Simon Retreats on Allegations of Illegal Fund-Raising by Davis

After accusing Gov. Gray Davis of illegal fund-raising, Republican challenger Bill Simon Jr. was forced to back away from the allegation Tuesday after release of a photograph that contradicted the charge.

At a raucous news conference in North Hollywood, Simon initially described the photo as proof that Davis had accepted a campaign contribution in his state office when he was lieutenant governor.

“Unlike people’s recollections, photographs don’t change, they don’t lie,” Simon said, adding that wrongdoing by Davis has “been proven now with the release of today’s photograph.”

But the office pictured was not the one the GOP nominee said it was.

After questioning by reporters, Simon retreated from his allegations of criminal wrongdoing. “Whether or not it’s the lieutenant governor’s office, it may or may not be,” Simon said. “That can be determined. That’s not my job to determine that.”

Simon raised the issue in Monday’s debate with Davis, asking the Democratic incumbent if he had ever accepted campaign donations in his state office. Immediately afterward, Simon aides accused the incumbent of violating state law by taking a check in 1998 in his then state office. While the Davis campaign immediately denied the accusation, Simon said there was evidence, and his campaign aides promised to provide it Tuesday.

However, the photograph produced by the political group--the California Organization of Police and Sheriffs--shows Davis posing with a check inside an office considerably different from the one he used as lieutenant governor.

The man shown handing Davis a $10,000 check--former organization President Al Angele--also denied presenting the money to Davis in his state office. He said he had never been in Davis’ state office.

Under questioning, Simon conceded his campaign had made no attempt to verify where the photo was taken and suggested that the state Fair Political Practices Commission could sort the matter out. “That’s why complaints get filed,” Simon said. “In order to resolve the truth.”

On Monday, the organization’s attorney sent a letter to the state watchdog agency accusing Davis of wrongdoing. But he, too, appeared to back away from that stance Tuesday.

In an interview, Sacramento attorney Tom Hiltachk said he has not “accused the governor of anything” and “never said there was a crime.”

Doubts about the veracity of the photo threatened to upend Simon’s troubled campaign less than four weeks before the election, at a time the GOP hopeful is struggling to raise money and boost credibility within his own skeptical party.

Davis, who made no public appearances Tuesday, had no comment on the strange sequence of events.

But his chief strategist, Garry South, delivered a blistering denunciation of Simon, his campaign team and the California Organization of Police and Sheriffs.

He called the GOP nominee “a desperate candidate” and denounced the police group as “a scummy organization that will perform any act for the right amount of money”--referring to the money Simon’s campaign gave to the police group to secure a spot on its list of endorsements.

South said that Simon “owes the governor an apology. This man has accused the governor of California of committing a crime without evidence at all.”

Had the allegation been true, Davis technically would have committed a misdemeanor by accepting the campaign check on state property.

The four-year time limit for prosecuting such a crime expired in January, however.

The accusation began unraveling within minutes of the photograph’s release at a Los Angeles news conference called by the police organization’s leaders.

In contrast to the scene depicted in the photograph, the lieutenant governor’s office has dark wood paneling running from floor to ceiling, a dark wooden door and a large, single-pane window.

The room in the photograph has white painted walls and a large, paned window.

Deborah Pacyna, a spokeswoman for Lt. Gov. Cruz Bustamante, said the office has not been remodeled in many years--at least not since Davis left the office four years ago to become governor.

The nearly identical police organization photos are stamped Jan. 31, 1998, when Davis was running for his first term as governor.

Davis strategist South said the governor was not even in Sacramento when the photos were taken, but was at an event with then-Vice President Al Gore in Pacoima.

But an attorney for the police organization said the group “continues to believe that the photo depicts” Davis’ office as lieutenant governor.

“If it’s not the lieutenant governor’s office, or some other state office, where is it?” asked Hiltachk.

None of the parties involved could answer that question Tuesday.

While the Tuesday brouhaha was damaging to the Simon campaign, it also raised questions about the actions of an organization that has long been courted by California politicians--chiefly because of its acronym, COPS.

