Press Room: Press Release
Los Angeles Times Focuses on Recall of Gray Davis
Target of Anger
Recall backers are critical of Gov. Davis' fund-raising, attack ads, and response to the budget and power crises.
By Peter Nicholas and Jeffrey L. Rabin
Times Staff Writers
August 31, 2003
The California recall campaign took root on a day best remembered for something else.
On Feb. 1, Ted Costa was keeping to his Saturday routine. He went outside to feed the small flock of chickens he raises on his one-acre property near Sacramento, then back in to switch on Fox News.
The financial show he was expecting had been preempted by reports that the space shuttle was lost. Costa began watching.
The phone rang — a friend from Bakersfield talking about an idea they had been kicking around for months: pushing the governor out of office.
The head of a conservative, anti-tax group, the 62-year-old Costa pulled up to the home computer he had built himself with parts purchased from Fry's. Glancing over his shoulder from time to time at the shuttle coverage, he tapped out a one-page, double-spaced recall petition. By the time television announcers confirmed that Columbia had disintegrated, he was finished, ready to submit a document that would upend the political order in California.
In its infancy the movement was propelled by the accusation that Gov. Gray Davis had mismanaged the state's finances and concealed the true dimensions of the problem when he ran for reelection last fall.
But the recall soon morphed into something broader — an expression of deeper misgivings about the governor and grievances toward the state's political leadership.
In Davis, the recall forces found a vulnerable target.
He is widely seen as an indecisive leader who stumbled badly in the two major tests of his tenure: the energy shortage and the budget crunch. Through both crises, Davis made time to raise campaign money at a record pace, much of it from donors who stood to profit from his actions. And after nearly five years in power the governor is associated as much with his vitriolic campaign ads as any of the health and education initiatives he has embraced.
Yet the slashing campaigner is proudly bland and somewhat aloof. For all his success in politics, Davis, 60, has never built much of a rapport with the electorate or a relationship with colleagues whose backing he now needs.
Forty-seven states faced major budget shortfalls this year, and polls show widespread voter anger toward governors, legislators and state officials alike. But only California has a recall on the ballot.
That has as much to do with the peculiarities of California law as it does with Davis.
A California governor can be recalled because voters think he stole money or because they don't like the way he combs his hair.
While 18 states permit the recall of elected officials, seven demand specific grounds, such as incompetence, malfeasance, corruption or neglect of duties, according to the National Conference of State Legislatures.
In California, there is no standard. What's more, California requires petition signatures from only 12% of the number of people who voted in the last statewide election — the lowest threshold of any state.
Introduced in the early 20th century by Progressive Gov. Hiram Johnson, the recall was seen as an exercise in direct democracy. If people wanted the governor out, they didn't need to wait until the next election, nor did they need to prove high crimes and misdemeanors.
As with any political controversy, the recall has more than one side.
Davis dismisses it as a Republican power grab with parallels in the 2000 presidential election and the redistricting fight in Texas.
Opponents in both parties condemn it as a dangerous precedent that could trigger fresh attempts to boot politicians prematurely — an unwarranted effort to unseat a duly elected governor.
But architects of the recall present a case against Davis that hinges on four broad themes: lack of leadership, bungling of the state's finances, excessive fund-raising and negative campaigning.
The energy crisis was complex, but many blame Davis for not acting sooner.
Leadership
It was December 2000, and former Secretary of State Warren Christopher was lecturing Gray Davis about how to be a leader. The two men were huddled with utility executives and state legislators in the Capitol's Ronald Reagan conference room, trying to map out a strategy to deal with the first crisis of the Davis administration, the destabilizing power shortage.
Conditions were so bad that the state shut off the lights on the official Christmas tree half an hour after Davis had ceremoniously turned them on.
Christopher, a member of Southern California Edison's board, spoke to Davis about the need to be decisive. To illustrate just where the buck stopped, state Senate leader John Burton (D-San Francisco) took out a dollar bill and tossed it near Davis.
But the message didn't take.
The governor noted happily that the bill actually landed closer to one of the utility executives.
The reasons for the electricity shortage are complex, and investigators eventually concluded that power companies had manipulated a flawed system adopted by Davis' predecessor, Gov. Pete Wilson.
But Davis has repeatedly been faulted for not acting quickly enough. In particular, he vowed for months not to raise rates, delaying the politically unpopular step that many argued could have lessened the severity and overall cost of the crisis.
While Davis urged federal intervention and railed against the energy companies, one utility filed for bankruptcy, another teetered on the brink and hundreds of thousands of people endured rolling blackouts.
Some who have worked with the governor said his response to the power crisis reflects a fear of alienating key constituencies and a reluctance to veer too far from the broad consensus.
"If you're leading, it means that you're out making decisions and taking risks," said Roderick Wright, a Democratic assemblyman from 1996 until 2002. "And those are things that people may or may not like. Gray attempts in his politics not to do things that people may not like."
Wright added: "When you're risk-averse, you postpone particularly difficult decisions until the eleventh hour and hope that things resolve themselves and you don't have to do anything. That's the energy crisis in a nutshell."
In describing his strategy at the time, Davis said he was wisely opting for an "incremental, cautious approach" and warned that "bold, decisive strokes sometimes backfire."
But the governor's strategy itself backfired, fixing in many people's minds the sense of weak leadership that persists nearly three years later.
