HAYDEN PUTS PRICE ON CAMPAIGN : MESSAGE, NOT MONEY, WILL WIN RACE, SENATOR SAYS.

Byline: Patrick McGreevy Daily News Staff Writer

As he gears up for a potentially expensive race against Mayor Richard Riordan, state Sen. Tom Hayden has written off $1.25 million in debt from previous campaigns largely financed with money from his divorce settlement with actress Jane Fonda.

Campaign records show that Hayden's previous campaigns for senate, governor and Proposition 128, a failed environmental reform initiative, racked up more than $2 million in debt as of October.

Included in the debt are three loans totaling $1.25 million that Hayden has officially written off as bad debt.

``That money came and went out of the divorce settlement,'' Hayden said.

The senator said his remaining personal assets total a little more than $1 million, including funds from the divorce settlement, income from his legislator's salary, book royalties, payments for teaching and income on a blind trust portfolio.

Hayden said that he believes he will be able to run an effective $2 million campaign for mayor, without relying as heavily on his personal funds as he has in past campaigns.

``My plan is to raise up to the ($2 million) limit,'' he said. ``I can give $100,000 of my own money to my campaign, and I have done that.''

Yet, with three months to go until the election, Hayden has raised only about $20,000 in contributions from the public, in addition to $100,000 he has put in from his own pocket, said Hayden campaign spokeswoman Patty Shin.

Hayden has a series of fund-raising ``house parties'' scheduled in the coming weeks and is calling potential contributors, Shin said.

``I will have enough money to be competitive,'' Hayden said, while adding ``I think the role of money in politics is outrageous.''

Hayden may be hindered in his fund raising by new campaign laws restricting his traditional campaign practice of relying heavily on loans, and by city ethics laws placing limits on candidates who file for city matching funds.

Under Proposition 208, which took effect Jan. 1, no candidate can loan his campaign more than $20,000, according to LeeAnn Pelham, deputy director of the city Ethics Commission.

That element of Prop. 208 was designed to prevent candidates from loaning their campaigns big bucks then recovering the loan after being elected by soliciting contributions of special interests.

The proposition doesn't limit the amount that candidates can simply give to their campaigns.

However, city ethics laws that govern the mayoral race also prohibit any candidate who signs up for city matching funds, as Hayden has done, from giving more than $100,000 to their campaign.

Riordan has not signed up for matching funds, meaning he has no limit on the amount he can spend or contribute to his campaign from his own personal fortune. He already has raised more than $2.5 million.

Under the city's matching funds program, Hayden would receive a match for up to $667,000 if he agrees to spend no more than $2 million in the primary. But that means in order to get the full match, he must raise about $1.2 million through contributions from supporters. That plus the matching funds plus Hayden's $100,000 would total about $2 million.

In deciding to take matching funds rather than rely on his personal wealth in the mayor's race, Hayden said he plans to run an effective campaign that won't rely on massive spending, and maintained that his debt from past campaigns has not left him short.

``I don't think this is going to be won entirely on the basis of money,'' Hayden said. ``I think it's going to be won on the message, the passion and the solutions that are offered, and I will have enough money to get the message out.''

Claremont political science Professor David Menefee-Libby also said Hayden can get a lot of free publicity through his frequent news conferences.

``I think it will be difficult, but this kind of improvisational campaign doesn't take much money at all,'' he said, adding that the danger is that Riordan will ``bury'' Hayden in costly television ads and mailers toward the end of the campaign.

City Councilwoman Ruth Galanter said whatever Hayden raised it would be difficult to keep up with Riordan, whose personal fortune is estimated to be about $200 million.

``It's going to be hard for anyone to raise the kind of money Riordan has,'' Galanter said.

The councilwoman said Hayden is adept at getting free publicity, but she wondered if that skill would be enough to compensate for Riordan's massive campaign war chest.

``What I think Tom does well is communicate his ideas well to an audience. He is a genius at free media, because he is so articulate, although free media has never won a campaign as far as I know,'' Galanter said.

Hayden has written off $293,573 in loans to his 1994 gubernatorial campaign and $945,138 in loans to his campaign committee for Prop. 128, an unsuccessful 1990 state measure on environmental reform, according to campaign records and Shin, Hayden's spokeswoman.

Hayden's last disclosure statement for his 1996 Senate re-election campaign indicated that the campaign committee had outstanding debts of $838,742 as of Oct. 1 - including $200,000 borrowed from City National Bank.

Shin said that as of last week, the Senate committee still owed Hayden $635,000 that he had provided in loans from his personal funds.

Bill Carrick, a campaign consultant for Riordan, said the extent to which Hayden has financed his own campaigns in the past is in conflict with his criticism of the practice.

Hayden, for instance, has criticized the independently wealthy mayor for pouring $450,000 into the campaign for an elected charter reform, saying, ``I think the mayor is trying to buy charter reform.''

``(Hayden has) made a lot of these comments opposed to self-financed campaigns, and he's been one of the most consistent self-financers of campaigns in the history of the state,'' Carrick said.

Hayden said Carrick's criticism is an attempt at ``distraction.''

``The difference is I try to spend my money in campaigns were I was up against massive amounts of special-interest money,'' Hayden said, calling Riordan a ``walking special interest'' whose fortune came from corporate mergers and acquisitions.

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Writes off $1.25 million debt