By Dan Morain, Senior editor The Sacramento Bee
Published: Sunday, May. 8, 2011 – 12:00 am | Page 1E

After accepting President Barack Obama’s request that he serve as CIA director, Leon E. Panetta offered his friends out here a pithy and prescient view about the daunting task ahead.

He would be leaving his Carmel Valley home, various boards, an institute he and his wife founded, and an important post as co-chair of California Forward, a nonpartisan organization advocating for reforms of this state’s dysfunctional government.

Why give that up? He was, after all, 70. Simple.

” ‘It may be easier to find Osama bin Laden than it is to fix California,’ ” James Mayer, California Forward’s executive director, recalled Panetta telling board members as he wrapped up his duties in January 2009.

Turns out Panetta was right. For the past week, the nation has been riveted by everything bin Laden, beginning with Obama’s address to the nation last Sunday in which he said that upon taking office, he told Panetta to “make the killing or capture of bin Laden the top priority of our war against al-Qaida.”

So many details that have emerged are the stuff of history: how CIA agents located bin Laden, how Navy SEALs trained for the assault, how Obama and his advisers gathered in the Situation Room to watch as Panetta, in his office across the Potomac River in Langley, narrated real-time details of the assault on the Abbottabad compound and the terrorist’s final moments.

Panetta’s place as a national figure is solid, deservedly so. But take a look at where he has been. Then consider his view of the state of the state of California. It ought to alarm those of us still here.

The son of southern Italian immigrants, Panetta, 72, grew up in Monterey and Carmel Valley, long before Carmel became fancy. His parents ran Carmelo’s Diner in Monterey and grew almonds.

After graduating from Santa Clara University law school and serving in the Army, Panetta worked for U.S. Sen. Thomas H. Kuchel, a California Republican in the moderate mold of Earl Warren, and one who fought to pass the Civil Rights Act and Voting Rights Act in the middle 1960s.

After Kuchel lost the 1968 primary, Panetta joined the Nixon administration, becoming responsible for enforcing desegregation orders in Southern school districts. That placed him in direct conflict with Nixon’s Southern strategy of winning over white voters. He resigned in 1970.

He became a Democrat, made his way home to Monterey, won a congressional seat in 1976, served eight terms and became House budget committee chairman.

In 1993, President Bill Clinton appointed him director of the Office of Management and Budget, and later chief of staff. In those roles, he helped balance the budget, surely among the reasons for the prosperity of the Clinton years.

Panetta returned to Monterey in 1998 and with his wife, Sylvia, founded the Panetta Institute, which is affiliated with California State University and encourages public service. He also started writing about California, like this article in 2003:

“There is no magic formula for dealing with deficits. You have to either raise taxes or cut spending, or do both. And yet, each time these difficult decisions must be made, both political parties fear for their survival and inevitably try to postpone the day of reckoning.”

And this piece, also in 2003:

“For too many years, California has ignored the financial dilemma that resulted from an array of state initiatives that have reduced governmental discretion and moved decision making from the Legislature to the populace.”

And this 2005 article:

“The Republicans seem hopelessly trapped by an ideological agenda and a growing arrogance of power. The Democrats seem afraid to advance any new or bold ideas about the future for fear of upsetting their political base and losing more power.”

In January 2009, the day before Obama announced his nomination as CIA director, Panetta wrote for this newspaper:

“California is in the worst fiscal and political crisis of its history. This crisis threatens the future of our economy, our education system, our infrastructure, and the promise that our children can have a better life.”

He summed it up: Deficits, partisanship, government by initiative and financial crisis. What a mess. When he became co-chair of California Forward in 2008, he got a closer look at California’s dysfunction.

California Forward board member Fred Keeley, a former assemblyman from Santa Cruz who has known Panetta since 1980, said Panetta witnessed a very basic problem. Promises made by California’s elected leaders don’t seem to mean much.

” ‘Yes,’ ‘no,’ ‘maybe’ – those terms are not interchangeable,” Keeley said. “What he was stunned by was that yes, no, maybe are interchangeable. He was very concerned about whether a government can function if yes, no and maybe are interchangeable.”

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