As Davis points out, widespread blackouts were averted, the utilities regained their footing and inquiries revealed that Enron and others bore much of the blame for creating false shortages. Yet, likely voters who want Davis recalled offered energy as the No. 2 reason in a Los Angeles Times poll taken earlier this month.
With his job at stake, Davis for the first time is accepting some measure of blame.
"I know many of you feel that I was too slow to act during the energy crisis," he said in a recent speech to supporters at UCLA. "I got your message, and I accept that criticism."
The power crisis weakened him just as he pivoted to an even more serious one, the foundering economy.
"The beginning of Gray Davis' unraveling was the energy crisis," said Garry South, one of his top advisors. "His numbers started to collapse."
In the spring of 2000, before the energy crisis, voters had a generally favorable opinion of Davis, though the governor's own focus groups revealed that people knew little about what he had accomplished after more than a year in office.
By the fall of 2002, South said, focus groups showed that voters still knew little — save for the electricity debacle.
"The energy crisis was the political equivalent of autoimmune disease. It destroyed his credibility," South said. "It destroyed his standing with the voters in the sense they weren't willing to give him the benefit of the doubt for anything that came afterward and, frankly, for anything that came before."
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A key fiscal truth is borne out: In the end the governor gets the credit or blame.
The Budget
In a state with 28 million cars and trucks, taxing vehicles is hardly popular. As debate swirled late last year over whether to restore the car tax to its 1998 levels and generate billions needed to plug the state's fiscal hole, Gray Davis was steadfastly opposed. He pointedly left the tax unchanged in his January budget. The following month, he angered Assembly Democrats by saying he would veto spending cuts linked to a car tax increase.
Then in March, the governor's top fiscal aide said the administration didn't have a choice: When revenue dropped low enough, state law would trigger a tripling of the tax. By June, the Davis administration had issued an order boosting the car tax to the tune of $4.2 billion.
Republicans dubbed it "immaculate taxation" — a ploy to bypass the requirement that the Legislature approve new taxes by a two-thirds vote. They are challenging it in court.
In the end, the increase proved an important step in plugging the $38-billion budget gap. But it also gave ammunition to those seeking to drive Davis out of office.
"He's the guy at the top," said Dave Gilliard, chief strategist for one of the main recall groups, Rescue California. "And if he showed leadership or had a plan or a roadmap to get us out of the mess, people would be forgiving."
When it became clear that the average driver would pay an extra $158 a year, Gilliard ordered 5,000 signs reading, "Mad about the car tax? Sign here to recall Gov. Gray Davis." People began lining up to sign petitions.
The car tax episode typified the budget battles that raged in the Legislature as the dot-com economy collapsed and California failed to live within its means. It also illustrated a central truth of the budget wars: The governor runs the state and, in the end, the credit or blame falls on him.
Over the past two years the state set two dubious fiscal records: the size of its shortfall and the delays in passing a budget. Davis points to a flagging national economy and Republican intransigence about tax increases as the culprits.
But voters do not seem swayed. The Times poll found that 23% of those who said they were likely to vote to recall Davis cited the budget as a prime reason — either because of the impasses in Sacramento, the size of the shortfall or suspicions that the governor masked the truth about state finances when he was up for reelection last fall.
"Gray Davis created these problems in Sacramento, he covered them up to win reelection and, having been reelected, he presented no solution to them," said Jonathan Wilcox, who worked with U.S. Rep. Darrell Issa (R-Vista) in the effort to get the recall on the ballot. "Frankly, people were fed up."
During Davis' tenure the state has moved from healthy surpluses to deep deficits. The governor, joined by bipartisan majorities in the Legislature, ramped up spending when times were flush.
In some cases Davis had no choice. Much of the added spending was mandated by voters — a ballot initiative passed 15 years ago, for example, requires that as state revenues rise, more than 40% of the additional money go to public schools. Other spending is a federal requirement: health care for the poor, for example.
Still, when the stock market bubble burst, the economy lapsed into recession and state tax revenue plummeted, the governor and legislators moved slowly to tamp down spending.
To close the multibillion-dollar shortfall last year, state officials relied on borrowing and creative accounting. They made erroneous assumptions about future revenue and ignored signs of a weakening economy. Ultimately, last year's budget was adopted 67 days late.
"It is not a perfect document," the governor said when he signed it.
With the election then just two months away, he sidestepped questions about the future. "I have no expectations one way or another," he said when asked about the year ahead. "I think it's absolutely foolhardy to talk about next year's budget until we get through all the spending implications of this year."
On Nov. 5, Davis was reelected. Nine days later, the state's legislative analyst reported that California faced a $21-billion budget gap. The following month, Davis announced that the shortfall was approaching $35 billion.
Davis has dismissed suggestions that he knew while running for reelection that the problem was worse than he was saying.
Some recall supporters are not convinced. "One of the primary points we were making was that this is a budget crisis without precedent and that information was hidden from us," said Howard Kaloogian, a former Republican assemblyman who headed one recall committee.
The recall itself complicated budget negotiations this year. Davis proposed a balanced budget, but lacking strong allies in the Legislature, he was unable to advance it. Lawmakers sparred over whether to close the gap by raising taxes or cutting spending. Once again, there were delays, missed deadlines and squabbling.
In July, Standard & Poor's dropped the state's bond rating to near junk status, the lowest in the nation. The downgrade will cost taxpayers hundreds of millions of dollars more in interest.
