Subject: California Update 7/31/01
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Date: Tue, 31 Jul 2001 14:40:40 -0700 (PDT)

There is a serious effort currently underway in California to unseat Senator Burton (D-San Francisco), President Pro Tem.   Even though the chances of this happening are relatively low, John Bryson, CEO of SoCal, with the support of the Governor, are making huge efforts to oust Burton and replace him with one of two potential candidates - Richard Alarcon (D-San Fernando Valley), Majority Whip or Sheila Kuehl (D-Los Angeles).  Alarcon has already stated that he would not accept the position.  However, at minimum, Bryson, Governor Davis and/or other Senators hope that Burton will rethink his position on the MOU and a SoCal bailout.
Additionally, behind the scenes, things are looking very grim for California due the implications of Direct Access.  The biggest opponent of Direct Access comes from the Governor's office as they realize the potential effects of direct access and how it could undermine the revenue stream supporting the bond issuance.