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Wealth Buys Access to State Politics

Donors: A small but diverse group leads campaign giving in California. And some of them appear to be reaping huge rewards.

April 18, 1999|DAN MORAIN | TIMES STAFF WRITER

SACRAMENTO — They can pick up the phone and get the political leader of their choice on the line. They can cook up bills or initiatives to boost their interests. They can kill measures that threaten them.

They are the state's largest campaign donors, and they are a relative few: A Times analysis of 1998 campaign spending records shows that about 330 individuals, corporations and political action committees gave $100,000 or more to state politics last year.

Of those, 48 gave $1 million or more. Eight reached eight-figure status, at $10 million and above.

Wealth is their common denominator. Beyond that, they are a diverse group. The roster of this exclusive club includes Republicans and Democrats, conservatives and liberals, business tycoons, Hollywood glitterati, media moguls, political action committee chiefs and labor leaders like John Hein of the California Teachers Assn., who helped direct how the union spent $21 million on ballot initiatives and candidates last year.

Many are wealthy partisans who have helped elect presidents and governors for decades. But some of the biggest spenders are nouveau riche who only recently began spreading their wealth around the halls of power. Many compound their influence by leaning on friends to give too.

Most donors and politicians say contributions merely buy access to leaders, not their votes. It is illegal for an official to take action based on a donation. Still, most large donors have financial interests that depend on the actions of the governor and Legislature. And already this year, there are indications that some are reaping rewards.

"These are entities that want something done in California," said Robert Stern, of the nonpartisan Center for Governmental Studies in Los Angeles.

All told, this elite club poured about $300 million into the state political system in 1998. That is 60% of the estimated $500 million spent on campaigns last year.

"The system we have puts an immense amount of power into the hands of a few people," said Samantha Sanchez, co-director of the nonpartisan National Institute on Money in State Politics in Helena, Mont. And "California, of course, is in a different universe than any other state."

Six-figure political donations are almost unheard of in most other states, all but 13 of which restrict campaign contributions. In California, however, even back-bench legislators attract $100,000 or more from single sources.

Last year's $500 million topped the $297 million spent on California elections two years earlier, which topped the $262 million spent in 1994.

Why the exponential growth? Multimillionaires Al Checchi and Jane Harman threw a combined $55 million at their failed runs for governor. Altogether, the governor's race cost $118 million, almost twice what was spent four years earlier. Flush gambling interests spent $100 million on one high-stakes initiative and various other campaigns.

Campaigners and their managers have voracious appetites for money; the cost of a single Senate race in rural Northern California reached $5 million last year. And with the economy expanding, there's money to spend.

The spigots opened wide just two years after voters approved Proposition 208, which imposed strict campaign donation and spending limits. A federal judge last year struck down the initiative; the measure's backers have appealed.

For comparison, consider the federal system, in which demand for campaign cash also is seemingly insatiable, but in which individual donors can give no more than $1,000 to a candidate for federal office, and corporations are barred from giving directly to candidates.

In 1997-1998, the biggest donor to a federal campaign was Philip Morris and its officers. The tobacco giant spent $3.2 million on federal elections, largely in so-called soft money to parties and political action committees.

In California, politics cost Philip Morris $21.9 million, as the New York firm led the tobacco industry's effort against the successful Proposition 10, which raised cigarette taxes 50 cents a pack.

People involved in the system expect more of the same in the new century. "De-escalation? Are you kidding?" said Hein, of the California Teachers Assn. "The initiative process is not going to go away. It's going to grow. . . . That is just a hard, cold fact."

Donors Pursue Business Interests

Roughly half the money spent last year went to initiatives. Interests affected by ballot measures to expand gambling, raise tobacco taxes, regulate electric utilities and weaken the influence of labor unions dominated the airwaves with ads bought by their millions.

But there are scores of other large donors who pursue business interests in the Capitol and generate much less attention. Here are a few:

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