On Aug. 2, Davis signed a budget that narrowed the gap through a mix of borrowing, spending cuts and increased fees that were especially painful for students at public colleges and universities. Because the solutions did not address the fundamental gap between the money the state takes in and what it spends, there is at least an $8-billion hole in next year's budget.
Davis' prowess at getting donations, what he sees as prudent, becomes a liability.
Fund-Raising
During his first term as governor, Gray Davis averaged about $1.5 million a month in campaign contributions, shattering state records.
Davis viewed it as the best protection against losing.
Now his fund-raising talent is an oft-cited argument for his ouster.
Davis took in $70 million and plowed the bulk of it into his reelection drive. He raised money as the state was battling budget and power crises. He courted donors while traveling outside California on official business. He took from Enron, WorldCom, Adelphia and others implicated in the corporate scandals. His donors read like a who's who of those with business before the state.
Davis has defended his fund-raising as necessary to ward off rich rivals who can bankroll their own campaigns. He's been there before. In the 1998 Democratic primary for governor, Al Checchi, the ex-Northwest Airlines executive, spent $30 million on a losing campaign. Davis was so short of funds he sweated a small purchase of radio ads.
Running for reelection last year, the governor had millions in the bank, but his two potential GOP opponents — businessman Bill Simon Jr. and former Los Angeles Mayor Richard Riordan — each boasted personal fortunes.
"He's known from Day One that he would be facing a very well financed millionaire opponent," said Steve Maviglio, the governor's spokesman. "That's the type of person who can afford to run for office in California right now. The governor lives in a 1,000-square-foot condo. He has just the 20 years of salary in public service. And so part of his time has to be dedicated to raising funds."
The concerns have centered on just how much time, and on the potential for putting contributors' interests ahead of the state's.
In his first term, Davis often coupled fund-raisers with public appearances, stopping to collect campaign funds no matter what business was pending in Sacramento.
A few months after 9/11, Davis flew to Washington, D.C., to meet with Homeland Security Director Tom Ridge and ask for federal help in covering the state's extra security costs. In town for just 24 hours, Davis picked up $422,000 at a union fund-raiser.
The governor took time out from a lengthy budget standoff in Sacramento last August to go on a fund-raising swing through Austin, Texas, netting $150,000. He left town again that month to attend a conference of Democratic governors in San Francisco, where he plotted election strategy and collected a $200,000 donation.
Amid the power crisis in March 2001, Davis went to a Palm Desert country club to raise more than $100,000 from the health-care industry. That same day, lawmakers were back in the capital struggling to pass energy legislation that Davis had sought.
On Valentine's Day last year, he used his Capitol office to solicit a $1-million campaign contribution from the California Teachers Assn. during a private conversation with union officials about policy.
"There's something broke," said recall organizer Costa. "Policy is being articulated by people who put money into the political arena, and that's a no-no."
State Sen. John Vasconcellos, a Democrat who has served in the Legislature longer than any other current member, said the governor's fund-raising practices "hurt him a lot. It gave a strong impression that he spends most of his time raising money. And that's not a healthy impression."
Vasconcellos, though, portrayed the system as inherently flawed. It happens routinely in U.S. politics: Donors with interests before the state give to politicians with the power to advance those interests.
"The system is corrupting by the way it's constructed," he said. Davis "was a victim of it as well as a perpetrator of it. It's awful."
The governor receives money from individuals and groups who have an agenda and want his favor, be they state employees or trial lawyers or environmentalists.
He has consistently denied that he rewards contributors in return for donations.
"There is not a major supporter of mine who has not had at least one or two of their measures vetoed," Davis said in 2001. "I take each issue as it comes. If you look at the whole history of what I've done, you won't find a single person — business, labor, the environmental community, the consumer community — that can't point to several successes and several failures. That's the way I intend to govern."
There were times he disappointed donors. Early in his first term, he called for merit-based pay for teachers, angering the California Teachers Assn., one of his major contributors. He vetoed legislation in 2000 that would have given tax breaks to WorldCom, a campaign donor. But he's also made decisions that helped contributors. In some cases, those policies proved costly to taxpayers.
The prison guards union, which has donated to many officials, gave Davis a total of $1.4 million during his first term. Last year he collected $251,000 from the union just weeks after he signed legislation that gave the guards raises worth about $1 billion. It was the biggest check Davis had received since taking office three years before.
Demonizing foes leads to victory but makes him even less popular.
Negative campaigning
The grainy footage of Richard Riordan was 11 years old, but the message was explosive. The man vying for the Republican gubernatorial nomination was shown on a cable talk show equating abortion with murder.
Riordan was doomed. He was forced to counter the broadcast by speaking repeatedly in support of abortion rights, thus alienating conservative voters. And he couldn't win back more moderate Republicans who no longer trusted him.
The $10-million ad campaign was bankrolled by Democrat Gray Davis, a successful foray into the other party's primary to weaken a candidate who would have posed a serious threat in the general election.
The tactic helped a more conservative candidate, Bill Simon Jr., defeat Riordan. But it was part of a blistering campaign strategy that left even some Davis sympathizers disillusioned.
Turnout was the lowest in state history, and exit polls showed that six in 10 people who voted disliked both Davis and Simon.
"One of the reasons we're in this place is that campaign," said Ben Austin, a Democratic political operative who is close to Riordan but now working against the recall.
