Widely Criticized in Crisis, Davis Defends His Caution
Power: Some say he has seemed unprepared for an emergency that could define his governorship.
By DAN MORAIN and MARK Z. BARABAK, Times Staff Writers
SACRAMENTO--It was the week the lights went out, a mad trucker torpedoed his 18-wheeler into the Capitol and George W. Bush gave California the back of his hand.
It was, in short, a time of trial and testing for Gov. Gray Davis unlike any he has faced in two years of bountiful budgets and social harmony. And it is a time when many found Davis wanting.
Republicans accused him of timidity. Democrats grumbled privately about his indecisiveness. Energy experts questioned his grasp of the state's spiraling crisis.
"Whoever's been feeding him information . . . hasn't been getting it too correctly," said Stephen W. Bergstrom, head of Dynegy Inc. and a major player in the state's energy market, who said he was unable to get a meeting with the governor for months.
Davis brushes aside his critics. In an interview late last week, the governor said that, with considerable help from Democratic and Republican lawmakers, he is navigating California out of harm's way and will emerge with a long-term solution to the state's mounting woes.
"At the end of this you will see my incremental, cautious approach will serve the state well," Davis said, throwing those labels back at his critics. "There are so many interchangeable parts here that bold, decisive strokes sometimes backfire."
Davis has faith a solution is near: "I am going to will my way to a solution that is financially viable and within the existing rate structure. And when you see the prices come in on these long-term contracts, you will begin to understand I am on the right track."
But many of those who have watched the governor up close paint a rather less decisive picture. They describe Davis as isolated, aloof and often more concerned with avoiding political blame than solving the state's energy problems.
"To say we're appalled is understatement," said one power company executive. Like many of those interviewed, he declined to be identified because of ongoing talks involving Davis.
In Sacramento, public criticism of Davis has been muted as well, in deference to the severity of the crisis. Although four freshman Republicans denounced his leadership on the Capitol steps last week, key players are reluctant to appear divisive as they struggle to pull the state out of its morass. "We can ill afford to fight now," said Assemblywoman Carole Migden (D-San Francisco).
The electricity crisis--or "challenge," as the governor prefers in news releases--comes as Davis has emerged as one of the Democratic Party's most frequently mentioned presidential prospects for 2004. In that context, each move is viewed through an exaggerated political prism.
"Whether he wants to be or not, Gray Davis is the electricity governor," said Dan Schnur, a Republican strategist and former aide to Gov. Pete Wilson, who signed electricity deregulation into law two years before leaving office. "If he tames this challenge, he's a national candidate. If the crisis tames him, it's all gone."
Davis, who faces reelection next year, is mindful of the political risks. Close campaign advisors, who remain on his political payroll from the 1998 election, have been privy to Davis' every step, from vetting his State of the State speech this month to monitoring daily developments, sometimes minute by minute.
At their most optimistic, aides suggest the crisis could burnish Davis' leadership credentials in a way that never would have happened if he had presided over four years of unblemished prosperity--the prospect he held out when he ran in 1998 on a platform of stewardship and stability.
"It gives him cachet, potentially, to say, 'I handled one of the biggest crises anyone has handled and come out of it whole,' " said one political advisor. "If he gets through this and voters affirm his leadership in 2002, he'll be stronger in many ways [politically] than had it never happened at all."
Davis insists he does not base his actions on political concerns. Outlining his plans in an hourlong interview, the governor said he is prepared to spend what it takes to keep lights burning in the short term.
Looking past the immediate crisis, Davis intends to recommend incentives as early as next week to accelerate construction of power plants to ensure more electricity for years to come. He vowed in the strongest terms yet that he will not preside over rate increases beyond those approved earlier this month.
Davis offered only generalized thoughts on his grander plans. His remarks came at the close of a week when California experienced its first planned blackouts across the state since World War II and, for the first time, decided to pour general taxpayers' money--$400 million--into buying electricity on the wholesale market.
