A Portrait of Serendipity : Ed Zschau: An Unknown Grabs for the Brass Ring

No celebrity candidate was there to beguile them, and no veteran rallied them. So California Republicans played a hunch on a tenderfoot who intrigued them, and nominated Ed Who?--Ed Zschau for the U.S. Senate.

He was fresh and vital and enthusiastic. Everyone could see that. He delivered a knowing pitch for the freedom to pursue wealth and live quietly without government supervision.

He was a university professor, an entrepreneur and elected to Congress. He proved smashingly adroit at accumulating successful patrons. For men and women who were making it in California, all the way up to billionaire industrialist David Packard, Zschau was their candidate to make it better.

And what else, really, did 737,384 Zschau voters need to know?

Pronouncing His Name

Even some of his fellow Republican congressmen from California witnessed Zschau, 46, win the primary election before they could pronounce his name. President Reagan may be looking at a new Democratic majority in the U.S. Senate if Zschau loses. But it was “Congratulations Mr. Show” when Reagan welcomed Zschau into the White House last month. GOP National Chairman Frank J. Farhenkopf Jr. mistakenly calls him “Mr. Chow.”

Not for a generation in California had so high an office been within grasp of such an unknown figure as this two-term, Los Altos congressmen with the toothy grin, the falcon’s stare and the peculiar name: Edwin Van Wyck Zschau. (pronounced “shout” without the “t”.)

These days, Ed Zschau is like some iridescent bug in a jar, held this way and that to the light to see what he is made of. If you are drawn to him, you are likely to see a new breed of pragmatist who approaches government from the board room not the back room. If you are not, you might see just another Republican millionaire filled with ambition.

Along the way, as people move in to get a better look, Zschau has been dealt quite a jostling in the jar.

He is at once a spirited campaigner who combines uplifting promises of economic prosperity with inspirational calls for shared sacrifice. He speaks of politics as a “principle” and wants his campaign against veteran Democratic Sen. Alan Cranston to be as noteworthy as the famous Lincoln-Douglas campaign debates over slavery in 1858. And he keeps it all in perspective by occasionally breaking into a light-hearted campaign fight song in front of even the stuffiest audience.

But at the same time, he plunges ahead with gimmicks that tend to trivialize the campaign. He commissions someone in a giant chicken costume to goad Cranston on debates. He stages a press conference in a pile of phony mail sacks to complain that Cranston spends too much money on constituent newsletters. He serves waffles at press breakfast as a commentary on Cranston. And he never seems to tire of striking images for television commercials--walking in the woods, bounding on the beach, riding the rapids and letting his hair blow in the wind.

‘Enlightened Capitalist’

He is by the description of close friends an “an enlightened capitalist . . . a conservative with a conscience.” He speaks of heartfelt views on equal opportunities, a Republican who favors abortion rights and affirmative action. He also is the suburbanite who, through all his business and political life, has never hired a black or Latino for a policy-level job.

He is a tireless champion of the Reagan economic revolution and has come to back the President on key foreign policy decisions, such as providing aid to rebels in Nicaragua. He boasts of a 70% voting record for the Reagan agenda. But conservatives still wonder if Zschau is too liberal.

He is a congressional craftsman who relies on years of first-hand understanding to fashion the trade policy for his trendy microchip constituents in the Silicon Valley. But at the same time he shows himself so green as to abruptly reverse his views on the volatile Mideast after a whirlwind tour of Israel.

Not exactly the polished media candidate some expected after Zschau’s flawless $3.4-million name-building primary election campaign.

Part of it can be explained by positioning. A candidate not on the left or the right is bound to be in the cross fire. And part of it Zschau concedes is merely a matter of experience. “I’m new at this,” he shrugs. He admits that he has not been pleased with his progress since June. But he promises Californians are soon to see a new Ed Zschau. “I’m going to be more myself.”

On-the-job training in a Senate campaign is tough business, to be sure. It is made more difficult by an opponent such as Cranston, a relentless campaigner whose grasp of California’s complex political topography goes back to winning elections in the 1950s.

But Zschau, too, is a salesman of considerable persuasiveness. He has boundless faith in the timeliness and mass appeal of his political message--a zealousness for free-market economics, a skinflint’s aversion to spending and frequent expressions of environmental concern.