Pointing to the money Davis spent on the campaign, Austin added: "If he had spent some of that $70 million in explaining to voters what he believed in, or engaging in a public policy debate about the future, voters would have walked away liking him. Even as a political junkie, I couldn't watch it. It was like a 'Seinfeld' episode: It was about nothing."
Some Davis associates said he had little choice.
"The circumstances were to get someone who is unpopular elected," said Phil Trounstine, Davis' former communications director. "What happened is they ran a negative campaign. You become unpopular when you do, but you defeat the other guy."
The governor considered a more affirmative message, going so far as preparing a series of ads laying out his record on the environment, health care and other issues, South said.
"Most of those didn't see the light of day," South said. "They didn't pass muster in focus groups. People didn't believe it."
Opponents of the recall are working to draw attention to Davis' accomplishments. Student test scores have risen under his watch. He signed family leave legislation that extends disability payments to people who leave work to care for newborns or sick family members. He pushed coastal protections, gun control measures and global warming initiatives meant to ratchet down the greenhouse gas emissions pumped into the air from cars.
But much of that remains eclipsed by the 2002 campaign, a race largely remembered for its rancor.
That is not out of the ordinary for Davis, a politician who has compiled a remarkable record of electoral success, winning five statewide contests over two decades.
In his unsuccessful bid for a U.S. Senate seat in 1992, Davis likened his opponent Dianne Feinstein to the convicted tax cheat and hotel queen Leona Helmsley.
Then state controller, Davis ran ads showing Feinstein and Helmsley side by side, equating Helmsley's crimes with a state lawsuit accusing Feinstein of improperly reporting more than $8 million in campaign donations from her 1990 gubernatorial bid.
"Helmsley is in jail. Feinstein wants to be senator?" the announcer said in the ad.
Kam Kuwata, then Feinstein's campaign manager and a former Davis consultant, at the time called him a "cheap, sleazy politician."
Former Assemblyman Wright has known Davis since they both worked for former Los Angeles Mayor Tom Bradley in the early 1970s. "Gray's politics have never been the politics of making you like him," Wright said.
"What Gray's politics have always been is, 'I'm going to make you not like the other guy and I'm going to emerge as the lesser of the evils — not the positive of the group — but the lesser of the evils."
Awaiting Judgment
For the first time, Gray Davis has no opponent. The recall is a referendum on the man.
In the crowded field vying to succeed him, many are offering reasons for voters to turn Davis out.
State Sen. Tom McClintock is hammering Davis on state finances, Arnold Schwarzenegger says the governor has mortgaged the state to special interests, and Peter V. Ueberroth calls the recall effort a mandate for change. Even Lt. Gov. Cruz Bustamante, the only prominent Democratic candidate and an opponent of the recall, has obliquely accused Davis of arrogance as a leader.
Their criticisms resonate with voters. In the Times poll, more than half said they strongly disapproved of the way Davis was doing his job, and an additional 20% disapproved somewhat.
Lacking popular support, Davis has focused his message on condemning the recall as illegitimate. However much people dislike him, he argues, nothing he has done justifies overturning last year's election.
That is the argument most commonly cited by those who plan to vote no. Even groups most enthusiastically embracing Davis' cause, like labor, do not often speak about him with warmth, or even sympathy.
In recent days, as the governor has attempted to be more outgoing, poking fun at himself and joking about an ancient fling with Cybill Shepherd, he has acknowledged that he is not a charismatic figure.
"I would love everyone to love me," the governor said last week. "If you ask me if I'm Bill Clinton, I'm not.... At the end of the day, I think what people really care about is: Did you do your job, did you keep your promises?"
The state's Democratic establishment is scarcely more supportive than are voters. Though he is a career Sacramento insider, the governor is on the iciest of terms with political leaders whose support he now needs.
Early in his first term, Davis, a former assemblyman, alienated lawmakers by saying the Legislature's job was to "implement my vision." Just after the recall effort had qualified for the ballot, Democratic state Atty. Gen. Bill Lockyer cautioned Davis to run a positive campaign, denouncing his penchant for "puke politics." Davis fought to keep a Democrat off the ballot in hopes of dampening the recall's appeal, but his own lieutenant governor defied him.
"Gray has never been one to go bowling with the guys after the session," said San Francisco Mayor Willie Brown, a former Assembly speaker.
Nor has Davis shared his campaign riches, as is often done.
"There's a perception among a number of my colleagues that he's rarely been helpful in the past — helpful in either promoting their public policy or political goals," said Los Angeles City Councilman Antonio Villaraigosa, also a former Assembly speaker.
Davis' detachment has proved costly.
"There's no reserve of goodwill you can call upon to help," said Assemblyman Joe Canciamilla, a Democrat from the Bay Area city of Pittsburg. "He either has political allies or foes — and neither is reliable when it comes to a crisis."
Several people who know Davis well describe his style as "transactional," making him dependent on friendships based on expediency that can dissolve in the face of trouble.
"It is in the fundamental nature of Gray Davis to stand alone," said Darry Sragow, a Democratic political consultant.
"With his career on the line, you might expect people in his situation to go to key players in the Legislature and say, 'You know what? I screwed up. And I'm in a real fix here. I need your help. I can't do this without you. If you'll stand by me at this crucial time and help me through this, I'll always remember you and take care of you and return the favor,' " Sragow said.
"Even now he doesn't do that. He stands alone."
