- The Washington Times - Friday, August 2, 2002

A Los Angeles jury's $87 million award, including $65 million in punitive damages, against Bill Simon's investment firm Wednesday in a fraud lawsuit was a "nuclear bomb" for the Republican gubernatorial candidate, officials with his campaign said privately
A Republican official close to both the Simon campaign and the White House said angry administration officials called the Simon campaign yesterday to complain that the Simon team never alerted the Bush political team in Washington about the lawsuit.
Mr. Bush had three visits scheduled this month to help Mr. Simon raise money, and Vice President Dick Cheney had one trip scheduled, but those visits "now look iffy," the official said.
However, two senior White House officials, speaking on the condition of anonymity, separately insisted that no such calls were made. They said the White House remains supportive of Mr. Simon and is confident he can win.
The bad news for Mr. Simon's campaign came a day after it heard the good news that the Republican businessman was leading Gov. Gray Davis by 47 percent to 45 percent in an independent statewide poll.
The poll, taken for several network television outlets in the state, suggested the Democrat incumbent was himself in trouble with his own voter base and was failing to generate as much commitment to vote as Mr. Simon was among Republican voters.
"Simon has secured his natural base more than Davis has," Joe Shipman, director of elections survey for the TV stations, said in an interview. "In areas of the state where Simon is strong, he is very strong. Davis' support is broader, but Simon's is deeper."
News of the jury's award Wednesday shattered whatever optimism the Simon campaign might have generated from the poll last weekend, by SurveyUSA, of 831 likely voters.
The poll had Mr. Davis winning the Los Angeles area, where 40 percent of the voters are, by only 8 percentage points, and the San Francisco Bay area, where an additional 20 percent of votes reside, by 15 points.
Mr. Simon was not named in the lawsuit. The man who successfully sued the Simon family firm is a convicted drug trafficker who has done prison time. But those facts were overshadowed by news of the multimillion-dollar punitive-damages award.
Mr. Simon has been telling voters his successful business leadership and integrity make him the right man to replace Mr. Davis.
With the judge not present Wednesday, the Los Angeles jury awarded the plaintiff $65 million in punitive damages on top of its previous award of $22.2 million in compensatory damages.
California newspapers splashed the lawsuit story all over their front pages yesterday.
One California Republican said the news surprised and angered the Bush White House, which has been giving all-out support to the Simon campaign.
Republican sources said that unless the jury award is set aside, Mr. Simon and members of his family involved in the investment firm will have to come up with $77 million for the plaintiff and perhaps an additional $6 million to keep Simon's underfunded Republican gubernatorial campaign on the air with ads and perhaps afloat all the way through the Nov. 5 elections.
The Simon campaign had not warned the Bush political team in Washington about the existence of the lawsuit, even though Mr. Simon had given a deposition in the case in May.
Mr. Bush has been the star attraction at Simon fund-raisers in California.
A Simon campaign official said the "word 'fraud' which is all over the press stories about Bill Simon and the jury award is the most dreaded word in today's political atmosphere."
That atmosphere includes corporate accounting scandals, a wobbly stock market and Democrats questioning both the president's and vice president's past business practices.
Mr. Simon's immediate reaction to the award was to say that the judge was likely to set aside the verdict and that if he didn't, the firm would win on appeal.
But other Republicans said they feared even his winning an appeal would be too late to salvage his image for an election that is a little more than three months off.
They also feared that the litigation was too complicated to explain to most voters but believe Mr. Simon will have to make the case that a biased jury along with political dirty tricks by the Davis side were at work.
But because of Mr. Davis' continuing disfavor with voters, as evidenced by the latest polls, even critics of the Simon campaign organization believe Mr. Simon can still defeat Mr. Davis.
"This looks like a runaway jury," said Arnold Steinberg, a long-time Republican strategist in California. "What's also odd here is that the plaintiff's law firm sent out news releases a suspicious rarity for a law firm. Voters may understandably see this as a dirty-trick play by Davis, since polls have shown the public has a highly negative view of Davis already and cynicism toward politics in general."
The fraud suit was filed by Paul E. Hindelang against William E. Simon & Sons, a firm founded by Mr. Simon, his father and his brother. In 1981, Mr. Hindelang was convicted on federal charges of drug smuggling and served about 30 months in prison.

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