And he knows that there are plenty worse things in California than being called new and interesting.

Oddest thing about getting to know Ed Zschau up close: He doesn’t get mad, or so the legend goes.

He doesn’t throw things. He doesn’t raise his voice. He doesn’t slam the door. He doesn’t turn red in the face. Never really has.

Well, once, wife Jo remembers his walking into an antique store where a gruff proprietor snapped when Zschau handled an item.

“He kind of stalked out,” Jo recalls.

And?

“Oh, that’s all. He turned and walked out,” she says with a laugh. “But that was 1969 when he was young and foolish.”

Some temper.

“I don’t ever remember being mad,” Zschau says, calmly.

Then he corrects himself. There was the time as a boy when he threw a fountain pen. He broke a window. “See what happens when you get mad?”

Trust in ‘Serendipity’

For a survivor in business and politics, Zschau is unexpectedly shameless in expressing his trust in “serendipity.” He uses the word rather than try to explain yesterday or guess about tomorrow.

“I can never remember a time when I didn’t think things would work out. I was born an optimist, which may not sound important. But I think it is.”

Also unmistakably important to Zschau is his home life. Other politicians may contrive happy family portraits, Zschau’s looks every bit the real thing.

Now that he is in Congress, the family spends the school year at one home in Bethesda, Md., a suburb of Washington. In the summers, the Zschaus move back to their other home in Los Altos, a once-rural community 10 minutes from Stanford University. Here is a reflection of the family personality, says Jo proudly.

One understands immediately what she means. Other homes in the area have large lawns and driveways that blot out the rustic with the suburban. Not the Zschaus. Their house is planted with an orchard in front, natural vegetation in back and only the tiniest patch of lawn. Inside, the house is brick-and-wood country. The only visible concession to high technology is solar hot water pipes.

It is their retreat.

Shy, Jo endures the spotlight, but barely. “I’ll never enjoy being up there on the podium, never,” she says.

Except during campaigns, the couple has a rule. No political social life; no Washington social life. Zschau says he doesn’t think the reception-cocktail party-dinner grind provides much political benefit.

Hardly a soccer ball has hit a field in their neighborhood over the years without a Zschau kid on hand to kick and a parent to coach. Zschau recalls coaching 13 teams himself. Jo Zschau has been a local soccer league commissioner.

One Child at Home

Only one of the children still lives at home, daughter Cameron, 16, who is finishing high school. Son Ed Jr., 22, is working in the Senate campaign after graduating from Princeton and will begin a Manhattan banking job in the fall. Their other daughter, Liz, 21, is a student at USC. The lavish attention to family has included sending the Zschau children to private schools for most of their education. Zschau says this does not lessen his commitment to public schools.

Among Zschau’s friends and backers are some of the most successful materialists in all the world. It’s not unheard of to see a volunteer campaign worker in a Maserati. There are hand-stitched suits and gold Rolexes.

But Zschau drives an Oldsmobile, wears department store suits, thick-soled brogans and a digital watch. He is presentably neat, but thanks chiefly to Jo. When he relaxes, such as traveling, she worries about his lapses. “I would prefer he not have so many stains or holes” in his clothes, she says with a smile.

You could say that Ed Zschau learned to get places going around in circles. You could say it was the perfect beginning for a career in politics.

Home was Omaha, Neb. Throughout his formative adolescence, for five or six hours a day, and more in the summer, “Buzzy” Zschau was a young man in pursuit of the lonely, repetitive perfections of the ice figure skater.

It began as a way to rebuild his legs, which were damaged in the summer of his fourth grade. A playmate set his pants on fire with flammable liquid. Today’s Zschau’s calves are as thick and hard as a lamppost.

Skating remained a dominant part of his life until he went to college. From age 13 to 18, his summers were spent in Colorado or Minnesota at skating camps. He qualified for national championships in 1956 and 1957. He won the Midwest ice dancing championships with a partner in 1956.

Demands of the ice affirmed Zschau’s patience. He says it gave him discipline to seek one goal at a time and not succumb to distraction.

‘Enormous Patience’

“You learn enormous patience and self-reliance as a competitive figure skater. Progress is measured by internal yardsticks. It’s like a campaign. You work for the one day when you get a chance at your goal,” Zschau says.

