Ever since his surprise election seven years ago, Gov. Harry Hughes has been described as the luckiest politician in Maryland, a fluke of history who always manages to avoid the political potholes that ought to swallow him up.
A year before he was to stand for reelection in 1982, the Democratic governor looked like an almost certain one-termer. The legislature was regularly rejecting his initiatives, including a gas tax increase, and the public had lost confidence in his prison policies. Yet a year later, Hughes rebounded strongly, had an enormously successful legislative session, and faced only modest opposition en route to a landslide victory.
But as he nears a decision on whether to challenge Republican Sen. Charles McC. Mathias Jr. for the U.S. Senate in 1986, Hughes faces what may be the most serious test of his political luck, and skill: the state's ongoing savings and loan industry crisis.
Two months ago, when management troubles at Baltimore's Old Court Savings and Loan Association touched off a massive financial and political crisis in the state, Hughes appeared to be in his usual form. His timing in cutting short a Mideast trip to cope with the crisis was extraordinary. Rather than being remembered as the governor who went to Israel knowing that Old Court was going to blow, he left an impression of a deft chief executive who returned from overseas to coolly handle the crisis.
But the Hughes administration is now coming to the uncomfortable conclusion that the quick fix of May, when the legislature enacted emergency laws to protect the savings and loan industry and its depositors, will probably fall short.
Hughes admitted as much last week, when he told legislative leaders what others had been whispering for some time: that a number of the state's largest associations will probably not qualify for federal insurance and may ultimately have to go out of business.
Some state officials and close observers of the industry are now predicting that some of those large savings and loans will have to go into conservatorship within the next month or so. Implicit in that, absent a massive rescue operation by out-of-state banks, is that the state faces a potential price tag of astounding size. The figure of half a billion dollars is being bandied about with increasing frequency, a cost that could threaten the AAA bond rating the state has held for 45 years.
Aside from the obvious fiscal ramifications, the continued savings and loan mess could have a major impact on Hughes' expected Senate bid. Watching carefully are two potential Democratic challengers, U.S. Rep. Barbara Mikulski and state Sen. Stewart Bainum, who is considering reaching into his own very deep pockets to finance a long-shot bid.
Without the long-term savings and loan crisis, with its potential for damaging Hughes, the governor would be regarded as a favorite to win the right to challenge Mathias. In fact, some Democrats such as U.S. Rep. Steny Hoyer are arguing that Hughes should be given a clear shot to increase the party's chances of retiring Mathias and recapturing the Senate majority. Their argument is that a tough primary would hurt the party's chances in a general election that follows the primary by just six weeks.
But the savings and loan situation could suddenly make Hughes a lot more vulnerable. The anger of thousands of depositors who have not been able to get their money is going to be directed at someone, and that someone could be Hughes. And if the state has to foot the bill for several failed associations, they could be joined by thousands of irate taxpayers.
Mikulski is giving very serious consideration to a run for Senate, according to her political supporters. A poll she commissioned last winter, even before the savings and loan storm broke, reportedly showed her running neck and neck with Hughes. In recent weeks she has been touching base with dozens of political and civic leaders, and many of them are encouraging her to run. She is now studying whether she can raise the $3 million to $4 million she estimates the campaign would cost.
Bainum is also nearing a decision, and the word on the street is that he is willing to commit $1 million or $2 million of his own money to the race. Already, two delegates in his district are positioning themselves to run for his state Senate seat, a clear sign he intends to vacate it.
Hughes, meanwhile, has given no signal of his intentions. His wife, Patricia, whose voice is an important one, is said to favor the race. But the governor has not put out the word to his political supporters and has made no effort to set up a fund-raising apparatus.
During the next few weeks, he will have to make his decision. At this point, his staff believes the savings and loan situation has been an overall plus for him. By Labor Day, that could begin to shift.
But then again, Hughes has dodged bullets before. A long-term resolution of the savings and loan situation, one that lasted a year or more, could work in his favor. Hughes could still retain his title as the luckiest politician in Maryland.