CALIFORNIA ELECTIONS TREASURER : Hayes, Brown in Uphill Battle for Recognition

Appointed Republican Treasurer Thomas W. Hayes concedes that the majority of voters who will decide his future in the Nov. 6 election still don’t know who he is, despite 20 months in office.

Then again, Hayes points out that public opinion polls show most voters don’t know his opponent, Democrat Kathleen Brown, either.

Both candidates acknowledge that their race is a toss-up and both figure it will go down to the wire.

The poll results are not surprising, since Hayes, appointed by Gov. George Deukmejian to fill the unexpired term of the late Jesse M. Unruh, is a new kid on the block and the treasurer’s office is the kind of institution that no one hears much about unless something goes wrong.

Pollster Mervin Field found in late August that 31% of prospective voters could identify Hayes, who took office in January, 1989. That compares to 78% who could identify Lt. Gov. Leo T. McCarthy, 73% who had heard of Secretary of State March Fong Eu, and 60% who could pick out Controller Gray Davis.

Hayes argues that his low visibility is a point in his favor. His reasoning: Since the treasurer is responsible for issuing about $3 billion worth of bonds each year and handling short-term investments of tax funds worth tens of billions, no news is good news. Even a minor foul-up, he points out, can cost the state millions. A major one, like bungled investments that cost West Virginia $297 million, can be devastating.

His opponent doesn’t buy that. Brown argues that the treasurer’s office is an elective office--and for good reason. She said if all that was needed was a shepherd for taxpayers’ money, the job could be filled adequately from the Civil Service ranks.

Promising she would be a much more aggressive treasurer than Hayes, she contends that Hayes’ cautious, conservative approach has cost school districts at least $37 million in higher interest revenue and that billions of dollars in voter-approved bonds are “sitting on the shelf, gathering dust.”

Hayes, the state’s auditor general before taking the treasurer’s job, frequently characterizes his race as “a financial manager” versus “a politician,” the label he pins on Brown.

Brown, the daughter and sister of two former California governors, Edmund G. (Pat) Brown and Edmund G. Brown Jr., hopes to turn the tables on Hayes. During the primary, she portrayed Hayes as “a professional bureaucrat.” While she still refers to him that way, she also is playing up his ties to the Capitol’s political establishment.

She points out that the Legislature, just before it appointed Hayes auditor general, passed a law removing the requirement that the job be filled by a certified public accountant. Hayes is not a CPA. Brown also frequently points out that Hayes owes his job to Deukmejian.

“He’s the one who owes his career to the politicians in Sacramento, not me,” Brown said during a recent interview.

Hayes and Brown will give the voters some clear choices on election day.

Contrasts include:

Hayes, the veteran gray government official, versus Brown, born into California’s best-known political family.

Hayes, with a cautious approach to issuing bonds and the debt that goes with them, versus Brown, who promises to aggressively market the $12-billion backlog in bonds approved by voters for housing, schools, earthquake repair and other projects that have not yet been issued by the treasurer’s office.

Hayes, who doesn’t rock the boat, versus Brown, who would like to use billions in pension fund investments as leverage to shake up corporate America.

Basically, what the treasurer does is raise and disperse through the sale of bonds the $3 billion or so needed each year to keep pace with building and capital costs needed to maintain California’s prisons, schools, highways and water and park systems.

Californians contribute more than $40 billion a year in state taxes to support government services--from meeting the needs of public schools to sending out checks to welfare recipients and paying off the bonds. A large part of the treasurer’s job is finding a place to put idle tax dollars, a place where the money can earn a good rate of interest until it’s needed.

Hayes contends he has earned consistently high yields on investments while managing bond sales so prudently that the state’s perfect AAA bond rating has not been jeopardized.

Brown maintains that Hayes should be doing a lot more, specifically using his authority to influence corporate policy.

