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Gray Davis

With the June 2 primary less than a month away, California voters will have the chance to elect the state’s first new governor in eight years. Business Journal editors and reporters interviewed the leading candidates for the Democratic and Republican nominations on their reasons for running, their plans to promote California businesses and other issues. Lt. Gov. Gray Davis is the second interview to appear in the series.

Question: Why are you running for governor?

Answer: I’m running for governor because I am frankly tired of more than a decade of divisive, wedge-issue politics. This state has enormous potential, and I intend to be the kind of governor who is positive, inclusive, forward-looking and who seeks out trading partners both in Mexico and Asia to attract investment. I think that kind of a governor will afford more opportunity to every citizen.

Q: Does it make a difference who is governor?

A: It makes an enormous difference. I was down in Mexico in November ? I am the highest-ranking member of the state government to visit the Zedillo administration ? and they told me in no uncertain terms that all discretionary investment is going someplace other than California. Because they don’t like the practice of California politicians going to the border pointing fingers at Mexico for various alleged offenses.

The attitude the governor sets affects the way people behave in the state. With the passage of Proposition 209 (the initiative that limits affirmative action programs), people feel very comfortable in just not even talking to subcontractors and folks they used to have to do business with. They feel released from whatever burden that they previously felt, to make sure part of the business goes to women and minorities.

Q: It seems like political forces on both sides use the initiatives to have a platform. How can you as governor cool that off?

A: I don’t think it’s fair to say that these initiatives will be on the ballot no matter what. On the (Proposition) 226 initiative (limits on union political contributions), I’m not sure who was the driving force before Gov. Wilson came on the scene, but as best as I can tell, there were four or five people from Orange County who dreamt this thing up and nobody was really embracing it.

As governor, I would have said, “This is crazy. I don’t want to see this initiative on the ballot. I don’t want to see it financed, and I’m going to communicate that to Republicans and Democrats alike.”

Q: Tell us how you would keep the economic recovery on track.

A: You have to look at our strengths, and clearly one of our strengths is the knowledge-based industries. That is one reason I am championing a tenth campus of the University of California in the Central Valley. Because it will not only allow the people to go to a university near their home, it will introduce biotechnology and high-tech opportunities that simply don’t exist.

I would try to increase research-and-development credit to encourage private-public partnerships. I would have exchanges with Mexico and other trading partners, academic exchanges and student exchanges. I would have an investment tax credit for growth, because in an era of downsizing, I believe we should reward (businesses) that are growing. Growth means more jobs and more revenues for the state.

Q: Should we just concede that L.A. is no longer going to be a major Fortune 500 headquarters, or would you try to do anything to win back some of the Fortune 500s that we have been losing?

A: As my record reflects, I fought very hard to keep Taco Bell from relocating to Texas and actually helped write legislation to keep them here that died in the Senate. When it looked like they were going to do something serious, the Japanese owner of the building in which Taco Bell was located came to us and we renegotiated the lease, and kept them here for five years. I also did a lot to keep Packard Bell from moving to Utah. I want to make clear that I have a great interest in attracting large, medium and small businesses to the state. I believe CEOs are like the rest of us. We like to know that we are appreciated. We like to be thanked for the good work we are doing. So part of what I would do is establish regular communication with business leaders in this state at least once a quarter.

Q: Does the governor deserve any credit for the economic turnaround?

A: He deserves zero credit for the kind of personal business diplomacy I espouse. (Wilson) argued with (the Taco Bell board) for three hours when they tried to assert that there was a premium to doing business in California. It costs more to do business in California period, end of story. There are some offsetting benefits, but there is no use in challenging the fundamental assumption.

But he does deserve credit for the enactment of various tax incentives, the sales tax exemption for the purchase of manufacturing equipment, the signing of the research-and-development tax credit and a variety of other things. All those required his action and support as the measures moved through the legislature. I would give him high marks for that. I think he could do a lot more in the personal diplomacy that I espouse.

Q: You are talking a lot about the small, fast-growing, high-tech companies that require extremely skilled workers. But here in Los Angeles we have an economy that is becoming increasingly service oriented and low-wage oriented. Is that a concern to you, and how do you plan to address that?

A: Clearly the answer lies with the schools. We have to do a hell of a better job in K-12. Well over half of the people getting into the Cal State system need remedial English or math. That is a pretty ringing indictment. And even at the University of California, they don’t talk about it too much, but it is in the 10 to 15 percent range. I have proposed a series of measures that fall under the rubric of “high expectations.” I believe in a high-expectation approach to education.

