SACRAMENTO — As the state's banker, Treasurer Jesse M. Unruh has sway over awarding bond and investment business that means millions to financial brokerage firms, attorneys and investment bankers, many of whom have provided him with gifts, travel expenses and sizable campaign contributions.
A detailed look at disclosure statements filed by Unruh since he was first elected almost 12 years ago shows that again and again the treasurer's office and various boards that he influences have made decisions financially helpful to his benefactors. For example:
- Unruh received a series of campaign contributions from fireworks manufacturer W. Patrick Moriarty, who is serving a seven-year federal prison term after his conviction on political corruption charges, and two Moriarty business associates. The contributions were made over a period when the California Pollution Control Financing Authority, chaired by Unruh, approved bond issues for two Moriarty-run companies.
- Officials of a Columbus, Ohio-based brokerage and investment banking firm paid more than $5,750 to fly Unruh and a top aide to Washington and Marco Island, Fla., and held a fund-raising reception in his behalf at about the time that the firm became a broker for the Pooled Money Investment Program. The board controlling the program's investment activity is chaired by the treasurer.
- In addition to large campaign contributions, two investment banking firms, which had been doing bond business with the state, gave Unruh $3,600 in tickets to the 1985 Super Bowl game. In the months that followed, Unruh, as chairman of the California Health Facilities Financing Authority, participated in decisions that increased the share of that authority's business handled by the two companies. His office also named the two companies to underwriting teams that sold bonds for the state.
Unruh and his staff insist that they have never been influenced by gifts or contributions and that many firms that do business with the treasurer's office make no contributions at all.
However, an increasing number of investment bankers, even those who count themselves as Unruh enthusiasts, believe that to get a share of state business, they must contribute to the Unruh political kitty.
"Anyone who is an underwriter in California contributes to Unruh," said an individual with a New York firm that sells a sizable share of public bonds issued by local and state governments in California. Like many in the financial community, he agreed to an interview only on condition that he not be identified.
"All of it is right up front. There's no 'please send it to this guy who comes around the back door,' " he said. "I have never seen anyone as overt as he is, and I don't respect his candor on this. He seems to do openly what no one else does. . . . I'm not saying Unruh should be going to jail, but the way his people behave, it is like a parish (county) in the mid-1930s in Louisiana."
Other financiers, however, say that they consider contributing to Unruh a civic responsibility because of the caliber of his performance as treasurer.
'On Top of Mt. Olympus'
"When it comes to the public sector (in the sale of bonds), Unruh is on top of Mt. Olympus," said Joseph M. Giglio, a managing director of Bear, Stearns & Co., an investment banking firm that has contributed heavily to Unruh's campaign in recent years while winning an increasing share of the state's bond sale business. "He's as tough as anyone in the profession, and if you don't perform, you're gone."
"I have seen people who struggled and who made significant contributions and haven't gotten to first base," noted Bank of America investment banker Timothy J. Schaefer.
Virtually every Unruh associate interviewed by The Times for this story talked about what several described as his "repugnance" at having to seek campaign contributions to stay in office.
Unruh has championed the idea of public funding of political campaigns as a way of countering the erosive effect of money on politics. Nevertheless, his own campaign reports and economic disclosure statements show that over the years he has accepted larger and larger contributions from firms that do business with the treasurer's office--and in some cases sizable gifts and speaking fees as well.
Unruh bluntly told the Wall Street Journal what many financiers had long suspected: "Probably as long as all things are equal, and all firms are equally capable, we do tend to go with them if they are friends."
That 1983 statement echoed through financial districts in New York, San Francisco and Los Angeles. Even today, investment bankers still quote it--some chuckling at the bravado of the remark, others shaking their heads at its implications.
Unruh aide Larry Margolis conceded that the article "absolutely pushed people to contribute that we never talked to."
Overflowing War Chest