The group, an affiliation of union organizations, has a membership of roughly 5,000 police officers.

However, rather than any law enforcement activities, it is best known among political insiders for the aggressive fund-raising practices surrounding its slate mailer program.

Such mailers, which purport to be independent voter guides, are a highly lucrative staple of California politics, familiar to voters who have found one of the cardboard strips hanging from their doorknob.

In the past, Davis has welcomed the organization’s support. Indeed, the organization endorsed Simon and Davis in their respective March primaries.

But relations between Davis and the group’s leaders soured after the organization tilted toward Simon in the general election.

South said the group was upset that the Davis campaign did not buy a slot on the group’s mailer in the primary.

He said that after being turned down, the organization’s political consultant, Kelley Moran, tried to sell the Davis campaign a spot on a separate environmental slate that his firm produces.

“That’s the level of consistency and principle involved in these things,” South said.

Simon has contributed at least $225,000 to the organization, according to records filed with the secretary of state.

The GOP nominee is set to appear on the group’s slate mailers for the Nov. 5 election, and members of the group are now providing security for the Simon campaign.

In addition to the money he gave to the organization, Simon also donated $143,000 to Moran’s consulting firm.

Asked Tuesday about his contributions to the group, Simon said he did not believe his campaign had paid to appear on its slate mailer. “Not to my knowledge,” the GOP candidate said, referring questions to his campaign consultant, Sal Russo.

Hours later, a spokesman for the Simon campaign, Mark Miner, responded by saying he was not aware if Simon knew about the payments to the organiza- tion.

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Gray Davis Fund-Raising

As the race for governor of California entered its final weeks, Gov. Gray Davis had more than $21.3 million left in his campaign treasury, almost five times as much money as Republican rival Bill Simon Jr. The latest campaign finance report shows that labor unions were among the biggest contributors to the Democratic governor’s reelection effort during the summer.

Raised -- $9,415,134

Spent -- $20,158,559

Cash on hand -- $21,376,963

Top contributors:

California Correctional Peace Officers Assn. -- $805,000

American Federation of State, County and Municipal Employees -- 750,000

Service Employees International Union -- 500,000

California Union of Safety Employees -- 352,500

Operating Engineers Statewide PAC -- 243,000

Democratic Governors Assn. -- 200,000

Jerry Perenchio -- 200,000

State Building & Construction Trades Council -- 169,260

California State Council of Laborers -- 127,673

AKT Development Corp., Sacramento -- 100,000

Casden Properties -- 100,000

Southern California Pipe Trades Council -- 100,000

Zenith Insurance -- 100,000

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Note: Campaign contributions, spending and major contributors are for the period July 1 to Sept. 30. Cash on hand Sept. 30.

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Source: Campaign finance report

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Bill Simon Jr. Fund-Raising

Republican candidate Bill Simon Jr. continues to be the largest donor to his gubernatorial campaign. The Los Angeles investment banker lent $4 million to the campaign in September to buy airtime for television ads. Simon continues to trail Gray Davis in raising the money needed to reach California voters. His top contributors include business interests and family members.

Raised -- $10,546,256

Spent -- $11,063,719

Cash on hand -- $4,298,878

Top contributors:

Bill Simon Jr. -- $4,020,750**

California Republican Party -- 238,611

A.G. Spanos -- 200,000

Samuel Cardelucci -- 107,176

Julie Simon Munro -- 100,000

Joseph Coors -- 100,000

Lincoln Club of Orange County -- 100,000

Race Investments, Eureka -- 75,000

Sierra Tel Communications Group -- 62,100

Carol L. Kimmelman -- 56,000

Gladys Gill -- 55,000

Howard Lester -- 51,410

Frank E. Baxter -- 51,345

William E. Simon & Sons Funds Group -- 50,000

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Notes: Campaign contributions, spending, and major contributors are for the period July 1 to Sept. 30. Cash on hand Sept. 30.

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**Includes $4 million loan to campaign

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Source: Campaign finance report

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Times staff writers Mark Z. Barabak, Michael Finnegan, Nicholas Riccardi and Nancy Vogel contributed to this report.