CAMPAIGN GIFTS KEEP GIVING BACK.

Byline: THOMAS D. ELIAS

IMAGINE what things might be like if the strict conflict-of-interest laws passed by initiative in a few cities just over three years ago were operating on the state level.

Gray Davis might still be governor because the Oracle Corp. would not have been able to give him the donation that became a seminal negative symbol of his administration. In fact, Oracle gave Davis a $25,000 campaign contribution on the same day it got a lucrative state software contract.

Current Gov. Arnold Schwarzenegger would not have been able to conduct all the fund-raising events he pulled off last spring. One event in Dallas, for instance, was co-hosted by Bob Schlegel, whose Pavestone Co. has a $113,000 California state contract. Another event in Chicago was co-chaired by Patrick Ryan, head of AON, a large insurance brokerage deeply involved in the California workers' compensation market, according to the consumer watchdog Foundation for Taxpayer and Consumer Rights.

Had the local laws been adopted statewide, none of these things could have happened because those laws prohibit contributions to campaigns of decision-making officials from any individual or company having business dealings with a city worth more than $25,000.

The laws also prohibit officials like city councilmen and planning commissioners from going to work for companies whose contracts they've approved for at least five years after voting on those pacts.

The laws were passed by voters in San Francisco, Pasadena, Santa Monica, Vista and Claremont, and they were immediately challenged in some of the cities. Petitions to put those laws on local ballots were circulated by unpaid volunteers.

Imagine if the same law were applied at the state level and expanded - as some have suggested - to include persons and interests directly affected by state actions, as well as those with contracts.

Toyota USA, whose dealerships had given Schwarzenegger $272,000 through June 1, would not have been able to contribute a dime since the company and its dealers are affected by everything from smog regulations to lemon laws.

ChevronTexaco, the Irvine Co., Mercury Insurance, Kaiser Foundation Health Plan, Hewlett Packard, Blue Cross of California and SBC Communications - all of which have given Schwarzenegger at least $135,000 each - could not have given a nickel.

And no state legislators or commissioners acting on anything affecting them could accept a job or a lobbying contract with any of those companies for years after leaving office.

Critics like Santa Monica Mayor Pam O'Connor say this kind of law discourages people from seeking public office. Certainly it would have given several top aides to Schwarzenegger - and previously to Davis - second thoughts. Maybe even Schwarzenegger himself.

For example, current gubernatorial chief of staff Patricia Clarey was a vice president of the Health Net health maintenance organization, whose interests are closely regulated by the state. She also has been a ChevronTexaco lobbyist.

As it stands, she could go back to either if she leaves government service, presumably with a large salary increase. But if the state had a conflict law modeled on those passed by the five cities three years ago, she could not - and that might have kept her from going to work for the governor.

Similarly, Schwarzenegger's current legislative secretary, Richard Costigan, previously was vice president of government relations and chief lobbyist for the state Chamber of Commerce, whose interests the governor usually backs. As it stands, he could go back to work for the chamber - and possibly be handsomely rewarded for services performed while in government employ.

It's all part of a de facto revolving-door arrangement between government and some private businesses. It works for Democrats, too. The chief transition aide for new Los Angeles Mayor Antonio Villaraigosa, for instance, served as a deputy mayor under former Mayor Richard Riordan. In between, while James Hahn was mayor for four years, she worked for developer and big political donor Eli Broad, whose initial is the B in the KB Homes firm.

Ideally, none of this should be possible. It leads to an old-boy, old-girl network that sees to it certain big commercial and labor interests always get their way.