He could do that, she contends, through his seat on the governing boards of Public Employees’ Retirement System, with $56 billion in investments, and the State Teachers’ Retirement system, which manages nearly $30 billion in investments. A substantial portion of that money is invested in common stocks, which gives the state’s shareholders voting rights.

Brown, noting that the employees’ retirement system owns 6.2 million shares of General Motors Corp. stock, argues that the treasurer should have opposed $42 million in pension fund benefits voted for top GM management. Brown argues that ownership of other stock should be used to generate more environmental and social consciousness among U.S. corporations. Hayes strongly disagrees, arguing that “government should not get involved in corporate affairs.

For now at least, Brown is continuing a big fund-raising lead over incumbent Hayes. In the latest reporting period, Brown had $1.18 million in the bank, compared to $252,768 for Hayes.

When they aren’t slinging barbs at each other or talking about investment strategies, both Hayes and Brown can be charming.

Whether it’s Brown talking about a son “leaving the nest” to begin his freshman year in college or Hayes talking excitedly about his daughter’s next soccer game, the candidates rarely miss a chance to mention their children.

Hayes, who probably would still be auditor general if the Legislature had confirmed Deukmejian’s first choice to succeed Unruh--former Rep. Daniel Lungren--at times seems nonplussed about being in politics. He often defines his priorities as “family, job and politics, in that order.”

Brown grew up in politics, moving to Sacramento in grade school after her father was elected governor, watching her brother win the governorship in 1974 and winning an election herself to the Los Angeles Board of Education in 1975.

Typically, when she recently turned 45, she used her birthday as an opportunity to raise money for her campaign, picking up $1,000 a person at Chasen’s, the Beverly Hills restaurant. She said that was a trick she learned from her father. “My mother likes to say my father never considered it a birthday unless he celebrated it in five cities and raised X numbers of dollars,” she said.

But, while Brown owes much to her family, the connection also has hurt her. A favorite line of hers is that she has three great assets: being a woman, a Democrat and a Brown. At the same time, she has three great liabilities: She is a woman, a Democrat and a Brown.

Throughout the campaign, Brown has been needled about being “Jerry Brown’s little sister.” Roger Ailes, the Washington-based media consultant hired to prepare Hayes’ television commercials, referred to her as “Sister Moonbeam,” a reference to the “Gov. Moonbeam” name pinned on the former governor by his detractors.

Ailes, who Kathleen Brown refers to as Hayes’ “hired assassin,” called the race “Kathleen Brown’s debutante coming-out party in politics so that she can one day be queen of California.”

Hayes also has questioned Brown’s decision to leave her job on the Los Angeles Board of Education midway through her second term to move to New York when her husband, former news executive Van Gordon Sauter, took a top job with CBS.

Hayes, noting that Brown also left a job as an appointed Los Angeles public works commissioner, said “she walked away from two jobs” and asks, “Why won’t she walk away from this one, too?”

Brown said of the move to New York: “It was a tough choice, but I made it out of what I thought were the best interests of my family and my constituents.” She said bi-coastal marriages were in vogue at the time, but such an arrangement would have made her a part-time school board member and a part-time mother and wife, an arrangement she found intolerable.

In between jobs as a school board member and public works commissioner, Brown worked as a public finance attorney in New York and Los Angeles for the law firm of O’Melveny & Myers, giving rise to her self-description as “the financial Brown.”

Hayes has no famous politicians in his family, but he has received much needed support from the Deukmejian political family. Hayes’ campaign manager is Donna Lucas, a former Deukmejian press deputy, and the treasurer is getting campaign advice from Sacramento attorney Steven A. Merksamer, Deukmejian’s former chief of staff, and Larry Thomas, the governor’s former press secretary. Hayes also is getting a significant amount of help raising money from Karl Samuelian, Deukmejian’s chief fund-raiser.

And, in a twist, Hayes is getting help from a former Jerry Brown ally. Early on, he hired B. T. Collins, former chief of staff to Brown, as a top deputy treasurer and political trouble-shooter.