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Simon Tries to Change Subject

Campaign: Candidate's talk of charity and urban renewal is met with more questions on finances.


SAN DIEGO — Bill Simon Jr. sought to shift the focus of the governor's race away from his personal finances Wednesday as Gov. Gray Davis released a new television ad saying his Republican challenger had "siphoned" money from a charitable foundation.

At campaign stops in San Diego and Hollywood, Simon tried to highlight his charitable donations and urban renewal plans. But he also faced questions for the first time on the stacks of tax returns that he let reporters peruse at a special viewing Monday.

"It's quite clear now to everybody--contrary to what Gray Davis said--that I've paid a lot of taxes," Simon said.

Simon, an investment banker who inherited millions of dollars from his father, former U.S. Treasury Secretary William E. Simon, reported income of $36 million from 1990 to 2000. He paid roughly a third of that in state and federal taxes.

Although the tax returns, which reporters were not allowed to photocopy, reported at least $13 million in investment losses from 1998 to 2000, Simon said they still reflected his solid track record as an investment banker.

"I made good money in the 1990s, so I am a successful businessman," he said.

The Democratic governor continued to challenge that assertion. Davis' latest television ad--his fourth attacking Simon--says the Republican nominee "inherited a fortune, but on his own, he's had losses, bankruptcies, lawsuits and even allegations of fraud."

The ad also says Simon "siphoned excessive fees from his father's charitable foundation" and cannot be trusted to run a charity, much less California. It cites a San Francisco Chronicle report that Simon's private investment firm charged unusually high commissions to manage the assets of the William E. Simon Foundation.

Davis released the spot on the same day his GOP rival sought to spotlight his record as a charity leader with a visit to the William E. Simon Jr. Center, named after the candidate, at Covenant House, a shelter for runaways in Hollywood. Simon, a former Covenant House California board chairman, said he hadn't seen the new ad.

"I'm sure it will be just as false as all the other ads that he's run, which have been false from the first sentence to the last sentence," Simon said.

His campaign later released a statement saying it was sad that Davis had "chosen to attack charities." It said Simon family foundations had given more than $50 million to charity, but the statement did not respond to the charge of excessive management fees.

Simon has also tried to broaden his base by--among other things--casting himself as a bigger champion of the environment than Davis. But on a KRLA-AM radio show Wednesday morning, Simon criticized Davis for signing legislation that makes California the first state to fight global warming by requiring a cut in tailpipe emissions of greenhouse gases. He said Davis "wants to get Californians out of their cars."

"The bottom line is, Gov. Davis believes in social engineering," Simon said.

In San Diego, Simon accused Davis of neglecting the housing needs in crowded areas of California cities, where he said many low-income families can't afford to live.

"Why has Gray Davis ignored the plight of our cities?" Simon asked. "Perhaps it's because the residents of these communities can't hire lobbyists, and they can't attend $10,000 fund-raisers."

Simon tried to deflect questions on his taxes by saying there was no time to "focus on things that are not on the people's minds."

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