LOS ANGELES -- So far the presidential campaign mostly has been staged in three places: Washington, the early primary states and, of course, L.A.'s Westside. The studio producers, entertainment lawyers and stars who live west of the Hollywood Hills have probably had a greater role in the process than, say, the Southern governors. Certainly, they have raised more money.

It was, after all, a California politician, Jesse Unruh, who said, "Money is the mother's milk of politics." This is the fundamental truism about California politics, where money buys media and a bargain-basement state assembly race can cost about $1 million. As always, California is the future in the present. Once the surviving presidential candidates escape the carnival of handshaking in Iowa and New Hampshire they will instantly inhabit a blurred series of media markets -- the main forums where politicians meet voters. For the politicians, the price of democracy will be exorbitant.

"These guys are continually marching here," says Bonnie Reiss, an entertainment lawyer and Democratic activist. "They don't miss a week when they're not calling. I got a call from {Bruce} Babbitt today. He's an incredible caller."

The $1,000 maximum limit on individual contributors has not exactly reduced the Hollywood presence, where more than a few have more than $1,000 to cast upon the waters. "The great thing with the max," says Danny Goldberg, chief of Gold Mountain Records, "is that you can give to {Michael} Dukakis, {Paul} Simon, even Babbitt."

This money is of a particular kind. In Hollywood, it is called "development money." It is the cash that is dropped to see if a certain sketchy scenario -- a "treatment" -- can be convincingly filled in. Yet no leading man has emerged; the plot is unfinished. And, in Hollywood's own terms, this isn't unusual. Of thousands of treatments that sound plausible, few get filmed. Thus, says Reiss: "The green light for the big production has yet to come out of this community."

It was cash that led Gary Hart to video producer Stuart Karl and Hart's latest imbroglio -- a Miami Herald report this week that Karl was secretly funneling thousands of dollars into Hart's effort, in apparent violation of federal campaign regulations.

But the presidential campaign and the entertainment industry share more than the cash nexus. Its players are in the same business -- the business of popularity. They both seek to captivate the masses: Viewers are voters. The themes that work in politics also work on the screen, especially an antiestablishment populism against corrupt and venal authority. Add sex, rock 'n' roll, and lurid de'cor, and it's "Miami Vice." Or the campaign.

The L.A. experience has unfolded in four stages: First, excitement and anticipation; then, sudden shock, betrayal and disappointment over the departures of Gary Hart and Joe Biden; followed by an attempt to make things work again with other candidates; and, finally, malaise. These happen to be the stages of a failing marriage. And yet, on the eve of the primaries, there is still widespread faith that there can be a happy ending, though nobody knows quite how.

In the beginning was Gary Hart, the very beginning, which was 1972. Before then was prehistory, when Lew Wasserman, Ronald Reagan's former agent and the head of MCA, raised the long green for John F. Kennedy in 1960. In 1964, Wasserman and Arthur Krim, then of United Artists, divided up the known universe and raised $10 million for LBJ. But the studio system cracked, replaced by entrepreneurial producers and actors who cut their own deals. Like Warren Beatty.

What happened in Hollywood was paralleled in politics. Feudalism in presidential selection collapsed. And the author of the rules reform within the Democratic Party, Sen. George McGovern, became the first avatar of the next epoch. His campaign manager, the shaggy-haired Hart, came to Hollywood in search of support. There he discovered his alter ego, the shaggy-haired Beatty. Partly from that alliance came the modern establishment of Hollywood as a political force. And Hart, the founding father, became its favorite son.

In the 1984 Democratic primaries, during Hart's hour of need, Hollywood raised almost $2 million. Beatty traveled on the trail, writing detailed memos. And, in the California primary, Hart won overwhelmingly.

By 1987, as he prepared to run again, the Hollywood scene had grown more crowded with dramatis personae. Political participation and donations had increased at a geometric rate. Part of this was the natural rising of a new generation of players; another part was the continuing reaction to the former president of the Screen Actors Guild, Ronald Reagan.

"We have seen the power of charm," says Danny Goldberg, who is also president of the Southern California branch of the American Civil Liberties Union. "Mondale almost willfully refused to communicate. How dare you run for president if TV is not your thing! Right-wing show business was running the country."

