Campbell Will Quit Senate, Join Major Trade Group : Politics: Common Cause delivers a conflict-of-interest scolding to the lawmaker, who plans to give up his seat in January.

SACRAMENTO — State Sen. William Campbell (R-Hacienda Heights), an influential legislator for two decades, abruptly announced Thursday that he will resign his seat in January to become president of the California Manufacturers Assn., a major trade group with extensive lobbying operations in Sacramento.

Campbell, 54, who won the Republican nomination for state controller in 1986 but then lost to Democrat Gray Davis, acknowledged at a press conference that part of the reason he is leaving the Legislature is because his immediate prospects for moving up in political office are dim.

“Things (opportunity for political advancement) started getting farther and farther into the future and thus more unattainable,” Campbell said. “And so . . . when I met with the California Manufacturers Assn. and they made this offer and they worked out the details of it, it was an offer I couldn’t refuse and probably the best thing for me.”

Campbell and officials of the Manufacturers Assn. declined to say how much money the senator will be paid in his new position. But a source told The Times that other candidates for the job were quoted an annual salary of $150,000--considerably higher than the $40,816 salary paid legislators.

The senator said that he will abide by the spirit of proposed ethics reforms that would ban former lawmakers from lobbying the Legislature for a year after they leave office.

Campbell also said that during a special legislative session expected to be called in response to last week’s Northern California earthquake, he will steer clear of any votes that could leave “the perception of a conflict of interest” with his new job.

Despite those pledges, California Common Cause accused Campbell of having “serious ethical problems” in accepting a full-time job without immediately relinquishing his office.

“If nothing else, the senator’s acceptance of a position with an association that he has been lobbied by, and perhaps even sponsored bills for, creates the appearance of a serious conflict of interest,” said Mark Haarer, acting director of the group.

The California Manufacturers Assn. represents about 70% of the state’s manufacturers and was identified in a Fair Political Practices Commission report earlier this month as the lobbying group that spent the most--$2.2 million--to influence legislation and administrative law decisions in 1988.

Campbell said his decision to leave the Legislature was not influenced by proposed ethics rules to ban the acceptance of speaking fees--which netted him $46,900 last year--or a number of recent news stories about how his wife and two top aides made thousands of dollars off of a series of womens’ conferences sponsored by Campbell’s office.

Records show that Margene Campbell and aides Jerome M. Haleva and Karen L. Smith were paid $452,500 in salaries and consulting fees since the annual nonprofit events were organized seven years ago. The state attorney general’s office is currently investigating fees paid to Campbell’s wife in 1987, and the federal Small Business Administration is demanding repayment of $43,000 in public funds used for the conferences.

Thursday’s announcement touched off vigorous speculation over who would replace Campbell in the 31st Senate District, a Republican enclave that stretches from southern Los Angeles County to the eastern half of Orange County.

Within hours of Campbell’s announcement, Assemblyman Frank Hill (R-Whittier) announced his intention to run for the spot in a special election to be called by Gov. George Deukmejian after Campbell resigns. Assemblyman Gil Ferguson (R-Newport Beach) also said he might be interested in the seat.

Campbell was first elected to the Assembly in 1966, the youngest Republican in the Legislature. He quit in 1972 to run an unsuccessful campaign for the Los Angeles County Board of Supervisors, returning to the Assembly in 1974.

He moved over to the Senate in 1976, where he was later elected minority leader, a prestigious post he held until deposed in 1983. Three years later, he ran a losing race for state controller, a contest that has left him with a campaign debt of $400,000.

Over the years, Campbell has carried legislation relaxing government regulation of certain industries, including stockbrokers and coin dealers.

He also has authored major bills on disaster preparedness and was one of the chief negotiators this year on an $18.5-billion transportation proposal that will be submitted to voters next June.