Viewpoint by Tom Elias: Demo governor bucks for Davis

December 18, 2001

No one tried to sound more ethically pious than Gov. Gray Davis amid the state's energy crisis of last spring. Even as he had to fire some aides for their own ethical lapses, he assiduously tried to maintain his own air of purity.

But it turns out that while the governor was returning money through the front door to power generators and utility companies who contributed before the crisis struck in earnest one year ago, he was accepting some of their cash through the back way.

That's the meaning of a recent finance report from the Democratic Governors' Association, a national group designed mainly to work for the election of Democratic governors. What better way to raise money for the DGA than by making Davis chairman, which it did soon after he took office in 1999? Want to generate the big bucks? Make the governor of the nation's biggest state your front man. It's even better when his ability to tap donors is legendary in his home state.


Davis has delivered for his party mates. The governor's group reported taking in $4.2 million in the first half of this year, an increase of 69 percent over what it reaped in the first half of 1999, the latest previous non-election year. One result was that Democrats last month captured two governorships from Republicans, in New Jersey and Virginia.

No one knows precisely where the Democratic governors will opt to spend their money next year. But it's a safe bet plenty will go to "soft-money" campaign advertising for the man who brought in a big chunk of the dough. The governors' association spent $900,000 on the 1998 Davis campaign even before he'd raised a nickel for them.

Here's where the Davis ethnical lapse comes in. Among the contributors to the group he heads were such power generators as Duke Energy, which kicked in $20,000, and Constellation Energy, Morgan Stanley, Calpine and the Williams Cos., which together put more than $45,000 into the pot.

That's peanuts, of course, where California campaign contributions are concerned. And by the time he gets a share of the DGA money, the tobacco and energy portion of what comes to him will be even smaller than it is today. But unless Davis can show that the DGA has somehow devised a way to segregate power company money from its other funds, he will be using cash from the power companies to finance his reelection, no matter what he says about refusing money from companies he called villains in the crisis.

The appearance of possible impropriety goes further: The companies that gave to the Democratic governors' group all have signed contracts to supply power to California, sometimes at prices above today's market rates.

It's the same for the tobacco industry. Davis makes a highly visible practice of refusing tobacco money for his campaigns. But the industry gave $108,000 to the governors' association, including $65,000 from Philip Morris, the bad guy in several state Health Department anti-smoking radio and TV commercials.

Davis, of course, is not alone in such blatant hypocrisy. New Jersey, for example, bans campaign donations from casinos or anyone seeking a gambling license in the state. But casinos contribute to the national governors' groups on both the Republican and Democratic sides. Other states ban insurance company contributions, but those firms also give to the national campaign committees.

It's a time-honored way for politicians to take money from companies, individuals or industry groups without risking a direct taint.

But Davis should be more cautious this year. Emboldened by disclosures of stock deals by Davis aides, Republicans love calling him and his entire administration "ethically challenged." The GOP says ethics will be a major theme of its coming campaign to unseat Davis.

The governor does have a way out, albeit one that might go against his well-known proclivity to gravitate to wherever the money is: He could simply refuse to accept funds from the governors' association or any other group that has taken funds from sources he personally refused to tap.

"If he did that, it would be a lot tougher for us to attack him on ethical grounds," said Republican consultant Arnold Steinberg.

If Davis is smart, that's just what he'll do. But he won't. "There's no ethical worry about taking money from the DGA," says his campaign manager and political adviser, Garry South. "We have followed our self-imposed pledge about not taking money from those companies, but we didn't raise money from them for the DGA. Other governors did that."

Davis, thus, will dare the Republicans to use the indirect tobacco and power generator money against him. Said South, "If that's all they can go after us on, I don't care, I'm fine with it."

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