Copyright: Los Angeles Times www.LATimes.com
# # #
Los Angeles Times Focuses on Recall of Gray Davis
Target of Anger
Recall backers are critical of Gov. Davis' fund-raising, attack ads, and response to the budget and power crises.
By Peter Nicholas and Jeffrey L. Rabin
Times Staff Writers
August 31, 2003
The California recall campaign took root on a day best remembered for something else.
On Feb. 1, Ted Costa was keeping to his Saturday routine. He went outside to feed the small flock of chickens he raises on his one-acre property near Sacramento, then back in to switch on Fox News.
The financial show he was expecting had been preempted by reports that the space shuttle was lost. Costa began watching.
The phone rang — a friend from Bakersfield talking about an idea they had been kicking around for months: pushing the governor out of office.
The head of a conservative, anti-tax group, the 62-year-old Costa pulled up to the home computer he had built himself with parts purchased from Fry's. Glancing over his shoulder from time to time at the shuttle coverage, he tapped out a one-page, double-spaced recall petition. By the time television announcers confirmed that Columbia had disintegrated, he was finished, ready to submit a document that would upend the political order in California.
In its infancy the movement was propelled by the accusation that Gov. Gray Davis had mismanaged the state's finances and concealed the true dimensions of the problem when he ran for reelection last fall.
But the recall soon morphed into something broader — an expression of deeper misgivings about the governor and grievances toward the state's political leadership.
In Davis, the recall forces found a vulnerable target.
He is widely seen as an indecisive leader who stumbled badly in the two major tests of his tenure: the energy shortage and the budget crunch. Through both crises, Davis made time to raise campaign money at a record pace, much of it from donors who stood to profit from his actions. And after nearly five years in power the governor is associated as much with his vitriolic campaign ads as any of the health and education initiatives he has embraced.
Yet the slashing campaigner is proudly bland and somewhat aloof. For all his success in politics, Davis, 60, has never built much of a rapport with the electorate or a relationship with colleagues whose backing he now needs.
Forty-seven states faced major budget shortfalls this year, and polls show widespread voter anger toward governors, legislators and state officials alike. But only California has a recall on the ballot.
That has as much to do with the peculiarities of California law as it does with Davis.
A California governor can be recalled because voters think he stole money or because they don't like the way he combs his hair.
While 18 states permit the recall of elected officials, seven demand specific grounds, such as incompetence, malfeasance, corruption or neglect of duties, according to the National Conference of State Legislatures.
In California, there is no standard. What's more, California requires petition signatures from only 12% of the number of people who voted in the last statewide election — the lowest threshold of any state.
Introduced in the early 20th century by Progressive Gov. Hiram Johnson, the recall was seen as an exercise in direct democracy. If people wanted the governor out, they didn't need to wait until the next election, nor did they need to prove high crimes and misdemeanors.
As with any political controversy, the recall has more than one side.
Davis dismisses it as a Republican power grab with parallels in the 2000 presidential election and the redistricting fight in Texas.
Opponents in both parties condemn it as a dangerous precedent that could trigger fresh attempts to boot politicians prematurely — an unwarranted effort to unseat a duly elected governor.
But architects of the recall present a case against Davis that hinges on four broad themes: lack of leadership, bungling of the state's finances, excessive fund-raising and negative campaigning.
The energy crisis was complex, but many blame Davis for not acting sooner.
Leadership
It was December 2000, and former Secretary of State Warren Christopher was lecturing Gray Davis about how to be a leader. The two men were huddled with utility executives and state legislators in the Capitol's Ronald Reagan conference room, trying to map out a strategy to deal with the first crisis of the Davis administration, the destabilizing power shortage.
Conditions were so bad that the state shut off the lights on the official Christmas tree half an hour after Davis had ceremoniously turned them on.
Christopher, a member of Southern California Edison's board, spoke to Davis about the need to be decisive. To illustrate just where the buck stopped, state Senate leader John Burton (D-San Francisco) took out a dollar bill and tossed it near Davis.
But the message didn't take.
The governor noted happily that the bill actually landed closer to one of the utility executives.
The reasons for the electricity shortage are complex, and investigators eventually concluded that power companies had manipulated a flawed system adopted by Davis' predecessor, Gov. Pete Wilson.
But Davis has repeatedly been faulted for not acting quickly enough. In particular, he vowed for months not to raise rates, delaying the politically unpopular step that many argued could have lessened the severity and overall cost of the crisis.
While Davis urged federal intervention and railed against the energy companies, one utility filed for bankruptcy, another teetered on the brink and hundreds of thousands of people endured rolling blackouts.
Some who have worked with the governor said his response to the power crisis reflects a fear of alienating key constituencies and a reluctance to veer too far from the broad consensus.
"If you're leading, it means that you're out making decisions and taking risks," said Roderick Wright, a Democratic assemblyman from 1996 until 2002. "And those are things that people may or may not like. Gray attempts in his politics not to do things that people may not like."
Wright added: "When you're risk-averse, you postpone particularly difficult decisions until the eleventh hour and hope that things resolve themselves and you don't have to do anything. That's the energy crisis in a nutshell."
In describing his strategy at the time, Davis said he was wisely opting for an "incremental, cautious approach" and warned that "bold, decisive strokes sometimes backfire."
But the governor's strategy itself backfired, fixing in many people's minds the sense of weak leadership that persists nearly three years later.