Even more basic than skating was the lesson left him by his mother, a executive secretary in a canning plant, and his father, a chamber of commerce executive--both deceased. They insisted that he believe and behave as if he were special among children. This was true even as he played out a middle-class Great Plains boyhood--the All-American world of soap box derbys, ham radios, Fisher car body design contests, Boy Scouts and piano lessons.

He unabashedly retains that belief today.

“I believe I have some special abilities. . . ,” he says about politics.

Zschau’s academic years are a story of an intellect of uncommon reach--mixing physics, philosophy, mathematics, computers and business.

He earned his degree from Princeton in a program that combined philosophy and science. Then he applied for Naval Officer Candidate School in the summer of 1961. But the Navy was worried that he was not fully recovered from a fracture incurred playing rugby and wanted him to postpone his training for two months. Zschau said never mind and came west to Stanford.

At the university’s business school, he once more mixed academic disciplines--business and the science of computers. He made his own mild stab at rebellion when he bought a Harley-Davidson motorcycle, blue jeans and stand-up collars. “My Brando thing,” he says, nudging the conversation elsewhere.

The motorcycle gave way to love. Zschau fell for Jo, who was then a secretary at the university. He was 35 minutes late for the wedding. She was 45 minutes late. “We were hang-loose,” he recalls.

Zschau earned an M.B.A. and Ph.D. and, to his surprise, an assistant professorship. But an ordinary prof he was not, not at Stanford or at Harvard, where he was a visiting instructor one year.

Homespun Music

For one thing, there was his corny homespun music. A student who was a folk singer with the group called the Highwaymen first inspired Zschau to sing. The point wasn’t the music, but to win over his class. Students loved it.

Many of his loyal supporters today were his students in the 1960s. And he’s still something of the professor. A questioner almost always gets an answer and not a speech even if it means Zschau must plunge into controversial subjects. More seasoned politicians snicker at the characteristic; Zschau’s supporters find it endearing.

“I guess I had a reputation of being a little different,” he recalls.

In the publish-or-perish world of academia, he was different enough to risk tenure by spending so much time in the classroom and so little on publishing. Not surprisingly, he was passed over for tenure the first year that he was eligible.

At age 28, Zschau yielded to the urge to test himself. What could he do with what he learned? With what he had been teaching?

It was the first but not the last time that he would boldly change his career in what he now calls a process of “self renewal.”

The Silicon Valley glamorized business in this generation the way that NASA glamorized engineering. Success could be counted in billions of dollars. Ideas hatched in garage laboratories changed American life styles. It was a big, delicious high technology hero sandwich of scientists and business people and money and dreams.

Zschau wanted in.

He was not, however, driven by more than the notion of success itself. He had not looked around and seen the need for some new product in the marketplace. He did not tap his imagination for something that people would buy. He did not see a world that he could make better. He just knew he wanted to be a businessman.

“I made the decision I was going to start a company, and then began to decide what it was I was going to start, rather than saying, ‘Here’s a burning need, and it needs to be filled,’ ” he says.

Bit of Self-Criticism

Zschau adds a bit of self-criticism: “Starting a company because you want to start a company is the worst reason, not the best.”

These days, Zschau’s detractors say his motives are not much better defined when it comes to politics.

“I’ve never had to deal with someone like him,” says Cranston, who seeks to exploit this as a flaw. “He doesn’t seen to have a compass, a guiding star.”

Zschau’s defense is that pragmatism itself is a guiding star, and that Washington could use a little more business sense. “My philosophy is based on a strong belief in the power of the free enterprise system and the entrepreneurial spirit to create jobs and opportunity,” Zschau says.

Zschau’s System Industries Inc. first entered the market in 1969 with data processing systems for a scientific instrument that measured the chemical composition of compounds. The U.S. Environmental Protection Agency bought them to check water quality.

The company moved into the black-box world of making data storage systems for mid-sized computers. It is a corner of the market System Industries holds today. A larger computer corporation has charged System Industries with patent infringement. System Industries has countered with a charge of unfair competition.

For 11 years Zschau and his company felt themselves within reach of much bigger things, of high-tech glory with a revolutionary ink-dot printer. But this was not to be. The troubled project collapsed and System Industries never joined the ranks of the valley’s glamour companies.

