Hoping for a Fresh Start

By GEORGE J. CHURCH

The furor over finances costs the Democrats time and momentum

"Today is the first day of the rest of the campaign."

--Geraldine Ferraro last Wednesday

The mixture of relief and elation evident in that comment was amply justified. Not quite 24 hours earlier, as the Democratic vice-presidential nominee prepared to answer questions about her own and her husband's taxes and finances, it was by no means certain that there would be any meaningful "rest of the campaign." But after Ferraro's bravura performance, the MONDALE-EAGLETON buttons that had sprouted on Republican lapels seemed an exercise in wishful thinking. Some Democrats came close to euphoria; more realistic ones gave thanks that their campaign was still able to roll.

The longer-term effect of the uproar over Ferraro's finances is impossible to judge; it will depend in part on whether some of the questions that her press conference did not entirely resolve continue to dog her. Even assuming, however, that most voters now view the matter as essentially closed and turn their attention to other issues, the controversy was a significant setback for the Democratic campaign, blunting its post-convention momentum and forcing it into a defensive crouch for nearly two weeks. For Ferraro, the affair probably comes out as a wash. She has lost some of the freshness and excitement that she brought to the ticket as the first woman nominated for national office by a major party. Many voters are now likely to see her less as a trail-blazing heroine than as a politician subject to the same kinds of criticism as the males in her profession. Says one Democratic political consultant: "She's human. She's attackable. She's no more Clean Geraldine."

Balancing--or perhaps outbalancing--that consideration, though, Ferraro decisively answered one of the hardest questions she had faced as a newcomer to national politics: How would she behave in a crisis? Veteran politicians of both parties gave her high marks for handling that crisis with unruffled calm, crisp authority and low-key humor. "She's tough; she put her head down and stuck with it," said Republican Senate Leader Howard Baker. Tony Coelho, chairman of the House Democratic Congressional Campaign Committee, compared Ferraro to the most successful politician in the U.S. today: "She handled it exactly like Ronald Reagan. Like him, she showed tremendous inner peace." Democratic strategists, jubilant over her performance, intend to encourage Ferraro to take on the heaviest campaign schedule she can manage. Says one Mondale staffer: "If you've got her, flaunt her."

For Walter Mondale, who after all is the head of the ticket, the storm turned out less happily. Though he escaped the disaster that might have overwhelmed his campaign if Ferraro had defended herself less skillfully, he faces new questions about his leadership ability. Even before her press conference, top-level Republicans were careful not to attack Ferraro directly. Aware that such criticisms would sound like partisan, if not sexist, badgering, they adopted a tone of high-minded regret, shedding political crocodile tears for "poor Gerry." But they were quick to accuse Mondale of selecting his ticket partner after inadequate financial investigation and failing to warn her or prepare himself against questions that should have been easily foreseeable. After the storm had burst, they claimed, Mondale left her to brave it on her own. Nevada Senator Paul Laxalt, general chairman of the Republican campaign, maintained that "Ferraro and her people have been badly served by Mondale. The primary responsibility has to be assumed by the Mondale team, principally by Fritz Mondale himself, to clean this thing up." Said White House Political Director Ed Rollins: "The issue that is going to start occurring is how did Mondale make this selection. I just don't think he did all the spadework."

Mondale and his aides, of course, indignantly dispute this charge. Their main point is that all's well that ends well. Ferraro's performance, they contend, fully vindicated Mondale's selection of her and the process by which he reached it. Further, they insist that Mondale did give Ferraro and her husband extensive backstage advice and help in preparing their financial disclosures, and that if the presidential nominee said little in public, it was only because he was confident his running mate could handle the controversy impressively by herself. Nonetheless, Political Analyst Alan Baron concludes that the whole affair "will make her look good, but not him."

During the uproar, the Democrats could win little attention for the case they were trying to make against the Reagan Administration because the issue of Ferraro's taxes and finances dominated the minds of Americans following the campaign. As Mondale put it to reporters last week, "The worst thing is that for about ten days, when I've been trying to deliver a message about the deficits, about Reagan's tax programs and budget-cut programs, the heartache in rural America, defense reform, it's been difficult to get that message out with this [Ferraro's finances] issue around." Immediately after the Democrats met in San Francisco last month, surveys by Reagan's pollster Richard Wirthlin showed the Republican ticket's lead dropping to as little as 2 points, partly because of the excitement over Ferraro's nomination. Just before the Republicans met in Dallas, it had climbed back to around 15 points in Wirthlin's and most published national polls. The Democrats' dropoff began before the controversy over Ferraro's finances blossomed into a major issue, but that furor certainly did nothing to check the slide.

The damage was not as great as it would have been had the Ferraro episode occurred closer to the election. "It's better to lose time in August than in September," says Mondale Campaign Manager Bob Beckel. "That's when the punching and counterpunching matter. That's when people start to focus."

Even so, the wasted weeks hurt. For one thing, making a persuasive argument against a highly popular President at a time of robust economic growth at home and relative quiet abroad was a formidable task for which the full 16 weeks between the Democratic Convention and Nov. 6 would scarcely have been too long. And by now it is getting late, though not yet too late, for some basic tasks that many Democrats concede still have not been accomplished: coordinating the Mondale and Ferraro campaigns, defining a clear set of issues to be pressed, drawing up a target list of the states in which to campaign hardest. "What is their plan?" asks Congressman Coelho. "I don't know. They don't know, either."