The Chicago school system has made a remarkable turnaround. It used to be the butt of jokes by educational leaders, and now it is an example of how you can turn around a school system in a very short order. I like their approach where they test kids at the end of every grade. If you don’t pass the test, you have to go to summer school.

Q: What about bilingual education? The polls show voters across the board in support for the 227 initiative, yet you are opposed. Why?

A: If this were an initiative sponsored by some educational authorities, it would have more credibility in my book. The bottom line is that I believe parents should decide how their kids should be educated. If they want them educated in some sort of English immersion, that’s great. If they want them educated in some sort of bilingual program, that’s fine. But I would put a limit of three years. I have seen first hand in San Francisco fourth-grade Latino kids speaking Japanese and fourth-grade Anglos speaking Chinese. Kids can grasp another language fairly quickly. It is also helpful after they learn English to encourage them to learn a second language. It makes good economic sense for people to be fluent in another language. I would reward schools that could make the conversion from a foreign language to English in less than three years.

Q: What is your take on Al Checchi, and why do you think you are a better candidate?

A: Let me ask you a question: If you had to have surgery, I expect you would want to find a physician who had performed that operation several times and who had been successful at it many times. What distinguishes me from my other two opponents is that I have spent a lifetime in public service ? starting with being a captain in the Vietnam War. Then I went to work in ’73 for Tom Bradley after practicing law for three years, and then Jerry Brown and then started running for office after that. Al Checchi has no experience in public service and I really believe what people want now is a tested hand at the helm.

Q: Why do you think you are a better candidate than Jane Harman?

A: Jane has spent six years in Washington. At least she has some experience in the public sector. The only difference is that all of my experience has been in Sacramento ? a lot of it as an executive chief of staff to a governor, controller and lieutenant governor. So I have spent almost 20 years of my 24 years of public service in executive positions, which is what the governor does.

I spent all of my time in California. Jane left California, I think, when she was 18, and came back to run for Congress six years ago. She has spent most of her adult life in Washington. I have spent all of my adult life in California and I have lived in the state and traveled up and down the state.

Q: You can’t turn on the television these days without seeing a Harman or a Checchi ad. At least as far as visibility, it seems they are leaving you far behind. Strategically, how do you plan on correcting that?

A: I am David in the struggle against two Goliaths. We will have a very aggressive media buy in the last six weeks, and I believe people will respond very positively. In the end, they do not want to take a chance with a newcomer for governor. Unlike other races, governor matters. Governors can make decisions without regard to what the legislature does or any other official. A governor can appoint, veto, set a tone and help frame the public agenda. They are looking for someone in this recovering economy who will continue the momentum and in whom they trust.

Q: What would your priorities be for using the state surplus?

A: I would like to encourage more business-university partnerships to facilitate the commercialization of research. There is a program down in San Diego called Connect, which tries to take work in biotech at UCSD and find venture capitalists and link them up. I would like to duplicate that at all nine UC campuses. I think the state colleges could do more research. I want to build on our strengths. We need to attract capital to make those ideas grow into businesses and jobs. It is unlikely that our aerospace industry is going to get larger, but it is quite possible that our biotech will get larger. Let’s see if we can’t attract capital and attention to those industries.

Q: Assuming you win the Democratic nomination, why vote for Gray Davis over Dan Lungren?

A: I think people want a governor who is a doer. They want a governor who will solve problems and be Clinton-esque, putting aside any Judge Starr activity. People are very pleased with the recovering economy, and his handling of domestic issues. That is why his job ratings are high. Dan is a decent person, but he is an ideologue and I doubt he would take the hands-on approach to resolving business issues that I espouse. Business is just a name we give to the collective pursuit of people’s dreams. A governor should have a keen interest in seeing things go well, as opposed to things going badly. I am not at all sure Dan Lungren is going to do that.

Gray Davis

Born: Dec. 26, 1942 in New York.

Education: B.A. from Stanford University, Cum Laude; J.D. from Columbia University Law School.

Career: Two years in the U.S. Army in Vietnam, finance director for Tom Bradley’s mayoral race 1974; chief of staff to Governor Jerry Brown 1974-1981; member of the state Assembly 1983-1986; state controller 1987-1995; elected lieutenant governor in 1994.

Residence: Los Angeles

Family: Wife, Sharon Ryer Davis.

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