Davis' Campaign Fund Wizardry the Stuff of Legends

SACRAMENTO, Calif. – Gov. Gray Davis has built a decades-long career in elected office, owing much of his success to an epic ability to raise money.

By doggedly accepting checks from donors across the political spectrum, Davis has collected $56 million for his re-election bid against Republican financier Bill Simon, averaging more than $1.2 million a month since taking office in 1999.

"He has taken it to an art form,'' said Joe Cerrell, a longtime Democratic consultant who ran Davis' first California political campaign, a failed run for state treasurer in 1974.

Spending for the governor's race could break California's own national spending record for a statewide campaign. In Davis' 1998 race, four candidates shelled out a combined $120 million, including $35 million from Davis.

Davis has never been accused of breaking the law, but even supporters and fellow Democrats have become nervous about potential conflicts of interest arising from his thirst for donations.

He's been criticized for acting in favor of large contributors, ranging from a prison guards union to oil refiners. "It's a long and distressing list,'' said Jim Knox, executive director of California Common Cause, a political watchdog group.

The California Correctional Peace Officers Association gave Davis more than $2 million during his 1998 campaign and another $550,000 since July 1. As governor, Davis approved a contract likely to bring union members a 37 percent raise over five years.

Two years ago, a policy board appointed by Davis and previous Republican governors allowed a refinery owned by Tosco Corp. to increase toxic discharges into San Francisco Bay shortly after the company gave Davis $70,500.

In the spring, a legislative committee investigated a $95 million no-bid state contract awarded last year to software giant Oracle Corp. An Oracle lobbyist made a $25,000 contribution to the Davis campaign days after the deal was signed.

Davis is firm and, at times, indignant when asked about what have been dubbed by Simon and reporters as "pay-to-play'' scandals. "It's just not true,'' Davis said, speaking to reporters recently on a private jet paid for by California labor groups to fly him to Labor Day campaign events.

Critics have no evidence Davis has acted improperly, but they wonder how someone who has taken so much money from so many special interests can govern without encountering conflicts of interest.

"When you start raising large amounts of money there is always the possibility of the appearance of an impropriety,'' said Ed Bender, research director for the National Institute on Money in State Politics, based in Helena, Mont.

Through the complaints, however, Davis keeps raising money.

"Gray Davis, in my humble opinion, relishes in it,'' Cerrell said.

Davis also is unabashed and often blunt in his requests, said California Teachers Association president Wayne Johnson.

During a meeting with Davis on education philosophy, Davis "just said, 'Oh by the way, I'm gonna need a million from you guys,''' said Johnson, whose group gave Davis more than $2 million for his 1998 campaign.

Knox said Davis has created an atmosphere in Sacramento in which special interests think they must give money to have any influence.

Not so, Davis said. "People on all sides of virtually every issue have supported my campaign. There is hardly a donor to me that hasn't seen major legislation vetoed.''

Simon's attacks of Davis' fund-raising have gained little ground as Simon has been hampered by his own troubles.

This summer, a jury handed down a $78 million civil fraud verdict against Simon's family investment firm, and the Internal Revenue Service announced it was investigating tax shelters used by the firm. The verdict was tossed out by a Los Angeles judge last week, but the opposing side has said it will appeal.

Simon has been at a financial disadvantage, as Davis had more than six times as much money in the bank on June 30, the end of the last reporting period. On Wednesday, Simon dipped into his personal finances to lend his cash-strapped campaign $4 million. He spent some $5 million of his own money in the primary.

"I think it sends a message to people that we are going to run a good, strong, credible campaign from now until Nov. 5,'' Simon told reporters Wednesday.

But Simon, Davis says, "has no standing to talk on ethics,'' elaborating that Simon's family investment firm was fined by the National Association of Securities Dealers in what was called a "pay-to-play'' case involving municipal bonds in New Jersey.

Davis insisted his fund-raising is separate from governing the state. "I don't care if my best friend is on the opposite side, I want to look back and know I did the right thing.''