Simon Attempts to Gain Initiative

A day after a judge overturned a fraud verdict that had hamstrung his campaign for governor, Republican Bill Simon Jr. tried to put his effort back on track by appealing to Republican donors for help and trying to close down a separate controversy about his tax returns.

Simon also began airing a new television ad, featuring testimonials from two key supporters: President Bush and former New York City Mayor Rudolph W. Giuliani.

The White House approved the use of Bush’s image in the ad after Los Angeles Superior Court Judge James Chalfant’s reversal Thursday of the $78-million verdict against William E. Simon & Sons, according to a GOP strategist who has discussed the governor’s race with the White House. That approval came despite irritation among Bush’s political advisors over Simon’s premature announcement Tuesday that the president would appear in the ad, the strategist said.

Simon advisors hope the spot will repair some of the damage inflicted by a barrage of ads by Gov. Gray Davis that have pounded the GOP candidate for the fraud case and other business troubles.

“Gray Davis’ lies and distortions create doubt in people’s minds,” said a Simon strategist, Sal Russo. “So it’s important for voters to see that the two most popular Americans today--President Bush and Rudy Giuliani--are proudly supporting Bill Simon.”

But the Democratic incumbent made it clear that he plans, if anything, to step up his efforts to persuade voters that Simon is unfit to govern California.

“Mr. Simon may have dodged one bullet, but he has a few more coming his direction,” Davis said at a San Diego campaign stop.

Given the Simon campaign’s severe money problems, it was unclear how long he can continue to broadcast the new ad. The campaign was able to purchase only enough air time to keep the spot on TV through the weekend.

On Friday, Simon and his fund-raisers were scrambling to raise money to extend the ad purchase into next week. Simon strategists were counting on the candidate to pour several million of his own dollars to keep his commercials running. Simon has promised to donate money, but has refused to say when or how much.

The reversal of the fraud verdict gave the GOP candidate an opening to counter the negative image painted by the governor throughout the summer. Yet Simon made no public appearances Friday; instead, he worked the phone, soliciting campaign donations and making the rounds of conservative radio talk shows.

“I want to congratulate you on winning this lawsuit,” host Inga Barks told him on KERN-AM (1410) in Bakersfield. “It was a ridiculous one.”

Overall, Simon sought to shift the campaign’s agenda toward the economy and other issues to his liking, even as he renewed his call for Davis to stop running his TV ad about the fraud case.

“The people of California know that personal attacks don’t create jobs, personal attacks don’t lower taxes and personal attacks don’t repair our schools and they don’t fix our quality of life,” Simon said on one of the morning radio shows.

Simon has used the conservative radio circuit to tend to his political base in the absence of money to match the governor’s statewide television ads.

While reassuring to core supporters, his appearances on the shows also have constrained his ability to shift toward the political center in a state dominated by Democrats and independents.

The difficulties in simultaneously pleasing both camps were evident Friday.

On the Bakersfield show, Simon spoke out against a bill--popular among some leading Latino political activists--that would give farm workers the right to binding arbitration in talks with growers.

“I don’t think we have to pick on our farmers, Inga,” Simon said.

Prompted by the host, Simon went on to criticize Davis for signing a bill that will force auto manufacturers to reduce tailpipe emissions to combat global warming. Davis has showcased the measure in TV ads aimed at appealing to the moderates and independents whose support is critical to Simon and the governor.

“That bill is a big nothing,” Simon said.

Meanwhile, at a campaign stop in San Diego, Davis joined several dozen environmentalists on a bank of the weed-choked San Diego River, where he signed a bill to create a conservancy to manage land along the waterway. He also pledged $12 million in state bond money to restore the river.

“We’re turning the tide on years of river neglect,” he said. Davis also spoke to delegates at the AARP national convention--as Simon had Thursday--before signing bills benefiting seniors.

Simon’s attempt to talk about issues other than his business background has been stymied for several months amid a series of distractions, including his refusal for months to release his tax returns. On Friday, he moved to put that, like the verdict, behind him.

After obtaining extensions for filing his 2001 tax returns, he allowed reporters to review them for the first time Friday. He reported $2.5 million in income and paid $513,004 in federal taxes and $66,135 in California taxes.

Simon’s income included wages of $634,817 from William E. Simon & Sons, $1.2 million in interest on investments and $503,692 in dividends. His net capital gains were just over $1 million.

When Simon released an earlier batch of tax records in July, the state returns for 1995 were missing. Russo, his campaign strategist, said the candidate’s only remaining copy had apparently been lost in transit between William E. Simon & Sons and a storage facility.

“We don’t know if it got mixed in with somebody else’s boxes, or it fell off a truck, or what,” he said.

The state, in the regular course of business, has destroyed its copy of Simon’s 1995 returns, he said. At any rate, “there was nothing of any consequence” in the tax returns, he said.

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Times staff writer Mark Z. Barabak contributed to this report.