Garamendi Accuses Gray Davis of ‘Unethical’ Fund-Raising Methods

State Sen. John Garamendi on Friday assailed Assemblyman Gray Davis, his leading rival in the fight for the Democratic nomination for state controller, for the “unethical” raising of more than $431,000 in campaign funds in 1981 while Davis was serving as former Gov. Edmund G. Brown Jr.’s chief of staff.

A check of Davis’ campaign financial reports showed, however, that most of the money he raised that year--about $260,000--was taken in after he had left the Brown Administration to run for the Assembly seat he now holds.

With only a few days left before Tuesday’s primary election, Garamendi’s charges reflect the high-stakes race for controller that--according to polls, anyway--show the two legislators neck-and-neck, although nearly half the state’s Democrats are still undecided on whom to vote for. The third Democrat in the race is Assemblyman Alister McAlister of Fremont.

Garamendi, who represents a Northern California district, made his latest attack on Davis at a press conference in Los Angeles.

Harsh Words

“In those days, Davis was more interested in milking checkbooks than in missing children,” Garamendi said. The reference was to Davis’ campaign ads promoting his attempts to find missing youngsters.

In 1981, Davis “was chief of staff to the governor and he was a candidate for no office at all,” Garamendi added. While stopping short of charging Davis with illegal activity, Garamendi said: “It is certainly unethical. There is no doubt in my mind that this should not have happened.

“He should have been fired the moment he began doing it, but he was not.”

‘Mired in His Own Mud’

Davis’ campaign manager, Mike Gage, responded that “Garamendi is mired in his own mud. These are desperate tactics of a candidate flailing about because he is losing ground in the polls.

“John Garamendi and every other elected official or candidate for office raises money. As long as they don’t raise it on state time, there is nothing wrong with that,” Gage said.

Garamendi said he learned about the Davis contributions “about two weeks ago” from Manning Post, a former member of the Little Hoover Commission, a state watchdog agency.

Garamendi said he reviewed the report Thursday night and added, “I don’t have any of the specific names with me, but they (Davis contributors) were people who were interested in actions that were taking place in state government at that time.” Garamendi said he had no details and referred questions to Post, who was not available for comment.

Making His Plans

Throughout 1981, Davis had acknowledged speculation that he was eyeing a political office such as lieutenant governor or a seat in the Legislature. Shortly before Davis left Brown’s side as his chief of staff, that speculation focused on a bid for the Los Angeles Assembly seat he now holds.

Garamendi said that Davis raised more than $431,000 in 1981 while serving as Brown’s top aide. A check of records shows, however, that Davis raised only about $174,000 before resigning from Brown’s staff on Oct. 7 of that year. All of that was raised in his final three weeks with Brown--after he made it clear he would be leaving to run for office.

Among the contributions reported by Davis for that year were $500 in December from convicted political corruption figure W. Patrick Moriarty and $5,000--received several days before Davis resigned from Brown’s staff--from John E. Murphy, a Moriarty associate who has since died. About the same time, Murphy also made a $2,500 campaign contribution to state Sen. William Campbell (R-Hacienda Heights), who is one of three candidates for the GOP controller’s nomination in Tuesday’s primary.

Reimbursed by Moriarty

Murphy later told The Times that he was reimbursed by Moriarty for the contributions to both Campbell and Davis. Both legislators have said they did not know the money was from Moriarty or that it had been laundered.

In another development in the controller’s campaign, the California branch of the National Organization for Women withdrew its endorsement of Garamendi and urged voters to support Davis.

Citing Garamendi television commercials that attacked Davis and linked him to California Chief Justice Rose Elizabeth Bird, the 23,000-member California NOW group said Garamendi had given a1936946546position on Bird’s reconfirmation election and that the commercials run contrary to those assurances. The reelection of Bird in November is a top priority for NOW.

Contributing to this article were Times staff writers George Frank in Orange County and Leo C. Wolinsky in Sacramento.