Democratic Party heavyweights in California smell the blood of an Austrian. Looking to unseat Arnold Schwarzenegger, Sens. Dianne Feinstein and Barbara Boxer and Congresswoman Nancy Pelosi have endorsed Phil Angelides for governor. How did Angelides--who has the charisma of an undertaker--become the Man?

Until he was elected state treasurer in 1998, Angelides, 52, was the junior business partner to one of the most powerful men in California, a guy you probably never heard of, Angelo Tsakopoulos. In 1984, Angelides became president of Tsakopoulos' AKT Development Corp. He soon started his own development company, River West, and entered into a series of enduring real estate partnerships with Tsakopoulos, who is his financial and political godfather. Together, they have made a fortune paving over thousands of acres of wetlands inside the Sacramento sprawl.

Although he keeps a low media profile, Tsakopoulos, 69, is a prodigious campaign donor to California office-holders. As chair of the California Democratic Party in the early 1990s, Angelides disbursed millions of party dollars to government officials. State Sen. Don Perata, former Assembly Speaker Willie Brown, Feinstein, Boxer and Pelosi have long been recipients of Tsakopoulos' and Angelides' largesse. In fact, most successful elected democrats in California are beholden to both men.

Here is a lesson in how things work in Sacramento: In the late 1980s, Tsakopoulos and Angelides were trying to plow over protected vernal pools in the flood plains of Sacramento County. But their development projects were stalled due to federal and state environmental concerns. Suddenly, a real estate partnership called Live Oak Associates II bought up part of the flood plain adjacent to AKT Development's land. Government disapproval of wetland development vaporized. The land was lifted from the flood plain--on paper. Live Oak Associates II mysteriously obtained permission to build over the wetlands.

Departing from normal practice, the city of Sacramento subsidized the development of Live Oak's physical infrastructure. And as Live Oak's suburb was planted on the banks of Laguna Creek, new life was breathed into AKT Development's projects in North Laguna Creek and Laguna West--both of which proceeded without significant regulatory opposition.

Miraculously, the state legislature funded a network of freeway exits and access roads and pretty parks to serve the expanded sprawl. Local environmentalists were incensed, but there was nothing they could do to stop the development juggernaut because, you see, one of the limited partners in Live Oak Associates II was Mr. Willie Brown, who, as assembly speaker, had the power to turn the wishes of his friends into bureaucratic realities.

During his long career, Brown regularly took campaign contributions from Tsakopoulos, but that money was chump change compared to the $9 million profit that his Live Oak Associates II reportedly made on the deal that opened up the south of Sacramento county to Tsakopoulos and Angelides.

To serve the expansion of his inland real estate empire, Tsakopoulos created Phil Angelides. He hired him fresh out of Harvard University, made him wealthy and smoothed his way into high public office where he could, presumably, look after their shared interests. State Treasurer Angelides' 2005 Statement of Economic Interest shows that he receives two separate sources of income--each worth "over $100,000" a year--from Tsakopoulos. He is a limited partner with Tsakopoulos in several ventures, including Placer 2780 Limited Partnership, a controversial project that is trying to get government permission to develop 3,000 acres of farmland near Sacramento. Angelides is substantially invested in real estate projects run by River West, the company he sold to an associate when he became state treasurer. He participates in River West's Canyon Creek, Mesquite Village and Gateway West developments.

Last year, Tsakopoulos donated $779,000 to fund the political activities of Tracy Hills Citizen Planning Association, an astroturf citizen group he designed to promote the development of a 6,000-acre Tsakopoulos-River West industrial development project in the Sacramento River Delta.

The list of real and/or potential conflicts of interest goes on. But the point is that Angelides has not successfully separated his official self from the business interests of his mentor, nor from his own financial interests. The profitability of his gargantuan real estate portfolio is contingent upon the granting of multiple governmental favors by scores of officials who are politically beholden to Angelides and Tsakopoulos. His financial holdings can easily be affected by his actions as a member of a score of state finance authorities that oversee billions of dollars in transportation, housing and infrastructure development projects. The treasurer influences government lending and taxation policies that affect all real estate developers. He also sits on the board of CalPERs, the state pension system that invests heavily in Sacramento-area real estate and has huge leverage in the market.

In short, whether or not the treasurer has consciously used his official power to benefit himself and Tsakopoulos, he is in a position to do so. Responding by email, Angelides spokesman Dan Newman asserts, "Angelides sold his business before taking office. He and his family do hold personal assets and investments. He holds himself to an extremely high ethical standard, consistent with protecting the best interest of taxpayers. No one has been tougher than Treasurer Angelides in cracking down on Wall Street conflicts and criminal behavior to protect taxpayers, pensioners and shareholders from well-connected insiders who exploit their position for personal gain."

It is worth noting that Angelides recently steered clear of an obvious conflict of interest when he recused himself from acting in his official capacity on deals that routed the state's proposed bullet train though property tied to Tsakopoulos. But the Treasurer appears to not be so fastidious about refraining from official actions that could affect his campaign donors.

Consider: the treasurer presides over the California Tax Credit Allocation Committee, which subsidizes private developers. Under Angelides, lucrative tax credit packages were awarded to the Related Companies of California and AF Evans Company--companies who have donated tens of thousands of dollars to Angelides' run for governor.

According to the state campaign finance database, the Angelides 2006 campaign has nearly 2,500 donors and $14.5 million in cash; Friends of Phil Angelides has $802,000; and his committee, Standing Up for California, has $1.55 million. Public employee unions, building trade unions and trial lawyers have donated millions to his political committees. Furthermore, what goes around comes around: Friends of Barbara Boxer has donated $5,000 to the Angelides campaign; Paul Pelosi, Nancy's husband, gave him $10,000. Casino interests have donated at least $50,000. A general partner of Live Oak Associates II, William Falik, sent a check for $2,000.

But the biggest contributor, by far, is--guess who? Since 2001, Tsakopoulos has donated $1.4 million to Angelides' campaign committees. His daughter Eleni Tsakopoulos-Kounalakis has given Angelides $250,000. Other of his relatives have contributed a total of more than $200,000. If Arnold Schwarzenegger is the captive of the Chamber of Commerce, Angelides is the captive of Angelo Tsakopoulos.

Like Schwarzenegger, Angelides promotes himself as a populist reformer. "I see a state budget still bleeding red ink as politicians in Sacramento fail to face fiscal reality," he said recently. Huh? The guy has been in charge of the state treasury for nearly eight years! In all that time he has not achieved a reform of lasting significance such as taxing commercial real estate or putting a sales tax on on Internet transactions or raising taxes on the wealthy by a point. Instead, he has sat by waiting for permission to reach for the brass ring. And that, ladies and gentlemen, is all you need to know about the man who would be governor: Angelo Tsakopoulos.

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