Republican candidates, too, parachute into L.A. for overnight fundraisers and leave in the morning happier, richer men. But their backing comes almost exclusively from the corporate boardrooms. There are a few Republican studio executives and fewer Republicans below that level. Most of them are older and relatively isolated, like Charlton Heston. Their cultural locus is not really Hollywood, but Palm Springs, a plush retirement home in the desert where the streets are named for Bob Hope, Guy Lombardo and Frank Sinatra. The real Hollywood, however, doesn't look like New Year's Eve at Walter Annenberg's with the Reagans. It is, in fact, overwhelmingly Democratic and liberal. Civil liberties, civil rights, arms control and environmentalism are theological issues. The homeless -- not the contras -- are the objects of sympathy. (Oliver Stone's next movie: contras as drug runners.) And the desire for the end of the Reagan era -- The Late Show -- is intense.

The political opinion leaders within Hollywood are especially influential because most Hollywood people, though increasingly concerned with politics, lack experience. They are "looking for guidance," says John Emerson, the L.A. deputy city attorney and Hart's former deputy campaign manager. And they are used to having their careers guided by agents.

Among the centers of influence:

The gray eminences, Stanley Sheinbaum and Norman Lear, close friends, whose dinner invitations to candidates are treated as command performances. Sheinbaum is an economist, married to Harry Warner's daughter. He is a serious intellectual, and last year he sold a de Kooning painting for $3.3 million to finance his quarterly political journal, New Perspectives. Lear, the Zeus of sitcoms, is the founder of the 270,000-member People for the American Way, which has battled the religious right and New Right judges.

The Hollywood Women's Political Committee (HWPC), composed of women in the industry, which made its first big splash in the 1986 midterm elections, raising about $3 million for Democratic candidates, much of it drawn from proceeds to a Barbra Streisand concert, the social event of the year.

Jane Fonda and Tom Hayden, the actress and state assemblyman. Outside Hollywood, conservatives regard them as Baader and Meinhof; inside, they are the chamber of commerce. A new political organization they have launched, the Network, includes most of the Brat Pack -- from Rob Lowe to Ally Sheedy -- which looks to them as elders.

Big producers and executives, from Michael Eisner at Disney to Barry Diller at 20th Century Fox, who function mainly as vaults -- "they are their own political action committees," says Emerson.

A small number of veteran political operatives, mostly attorneys, who swim in the Hollywood sea, such as Emerson (Hart's 1984 state chairman) and Mickey Kantor (Mondale's 1984 state chairman).

Overlapping at the edge are L.A. real estate tycoons and senior partners of the sort of law firm depicted in "L.A. Law." The representative figure here is Charles Manatt, the former Democratic National Committee chairman.

The Leading Man As the curtain lifted on 1987 great expectations were aroused that the campaign would be dramatically satisfying. The prologue -- the Democrats' recapture of the Senate, in which Hollywood played a generous supporting role, and the revelation of the Iran-contra scandal, in which Reagan didn't know his lines -- had quickly created optimism.

What Hollywood wanted was what it always wants: a leading man who could set the deal. Once he appeared, the script would make sense. Most thought Hart could carry it off. His support cut across many lines: about one-third of the HWPC; Fonda and Hayden; former MGM owner Marvin Davis, a Colorado oilman; Danny Goldberg; executives from most of the studios; and the trio of leading men -- Robert Redford, Jack Nicholson and, above all, Beatty. These forces were marshaled by Emerson and Patricia Duff Medavoy, a former associate of pollster Patrick Caddell and media consultant Robert Squier, now married to the chief of Orion studios, Michael Medavoy.

Hart's main challenger here was Biden, whose stem-winding speaking style and seeming conviction made some believe that he was the man to set the deal. His main backer was Ted Field, heir to the Marshall Field fortune, including the Chicago Sun-Times, which he sold, using the proceeds to establish himself as a producer. His credits: "Revenge of the Nerds," "Outrageous Fortune" and "Three Men and a Baby."

In January 1987, a Los Angeles Times straw poll of the state Democratic convention in Sacramento registered the delegates' sudden preference for New York Gov. Mario Cuomo over Hart. The clamor in Hollywood for the Cuomo experience was enormous. The next month, at Sheinbaum's invitation, he landed to unleash his fabled oratory at the 15th anniversary dinner for the Center for Law in the Public Interest. Everybody -- that is, about 900 people -- turned out at the Dorothy Chandler Pavilion at a very reasonable $200 a plate. "A terrific room," says a Hollywood figure.