For all that, some Democrats express hope that the whole affair will work to the advantage of their ticket. Beckel insists that because Ferraro showed so much spunk under fire, "this netted out as a political plus." One senior strategist asserts that Ferraro's performance instilled in campaign workers across the country a fighting spirit that "sometimes turns certain defeats into victories."

Perhaps. But the most galling thought for Democrats must be that the whole controversy might have been avoided, or at least prevented from reaching the dangerous point that it did, with a bit more foresight and more cooperation between the presidential and vice-presidential nominees. To begin with, the Mondale camp's prenomination review of the finances of Ferraro and her husband John Zaccaro fell short of the rigorous inquisition some other potential vice-presidential choices and their families have been put through.

Howard Baker endured two such investigations, in 1976 and again in 1980, when he was considered as a running mate first by Gerald Ford and then by Reagan. "Dreadful" was the way he described the experiences to TIME editors in Dallas last week. Said Baker: "We gave them ten years of income tax returns, personal worth statements, personal history, medical records and incredible amounts of evidence. I paid Arthur Andersen [a major accounting firm] almost $10,000 to get that financial stuff up. It was gone over with a fine-tooth comb. We had follow-up questions for weeks and written explanations of particular transactions. Both Ford and Reagan did that."

The Mondale team, by contrast, did not start poring over the records of any potential running mates until Sunday, July 8, eight days before the Democratic Convention was to begin. The reviews began with the records of San Francisco Mayor Dianne Feinstein, Massachusetts Governor Michael Dukakis and San Antonio Mayor Henry Cisneros; Ferraro was added the next day. By Wednesday evening, when Mondale told Ferraro that she was his choice, his aides had had only about 48 hours to examine her records and those of Zaccaro. They missed at least one real estate transaction that Ferraro later conceded "doesn't look so hot." Could they have done a better job if they had been allowed more time? Says one Mondale aide: "Absolutely."

A more extensive review began after the nomination. Lawyers and accountants reporting to Mondale, including Sheldon Cohen, former commissioner of the Internal Revenue Service, examined the Ferraro and Zaccaro records and helped prepare the financial disclosure that Ferraro was obliged by law to make no later than Aug. 20. Oddly, though, Mondale and his aides admit they cannot recall asking for a specific pledge that Zaccaro would make his tax returns public. They knew that would be necessary, even though it is not required by law, and helped Ferraro draft a statement promising that it would be done; everybody seems simply to have assumed that Zaccaro would go along.

On Sunday, Aug. 12, however, Ferraro announced at an airport press conference in Washington that her husband had refused to release his tax returns. Surprisingly, she had not told anyone in the Mondale camp beforehand. Campaign Chairman Jim Johnson got the news from a staffer at about 10 a.m.; he immediately phoned Mondale, who could scarcely believe what he heard. One of his aides recalls the mood in the Mondale entourage as being "furious, just furious." The presidential nominee and his advisers, however, agreed that they would only urge, not demand, Ferraro to speed up the release of her own and her husband's tax returns and other data.

One reason for this gingerly approach was that the Mondale team by then had evidence of Ferraro's stubborn independence: she had sternly and successfully resisted efforts to tie her to a whirlwind August campaign schedule that she felt would be premature. Mondale and his aides feared they could not predict how she would react to heavy pressure on the financial disclosure issue. They also insist that Mondale felt confident such pressure would prove unnecessary: he had seen both Ferraro's and Zaccaro's tax returns, was convinced that the couple had nothing damaging to hide, and trusted they would see it that way too. In the end he proved to be right, but only after prolonged anxiety. For all the aplomb that she demonstrated at her press conference, Ferraro had also shown her inexperience as a national candidate; she seemed initially to have little idea of how much doubt and suspicion her husband's secrecy had aroused, and of how badly it was hurting the Democratic campaign.

Given Ferraro's thorniness, will she and Mondale be able to work together in the days ahead? Mondale aides are hopeful, but admit they do not know for sure. Says one: "I think she's learned ten years' worth in the past two weeks." When Mondale phoned to wish Ferraro luck on the eve of her big press conference, she apologized for causing him so much distress and said the whole uproar had been unnecessary. If she can combine that sensitivity with her natural toughness, Mondale aides say, the Democratic ticket could turn out to be quite a team.

Satisfied that the worst was behind him, Mondale at week's end was trying to get his campaign back on track. He canceled plans for a fishing trip and embarked on a round of campaign appearances that opened with a Friday speech in Springfield, Ill. "The idea behind Reaganomics," he said, "is this: a rising tide lifts all yachts." Deriding Reagan's acceptance speech the night before as an exercise in "selective political amnesia," he asked: "Can you imagine a snow job in August? But that's what we had." A crowd of 2,500 whooped and cheered at this evidence of renewed Democratic vigor. But Mondale must have known that, more than ever, he is playing catchup, and the time for doing so is short. --By George J. Church. Reported by Sam Allis/Washington and Jack E. White with Mondale

With reporting by Sam Allis/Washington, Jack E. White, Mondale