Davis Aides Repaid Funds During Probe

SACRAMENTO — During an investigation into allegations that state Controller Gray Davis improperly used public employees and state facilities in his successful 1986 election campaign, a Davis campaign committee repaid the state $8,000, it has been learned.

The investigation, launched 16 months ago by Atty. Gen. John K. Van de Kamp, is expected to end by September, but the attorney general’s staff is still struggling with the question of who would handle any prosecutions that might result.

Los Angeles County Dist. Atty. Ira Reiner, who would normally be expected to pursue charges that state funds were used for political purposes within the county, has bowed out of the politically sensitive case by declaring a conflict of interest.

Davis refused Thursday to comment on any aspect of the investigation, including his reasons for returning the $8,000 to the state. Calls to Davis’ office were referred to Joseph Remcho, a San Francisco lawyer hired by the campaign committee.

Remcho said he had advised Davis not to answer questions until the investigation by Van de Kamp is completed. In the past, Davis has insisted that he did not knowingly use state resources for campaign purposes while he was an assemblyman running for controller.

Davis’ campaign statements show that Friends for Gray Davis paid a total of $8,000 to the state in 1987. The money was sent to the Assembly Rules Committee in two payments--$1,900 on Aug. 20 and $6,100 on Nov. 25, said Bob Connelly, the Assembly’s chief administrative officer. The checks came without any explanation, Connelly said, “but we normally assume it to be for the inadvertent use” of Assembly staff or services.

Probe Began Last Year

The investigation, begun in March, 1987, after a Times story on Davis’ campaign fund raising, has provided a far-reaching examination into the way Davis conducted his $5-million campaign for the controller’s office.

But the case is proving to be politically hot for Davis and Van de Kamp, both Democrats and potential rivals for their party’s nomination for governor in 1990.

By refusing to take the case, fellow Democrat Reiner avoided taking sides in what could become a legal slug-out between the two statewide officeholders.

Reiner pulled out because he has “the appearance of a conflict of interest,” said Assistant Dist. Atty. Curt Livesay, speaking for Reiner, who is traveling out of state.

Livesay explained that a one-time Reiner campaign aide also worked in Davis’ campaign, but is neither a potential witness nor a principal in the investigation.

“Technically that’s not a conflict of interest,” Livesay said. “At most it is the appearance of a conflict. . . . But the appearance is enough that we felt (Reiner) should decline.”

Van de Kamp refused to answer questions about the Davis probe. The attorney general has a policy of not commenting on ongoing investigations, spokesman Duane Peterson said.

However, others on Van de Kamp’s staff say privately that the attorney general has considered ways of turning the case over to another, independent prosecutor. But that may prove impossible under state law.

Immunity for Some

According to several sources familiar with the probe, the attorney general’s investigators have granted immunity from prosecution to some of those who were on Davis’ Assembly staff when he was running for the controller’s office and who may have done campaign work while on state time. The aim, these sources said, was to determine what Davis and his top advisers knew about campaign improprieties admitted to by lower-level staff members.