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California and the West

Activist Gives $1 Million to Help Prop. 25


SACRAMENTO — One of Gov. Gray Davis' richest and most loyal contributors shocked the political establishment Tuesday with a $1-million donation to the Proposition 25 campaign finance reform effort.

Longtime Democratic patron Max Palevsky of Los Angeles said he is sickened by the "corruption of the electoral process" caused by enormous sums being funneled to political campaigns. He made the donation to give the March 7 ballot measure a fighting chance in the preelection advertising war, he said.

"I am making this million-dollar contribution," he said in a statement, "in hopes that I will never again legally be allowed to write huge checks to California political candidates."

The donation provides a large infusion of cash for the Yes on Proposition 25 campaign at a critical time. Opponents of the measure had just started a modest advertising effort that was causing the proposition to slip in the polls.

The initiative, sponsored by millionaire businessman Ron Unz and public interest activist Tony Miller, would limit contributions, require overnight disclosure on the Internet of donations above $1,000, ban corporate donations, restrict the times when political funds could be raised and provide taxpayer-financed advertising credits to campaigns that agree to overall spending limits.

Palevsky's donation came one day after The Times revealed that Davis, who raised a record-breaking $13.2 million in political funds in his first year in office, had mounted an aggressive telephone effort to solicit contributions from business interests for the campaign to defeat the proposal. In a one-month period, the "no" campaign reported raising $1.3 million and insiders said it was mostly the result of Davis' efforts.

"The huge corporations, wealthy individuals and unions that currently make unlimited contributions to California candidates are paying for a one-sided . . . advertising campaign against Prop. 25, thereby seeking to preserve our corrupt status quo," Palevsky's statement said. "My contribution is intended to allow the voters . . . to hear both sides."

Scott Macdonald, communications director for the No on Prop. 25 campaign, said his side will not be able to counter the television and radio advertising blitz that proponents of the initiative will now have the resources to launch in the final week before the election.

"A million-dollar check, seven days [before the election], that's just an amazing thing," he said.

Macdonald said the "no" side has been running some commercials in Los Angeles and San Francisco and started spots Tuesday in Sacramento and San Diego, but none of them were very big buys. He said even if the campaign raises more money it is probably too late to find available air time.

"This [donation] is a clear example of what we've been talking about," he said. "Here on a silver platter is an example of the kind of person who benefits from Prop. 25." Opponents of the campaign reform proposition claim that it would benefit wealthy candidates who finance their own races.

But Unz said Palevsky, 76, is not someone who ever intended to run for office and his support of Proposition 25 would help pass a measure that would give the opponents of millionaire candidates access to free advertising. He said the proposal could not curb expenditures by millionaire candidates because Supreme Court rulings have upheld candidates' constitutional right to put their own money into their campaign.

Unz said he had been talking to Palevsky in recent weeks about a possible contribution but was stunned when the Westside political activist told him just how much he was giving.

"Without this contribution . . . there would have been a one-sided advertising campaign," Unz said. "Since the other side started advertising a week ago, our polling numbers have been trending downwards."

Political strategists said they were shocked by the amount of the donation and the source. Palevsky, named by Forbes magazine as one of the 100 richest people in the technology business, was the founder of Scientific Data Systems, a firm he ultimately sold to Xerox. Over the years, he and his wife have contributed more than $150,000 to Davis.

"A donation of this size from this particular contributor comes out of left field," said Darry Sragow, a Los Angeles political consultant. "I don't think anybody I talk to would have expected anything like this. It leaves us all a bit perplexed."

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