As Davis points out, widespread blackouts were averted, the utilities regained their footing and inquiries revealed that Enron and others bore much of the blame for creating false shortages. Yet, likely voters who want Davis recalled offered energy as the No. 2 reason in a Los Angeles Times poll taken earlier this month.
With his job at stake, Davis for the first time is accepting some measure of blame.
"I know many of you feel that I was too slow to act during the energy crisis," he said in a recent speech to supporters at UCLA. "I got your message, and I accept that criticism."
The power crisis weakened him just as he pivoted to an even more serious one, the foundering economy.
"The beginning of Gray Davis' unraveling was the energy crisis," said Garry South, one of his top advisors. "His numbers started to collapse."
In the spring of 2000, before the energy crisis, voters had a generally favorable opinion of Davis, though the governor's own focus groups revealed that people knew little about what he had accomplished after more than a year in office.
By the fall of 2002, South said, focus groups showed that voters still knew little — save for the electricity debacle.
"The energy crisis was the political equivalent of autoimmune disease. It destroyed his credibility," South said. "It destroyed his standing with the voters in the sense they weren't willing to give him the benefit of the doubt for anything that came afterward and, frankly, for anything that came before."
___
A key fiscal truth is borne out: In the end the governor gets the credit or blame.
The Budget
In a state with 28 million cars and trucks, taxing vehicles is hardly popular. As debate swirled late last year over whether to restore the car tax to its 1998 levels and generate billions needed to plug the state's fiscal hole, Gray Davis was steadfastly opposed. He pointedly left the tax unchanged in his January budget. The following month, he angered Assembly Democrats by saying he would veto spending cuts linked to a car tax increase.
Then in March, the governor's top fiscal aide said the administration didn't have a choice: When revenue dropped low enough, state law would trigger a tripling of the tax. By June, the Davis administration had issued an order boosting the car tax to the tune of $4.2 billion.
Republicans dubbed it "immaculate taxation" — a ploy to bypass the requirement that the Legislature approve new taxes by a two-thirds vote. They are challenging it in court.
In the end, the increase proved an important step in plugging the $38-billion budget gap. But it also gave ammunition to those seeking to drive Davis out of office.
"He's the guy at the top," said Dave Gilliard, chief strategist for one of the main recall groups, Rescue California. "And if he showed leadership or had a plan or a roadmap to get us out of the mess, people would be forgiving."
When it became clear that the average driver would pay an extra $158 a year, Gilliard ordered 5,000 signs reading, "Mad about the car tax? Sign here to recall Gov. Gray Davis." People began lining up to sign petitions.
The car tax episode typified the budget battles that raged in the Legislature as the dot-com economy collapsed and California failed to live within its means. It also illustrated a central truth of the budget wars: The governor runs the state and, in the end, the credit or blame falls on him.
Over the past two years the state set two dubious fiscal records: the size of its shortfall and the delays in passing a budget. Davis points to a flagging national economy and Republican intransigence about tax increases as the culprits.
But voters do not seem swayed. The Times poll found that 23% of those who said they were likely to vote to recall Davis cited the budget as a prime reason — either because of the impasses in Sacramento, the size of the shortfall or suspicions that the governor masked the truth about state finances when he was up for reelection last fall.
"Gray Davis created these problems in Sacramento, he covered them up to win reelection and, having been reelected, he presented no solution to them," said Jonathan Wilcox, who worked with U.S. Rep. Darrell Issa (R-Vista) in the effort to get the recall on the ballot. "Frankly, people were fed up."
During Davis' tenure the state has moved from healthy surpluses to deep deficits. The governor, joined by bipartisan majorities in the Legislature, ramped up spending when times were flush.
In some cases Davis had no choice. Much of the added spending was mandated by voters — a ballot initiative passed 15 years ago, for example, requires that as state revenues rise, more than 40% of the additional money go to public schools. Other spending is a federal requirement: health care for the poor, for example.
Still, when the stock market bubble burst, the economy lapsed into recession and state tax revenue plummeted, the governor and legislators moved slowly to tamp down spending.
To close the multibillion-dollar shortfall last year, state officials relied on borrowing and creative accounting. They made erroneous assumptions about future revenue and ignored signs of a weakening economy. Ultimately, last year's budget was adopted 67 days late.
"It is not a perfect document," the governor said when he signed it.
With the election then just two months away, he sidestepped questions about the future. "I have no expectations one way or another," he said when asked about the year ahead. "I think it's absolutely foolhardy to talk about next year's budget until we get through all the spending implications of this year."
On Nov. 5, Davis was reelected. Nine days later, the state's legislative analyst reported that California faced a $21-billion budget gap. The following month, Davis announced that the shortfall was approaching $35 billion.
Davis has dismissed suggestions that he knew while running for reelection that the problem was worse than he was saying.
Some recall supporters are not convinced. "One of the primary points we were making was that this is a budget crisis without precedent and that information was hidden from us," said Howard Kaloogian, a former Republican assemblyman who headed one recall committee.
The recall itself complicated budget negotiations this year. Davis proposed a balanced budget, but lacking strong allies in the Legislature, he was unable to advance it. Lawmakers sparred over whether to close the gap by raising taxes or cutting spending. Once again, there were delays, missed deadlines and squabbling.
In July, Standard & Poor's dropped the state's bond rating to near junk status, the lowest in the nation. The downgrade will cost taxpayers hundreds of millions of dollars more in interest.
