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Group Retracts Gov. Davis Allegation

October 10, 2002

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LOS ANGELES (AP) _ A group that accused Gov. Gray Davis of illegal fund-raising has retracted the allegation, which Republican opponent Bill Simon briefly made an issue in his campaign then conceded was incorrect.

``It now appears that our original belief was erroneous,″ the California Organization of Police and Sheriffs said in a statement late Wednesday.

Davis had called on Simon to drop out of the race after Simon accused him of illegally accepting a campaign check inside the Capitol during his first run for governor in 1998. State law bars giving or receiving campaign contributions in state buildings.

Simon’s evidence was two photos released Tuesday by COPS, one of his main backers, that he claimed showed then-Lt. Gov. Davis taking money in his office. It became clear almost immediately, however, that the pictures were not taken in the lieutenant governor’s office.

They were taken in a private home in Santa Monica, the home’s then-owner confirmed Wednesday.

``We regret the impact this erroneous information has had in the Simon campaign,″ COPS said.

Simon, whose campaign has been plagued by a series of stumbles, will not drop out of the race, his aides said Wednesday. He had backed away from his claim earlier in the day but defended himself for making it.

``I had no reason to question the California Organization of Police and Sheriffs’ good faith belief in their charge against the governor,″ Simon said in a statement.

``They were reporting the charge directly to the (Fair Political Practices Commission), and they claimed that they had documented proof of their charge,″ he said.

COPS said Wednesday it was withdrawing the complaint.

``This whole sorry episode has backfired in Mr. Simon’s face ... as a former prosecutor, he should certainly be embarrassed, and if he had any sense of honor, he would drop out of the race. You have to check your facts in this business,″ Davis said.

``He should drop out,″ the governor told radio station KGO-AM.

Simon initially made the accusation Monday, following a debate with Davis. The Davis camp immediately denied it, and scrutiny of the photos by reporters and the Davis campaign quickly showed they had not been taken in Davis’ office.

On Wednesday, the Davis camp disclosed they were taken at a fund-raising breakfast in the Santa Monica home of Davis backer Bruce Karatz, chairman and CEO of KB Home. Karatz no longer owns the home.

``He was able to identify it because there’s a painting in the background that is his painting,″ said Larry Gotlieb, KB Home’s vice president for government and public affairs.

``We believed, in good faith, that the location of that contribution was the lieutenant governor’s office,″ COPS said.

The COPS episode was the latest in a series of setbacks for Simon, from the bungled release of his tax returns to a civil fraud verdict against his investment firm that a judge later threw out.

Analysts said the first-time candidate’s chances of overtaking Davis in the campaign’s crucial final month were dimming.

``How often have we had this conversation _ can he recover from it, can he recover from it? Probably not any longer,″ said Allan Hoffenblum, a Republican consultant.

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