Crafting a Multifaceted Plan
There are three legs to the plan Davis describes: more conservation, more power plant construction, and allowing the state and utilities to enter into long-term electricity contracts that promise more price stability. He also says he wants to keep utilities, which say they are $11 billion in debt, from going bankrupt. Davis and lawmakers are working on a deal to help the companies pay off their debt, which he estimates at $4 billion, by allowing them to apply a specific portion of consumers' monthly bills.
Early in his tenure, Davis offended some veteran lawmakers by suggesting their job was to implement his vision. There's no such talk these days. Davis increasingly seems to lean on key legislators to help pull the state through its crisis.
In addition, Davis said, he regularly consults former U.S. Treasury Secretary Robert Rubin, ex-Energy Secretary Bill Richardson and former Southern California Edison President Michael Peevey.
Still, several lawmakers and others who have regular contact with Davis say his circle of close advisors remains small, a habit he has kept throughout his 20-year public life.
A politician who keeps his own counsel and delegates few tasks, the governor prides himself on his attention to detail--even editing the press statements issued by his office.
Electricity, however, is not a topic easily mastered, and many experts say that no one in his group knew much, if anything, about it before the crisis hit.
One key advisor, Loretta Lynch, for example, is chairwoman of the California Public Utilities Commission, which regulates state utilities. She was a San Francisco trial lawyer with no energy background when Davis tapped her for the job.
She defended Davis' go-slow approach. "The folks who brought us deregulation were theorists who had no experience in making a deregulated market work," Lynch said. "There was a lot of wishful thinking. . . . We can't afford two failed theories."
But the governor's cautious approach infuriates others who believe the time for action passed long ago. The state's utilities have been dealing with high wholesale electrical prices since May. Executives began asking for meetings with Davis last spring. Independent power generators asked for meetings during the summer. Although some gained audiences with Lynn Schenk, the governor's chief of staff, company executives say they did not meet face-to-face with Davis until December.
"We have tried since late May, June to meet with the governor. The whole industry. We have tried and tried and tried," said Bergstrom, of the energy company Dynegy. He said the heads of the state's two biggest privately owned utilities--PG&E's Robert Glynn Jr. and Southern California Edison's John Bryson--have also complained about Davis' inaccessibility.
Bergstrom finally sat down with Davis and California lawmakers earlier this month.
"I don't understand that," Bergstrom said. Normally, if utility and power executives sought a meeting with a governor under such urgent circumstances, "it would happen 49 times out of 50." Davis dismissed such complaints.
"Right, and what were they going to tell me then . . . that they didn't tell me now?" he asked, saying that utilities and their independent power suppliers see rate increases as the solution to the deregulation mess. "This is all just cover to raise rates. They want my constituents to ship more money back to them. . . . They're used to rolling over politicians: 'We want it; you give it to us.' "
Energy producers aren't the only ones displeased with the governor. A top Wall Street analyst who is closely following the state's crisis listened last month as Davis tried to assuage concerns that California was not helping the utilities as they piled up billions of dollars in debt. Rather than offer a plan, he said, Davis spoke at length about how the crisis was not his fault.
"He wasn't talking about measures he was proposing, about what steps he could take or would take," the analyst said. "He wouldn't address it, to be perfectly honest."
Of course, the analyst and many of Davis' critics believe he should raise electricity rates--something Davis vows never to do.
" 'Leadership' means raise rates," the governor scoffed. " 'Bold' means raise rates. 'Decisive' means raise rates. Everything means raise rates. That makes everyone on Wall Street happy. It does nothing to solve our problem."
Davis has dedicated long hours to the energy issue. But in meetings, some participants say, the governor's questions suggest he fails to grasp the depth of the problem. He can also appear aloof.
During one seven-hour session last weekend, Davis showed up about half an hour late, while two Clinton Cabinet officials, the president's top economic advisor and several energy company executives waited. He also took breaks when others felt more work could have been done, particularly in Washington, where it was getting late.
"People fumed," one executive who was participating from Washington said, adding that he viewed the breaks as "gamesmanship" on the governor's part. "People in Washington were shaking their heads."
Some of those involved in trying to solve the crisis say Davis is simply failing to assert much leadership. There is, said an energy company executive who has participated in recent sessions, a "constant search for cover" and a "willingness to do things only standing side by side" with Republicans and Democrats in the Legislature.