"He had given a magnificent speech at the Democratic Convention in San Francisco," says Sheinbaum. "Now it's three years later. The San Francisco speech was one of vision and ideals. People wanted to hear the next shoe drop, which had to do with policy, how to get from here to there."

With all eyes riveted on him, Cuomo did not work the room. And when Sheinbaum introduced him as "the most exciting political figure" in the country, he declined the honor: "I am not a politician." Then came the oratory, with repeated references to Cuomo's running mate, the Statue of Liberty: "Lift your lamp, Lady!"

The reviews were uniformly bad. About a week later Cuomo summoned Sheinbaum to New York "to tell him why there seemed to be a negative reaction." Cuomo had a surprise waiting for Sheinbaum: his declaration of noncandidacy. "I can't believe," says Sheinbaum, "that what I had to tell him pushed him out."

The day after Cuomo left L.A., the next hopeful landed. Michael Eisner of Disney and Michael Ovitz of Creative Artists Agency literally set up a big top under which they presented Sen. Bill Bradley -- smart, "safe," as one Hollywood figure put it, and pragmatic. Well, maybe too pragmatic and not that safe.

He was greeted by a full-page ad taken by the HWPC in Daily Variety blasting his vote for contra aid. The mood was also curdled by a tension between studios that placed the debut of this potential president in perspective. Disney, it seems, had been contemplating opening a public tour of its studio, which would undercut the lucrative Universal Studios Tour, owned by MCA. So Lew Wasserman of MCA and his minions, who had purchased tables at the Bradley event, pointedly refused to attend.

Then the entertainment turned into guerrilla theater. Whoopi Goldberg, coaxed to perform and lighten the atmosphere by Ovitz, her agent and Bradley's cohost, performed, all right: "As far as I can see, there are two black people here tonight -- me and the waiter. And we're both working for our supper." Hostile questions about the contras followed dessert. Bradley, who "mostly bored people," according to a Hollywood source who was there, fled east.

Disaster Plots The drive down Sunset Boulevard seemed like nothing but green lights for Hart. Three days after his announcement in April, he appeared the conquering hero at a fundraiser at Marvin Davis' palatial house. Most of the guests were unaware that, as they partied, federal marshals were seizing the receipts to cover one of Hart's unpaid bills from his 1984 campaign.

His Hollywood backers had a premonition that something could go very wrong. Before his arrival, a few strenuously argued with him about staying at Beatty's. They were more sensitive to the "womanizer" issue than was the candidate. Davis offered Hart a suite at the Beverly Hills Hotel, a recent acquisition. "What's wrong with staying at Warren's?" asked Hart, according to a source close to his Hollywood group. And he brushed aside the objections. By so doing he violated Hollywood's first principle: "Appearances count," as one of his supporters said.

But Hart had already given himself over to fate. At a Hollywood party, the Medavoys introduced him to rock star Don Henley, who in turn introduced him to Donna Rice in Aspen, Colo., Hollywood's winter wonderland.

Hart's fall was "the central event," says Danny Goldberg. It released the biggest and most organized group in Hollywood, but left its members disoriented. "I was pretty devastated," says Pat Medavoy, offering a typical reaction.

The Hart group, unlike Hart, did not leave the scene, but reformed itself as a new center of influence, a required stop for candidates.

Hart's leaving created a vacuum that others immediately attempted to fill. The first candidate to make a direct pitch to Hollywood in the post-Hart period was Rep. Richard Gephardt, who proposed a bill requiring permission of screenwriters and directors before their black-and-white films could be colorized.

On Capitol Hill, Woody Allen, Ginger Rogers and Sydney Pollack appeared as witnesses. But Gephardt had tossed himself into a Hollywood tempest he didn't fully comprehend. More than artistic purity was involved -- money, for example. Wasserman and the other moguls of colorization loathed Gephardt's effort. And "a lot of people thought it was a bald device, too opportunistic," says Pat Medavoy. "You kind of heard about it for a while," says one Hollywood figure, "and then you didn't, like forever."

