SACRAMENTO — In the hunt for a U.S. Senate seat, Matt Fong faces a formidable political obstacle: A multimillionaire campaign foe with a seemingly bottomless bank account.
Though far outspent heading into the June 2 primary, Fong is hardly unarmed. As state treasurer, he commands an office that has historically been a prime perch for raising campaign funds.
Like his predecessors, Fong has received, sometimes after direct solicitations, a bumper crop of campaign money from private interests--law firms, financial consultants, accountants, investment companies and developers--who have a stake in decisions at the treasurer's office.
Campaign records show that law firms and others vying to profit from the state's bond deals have donated more than $325,000 to Fong, even as federal securities officials have pushed to ban what they consider a "pay-to-play" system of campaign patronage.
An additional $160,000 has come from developers and others who deal with the treasurer's committee that helps finance affordable housing. Companies that have benefited from low-interest financing doled out by another panel Fong shepherds have chipped in at least $25,000. And he received $150,000 more from firms tied to the state's two big employee pension funds, which the treasurer helps oversee as a board member.
Fong rejects any suggestion of a nexus between campaign contributions and his decisions as steward of California's financial empire, which dwarfs the investment portfolios of most foreign governments.
"There's no ethical problems, there is no pay-to-play," Fong said. "There's no connection between contributions and work. Many of the firms we've retained have never given me anything."
Following Big Footsteps
Campaign watchdogs say Fong's approach to fund-raising harks to the days of the Jesse "Big Daddy" Unruh, the political power broker who swept into the treasurer's post a generation ago and began tapping the private sector for campaign cash.
"Jesse Unruh was really the one who made the treasurer's office a fund-raising machine," said Robert M. Stern, co-director of the Center for Governmental Studies, a Los Angeles research organization. "It's the way it always has been done and, until we have an alternative form of fund-raising, it'll remain the way it's done. Where else would the money come from?"
Companies that do business with the treasurer's office, Stern said, "believe they get an extra edge by giving. They get access to Matt Fong, know what he's thinking. It's a business decision."
The irony, he added, is that formidable fund-raisers from the government sector such as Fong and Lt. Gov. Gray Davis now face candidates from big business who can bury them with cash.
In the Senate race, car alarm millionaire Darrell Issa has already outspent Fong by more than 3 to 1 in seeking the Republican nomination. Fong has an added disadvantage: Under federal campaign law, the most he can accept from any donor is $1,000 an election, while Issa is free to deploy as much of his own personal wealth as he wants.
Such constraints have hurt Fong's access to a pair of wealthy contributors who helped bankroll his past political battles.
His biggest donor has been developer Alex Spanos, the San Diego Chargers owner, who with family and associates has poured more than $340,000 into Fong campaigns.
Capitol sources say Spanos, a generous giver to numerous GOP politicians, backed Fong's 1994 treasurer's campaign in part because of antipathy toward the Democrat candidate, fellow Greek-American Phil Angelides.
Spanos would not comment, but a spokeswoman dismissed the Angelides angle. "If it did play a role, it played very little," said Natalia Orfanos, a Spanos aide. "Mostly he really likes Matt."
Fong has also collected more than $265,000 from Andrew Cherng, owner of the Panda Express Chinese restaurant chain.
Cherng did not return phone calls seeking comment. But Fong said he met the restaurateur and many of his other Asian American contributors through family and friends. And some, he said, were once supporters of his mother, former Secretary of State March Fong Eu.
An analysis performed for The Times by the private Campaign Study Group of Virginia found that Fong has raised $9.4 million since his first run for statewide office in 1990. His biggest contributor has been the real estate development industry, with $1.4 million in donations. Financial firms including banks and investment companies have given $792,000. Law and accounting firms have added $668,000.
Fong's fund-raising put him in a politically awkward position last year when he was brushed by the Asian fund-raising scandal. He quickly gave back $100,000 in contributions after disclosures that the money was linked to an Indonesian businessman with ties to China.