

At issue is the role of California officials in reviewing new oil-drilling plans in federal waters, which are at least three miles from the shoreline.

The Davis administration argues that federal law gives California the right to make sure new drilling plans, or even the extension of offshore oil leases, conform with state laws protecting air and water quality, sea life and scenic views.

A U.S. District Court judge last June agreed, effectively blocking new oil-drilling plans until they pass muster with the California Coastal Commission. The Bush administration has appealed the decision to the U.S. 9th Circuit Court of Appeals.

Davis has called on the Bush administration to drop the appeal, but Simon has not. Instead, Simon criticized Davis on Wednesday for taking the issue to court in the first place and suggested the conflict should be resolved in negotiations out of court.

“If you look at the way Davis handles lots of situations, it’s often through an adversarial context as opposed to a collaborative context,” Simon said. “It’s kind of his way or no other way.”

In October, the Bush administration floated a settlement proposal to Barry Goode, the governor’s legal affairs secretary.

Goode said federal officials were willing to buy back 13 of the 36 leases, if the state would drop its lawsuit and allow oil companies to develop the remaining leases by various methods of slant drilling.

But Goode said the governor’s office dismissed the offer, because Davis is unwilling to budge from his position opposing offshore drilling in any new areas.

Some Issues

‘Not Negotiable’

“It was clear they were angling to allow some continued offshore drilling,” Goode said. “There are some things we will not negotiate. We would not talk about how many unacceptable things we would accept.”

These companies filed a breach of contract suit earlier this year against the federal government over the delays and ever-changing rules that have thwarted their ability to produce oil from the 36 tracts.

One of those companies, Nuevo Energy Co., urged federal officials last year to buy back these leases so the oil companies could recoup their investments.

California Resources Secretary Mary Nichols said the Bush administration needs to negotiate with the oil companies that own the offshore leases.

Although the Bush administration has not embraced that idea, a few weeks ago it cobbled together a similar deal promising $235 million to buy back oil leases off the coast of Florida and in the Everglades. The deal was criticized by some Democrats as an effort to boost the November reelection chances of the president’s brother Jeb, the state’s Republican governor.

In her letter to Simon, Norton made a point of singling out Davis for his role in approving 193 oil wells offshore, including 13 since he took office as governor in 1999. The earlier cases stem from his post on a state commission that oversees drilling permits.

But Davis aides said that he--or in some cases his appointees--had no choice but to approve those permits.

Bruce Hamilton, national conservation director for the Sierra Club, said Davis “has been consistently against drilling offshore.”

“I think Bill Simon is the one who’s the Johnny-come-lately here,” he said. “But frankly, we’re happy to have him on board.”

Times staff writer Kenneth R. Weiss contributed to this report.