Wilson Uproots Tradition With New Agriculture Chief : Cabinet: Ann Veneman's strongest ties are to California agribusiness and Washington politics. Some smaller growers fear they'll be overlooked.

By DAN MORAIN

May 31, 1995 12 AM PT

TIMES STAFF WRITER

SACRAMENTO — In the “other California,” where towns have names like Grangeville, Gov. Pete Wilson’s appointment of Washington lawyer Ann Veneman as agriculture secretary came as a surprise, like an early frost.

Wilson broke with tradition by looking far beyond the fields of California, reaching inside the Washington Beltway and choosing Veneman to head his Department of Food and Agriculture. Veneman is an agribusiness lawyer-lobbyist, farm export specialist and longtime Wilson ally and friend.

In picking her, Wilson highlighted the changing nature of the state’s $20-billion-a-year agricultural industry and its political importance to his upcoming presidential race--as well as the need for reform at the department.

When she arrives Thursday, Veneman, 45, will find a traditionally low-profile department of 2,000 employees in the headlines and on the defensive over its lax adherence to conflict of interest laws.

The resignation of her predecessor, Henry J. Voss, brought to the forefront questions about the department’s inner workings and close connections to the industry it regulates. Voss quit amid controversy over his failure to disclose $420,000 in outside income from his private farming business, and consumer groups’ accusations that he made decisions that could have affected his holdings. As he runs for President, Wilson needs an agriculture secretary who can make problems in the agency disappear.

“She can make the trains run on time,” said Wilson’s spokesman, Sean Walsh. “Her professionalism and her experience put her in a unique circle of professionals who would be available to fill a post like this.”

While the governor looks to Veneman to resolve the department’s problems, he also is counting on her to win over skeptical farmers and ranchers, many of whom are upset that Voss resigned under pressure.

Voss was well known among farmers and regularly accompanied Wilson to fund-raisers in the Central Valley. In turn, farming interests played a major role in Wilson’s career, giving his gubernatorial campaigns more than $2 million since 1989.

Two of Wilson’s major agribusiness supporters, Sun Diamond Growers and Dole Food Co., praised the appointment of Veneman (who has done legal work for Dole), and that can only help as Wilson runs for President.

But the California Farm Bureau, reflecting the views of many farmers and ranchers, particularly those who work their own smaller plots and have the dirt under their fingernails to prove it, reacted coolly. In a statement, the farm bureau said the agriculture secretary should be “a farmer or rancher, someone who has experience with government regulation at the ground level.”

Voss, one of a long line of farmers to head the agency, got his expertise from a life of farming peaches and other crops on the family spread. Much of Veneman’s knowledge comes from doing legal and lobbying work for agribusiness concerns, particularly on trade questions.

Wilson’s aides are working to soften hard feelings, explaining that Veneman, who declined to be interviewed for this article, grew up on a Modesto farm, is a farm export specialist and was a high-ranking U.S. Department of Agriculture official under President George Bush.

In Bakersfield, Ken Miller, a rancher who runs 20,000 head of cattle, is not convinced, and called the choice “strictly political.”

Miller calls himself a conservative and a staunch Wilson backer, one who has given the governor campaign contributions of a few hundred dollars. But he is angry that Wilson is running for President after promising last year that he would serve a full four-year term as governor, and the Veneman appointment only adds to that disillusionment.

“I don’t know the woman. But I don’t think she knows anything about any crops, what it takes to make a crop,” said Miller. “The governor might like my ideas, but if I give him $1,000 and they give him $100,000, he’s going to listen to Sun Diamond.”

Although it has kept a low profile, the state Department of Food and Agriculture oversees and sets policies for one of California’s largest industries. It exercises some control over prices that consumers pay for such staples as milk, and it helps ensure that food is safe.

But within state government, the department is an anomaly. Perhaps more than any other bureaucratic institution in state government, it has strong internal ties to the industry it regulates. As part of its role, the department also is responsible for promoting California agriculture, something that critics say is a built-in conflict.

Like Voss, some other top managers have outside farm holdings, and have acknowledged failing to properly fill out annual disclosures about their holdings.

There is no law against working for the state and having outside businesses. But the Political Reform Act, approved by voter initiative in 1974 to guard against conflicts of interest, requires that officials formally step aside when issues come up that affect their private interests.

In the agriculture department, however, officials only loosely followed the Political Reform Act. There was what Voss called an “informal” system in which no records were kept when officials recused themselves. When he resigned, Voss could cite no instance in which he had stepped aside from a decision under this informal system.

“People [in the department] were surprised that the informal approach that had been applied, the attitude that an individual’s word is his bond, wasn’t enough,” said Robert Shuler, a farm lobbyist who until last year was Voss’ deputy. “The entire department was perhaps a little naive.”

State officials commonly quit to become lobbyists, as Shuler did. But in the department of agriculture, the revolving door swings in unusual ways. Here, some people are registered lobbyists and, at the same time, enjoy appointments as official advisers to the agency.

