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Analysis: Simon: dead or alive in Calif?

By PETER ROFF, UPI National Political Analyst

WASHINGTON, Aug. 2 (UPI) -- Bill Simon's effort to become the next governor of California hit a bump in the road the size of a small mountain Thursday. A Los Angeles jury awarded $87 million -- including $65 million in punitive damages -- to a man who claimed the family investment firm, William E. Simon and Sons, had defrauded him in a business deal involving a pay telephone company.

The story was splashed all over the California media. Democrats reveled in the verdict, hoping it was the silver bullet to put an end to what heretofore been an American political Cinderella story. The campaign of incumbent Gov. Gray Davis, a Democrat, immediately went on the attack, launching a new statewide television ad campaign criticizing Simon. "If we can't trust him in business, how can we trust him in the governor's office?" the spot asks.

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In Washington and Sacramento, the verdict has been followed by what the Simon campaign must feel is an eerie silence. GOP leaders are assessing the situation and trying to figure out what to do.

For Simon's campaign, this is, in one sense, nothing new. His surprise win in the state's GOP primary, helped along by a negative media campaign from Davis against the Republican front runner, former Los Angeles Mayor Richard Riordan, set the party establishment on its ear. Simon, the conventional political wisdom held, was "too conservative" to be elected in contemporary California. The state GOP has been largely moribund since Davis's thumping victory over former state Attorney General Dan Lundgren in the governor's race four years ago.

The key question on everyone's mind right now: Is Simon finished?

The Democrats certainly think so. To them, having Simon held responsible for a fraudulent business deal strikes at the heart of what had been his principal strength: That he could use his business skills to bring about positive change in the state's economy, solve its energy crisis and forestall what some suggest is a pending water crisis equal to if not more severe than the power emergency.

It is also true that the verdict in the case underscores the national Democratic theme that the GOP is too close to big business, dragging Simon into the corporate confidence crisis. If the prevailing opinion about the crisis is, as pollsters John Zogby, David Winston and others have suggested, that a select few corporate leaders enriched themselves through questionable means and at the expense of ordinary investors, then Simon's campaign will be handicapped by the disclosure.

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As a result, Simon will also likely have to be more forthcoming about his personal finances. For some months, the campaign refused to release his tax returns. They finally made them available for review in a limited manner but no one who saw them was allowed to take copies. This, of course, gives the impression that there is something to hide, a notion the fraud verdict reinforces. In politics impressions matter as much as facts.

Even with all that however, it is by no means certain that the campaign is dead in the water.

Before the judgment was announced, Simon was repeatedly polling even or ahead in polls against Davis. An independent survey of 831 likely voters released last week actually showed Simon leading, 47 percent to 45 percent. While Davis's support may cut across a broader section of the electorate, Simon's support seems to go much deeper and be much more firmly rooted. This means that the news of the judgment, while important, is less certain to rock the foundations of his campaign.

There are some California Republicans, most notably multi-millionaire Gerald Parsky, who have no great love for Simon and have been rather public in the expressions of concern about some of his positions.

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Parsky is President George W. Bush's point man in the state, giving his pronouncements some weight, at least with those who are in the business of covering politics.

It is equally clear that Parsky does not speak for the GOP grassroots, some of whom have been equally strong in their condemnations of his efforts to take over the state party apparatus.

The judgment against Simon has spawned rumors of an nascent effort to run a write-in campaign on behalf of state Secretary of State Bill Jones. This would supplant Simon and limit the political damage to the GOP statewide. Jones finished third behind Simon and Riordan in the gubernatorial primary.

That idea is, in the words of GOP consultant John Hoy, "Preposterous."

Hoy, who has worked in Republican circles for a number of years, points out that Rob Lapsley, who is Jones's closest political adviser, is now a senior official of the Simon campaign. "Jones could not mount this effort without Lapsley and, more importantly, he just would not do it. He is a person of incredible integrity and loyalty," Hoy says.

According to Hoy, Jones would never be party to such an effort, let alone lead it.

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Fortunately for Simon, this newest disclosure came at the beginning of August, a time when people are notoriously uninterested in political events.

Simon still has several months in which to rebuild whatever support he may have lost among his political base and among the swing voters and Democrats he needs to win.

One thing in his favor is that, so far, the race has been all about Davis.

Though California voters have, of late, been more liberal in their habits, they appear not to be wedded to either party. Some political observers believe that party loyalty in the state may be, for all intents and purposes, nonexistent.

Simon supporters also point to Davis's extraordinarily high negatives, even among his own party. As one senior Simon adviser says, "Even (former Gov. Edmund G.) Pat Brown was not as hated in his 1966 race against Reagan as some of the polls show Davis being."

In the ensuing months, Simon is faced with the challenge of rehabilitating the image he spent some months crafting. This will be done primarily through radio and television but also through certain high profile appearances and speeches.

The important consideration here, say analysts, is not that Simon must end up looking squeaky clean; it is that he only has to end up looking better than Davis.

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If there are additional negative revelations about Simon's business activities, this will be very hard to do, as Hoy acknowledges.

"No one knows if there is another shoe waiting to drop, as is almost always true in cases like these. This means that people will spend at least a few days being cautious in their relations with the Simon campaign," he says.

A temporary distancing does not equal to a call to abandon ship.

"Davis is in too deep with the voters," Hoy says. "Simon has to prove he's up to the job -- and he has plenty of time to do that still. The campaign is going through an exceedingly bad spell right now but most people believe the problems with the Davis campaign are so systemic with the voters that, provided Simon can work through this, it's still a competitive race."

That may change but, for the time being it still appears that the race is exactly where it was at its start -- with voters trying to decide which of the two candidates they dislike the least.

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