On Aug. 2, Davis signed a budget that narrowed the gap through a mix of borrowing, spending cuts and increased fees that were especially painful for students at public colleges and universities. Because the solutions did not address the fundamental gap between the money the state takes in and what it spends, there is at least an $8-billion hole in next year's budget.
Davis' prowess at getting donations, what he sees as prudent, becomes a liability.
Fund-Raising
During his first term as governor, Gray Davis averaged about $1.5 million a month in campaign contributions, shattering state records.
Davis viewed it as the best protection against losing.
Now his fund-raising talent is an oft-cited argument for his ouster.
Davis took in $70 million and plowed the bulk of it into his reelection drive. He raised money as the state was battling budget and power crises. He courted donors while traveling outside California on official business. He took from Enron, WorldCom, Adelphia and others implicated in the corporate scandals. His donors read like a who's who of those with business before the state.
Davis has defended his fund-raising as necessary to ward off rich rivals who can bankroll their own campaigns. He's been there before. In the 1998 Democratic primary for governor, Al Checchi, the ex-Northwest Airlines executive, spent $30 million on a losing campaign. Davis was so short of funds he sweated a small purchase of radio ads.
Running for reelection last year, the governor had millions in the bank, but his two potential GOP opponents — businessman Bill Simon Jr. and former Los Angeles Mayor Richard Riordan — each boasted personal fortunes.
"He's known from Day One that he would be facing a very well financed millionaire opponent," said Steve Maviglio, the governor's spokesman. "That's the type of person who can afford to run for office in California right now. The governor lives in a 1,000-square-foot condo. He has just the 20 years of salary in public service. And so part of his time has to be dedicated to raising funds."
The concerns have centered on just how much time, and on the potential for putting contributors' interests ahead of the state's.
In his first term, Davis often coupled fund-raisers with public appearances, stopping to collect campaign funds no matter what business was pending in Sacramento.
A few months after 9/11, Davis flew to Washington, D.C., to meet with Homeland Security Director Tom Ridge and ask for federal help in covering the state's extra security costs. In town for just 24 hours, Davis picked up $422,000 at a union fund-raiser.
The governor took time out from a lengthy budget standoff in Sacramento last August to go on a fund-raising swing through Austin, Texas, netting $150,000. He left town again that month to attend a conference of Democratic governors in San Francisco, where he plotted election strategy and collected a $200,000 donation.
Amid the power crisis in March 2001, Davis went to a Palm Desert country club to raise more than $100,000 from the health-care industry. That same day, lawmakers were back in the capital struggling to pass energy legislation that Davis had sought.
On Valentine's Day last year, he used his Capitol office to solicit a $1-million campaign contribution from the California Teachers Assn. during a private conversation with union officials about policy.
"There's something broke," said recall organizer Costa. "Policy is being articulated by people who put money into the political arena, and that's a no-no."
State Sen. John Vasconcellos, a Democrat who has served in the Legislature longer than any other current member, said the governor's fund-raising practices "hurt him a lot. It gave a strong impression that he spends most of his time raising money. And that's not a healthy impression."
Vasconcellos, though, portrayed the system as inherently flawed. It happens routinely in U.S. politics: Donors with interests before the state give to politicians with the power to advance those interests.
"The system is corrupting by the way it's constructed," he said. Davis "was a victim of it as well as a perpetrator of it. It's awful."
The governor receives money from individuals and groups who have an agenda and want his favor, be they state employees or trial lawyers or environmentalists.
He has consistently denied that he rewards contributors in return for donations.
"There is not a major supporter of mine who has not had at least one or two of their measures vetoed," Davis said in 2001. "I take each issue as it comes. If you look at the whole history of what I've done, you won't find a single person — business, labor, the environmental community, the consumer community — that can't point to several successes and several failures. That's the way I intend to govern."
There were times he disappointed donors. Early in his first term, he called for merit-based pay for teachers, angering the California Teachers Assn., one of his major contributors. He vetoed legislation in 2000 that would have given tax breaks to WorldCom, a campaign donor. But he's also made decisions that helped contributors. In some cases, those policies proved costly to taxpayers.
The prison guards union, which has donated to many officials, gave Davis a total of $1.4 million during his first term. Last year he collected $251,000 from the union just weeks after he signed legislation that gave the guards raises worth about $1 billion. It was the biggest check Davis had received since taking office three years before.
Demonizing foes leads to victory but makes him even less popular.
Negative campaigning
The grainy footage of Richard Riordan was 11 years old, but the message was explosive. The man vying for the Republican gubernatorial nomination was shown on a cable talk show equating abortion with murder.
Riordan was doomed. He was forced to counter the broadcast by speaking repeatedly in support of abortion rights, thus alienating conservative voters. And he couldn't win back more moderate Republicans who no longer trusted him.
The $10-million ad campaign was bankrolled by Democrat Gray Davis, a successful foray into the other party's primary to weaken a candidate who would have posed a serious threat in the general election.
The tactic helped a more conservative candidate, Bill Simon Jr., defeat Riordan. But it was part of a blistering campaign strategy that left even some Davis sympathizers disillusioned.
Turnout was the lowest in state history, and exit polls showed that six in 10 people who voted disliked both Davis and Simon.
"One of the reasons we're in this place is that campaign," said Ben Austin, a Democratic political operative who is close to Riordan but now working against the recall.