It did, however, make its founder a millionaire. He left behind a business that today grosses $100 million a year and employs almost 700. And Zschau is indelibly steeped in the powerful, futurist mystique of Silicon Valley.

Viewed as a Promoter

His former peers and colleagues in the electronics industry remember Zschau as more promoter than manager.

“He had this fantastic ability to motivate, inspire and sell. But that didn’t always translate into effective management. Many of our operations were just plain sloppy,” James L. Patterson told The Times earlier this year. He is Zschau’s former vice president for engineering and now CEO of another electronics company.

Zschau says he is proud of System Industries’ record of recruiting minority employees, although he concedes that he never hired a black or Latino to a position higher than a production manager. Likewise, blacks and Latinos have held only internship positions in Zschau’s congressional office.

Zschau’s move out of business and into politics was gradual, if inevitable.

In the 1970s, the mushrooming world of high tech was starved for investment capital. This in turn energized its trade association, the Palo-Alto based American Electronic Assn. In 1978, Zschau was its eager chairman and lobbyist in the crusade to lower the capital gains tax. Which, of course, took him to tax headquarters--Washington.

Zschau often tells of meeting a young congressman, William A. Steiger of Wisconsin, and how they pushed the strangest idea--to fire up the economy by cutting taxes on investment income. He recounts how Steiger overcame opposition from then-President Jimmy Carter and the Democratic majorities in both houses of Congress, who saw the idea as a tax break for the rich. Even Cranston joined in. Eventually, the maximum capital gains tax on investments came tumbling down from 49% to 28%. It was the first of several landmark moves to stimulate the American economy through tax incentives.

Within 18 months, Zschau says, the tax cut generated $1.5 billion in new venture capital for U.S. business development.

Steiger died of a heart attack later that year at 40. And Zschau pondered his own political ambitions. His chance came in 1982 when Rep. Pete McCloskey (R-Menlo Park) retired from California’s 12th Congressional District. The area encompasses Zschau’s home near Stanford and reaches up to include southern suburbs of San Francisco and down to the suburbs of San Jose. It is overwhelmingly white and affluent.

Zschau was elected with 63% of the vote. He was reelected by 62% in 1984. They were easy campaigns. He never had a Republican opponent, and the Democrats never stood a chance.

What a change. Going from front-line lobbyist to junior congressman, Zschau found that he was lucky if anyone would tell him where the front lines were, let alone welcome him up there.

Even today, an election away from the U.S. Senate, he commands no better than cramped and plain quarters in the Cannon House Office Building. Cockroaches won the battle to set up housekeeping in the congressional coffeepot, and it was discarded. The congressional furniture is late supply room. Decor consists chiefly of a bust of Einstein and a framed collage of mail and messages in which Zschau’s name was mangled (from Aschou to Showel to Zschau Mein).

He promised his constituents that he was going to serve two, maybe three terms, and then get out. The House of Representatives was not the place to make careers. He didn’t even lift his few photographs off the floor and hang them on the wall until his second term.

The trappings of wealth and power appear to mean nothing to him. All his life, he has insisted that everyone call him by his first name.

Not Without a Plan

But Zschau was not a congressman without a plan.

If there was opportunity to make one’s mark quickly, he reasoned, it was to specialize. He became the congressman for high technology electronics.

That meant little time for other things. He took a seat on the Foreign Affairs Committee and only two subcommittees, an unusually small workload. And, in an act of political anarchy, he also began attending meetings of the Foreign Affairs trade subcommittee of which he was not a member. That’s because it fit into his plan.

He became the subcommittee’s most faithful squatter. The Congressional Quarterly in 1983 explained: “Congress’ only computer impresario, Zschau is interested in the Export Administration Act, a complicated law that allows the government to restrict the export of high technology. The act expires in September, and Zschau wants a hand in its rewriting.”

He got what he wanted. Moreover, his diligence earned him a legitimate seat on the subcommittee in 1985.

David Packard of giant Hewlett-Packard credits Zschau with “remarkable efforts” to open up export opportunities for high technology products. Previously, a huge range of electronics and related goods were banned from export because of possible military applications by unfriendly nations.

Zschau said the bill that he helped write eliminated needless impediments to the sale of harmless technologies. He argued strenuously that this would improve international trade and permit U.S. authorities to focus on stopping just those products with real military implications.

As a businessman might, Zschau and his staff began each year by putting specific goals on paper. At the end, he wrote an evaluation.

