DELEGATES TALK FEINSTEIN RUN : SPECULATION FLURRIES OVER GUBERNATORIAL BID.

Byline: Amy Chance Scripps-McClatchy Western Service

It's the stuff of California political legend.

Dianne Feinstein was recovering from a hysterectomy in 1989 when her political consultant, Clint Reilly, announced he was dropping her as a client because she was unwilling to demonstrate her commitment to running for governor.

``We had her as close to on the ropes as you could get,'' recalled Richie Ross, political consultant for Feinstein's competitor at the time, then-state Attorney General John Van de Kamp.

``She was sick. Reilly humiliated her. She didn't have any money. Everybody was for Van de Kamp. She was in the toilet bowl,'' he said. ``But she didn't scare out. She filed (for governor).''

State Democratic Party activists debating whether Feinstein, now a U.S. senator, will opt to run for California governor again next year were retelling that story as they gathered in Sacramento for their annual state party convention this weekend.

Feinstein, who went on to win the Democratic nomination for governor in 1990 before losing in the general election to Pete Wilson, has some problems this time, too.

She's acknowledged she's ``conflicted'' about entering the race. Her detractors, noting she's been plagued recently by back trouble, say she's tired of running for office, having waged three major statewide campaigns in the '90s. The last one was against GOP multimillionaire Michael Huffington, who battered her image badly by pouring millions of his own money into television ads.

Now there's another multimillionaire on the horizon, Northwest Airlines co-chairman Al Checchi, who says he might want to run for governor as a Democrat, too.

And from Washington, reports that Feinstein may have been targeted by China to receive illegal campaign contributions funneled through foreign corporations have led to increased scrutiny of her high-profile advocacy of stronger U.S.-China ties and her husband's investments there.

To date, however, little of it has shaken party activists' interest in knowing the answer to one key question for 1998: Will she or won't she run for governor?

``The most important person on Earth related to California politics right now is Dianne Feinstein and whether she says yes or no,'' said Sacramento lobbyist and Democratic activist Bruce Pomer. ``Until we know what Dianne's going to do, nothing else really can happen.''

That is not to say that all Democrats are hoping she enters the race.

The first major Democrat to announce formally he is running, state Lt. Gov. Gray Davis, is busy courting key party constituencies, including labor. Davis and his energetic aide, Chief of Staff Garry South, are busy arguing that Davis is ``a perfectly logical candidate who's a proven vote-getter'' and party loyalist. Last Thursday he announced the endorsements of eight Democratic legislators and four labor organizations.

``Gray has worked with these people for 20, 25 years,'' South said. ``Gray is the only candidate who has the deep, deep roots down into the Democratic activist core.''

Walter Rice, a Democratic delegate from Sacramento County who's active in the California State Employees Association, says he isn't committing until he knows what some of the potential candidates think about issues affecting state workers.

``I like Gray Davis,'' he said. ``He's been there for state workers. He's come to bat for us, really. But I don't think he's that strong a candidate.''

Feinstein ``would be better'' than the likely GOP nominee, state Attorney General Dan Lungren, he said. ``But she's kind of conservative for a Democrat,'' Rice said. ``If she's going to be a candidate, we ought to get come commitments from her on state labor issues.''

Among Democratic Latino activists, Feinstein's outspoken efforts against illegal immigration in Congress have left many with the perception that she's ``very anti-immigrant,'' said Jesse Valenzuela, a Democratic delegate from Banning.

``She's a good candidate, but with the Latino community she's got a tough battle,'' Valenzuela said. ``There's concern she could have done a lot more in assisting immigrants who are legally here.''

Some of those Democrats would prefer to support former White House Chief of Staff Leon Panetta, who planned on addressing delegates at a Saturday dinner. Weighing a run for governor himself, Panetta is considered unlikely to compete if Feinstein enters the race.

Checchi, meanwhile, has said Feinstein's decision won't play a part in his own determination about whether to spend some of his considerable personal fortune on the race. He has no plans to speak at what will be his first state party convention, where campaign manager Darry Sragow said Checchi plans to ``hang out'' with delegates in the halls.

But most state political consultants believe even a multimillionaire would have trouble getting past Feinstein to win the Democratic nomination and defeat Lungren in the fall.