Pointing to the money Davis spent on the campaign, Austin added: "If he had spent some of that $70 million in explaining to voters what he believed in, or engaging in a public policy debate about the future, voters would have walked away liking him. Even as a political junkie, I couldn't watch it. It was like a 'Seinfeld' episode: It was about nothing."
Some Davis associates said he had little choice.
"The circumstances were to get someone who is unpopular elected," said Phil Trounstine, Davis' former communications director. "What happened is they ran a negative campaign. You become unpopular when you do, but you defeat the other guy."
The governor considered a more affirmative message, going so far as preparing a series of ads laying out his record on the environment, health care and other issues, South said.
"Most of those didn't see the light of day," South said. "They didn't pass muster in focus groups. People didn't believe it."
Opponents of the recall are working to draw attention to Davis' accomplishments. Student test scores have risen under his watch. He signed family leave legislation that extends disability payments to people who leave work to care for newborns or sick family members. He pushed coastal protections, gun control measures and global warming initiatives meant to ratchet down the greenhouse gas emissions pumped into the air from cars.
But much of that remains eclipsed by the 2002 campaign, a race largely remembered for its rancor.
That is not out of the ordinary for Davis, a politician who has compiled a remarkable record of electoral success, winning five statewide contests over two decades.
In his unsuccessful bid for a U.S. Senate seat in 1992, Davis likened his opponent Dianne Feinstein to the convicted tax cheat and hotel queen Leona Helmsley.
Then state controller, Davis ran ads showing Feinstein and Helmsley side by side, equating Helmsley's crimes with a state lawsuit accusing Feinstein of improperly reporting more than $8 million in campaign donations from her 1990 gubernatorial bid.
"Helmsley is in jail. Feinstein wants to be senator?" the announcer said in the ad.
Kam Kuwata, then Feinstein's campaign manager and a former Davis consultant, at the time called him a "cheap, sleazy politician."
Former Assemblyman Wright has known Davis since they both worked for former Los Angeles Mayor Tom Bradley in the early 1970s. "Gray's politics have never been the politics of making you like him," Wright said.
"What Gray's politics have always been is, 'I'm going to make you not like the other guy and I'm going to emerge as the lesser of the evils — not the positive of the group — but the lesser of the evils."
Awaiting Judgment
For the first time, Gray Davis has no opponent. The recall is a referendum on the man.
In the crowded field vying to succeed him, many are offering reasons for voters to turn Davis out.
State Sen. Tom McClintock is hammering Davis on state finances, Arnold Schwarzenegger says the governor has mortgaged the state to special interests, and Peter V. Ueberroth calls the recall effort a mandate for change. Even Lt. Gov. Cruz Bustamante, the only prominent Democratic candidate and an opponent of the recall, has obliquely accused Davis of arrogance as a leader.
Their criticisms resonate with voters. In the Times poll, more than half said they strongly disapproved of the way Davis was doing his job, and an additional 20% disapproved somewhat.
Lacking popular support, Davis has focused his message on condemning the recall as illegitimate. However much people dislike him, he argues, nothing he has done justifies overturning last year's election.
That is the argument most commonly cited by those who plan to vote no. Even groups most enthusiastically embracing Davis' cause, like labor, do not often speak about him with warmth, or even sympathy.
In recent days, as the governor has attempted to be more outgoing, poking fun at himself and joking about an ancient fling with Cybill Shepherd, he has acknowledged that he is not a charismatic figure.
"I would love everyone to love me," the governor said last week. "If you ask me if I'm Bill Clinton, I'm not.... At the end of the day, I think what people really care about is: Did you do your job, did you keep your promises?"
The state's Democratic establishment is scarcely more supportive than are voters. Though he is a career Sacramento insider, the governor is on the iciest of terms with political leaders whose support he now needs.
Early in his first term, Davis, a former assemblyman, alienated lawmakers by saying the Legislature's job was to "implement my vision." Just after the recall effort had qualified for the ballot, Democratic state Atty. Gen. Bill Lockyer cautioned Davis to run a positive campaign, denouncing his penchant for "puke politics." Davis fought to keep a Democrat off the ballot in hopes of dampening the recall's appeal, but his own lieutenant governor defied him.
"Gray has never been one to go bowling with the guys after the session," said San Francisco Mayor Willie Brown, a former Assembly speaker.
Nor has Davis shared his campaign riches, as is often done.
"There's a perception among a number of my colleagues that he's rarely been helpful in the past — helpful in either promoting their public policy or political goals," said Los Angeles City Councilman Antonio Villaraigosa, also a former Assembly speaker.
Davis' detachment has proved costly.
"There's no reserve of goodwill you can call upon to help," said Assemblyman Joe Canciamilla, a Democrat from the Bay Area city of Pittsburg. "He either has political allies or foes — and neither is reliable when it comes to a crisis."
Several people who know Davis well describe his style as "transactional," making him dependent on friendships based on expediency that can dissolve in the face of trouble.
"It is in the fundamental nature of Gray Davis to stand alone," said Darry Sragow, a Democratic political consultant.
"With his career on the line, you might expect people in his situation to go to key players in the Legislature and say, 'You know what? I screwed up. And I'm in a real fix here. I need your help. I can't do this without you. If you'll stand by me at this crucial time and help me through this, I'll always remember you and take care of you and return the favor,' " Sragow said.
"Even now he doesn't do that. He stands alone."
Copyright: Los Angeles Times www.LATimes.com
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