CAPITOL NOTEBOOK: WATER CHIEF'S FUND WRINGING UPSETS CRITICS.

Byline: Terri Hardy and Dorothy Korber

FUND raising is the lifeblood of politics.

The constant need to raise cash keeps lawmakers on the lookout for new ways to keep the money rolling in. But some eyebrows went up recently when potential contributors received letters from Phillip J. Pace, the chairman of the board of the Metropolitan Water District of Southern California, on what appeared to be agency letterhead, urging ``sponsorship'' for a fund-raiser for Assemblyman Bob Hertzberg, D-Van Nuys.

Recipients of the letter - including vendors and consultants for the water district, sources said - were asked to contribute a certain amount of cash (the amount varied) to sponsor a July 15 fund-raiser for Hertzberg in Montebello.

An anonymous letter of complaint about the solicitation was sent to the state Fair Political Practices Commission in Sacramento, according to Hertzberg spokesman Paul Hefner.

Sigrid Bathen, a spokeswoman for the FPPC, said the commission could not confirm or deny that an investigation was under way.

Jim Knox, executive director of California Common Cause, said he wasn't sure if the letter violated the Political Reform Act but said it was ``rare to see such blatant arm-twisting of vendors by a public officer. It's certainly inappropriate.''

Hefner said that Hertzberg was aware that Pace was putting on a fund-raiser but didn't see a copy of the invitation until after it had been sent. Hefner, who had seen a copy of the complaint letter, dismissed all its allegations, saying that Pace had not used any public funds to print or mail the letter, and had used his own Rolodex to generate the mailing list.

He said that the letter, although it was topped with the words Metropolitan Water District and included the agency's official seal, was not agency letterhead, adding that Pace had assured Hertzberg the water district's legal counsel had approved the mailing.

Hefner believes the complaint was prompted by internal strife within the water district.

``This was about someone with another beef trying to make trouble,'' he said. ``The problem is that no one knows who Phil Pace is, so the only one that gets hurt by this is Bob Hertzberg.''

Shades of gray

Poor Gray Davis. We've been kind of tough on the governor, teasing him about ``gray madder'' in the wake of his pronouncement that the Legislature's job is to implement his vision.

The wittiest commentary came from Republican Dan Schnur, national communications director for presidential candidate John McCain, who let loose with this fusillade:

``Gray Davis declared martial law in California this week, telling the serfs and peasants of the state Legislature that their purpose was to serve his whims and bask in his reflected glory. Lobbyists gathered from across the land, bringing him their finest meats and cheeses, hoping to placate the governor who would be king. . . .''

Meats and cheeses and cookies. The sarcastic president of the state Senate, San Francisco's John Burton, presented Davis with a plate of home-made cookies. Burton's aim, however, was not to placate.

``Getting that plate of cookies,'' explained one Senate staffer nervously, ``is like waking up with a horse's head next to you in bed.''

New laws

The governor has signed into law a measure that would allow victims of the Holocaust to sue companies that profited from their slave labor.

Under SB 1245, by Sen. Tom Hayden, D-Los Angeles, California Superior Courts will be granted jurisdiction over these cases until they are resolved, and the statute of limitations for filing lawsuits will be extended until Dec. 31, 2010.

Another new law signed last week by the governor was authored by Assemblyman Tony Cardenas, D-Panorama City, and requires the state to give priority funding to new school construction projects that relieve overcrowding.