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Phil and the Cavity 

How the media have misunderstood the Democratic race for governor

Wednesday, May 17 2006
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IT’S ENDORSEMENT SEASON here at the Weekly, and since term limits have whacked an entire generation of incumbents and compelled us to interview, by actual count, a gazillion candidates over the past several weeks, many of those interviews, truth be told, tend to run together in our collective semiconscious. (After interviewing five candidates a day for multiple days, semiconsciousness is sometimes the highest state of alertness we can achieve.) But every now and then, a candidate says something that jolts us into full consciousness. One such moment came last week while we were interviewing John Chiang, the member of the State Board of Equalization who represents the L.A. area, and one of the two candidates seeking the Democratic nomination for state controller. As a member of the Board of Eq and the Franchise Tax Board as well, Chiang is a colleague of current state controller Steve Westly (who also sits on those boards), as well as a longtime associate of state treasurer Phil Angelides. So for a few minutes, we sought his impressions of these rival candidates for governor.

Chiang spoke, with unusual frankness, about his experiences with each of the gubernatorial campaigns, and occasional difficulties he’s had with each candidate. He spoke of Angelides first, then turned to Westly.

“There’s a cavity there,” he said.

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On the tape of the interview, you can hear three Weekly people say, simultaneously, “A cavity?”

Westly, Chiang explained, exuded “an emptiness” when it came to discussing the particulars of his campaign. Chiang added that, “Steve’s been a very easy colleague” on the boards they both sit on, and he praised his ability as “a problem solver.” But when he contrasted Westly with Angelides on how they’ve handled their jobs, he seemed to me to reinforce that indelible “cavity” image.

On the boards they both sit on, Chiang said, Westly “defers to me. He says, ‘John, explain the tax to me,’ and then he makes his own decision. I say, ‘SEIU is concerned about this, CTA about this, [and] he tries to problem solve.”

Asked about Westly’s strengths and weaknesses, Chiang continued, “He tries to bring everyone to the table and find a solution. In terms of leadership and sticking your neck out on critical issues, that’s not Steve’s forte.”

Saying, “I like Phil’s politics,” Chiang also assessed the treasurer. “He’s aggressive on technology; he’s aggressive on executive compensation; he understands smart growth; he’s not only looking at the bottom line but trying to create new housing, in-fill housing, new jobs. He’s looking to see that the dollar’s not lazy.”

Since Chiang’s paean to Phil was delivered in public-policy shorthand, here’s a little decoding. As treasurer, Angelides has been the most influential public figure in determining the investment policies of the state’s two main public-employee pension funds, CalPERS and CalSTIRS, which are the two largest pension funds in the nation. As such, while exercising his fiduciary responsibility to ensure a good rate of return, Angelides has also steered investments into inner-city and inner-ring-suburban development, into densification along transit corridors, into small businesses and renewable-energy technology. And as the main voice for funds that are often among the largest shareholders in corporations, he’s been an outspoken and influential force for reducing CEO pay. (He was the first official, for instance, to demand that the New York Stock Exchange rescind the ridiculous platinum parachute it bestowed on Richard Grasso, its departing CEO.)

In short, like New York state Attorney General Eliot Spitzer (now running for governor in his state), Angelides has used his power to try to curtail the excesses of winner-take-all capitalism, and to establish a more socially responsible capitalism in its stead. For that matter, Angelides and Spitzer are just about the only elected officials at any level of government to have taken on the culture of boardroom chicanery during the past decade, and Angelides stands alone, alas, for the magnitude of his efforts to put capital to remunerative but also socially necessary purposes.

California’s treasurer ain’t nobody’s shrinking violet. During the energy crisis, he called for the creation of a state energy company to serve as a yardstick for the private companies that were then robbing California blind. He criticized Arnold Schwarzenegger’s budgets when no one else was criticizing Schwarzenegger at all. And he advocates raising taxes on the rich and corporations to improve the state’s schools.

For this, Westly has mounted a new ad campaign criticizing Angelides as a tax-raiser who may say he’s only interested in taxing the rich, but will someday be coming, dear viewer, after you. It’s a line of attack that Republicans always use against Democrats who favor progressive taxation. Should Angelides make it into the general (and at the moment, the polls depict the Democratic contest as a tossup), Westly is in essence previewing the ads that Schwarzenegger will use against the treasurer in the fall.

THE QUESTION FOR DEMOCRATS is how much a Westly governorship would resemble Schwarzenegger’s as well. On most issues, the controller takes generally mainstream Democratic positions. But behind the scenes, his unwillingness to upset business interests has been troubling. Today, he touts his success at bringing in revenue to the state from all manner of one-time tax shelters. But when the bill closing those shelters was moving through the Legislature in 2003, and when it was sitting on then-Governor Gray Davis’ desk as the Gray One pondered his position (he ultimately signed it), Westly rebuffed invitations to endorse the bill either publicly or privately.

Angelides is not the sum of human virtue. He’s brilliant and not shy about letting you know it. He’s micromanaged his own sometime-meandering campaign in a way that might portend problems if he’s elected governor. But the conventional media wisdom, that there’s really no difference between the two Democratic candidates for governor, is deeply wrong — wrong as only the conventional media wisdom can be. In a timid time, Phil Angelides has a clear record as a bold liberal. Steve Westly, I fear, may be — well, a cavity.

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