William Thomas is an example. He is a lobbyist who represents groups such as the California Grape and Treefruit League, one of the largest farm organizations in the state. The group gave Wilson nearly $30,000 in campaign donations last year. Thomas lobbies the Legislature, the governor and the Department of Food and Agriculture.

Thomas also serves on a board that oversees the department’s market enforcement division, which mediates disputes between growers, many of them small farmers, and larger packinghouses and brokers who move the harvest to retailers. Thomas also lobbies the Division of Market Enforcement, according to statements he files with the secretary of state.

“If no one was on [the market enforcement board] who knows anything, it couldn’t advise anyone,” Thomas said of the unpaid post.

Michael Chrisman, second in command at the department and a cattle rancher, said he has “the utmost confidence in people like Bill. He has to be extra careful and quite frankly brings a lot to the discussion.”

Joe Flores, a small farmer in Fresno, doesn’t see such relationships as quite so benign. He complained last year to the market enforcement division about what he believes was an underpayment for his crop, and he received a letter from the Western Growers Assn., which represents the packer with whom Flores had the dispute.

The letter informed him that he was mistaken and that he might not be owed as much as he thought. It was signed by Thomas Oliveri, a member of the market enforcement advisory board and an executive at Western Growers.

“I think that’s a conflict,” Flores said in an interview. “This guy has a lot of influence over market enforcement.”

Oliveri called the letter innocuous and said he makes sure his duties for Western Growers and the market enforcement board do not conflict.

“Western Growers always has had a representative on the [advisory] committee,” Oliveri said. “Because we do represent growers and shippers, we want to be aware of pending legislation. If the law is going to be amended, we want to have input.”

The Western Growers Assn., which spent $183,000 on campaign donations last year, including $50,000 for Wilson, also has lobbyists in Sacramento. But Oliveri, who is not a registered lobbyist, said he brings a hands-on perspective to pending legislation.

Harry Snyder of Consumers Union, among the agency’s critics, said the way it has been operated amounts to “a complete abdication of government responsibility in favor of business.”

Snyder said the department has permitted the industry to “take advantage of immigrant labor and spray us with malathion . . . to protect their crops,” and keeps prices of milk and such crops as peaches stable through regulations that restrict what is sent to market. But Snyder, who led the attack on Voss, also is hoping for change under Veneman, calling her appointment “the best we’re going to get from this governor.”

Her appointment is, in some ways, a reflection of California’s huge yet changing farming industry.

California remains by far the largest agricultural state in the nation, with harvests worth $20 billion a year. The state produces 250 different crops, leading the nation in 74 of them, from artichokes, garlic and avocados to strawberries, walnuts, prunes and persimmons. But the number of farmers who grow this bounty is shrinking, the amount of farm acreage has dwindled and the markets increasingly are overseas.

“She could be very good for agriculture. It’s a kind of professionalization of the job,” said Don Villarejo, director of the Institute for Rural Studies in Davis. “But for the small-scale farmer, their epic is done. It’s the Doles, it’s Sun Diamonds that control. The small-scale farmers just don’t represent agriculture today.”

Veneman’s relationship with Wilson goes back to 1969, when Wilson was an assemblyman and she was an intern for him. Her father, John Veneman, was a Republican assemblyman from Modesto and a friend of Wilson. In 1974, John Veneman ran for lieutenant governor, and Wilson, then mayor of San Diego, was his campaign chairman. The Venemans were peach farmers, but the family farm has been plowed under to become part of Modesto’s sprawl.

Ann Veneman went to Hastings Law School in San Francisco and was a deputy public defender in Stanislaus County and a lawyer for the Bay Area Rapid Transit District. In 1986, she went to Washington to work in the U.S. Department of Agriculture, rising to second in command during the Bush Administration.

After leaving government, Veneman stayed in Washington and went to work as an attorney at the influential lobbying and law firm of Patton, Boggs & Blow, where she put her farm background to work, representing clients such as Dole Food Co.

Dole’s chairman and largest stockholder, billionaire David Murdock, has been a major donor to GOP presidential candidates. Dole donated $23,000 to Wilson’s gubernatorial campaign last year and $35,000 to the California Republican Party, campaign finance reports show.

A company with $3.8 billion in revenue last year, Dole runs such a sophisticated operation that it doesn’t use the word farming to describe its work. Rather, it uses the word sourcing. As Dole says in its annual report, “The company is one of the largest companies engaged in the worldwide sourcing, processing, distributing and marketing of high quality, branded food products.” Dole is among the largest growers of fresh fruit and produce in California.

Tom Pernice, Dole’s vice president for public affairs, said that Veneman was one of many lawyers who did work for the firm and that her focus was on international trade. “We think it is a very good appointment. She is very well qualified for the position,” Pernice said.

Veneman has said she intends to sever all ties with Patton, Boggs, and her clients. But her ties to Washington will serve Wilson as he looks to raise money among farm interests.

“That was a real coup for Pete Wilson to get her to come out to California,” said Richard Douglas, part of Wilson’s campaign team and a senior vice president of Sun Diamond, which has given Wilson at least $90,000 since 1990. “It sends a very strong signal. Here’s a farmer’s daughter who went out and carved out a great niche internationally.”