GOP Candidates Push for More Business-Friendly State

The Business Journal interviewed the three Republican candidates for governor last week to get their views about the waning days of the campaign and their stands on business and economic issues. The interviews, which were conducted by staff reporter Howard Fine, are presented alphabetically.


Born: Dec. 1949, Coalinga, Calif.

Education: Bachelor of Science degree in agribusiness, California State University, Fresno.

Career: Managed family farm. Volunteered for Richard Nixon's presidential re-election campaign in the Central Valley. Lost initial bid for state Assembly in 1976; won election in 1982, served six two-year terms, becoming minority leader in 1990. Elected Secretary of State in 1994 by 40,000 votes out of 7 million cast; re-elected in close race over Michela Alioto in 1998.

Personal: Married to Maurine Jones; two children: Wendy, 27, Andrea, 24. Lives in Fresno.

Question: This past week you've just begun airing your campaign commercials. Isn't this too little, too late?

Answer: Let me tell you a little story. I ran into Garry South (Davis' chief campaign adviser) at the Rose Parade in Pasadena. He said to me, "By this time in 1998, Al Checchi had been on the airwaves for four months." And then there's Dan Lungren, who spent $40 million in 1998 and lost by 20 points. So I just give you those as a frame of reference.

Secondly, in all the polling, 60 percent of the people are still searching for a candidate. When you're running against people like Bill Simon, who takes his checkbook and writes another million-dollar check to his campaign, you don't raise television ads early in the campaign.

Q: You had some difficulty in raising money, at least compared with your opponents, who have raised more than you have. Why is that?

A: I didn't begin raising money for this until last March when I decided to run. I hadn't raised huge amounts prior to that as Secretary of State because it's not required for that office. But when I was (minority) leader in the state Legislature, we raised millions to win Republican races. So I have always been able to put together adequate resources to win elections. And even in this campaign, I have raised thousands and thousands of individual contributions. The point here is that money is important, but when you are running against millionaires who have no end to their resources, you have to run on the years of service that I've provided and the successful record that I've had.

Q: Why are you running?

A: I'm running for governor because the current administration has failed to provide the vision for California. They have failed to energize the public behind the major initiatives that need to be dealt with in California: education, transportation, jobs and, of course, public safety. I have served in public life and I have a background in the private sector as a third-generation farmer/rancher/businessman. My vision as governor is fewer crime victims, better-educated children, healthier families and an economy strong enough so that there are jobs for everyone. And I think I can deliver that.

Q: Why should voters with Republican ballots vote for you?

A: I'm the only candidate in this primary who has run as a Republican and won any office in California, statewide or otherwise. And I've done it twice. The current polls both our own polling and Democrat polling show that I am even with Gray Davis or a little ahead, so I can beat Gray Davis. I'm also the only one with the experience in governing on a statewide level. I passed major policy initiatives in a Legislature controlled by the other party. I've actually been able to implement the types of policies that Republicans support.

Q: How do you see the state's business climate?

A: You've got the energy crisis, which has left a tremendous overhang in debt both in the state budget and in higher energy bills that employers and employees are paying. That's a big problem that we've not dealt with. Businesses are making decisions because of this workers' comp measure that was passed the other day. Davis was talking about a 50 percent increase in costs offset by savings due to the measure. But those savings are not going to materialize. We're going to be talking about a 75 percent to 100 percent increase in costs. You're not going to see the job growth, you're not going to see the incorporation increases of the last few years, because the principles Sacramento is operating on now are not job-creating principles.

Q: You've talked about a stimulus package to improve the state's business climate. What would go into that package?

A: We have a manufacturers' tax credit and a reduction in the capital gains tax. When we put this together, we were looking at workers' comp reform. Now that the Davis package has been passed and signed, we're going to have to go back into the Legislature on the workers' comp issue and try to get real savings in there. We also have to convince businesses that we're serious on making infrastructure improvements not just new schools, but water facilities, highways and rail.

Q: What's your view of the California and L.A. economies?

A: Between now and the November election, there will probably be some improvement in the California economy. Certainly we've gone through a very difficult period over the last year because of the dot-com collapse, the national recession and Sept. 11.

The L.A. economy has not been damaged as badly as Silicon Valley, which was so dependent on that dot-com explosion you saw a few years ago. I think the basic infrastructure here in L.A. is quite solid. The Alameda Corridor that's opening this spring is a tremendous asset. When the Pacific Rim economies rebound, as they will, we will see the ability of trade to drive the Southern California basin.

Q: Name three state programs you would cut to reduce the state's $12.5 billion budget deficit.

A: First, I would freeze or even reduce the 35,000 new employees that have been added to state payrolls over the last three years. Some of these positions have been allocated but not yet filled. Those that haven't been filled should be deleted, at least for the time being.