The next candidate to court Hollywood was Rep. Patricia Schroeder, who went from one Beverly Hills living room to the next playing Hamlet ("To run, or not to run"). As she pondered her ambition, some Hollywood women, including Streisand, urged her on. Then, sobbing, she departed. "A lot of people were disappointed," says one of the Hollywood figures Schroeder approached for counsel. For Schroeder had at least created some excitement. But this was less a scene than an entr'acte.

Attention now turned to Biden. After Hart, his backing was the biggest. Moreover, as chairman of the Judiciary Committee, he would chair the hearings on the appointment to the Supreme Court of Robert Bork, who was viewed as the lowering force of a dark age: Reaganism with a bearded face. The feeling against Bork was intense, spontaneous and thoroughgoing. At the hip City restaurant on LaBrea, the Brat Pack gathered to sign post cards to their senators urging a vote against him. In the meantime, Biden's supporters impatiently awaited his moment in the spotlight.

But, within Hollywood, Biden had never filled Hart's position. He had already earned a considerable reputation in certain circles as supercilious and arrogant. At a Sheinbaum-Lear dinner, for example, he spoke for hours, making his listeners feel as though they were trapped in a wind tunnel. As the guests were leaving, according to one of his questioners, an influential member of the HWPC, he grabbed her hand and said: "It doesn't really matter if you disagree with me because I'll be the nominee and you'll have nowhere else to go."

Biden's moment lasted a split nanosecond. When his impersonation of British Labor Party leader Neil Kinnock was aired ("the first Biden in a thousand generations . . ."), President Biden was gone before Justice Bork.

Hollywood was becoming gripped by a strain of political neurasthenia, a combination of anxiety and fatigue. "There's this destructive theater, the theater of Hart and Biden," says a Hollywood producer. "You're longing for a connection, to get away from the headlines of foolish behavior. You walk in the room to see another candidate. You feel excited. This guy would be okay, you say. You want to make a commitment. Two days later you don't remember you've met them."

Into this shellshocked community marched Sen. Paul Simon. The straightest man in America was a freak in Hollywood. Some indeed liked him for his old-fashioned Hubert Humphrey-style liberalism. He may not have been a "neo-anything," as he claimed, but he was a retro-something. And some liked him precisely because they considered him weird. "The only one with any kind of cachet is Simon," says Pat Medavoy. "It's reverse chic. He's offbeat."

Dukakis, who spent a week touring L.A. before the Biden debacle, was viewed as stability personified. He impressed the dinner crowds with his mastery of policy, his record of competence. Barry Diller of Fox gave him a party. And Sally Field. And the Medavoys. Nothing he said disappointed anybody. But there was a missing star quality that made Hollywood wonder whether he was really the one to set the deal.

"People want to be dazzled," says Pat Medavoy. "They desperately want to be dazzled." But just as the candidates redoubled their efforts to win over uncommitted Hollywood, it was becoming harder and harder to dazzle.

Two Crusaders Two candidates, however, still managed to evoke visceral emotions. The first was Jesse Jackson. Star quality was not his problem. It was his episodes of casual anti-Semitism in the 1984 campaign, for which most in Hollywood were unforgiving. Still, many felt that "at least he's saying something," as one Hollywood figure put it. Some gave him money, though they didn't agree with everything he said, to keep him talking.

In early September, the Jackson syndrome of sin-and-redemption, acted out in 1984, repeated itself on a small scale. At one L.A. fundraiser, Jackson was questioned about the 1984 incidents by a young black lawyer. "Let the Jews speak for themselves," Jackson told him, according to The New York Times. A few days later, Jackson arrived at Sheinbaum's house to address a group of about 75 Jewish figures in Hollywood.

"I deliberately asked a number of Jews who were skeptical or hostile," says Sheinbaum. "I asked them one thing: Don't start the meeting by asking about the Farrakhan/Hymietown question. Let him say his piece. Almost everyone there was very impressed." Sheinbaum estimated that Jackson raised about $10,000: "From his point of view, it was very successful."

The other candidate to arouse strong feelings was Sen. Albert Gore Jr., principally because of his wife Tipper's crusade against what she regards as obscene rock lyrics, songs that she says figure in "case after case of teen suicide," and "heavy metal satanism." In 1985, her lobbying led to Senate hearings on rock 'n' roll, at which Sen. Gore attacked "the heads of the record companies" for failing to appear and record stores for being "really irresponsible in promoting suicide and all the other things we have heard about here."

