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Campaign Darkness

As high-stakes maneuvering heats up over California‘s massive portfolio of long-term power contracts and a state bill to start controlling global warming, the song remains mostly the same for Republican gubernatorial nominee Bill Simon Jr.

Nor is incumbent Gray Davis going out of his way to lead on environmental issues, as he confines himself to revamping some of the more embarrassing and costly power contracts negotiated at the height of the energy crisis.

But it’s Simon who is missing the most opportunities. It‘s been four weeks since Simon has held a press conference or met with California reporters. Ever since his rocky performance at a Sacramento press conference, during which he dodged repeated questions on abortion (he’s against it but won‘t talk about it) and energy deregulation (he’s for it but won‘t talk about it), Simon has been in semistealth mode, appearing before friendly audiences and taking only a few questions from them before blowing past journalists on his way out the door.

It seemed the silent treatment was about to ease ever so slightly last week. During a fund-raising trip to Washington, where his take was a disappointing $150,000, his campaign had the bright idea of having Jack Kemp, the Republicans’ 1996 vice-presidential nominee, host sit-downs for the candidate with right-wing journalists. But that didn‘t go so well, either, as conservative columnist Bob Novak took to the air to report on CNN that things weren’t going so well for the veteran investor turned novice politician.

Then, a few days ago, Novak had this to report: “Presidential political operative Karl Rove [W‘s chief political adviser] laid it on the line in a sometimes heated White House meeting with Bill Simon,” telling him in no uncertain terms that L.A. mega-investor Gerald Parsky remains President Bush’s man in the Golden State. Hard-right elements in the California GOP, which backed Simon over former L.A. Mayor Dick Riordan in the March Republican primary, want the more moderate Parsky‘s scalp. And Simon had a serious business falling-out with Parsky, who was once the partner of Simon’s famous father, the late Nixon Treasury Secretary Bill Simon.

Nevertheless, Bush will campaign with Simon in California at the end of the month, jump-starting fund-raising efforts with events in Los Angeles and San Francisco. And, notwithstanding the refusal of the self-styled “candidate of ideas” to discuss those ideas with the press, Simon has offered one intriguing notion on how to bring down the cost of the state‘s controversial $44 billion in long-term power contracts.

He said that an investment banker, whom he did not name, had told him that the financial markets, skeptical about whether the contracts will be fulfilled, are effectively valuing them “at or near zero” in arriving at the depressed share prices of the power companies.

“An enterprising banker [perhaps he meant governor],” said Simon, “could go to a CEO and say, ’I have a way to get your stock price up. If I can get you 75 cents on the dollar, don‘t you have a fiduciary responsibility to your shareholders to take the deal and get your price up?’”

An intriguing notion, though an investment-banking source told me, “I‘m not sure that sounds right.” Neither Simon nor his communications director, Bob Taylor, would identify Simon’s helpful investment-banker friend or elaborate on the idea.

It all makes for a confusing assault on the issue of power contracts, which only a few months ago seemed to loom as one of Davis‘ top vulnerabilities.

Meanwhile, the Davis administration’s efforts to renegotiate the contracts continue, with an unfortunately familiar flavor of conflict of interest. The most important lobbyist for the state‘s backdoor bailout of Calpine, the San Jose power company, is actually a top state official -- Jeremiah Hallisey, a high-powered San Francisco lawyer (Standard Oil et al.) and longtime associate of Davis’ from the Jerry Brown days, who now serves on the state Transportation Commission.

The two chief negotiators for the state are former L.A. Assemblyman Richard Katz, who had virtually no involvement with energy issues until last year and knows that the governor referred to the company as a “white-hat power generator,” and Michael Kahn, another San Francisco lawyer, who represented the polluters in the infamous Stringfellow toxic-waste-dumping case.

Calpine is in danger of bankruptcy after the latest downgrade in its junk-bond-class credit rating and the canceling or delay of billions in power-turbine purchases.

With the recent environmental defeats in Washington, the focus shifts to California, where the battle is swiftly being joined.

Davis may face more tough decisions soon, on L.A. Assemblywoman Fran Pavley‘s global-warming bill, AB 1058, which would force reductions in the emission of carbon dioxide by cars, SUVs and light trucks, which account for 60 percent of the state’s carbon dioxide emissions. With California accounting for 10 percent of national car sales, the bill could play a major forcing function with the automobile industry, which not surprisingly is opposed, as it has historically opposed emissions controls. The Pavley bill narrowly passed the Assembly earlier this year.

Senate President John Burton, who backs it, said last week that the global-warming bill needs to move fast because the car manufacturers are coming after it. Davis remains neutral but, in comments last month to the Weekly, sounded more negative than positive.


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