Take 1983 at random:

Goal: Become acknowledged nationwide as a leading policy-maker and spokesman on high technology, international trade, economic growth and industrial policy.

Goal: Establish Republican (party’s leadership) image on high technology issues.

Goal: Be well prepared for House votes and develop a voting record consistent with a fundamental set of principles (which will be evolving over time).

His year-end review of his performance: I think I began to lay a foundation that will enable me to make a difference around here someday . . . . There are indications that I am beginning to be recognized as knowing something about technology and economic issues.

As for voting: I was not always completely prepared (but) good, 98.7% attendance, defensible on the key issues and reasonably consistent.

This business of consistency has become the foundation of Cranston’s campaign against Zschau. The senator bears down hard where he thinks there are soft spots in his challenger’s record.

Fiscal Principles

Sometimes, Zschau gets roughed up for sticking to his fiscal principles. The Clean Water Act is an example.

In answer to a 1984 Sierra Club questionnaire, Zschau affirmed his support for reauthorization of the act. He added, “It is vital that the threats to our water, many of which have developed since the original act was adopted, be addressed broadly and in a way that does not delay implementation.”

But when the vote came the following year, Zschau voted no. It was not a matter of clean water, but pork barrel spending, he insists. The measure called for an increase of federal spending from $2.5 billion to $4.6 billion. And Zschau said $822 million of that was lard.

He complained of 17 separate projects, from a sewer in Massachusetts (federal share of costs too high at 75%) to an acid lake study (belonged in a separate bill).

Parsimony like this earned perfect key-vote ratings of 100% by the U.S. Chamber of Commerce during two of Zschau’s years in Congress. For many of the same reasons, the AFL-CIO’s political action committee found him worth only an 11% key vote rating. In its newsletter, the union grumbled about the moderate image Zschau has cultivated in the media: “The media’s moderate is a mossback.”

In a recent series of interviews, Zschau concedes that it was politically risky and maybe naive to be so tightfisted on such a popular issue as clean water.

“More experience with the legislative process gives me a better understanding of how somebody should vote from a public relations standpoint,” Zschau says. “Since I came into the Congress, I’ve sort of always stuck to the principles--if it (a bill) wasn’t acceptable, I would vote against it. As I have gotten more experience, I understand you can have your cake and eat it too.”

This is possible, Zschau explains, by voting for amendments that would reduce spending in a bill. Then, if the amendments fail, one can vote for the measure anyway “because you agree with the thrust of bill and a lot of what’s in it and you tried your best to get it changed.”

Stand on MX Missile

On other matters, Zschau’s fiscal principles have been set aside for politics. Take the MX. This is the rocket that is supposed to modernize the U.S. land-based intercontinental ballistic missile fleet.

In his 1982 congressional race, Zschau pledged opposition to MX. He said it had become a costly boondoggle vulnerable to Soviet attack. But when it came to a vote in the House of Representatives, Zschau succumbed to lobbying by the Reagan Administration and voted for the MX. Zschau said it was a matter of backing his President during the Strategic Arms Reduction Talks in Geneva. In 1984, after the talks collapsed, he went back to voting “no.”

Likewise, Zschau’s controversial change of heart about Arab arms sales was widely viewed as politically motivated.

This occurred after the primary election when Zschau, a member of the Mideast subcommittee of the Foreign Affairs Committee, toured Israel for four days on the advice of campaign backers, who were concerned about his strained relations with Jewish Americans.

Zschau had supported President Reagan’s sale of arms to Saudi Arabia. But upon his return from Israel, he hesitated and finally said he wouldn’t vote for such a sale again.

Cranston has spent vast amounts of campaign energy trying to portray Zschau as man of squishy character as evidenced by events like these. “I defy you to figure out where my opponent Ed Zschau stands on anything,” Cranston tells audiences.

Former business backer and now a key campaign supporter, B. Kipling Hagopian, acknowledges that Zschau’s “personal philosophy is still under development.”

But Hagopian, a venture capitalist by trade, argues that critics are wrong to think Zschau is therefore vulnerable. “He should get kudos. Isn’t that what people want, flexibility? . . . He is not rigidly ideological or rigidly consistent. . . . He examines an issue on the merits at that particular time and the facts at that particular time.”