Second, there was legislation that was passed and signed by Gov. Davis that added some $2 billion to the general fund. Those measures need to be set aside until we see whether this is an ongoing deficit or a one-year deficit.

Third, we need to reallocate Proposition 99 (education) funds to support ongoing children's programs instead of new education programs.

Q: Of the Republican candidates in the primary, you've launched the strongest verbal attacks against your opponents. Will so much negative campaigning cost you more votes than it gains?

A: Campaigns are about contrasts. We have brought up nothing personal about anyone, with the exception of Governor Davis, where we have raised repeatedly the ethical challenges of his administration. As Secretary of State with an appointment to the Fair Political Practices Commission, that is an appropriate action for me to take.


Born: April 1930, Flushing, NY

Education: Bachelor's degree in philosophy from Princeton University; juris doctorate from University of Michigan Law School.

Career: Served as field artillery lieutenant in Korea, 1953-54; joined O'Melveny & Myers in 1956; left in 1975 to form his own law firm, now called Riordan & McKinzie; in 1981, formed venture capital firm now called Riordan, Lewis & Haden. From 1993 to 2001, mayor of Los Angeles.

Personal: Married to Nancy Daly Riordan, a Democrat; three daughters from first marriage. Lives in Brentwood.

Q: Traditionally mayors of Los Angeles are not held in high esteem in other parts of the state. In a statewide campaign, how are you trying to overcome that built-in bias?

A: I'm going to let them know who Dick Riordan is and then let them decide if Dick Riordan is the man they want to run the state. By the time the election comes, biases should be irrelevant. By the way, I have seen none of that prejudice as I have campaigned up and down the state.

Q: Others have noted you have not had extensive experience in statewide office or dealing with statewide issues. They say you will have a steep learning curve when you take office.

A: They said the same thing when I was running for mayor of Los Angeles the first time. But let's turn that around for a moment. Gray Davis on paper should be the perfect governor: much of his life was spent in state government. But look at his record: it's abysmal.

I'm going to take business concepts that I applied in Los Angeles and apply them on the state level, on infrastructure, for example. We're building about half the housing we need each year in the state; I care about that, Davis doesn't. I'm going to round up the best experts and we're going to work on that and fix that.

Q: So why specifically should voters with Republican ballots vote for you on March 5?

A: Actions speak louder than words. Look at what I've done. As mayor of Los Angeles, I had eight straight balanced budgets without raising taxes one penny. I left with the largest surplus in the history of any city in the state. We created hundreds of thousands of new jobs by being friendly to business, changing the rules on getting entitlements and permits. Also, I'm the only Republican who can beat Gray Davis.

Q: In this last week of the campaign, are you going to change your strategy at all and concentrate on your Republican opponents instead of just attacking Davis?

A: I think the enemy of the state is Gray Davis. I'm going to continue to run against Gray Davis. If we want a truly great state, we have to get rid of him. And I'm the person that can beat him.

Q: But isn't that risky? If you don't focus on your opponents, they could sneak up on you and pull ahead on primary day.

A: My opponents are making a big mistake. They are setting themselves up now so they don't have a chance to beat Davis come November. They are cutting out millions of women votes from a Republican candidate. To me, this is stupid. I'm going to keep running against Gray Davis because that's what I think this state needs.

Q: What steps will you take as Governor to improve that climate?

A: First, I'm going to put together a task force to put a microscope on all regulations and do a cost-benefit analysis. We should get rid of the vast majority of them so people will know what the rules of the game are.

Next, we have to invest more in our infrastructure. I spoke with a top executive of a major manufacturing company and asked them what they need from the state to consider expanding here, and they said, "Better housing, transportation and education."

We also must look at lowering taxes and lowering fees.

Q: Name three state programs you would cut to reduce the state's $12.5 billion budget deficit.

A: I would start by looking at departments that could be entirely cut out. I would have only one department dealing with energy instead of the five or six that deal with energy now. I would have one department dealing with education, one with transportation, etc.

I would also do zero-based budgeting. And I would come up with budgets for departments not based on what they think but on what I think is necessary for them to do their job. Then, I would require them to live within that budget. Otherwise, anytime you fight over details with bureaucrats, the bureaucrats win.

Q: What about specific programs?

A: As far as other cuts, I'm going to wait for the May revise of the budget to come out. That's when we get the real numbers. Then, you will have to make the tough choices. And borrowing just won't do it, because there's a $3.5 billion built-in deficit each year for the next three years.

Q: What's your view now of the California and L.A. economies?

A: Los Angeles is doing better than the rest of the state. And I think that's in some part because of what my administration did. For example, in zoning, we pushed hard to attract manufacturing companies instead of retail companies. This is hard to do because you're giving up sales tax.

Q: What about the state's business climate?