It is as if the governor is waiting for "political permission to act," the executive said, rather than taking steps he might see as necessary, regardless of the effect on his popularity.
Davis has a different view. Perhaps, he suggested, Texas energy executives and Washington insiders fail to understand the extreme nature of California's direct democracy. Davis was chief of staff to Gov. Jerry Brown in 1978 when the anti-property tax revolt resulted in passage of Proposition 13. Similar stirrings are present in the energy crisis, Davis said, and he vowed not "to let that mistake happen."
"An initiative put on the ballot by someone who might have different agendas could pass if there is a high level of discontent," the governor said. ". . . If we don't solve the problem, there will be consequences which no one can predict and they won't be good."
Poor Marks on Handling of Crisis
Politically, the governor seems to face no immediate danger. His approval ratings remain robust. But polls have found considerable unhappiness with the way Davis has handled the energy crisis. A survey released last week by the Public Policy Institute of California, a nonpartisan think tank, showed 63% of Californians approved of Davis' job performance--but 62% disapproved of his actions in the energy crunch. An earlier Los Angeles Times Poll gave Davis similarly poor marks on the crisis.
Republicans admit they face a tough task dislodging Davis. It has been nearly 60 years since a California governor was denied reelection.
But the scenes of neighborhoods darkened by rolling blackouts and the ranks of stranded citizens boiling in anger has convinced GOP strategists that their efforts to unseat Davis, while uphill, may be growing somewhat less so.
Secretary of State Bill Jones, the party's leading contender to face Davis in 2002, acknowledges the governor inherited a deregulation scheme of others' making. But, Jones suggested, "delay and procrastination" have worsened the state's power problems.
"This could have been avoided if, in fact, the governor would have used the past 18 months differently," Jones said, citing the failure to lock in long-term electricity supplies when the state could have done so for much less than today's prices.
If Davis wins reelection, the speculation about a presidential bid will surely intensify; the guessing began virtually the minute former Vice President Al Gore conceded to Bush.
Every California governor gets an automatic place on the proverbial candidate short list. But Davis has several other things going for him. With a wide-open Democratic field, he is the party's most prominent elected official outside Washington. His chairmanship of the Democratic Governors Assn.--a springboard for Bill Clinton and Michael Dukakis--may further enhance his visibility. Also, Davis is a phenomenal fund raiser.
Still, though many take a Davis presidential bid for granted, those close to the governor give no better than even-money odds that he will run, even if he sweeps to reelection.
One intimate said there are two questions any prospective candidate faces: Can I do the job of president and can I do what it takes to win?
"I believe that Gray is growing increasingly confident on the first question," said the Davis associate, who did not want to be identified while discussing political calculations amid the energy crisis. "But the second question is very debatable and, believe me, he's not going to make a rash decision without an awful lot of evidence that the path is relatively clear.
"He saw firsthand what happened to Jerry [Brown]. He saw relatively firsthand what happened to Pete [Wilson]. He doesn't want to repeat any of those experiences."
In fact, there are plenty of reasons why no sitting California governor has been elected president in modern times. Logistics, for one.
"There aren't any direct flights from Sacramento to Manchester [N.H.] and you can't run the state from a cell phone at O'Hare [airport]" said Schnur, who was part of Wilson's failed 1996 bid. "Any significant time campaigning means several days away from the state."
Moreover, as big and important a job as it is to be California governor, it is a post that wins precious little attention outside the state, where news coverage tends toward disasters (man-made and otherwise) and the state's kooky La-La Land image.
Indeed, for most Americans the past month of crisis bulletins has served as their first introduction to California's chief executive. Interviews with a half dozen Democratic Party chiefs around the country, including those in the early-voting states of Iowa and New Hampshire, found little more than passing knowledge of Davis.
"He's sort of a blank slate," said Dick Harpootlian, chairman of the South Carolina Democratic Party. "He certainly hasn't demonstrated any pizazz or charisma."
"I know that he's an incredible fund raiser," volunteered Iowa chairman Rob Tully.
"Electrical problems," said Kathy Sullivan, head of the New Hampshire Democratic Party. "That's what comes to mind right now." |