Danny Goldberg met Gore in 1984, in his Senate office, where "the whole thing he talked about was arms control, how in a dream he saw a nuclear holocaust, and he woke up and said his whole life would be devoted to controlling nuclear weapons." Then Tipper launched her campaign. And Goldberg took the lead in opposing her, forming a group called the Musical Majority.

The Medavoys tried to negotiate an armistice. The record company executive and the senator were quietly brought together. "I said I didn't get up in the morning and want to attack Al Gore. 'I'm not your enemy,' " says Goldberg. " 'As long as your wife doesn't attack my business, I'll shut up.' " He recalls Gore saying, "We're very much trying to achieve the same thing."

But the truce was broken by the publication of Tipper's book, "Raising PG Kids in an X-Rated Society" -- "a vile, vile work, a staggeringly right-wing cultural document," according to Goldberg.

On Oct. 28, another effort at reducing hostilities took place at the MCA executive dining room, where about 35 music industry leaders, agents, Don Henley, Norman Lear and Goldberg met with the Gores. Tipper apologetically termed the Senate hearings "a mistake . . . that sent the wrong message." And the senator said: "I was not in favor of the hearing." Censorship was not what they had in mind.

This frank exchange of views, however, did not convince the Hollywood people that the Gores were sincere in wanting to quench the fires of their rock crusade. "They have made a calculated decision that there are voters out there they want to reach," says Goldberg. "A good community has unfair pressures put on it because of their political calculations."

"Gore is probably the toughest sell of all," says Pat Medavoy. His support in L.A. is all business, not show business. And some in Hollywood argue that the Gores' crusade has so offended the popular culture in California that the candidate who has made his electability in the South his selling point is "unelectable" here. "I don't think he could carry the state," says Bonnie Reiss. "California Democrats and baby-boom voters have a real problem with him."

Fantasy Island At this confusing juncture, in December, as Hollywood surveyed the wreckage of the year gone by, Hart slipped away from his Elba at Troublesome Gulch into New Hampshire, and reannounced his candidacy. The former Hart group did not endorse him. A few of those who had been close to him hoped he would do well. They gave him advice on the phone. But none joined his "light brigade" for the duration -- except for the eager Stuart Karl.

As Karl's friends tell it, he was a water bed salesman who hit one of the great gushers of the 1980s -- producing Jane Fonda's "Workout" tapes. In 1984, he became a Hart enthusiast, "a true believer," yet "on the fringes," according to one of Hart's main Hollywood backers. And even after Hart resurrected himself, Karl had not risen to the loop of Hollywood friends who still discussed strategy with the whirlwind candidate.

There was more confusion about the character of the campaign than ever. And many were angry. Perhaps, some daydreamed, another candidate would enter the race, "a fantasy candidate," says Reiss, not necessarily Cuomo or Bradley -- or at least not the Cuomo and Bradley who appeared earlier in L.A. "Everyone," says Reiss, "is looking for an intangible. I've heard it referred to as falling in love. They want to feel passionate."

"There's a general directionlessness about every encounter," says a studio executive. "Everybody is slightly drained and weary of cocktail parties and dinners and raising money. It's beginning to wear badly in the town. Nobody's thrilled and nobody's thrilling."

"I get every printed invitation sent out in L.A.," says Sheinbaum. "A year ago I felt a lot of stirring. Now I don't go to many of these events."

When the man who can set the deal emerges, Hollywood will back the production.

But the wait is not calm. Hollywood people are desperate to get a sense of the next dominant mood. If it's not morning again in America, what time is it? The paralysis in politics creates an undercurrent of uncertainty about their own work; for they do not know the atmosphere in which movies, music and television shows will be made.

But there are a prescient few who are making plans for what's coming next. Among them is the restaurateur, Bruce, who owns the whitewashed West Beach Cafe and Rebecca's, a nuevo Mexican seafood place adorned with about $1 million in glittery de'cor.

Bruce began as a small-scale caterer. Sheinbaum gave him one of his first big orders. Then he opened the West Beach, which drew the celebrities. One restaurant led to another. He did so well that he voted for Reagan. But, for special customers, he will still cater. He boasts about his most recent affair, for Sandinista leader Daniel Ortega, somewhere in the Hollywood Hills. Now Bruce is building two new restaurants. They will reflect his program for the 1990s: "Upscale, inexpensive and a la carte."