A: In the long run, I think the state is in big trouble. We have an administration in Sacramento that is the enemy of business. The rhetoric there is terrible, the taxes are way too high and the fees keep going up like workers' compensation just recently. The worst part is the thousands of regulations that stifle the ability of a company to get anything done. If someone wants to move to California or expand here, they just don't know what the rules of the game are, because the rules change every day.

Our housing is inadequate, we have no water policy that goes beyond a year, our transportation is in dismal shape, healthcare is over a cliff and in education we're near last in math and science. We're not prepared for future growth.


Born: June 1951, Neptune, N.J.

Education: Bachelor of Arts degree in history, Williams College; juris doctorate, Boston College, 1982.

Career: Joined law firm of Davis, Markel, Dwyer & Edwards. From 1985 to 1988, worked as prosecutor in the U.S. Attorney's Office, Southern District of New York, under Rudolph Giuliani. In 1988, co-founded private investment firm William E. Simon & Sons in Los Angeles with his father, former Treasury Secretary William E. Simon.

Personal: Married to Cindy Simon, four children.

Q: In the last week of the campaign, how would you handicap the race?

A: At this point, we see this as a two-man race between Dick and me. We are going to highlight differences between us, as I have done throughout the campaign. People are waiting for Dick and I to be personally critical of one another; that's not going to happen. Dick is a friend; I think he's a good man.

But we do have differences. I'm backed by taxpayer groups. I've been much more specific about what I would do as governor than he has. I will also use his statements on the record like praising Bill Clinton as one of the world's best leaders to highlight those differences.

Q: Riordan was one of the people who encouraged you to enter. Did you at the time have any idea you would ultimately be running against him?

A: Funny things happen. I'm grateful to Dick for encouraging me to run. It's been a great thrill to run for governor. It's given me a chance to learn a lot more about California. Dick of course was not the only one: Ed Meese, John Harrington and former California Republican chairman John McGraw, who first encouraged me to run.

Q: Two other multimillionaires ran for governor as their first elective office: Ron Unz and Al Checchi. Both failed in the primaries. What makes you think you're going to succeed?

A: Those candidates almost entirely self-financed their campaigns because they didn't want to be beholden to anybody. That's a noble motive, but the downside was they didn't know what their support level was. They didn't have grass-roots support. TV ads proved not to be enough for them. I'm trying to strike that balance between running a credible campaign and not totally self-financing.

Q: You loaned your campaign nearly $2 million. Are you planning to loan your campaign any more money in the closing days?

A: I do think we'll need a little cash infusion, so yes, I'll probably put money in.

Q: Why should voters with Republican ballots vote for you?

A: Because I've got the answers to the problems that face our state. I've come out with specific proposals with respect to the economy, the budget, our schools, roads, water and power. I'm a problem solver and a builder look at my background in business.

I also favor local control, smaller government and more accountability, all of which have been prominent themes in my campaign. And I've been a candidate of the grass roots. I've gotten the support of the grass roots organizations like the California Republican Assembly and tax limitation groups. I also won that straw poll at the recent state Republican convention.

Q: If you win the primary, how are you going to broaden your conservative Republican base to capture Democrats disaffected with Gray Davis?

A: The day after the primary, I'm going to focus on education. In the bottom 10 percent of schools, three-fourths of the kids are Latino. When I'm talking to Latino groups, especially Latino women, their ears perk up the moment I talk about education. Lots of their kids are trapped in these bottom schools.

The second area is your pocketbook, and that affects everybody, even if you're a disaffected Democrat. Lowering taxes is one of my main points, putting more dollars back into people's pockets.

Q: What's your view of the California and L.A. economies?

A: At this point, the picture looks mixed and it's not clear to me exactly when we're going to bottom out, though I think it will be some time this year. I think that Southern California is in much better shape than Northern California. However, I think the bottoming out will not be felt by the voters until well after the election not unlike what happened to George Bush senior back in 1992.

But the issue is really more about getting some responsible fiscal leadership so that we can ride through the tough times.

Q: What are the three top things you would do as Governor to improve the climate for business in the state?

A: The most business-friendly thing we can do is reduce the capital gains tax rate from the current 9.3 percent to 5 percent. Second I would reduce the regulatory burden. Now take workers' compensation. Businesses here pay the highest fees in the nation, yet the workers are 49th in the level of benefits. There are too many middlemen in there taking their cut of the money and there are too many bureaucrats involved.

Finally, we must look at reducing frivolous litigation.

Q: Name three state programs you would cut to reduce the state's $12.5 billion budget deficit.

A: We have looked at three areas. One is the $400 million for vacant positions in the state budget. I don't think we can afford to hire those people now, so at least for now, we should cut all or most of those. Next, there was $100 million in pork that was handed out to get the budget passed last summer. We can't afford it. Then there's $700 million in new programs. If we could have gotten along for so long without them, we can defer them until we can afford to pay for them.

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