Al Checchi Is Singing: California, Here I Come

Suddenly, the multimillionaire is looking like a serious contender for governor

Alfred A. Checchi is not yet a professional politician, and it shows. True, the former Northwest Airlines Corp. co-chairman who wants to be California's next governor spoke with ease at a recent rally at Pasadena City College, hitting all the points in his burgeoning campaign--from beefing up police departments to spending more on education. But when his prepared speech was over, Checchi found himself stumped by the very first question. Staring blankly at the crowd of 200, Checchi looked perplexed, then finally shot back: "No, I don't yet have a position on Indian gaming in California."

Checchi will have to do far better than that in the months leading up to California's June 2 primary if he is to become the first Democratic governor of the state since Jerry Brown hit Sacramento in the 1970s. But the 49-year-old Checchi got a huge boost in late January when political heavyweights Senator Dianne Feinstein (D-Calif.) and former White House Chief of Staff Leon E. Panetta decided against running. And Checchi's willingness to spend a chunk of his $650 million fortune to beat out a now less-than-stellar field of candidates means he's the hottest new candidate around.

MEDIA BLITZ. That's a far cry from just a few months ago, when the onetime Marriott Corp. executive and Bass Brothers lieutenant was a total unknown on the California political landscape. Now, Checchi's approval ratings rival the two presumed favorites--Democratic Lieutenant Governor Gray Davis and Daniel E. Lungren, the Republican Attorney General. "He has a 50-50 chance of winning" the primary, says GOP operative Ken Khachigian, a former aide to Ronald Reagan and California Governor Pete Wilson.

Of course, it's early going in what promises to be a drawn-out campaign. Checchi's lavish spending is sure to bring charges that he is simply trying to buy the election, and his mixed record at Northwest could easily become a liability. Union leaders are likely to oppose him, while experienced pols such as Davis and Lungren won't give him a free ride for long. "He talks a good talk," says Judith Barrish, a spokesperson for the California Labor Federation. "But he has no political record."

Still, Checchi's five-month-old campaign has rivals worried. His profile has been on the rise, thanks to a staggering $7 million media blitz that has crammed the airwaves since November. In all, Checchi is expected to spend more than $30 million before the primary alone. That could put the total tab at $50 million, by far the most ever spent in a statewide race and nearly twice what Governor Pete Wilson spent in 1994.

Such big bucks are necessary, insists Checchi, to get his ideas across to voters. Having tired of business, Checchi figures he can use all that cash to broaden his power base while indulging what he claims is a newfound fervor to do good. "I'll spend whatever it takes to get my position known," he vows. The cash also buys some of the best political minds in the business, including Clinton pollster Mark Penn and longtime California Democratic operative Darry Sragow.

The strategists are already working overtime to pull a coherent theme out of Checchi's sometimes conflicting political views. A social liberal, he favors gun control, abortion rights, and increased school funding. But he is also a law-and-order fiscal conservative who wants to slash government by 10%, and he supports the death penalty. So far, his ads appear to be working. In a Feb. 6 statewide poll by Field Research Corp., Checchi barely trailed both Lungren and Davis, a 20-year political veteran.

Checchi's push into big-time politicking marks an about-face for a man who until now has been driven by financial dealmaking. Armed with a Harvard MBA, he went to work for Marriott at age 24. Eventually, he toiled his way up to treasurer, and with then Marriott CFO Gary L. Wilson, he helped transform Marriott into a hotel powerhouse by selling properties to investor groups and leasing them back at favorable terms.

After Marriott, Checchi moved to California in 1984 to look out for the Bass brothers' 25% stake in Walt Disney Co. and to advise new Chairman Michael D. Eisner. Checchi, along with his wife, Kathy, and their three kids, settled into the former Beverly Hills home of Sidney Poitier. Soon, he and Kathy were socializing with the likes of superagent Michael Ovitz.

Poor timing and a bad case of overreaching ambition, however, followed Checchi's move to California. In 1989, he and Wilson acquired Northwest Airlines in a $3.65 billion leveraged buyout just as the airline industry entered a protracted slump. The massive debt enfeebled the airline, which lost $1.8 billion in the early 1990s. By 1993, it was on the brink of bankruptcy. Checchi and Wilson pulled out the stops, using the hardball negotiating tactics they'd honed in the world of finance to pressure unions and state officials. Only when workers coughed up some $800 million in wage concessions and Northwest won $837 million in state subsidies, was survival assured.

TURNING POINT. In return, Wilson and Checchi agreed to lock up their 23% stake in the airline for five years. But as the company's losses mounted, the co-chairman continued to pull in large consulting fees. Although the airline eventually recovered under the leadership of CEO John H. Dasburg, many workers emerged bitter from the ordeal, and relations between Northwest and its unions soured. "Wilson and Checchi crippled the airline," asserts one union staffer. "It was clear they were in it to help themselves." Checchi's stake in the airline is now worth $638 million.

Had it not been for the events of one gloomy April night in 1996, Checchi may have gone right on cutting deals, he says. Instead, a coveted invitation to visit Sarajevo on a trade mission with Commerce Secretary Ronald H. Brown changed his life. Unable to take the government plane with Brown, Checchi arranged for a flight a few hours later. But on the landing approach, his plane was waved off and rerouted to Switzerland. Brown's plane had already crashed, killing all aboard, and the airport in Sarajevo was closed.

Alone in his hotel room, Checchi couldn't sleep. "I spent a strange night by myself thinking about my life, and what I wanted to do with it," he recalls. He remembered how he had been passionate about politics as a boy, when John F. Kennedy was President and Checchi trekked to the Lincoln Memorial from his suburban Maryland home to hear Martin Luther King Jr.'s "I Have a Dream" speech.

As an adult, though, Checchi's involvement in politics consisted mostly of opening his checkbook. So, back in the States, he began crisscrossing the state in one of the more unusual campaign swings in recent memory. Instead of trying to raise money on the trail, Checchi dispensed it liberally. In one poor neighborhood, for instance, Checchi gave away $35,000 in airline tickets to fly teenage mothers to a conference in Washington, D.C.

"CALL ME AL." But in California, it's TV, not traveling the state, that wins elections. So Checchi has been bombarding the airwaves. One spot shows a group of kids struggling to pronounce his name before Checchi tells them to "call me Al." In another, Checchi's wife woos the state's Hispanic voters in fluent Spanish.

In the end, Checchi is likely to hark back to his business dealings. He claims credit for Northwest's revival, offering it up as proof that he has a "huge amount of energy and iron will to never take no for an answer"--just the skills he says are needed in government. But the strong-arm tactics he used against Northwest's unions could come back to haunt him. And opponents are already beginning to pick apart Checchi's resume. "The fact that he says he saved the airline from bankruptcy is just a lie," says Davis campaign manager Garry South. "The debt he piled on it nearly put it there."

Checchi will no doubt hear much more talk like that. And money is no guarantee of success. Former Representative Michael Huffington, who spent $30 million and nearly pulled off an upset of Feinstein in the '94 Senate race, crumbled after reports that he had hired an illegal nanny. Checchi, too, is preparing to withstand the inevitable backlash and says he will meet any negative campaigning barb for barb. "I know how scummy this business can be," he says.

Can money, good looks, and unflappable confidence propel a neophyte to the top of the pack in California? Maybe. But things are likely to get a lot tougher from here on out. Al Checchi might want to learn a thing or two about Indian gaming--and a host of other hot-button issues--before he next jumps in front of a crowd of would-be supporters.

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