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California and the West

Checchi Richest Candidate, Filings Show

Politics: Even wealthy gubernatorial rival Jane Harman is far behind him, according to economic interest statements. Experts predict that their spending will break records in California.

March 09, 1998|DAN MORAIN | TIMES STAFF WRITER

SACRAMENTO — In a gubernatorial race of mega-millionaires and comparative paupers, Democratic businessman Al Checchi's holdings far exceed those of all his rivals including Rep. Jane Harman, according to statements of economic interest filed Friday.

Compared to Checchi and Harman's portfolio, Lt. Gov. Gray Davis, battling the two big-spending Democrats for the nomination in the June 2 primary, scarcely rates a decimal point. And the major Republican candidate, Atty. Gen. Dan Lungren, barely amounts to a blip.

The filings by Checchi and Harman make clear what the candidates and consultants have been saying: With their wealth, the 1998 race for governor is sure to break all campaign spending records in California.

Checchi, who made most of his fortune by engineering a buyout of Northwest Airlines, holds 11.4 million shares of the airline's stock. That was worth more than $700 million as the stock exchanges closed Friday.

Checchi no longer is chairman of Northwest but remains a director, for which he was paid more than $100,000 in 1997. Checchi's other holdings in stocks, bonds and real estate are worth $100 million, "conservatively," said his campaign manager, Darry Sragow.

While Harman has money of her own, much of her wealth comes from her husband, Sidney, chairman of Harman Industries, which makes audio equipment. Like Checchi, the Harmans have significant holdings in blue chip stocks, real estate and limited partnerships.

Harman and her husband reportedly also are worth hundreds of millions of dollars. Her campaign aides did not discuss the reports filed Friday.

Several of Checchi and Harman's holdings are in companies with major stakes in California government and deploy large lobbying corps in Sacramento. They hold stock in everything from gambling enterprises to the aerospace, oil, health care, banking and high-tech industries. All of the above opens the potential of conflicting interests if either candidate is elected governor.

"Everything you see there will go into a blind trust [if Checchi becomes governor], with the possible exception of Northwest, and he is willing to put that in a blind trust if that's the best thing to do," Sragow said.

Sragow and Harman campaign manager Kam Kuwata said that despite the candidates' wealth they could still relate to Californians. "She has been fortunate," Kuwata said about Harman. But, he said, her wealth "doesn't mean you can't have values and represent California."

A state law approved after the Watergate scandals requires that candidates and officeholders file statements of economic interest listing their investments and income, and any gifts they receive.

The forms are relatively short on detail. They don't require that officeholders or candidates disclose details of retirement accounts. Nor have they been updated since the 1970s. When candidates disclose the value of their investments, the top category for any particular holding is listed as simply "over $100,000."

Harman reports, for example, that her stake in Harman Industries holdings is "over $100,000." She's not required to specify how much more. Harman also must file a federal statement because she is in Congress. The federal filing lists her Harman Industries holding as more than $1 million.

In the state filing, Harman reports having a personal trust that contains 25 separate holdings, from stock in Coca Cola to Harman Industries. The listed value is between $240,000 and more than $2.5 million.

Sidney Harman's trust is far richer, with stock in 229 separate companies, from his Harman Industries to 3M, Boeing, Lockheed, and Time Warner. The value is somewhere between $1.27 million and more than $23 million.

Checchi, through his stake in Northwest, has far-flung interests ranging from cargo facilities at Los Angeles and San Francisco international airports to banks, a sugar company, health care firms, oil companies and a tobacco concern.

In addition to his Northwest holdings, Checchi has established a family trust, and separate trusts for his three children. The family trust contains 46 separate holdings, primarily stock in publicly traded companies.

The trusts for his children each hold more than 80 investments, also primarily in stocks. The children's trusts are worth between $3.4 million and more than $8.1 million.

Then, there are the other candidates.

Lt. Gov. Davis reports only one investment--a State of Israel bond. The value is between $1,000 and $10,000. Davis also reports his wife's income as being in excess of $10,000 a year. She works for Ralphs Grocery chain.

"Gray lives on his paycheck and his wife's paycheck," said Garry South, Davis' campaign manager. "It's pretty clear who more lives like an average Californian."

Unlike most officeholders, Davis reports not a single gift from lobbyists, corporations or others--no baseball tickets, no parking passes, no holiday gift baskets, nothing.

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