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Loophole Shields Backers of Racial Privacy Measure

Finances: Campaign laws allow use of nonprofit to keep names from being made public.


SACRAMENTO — A group pushing an initiative to bar California from collecting racial data may get the measure on the ballot as early as this fall--but the donors who bankrolled the effort have never been publicly revealed, and may never be.

Under a major loophole in campaign finance laws, the political campaign led by University of California Regent Ward Connerly--the man who spearheaded the successful 1996 initiative to abolish affirmative action at California schools and government--has not had to disclose most of its financial backers.

That is because the group has essentially laundered roughly 90% of its $1 million in contributions through a type of nonprofit organization that is not required to reveal the names of contributors under federal law. The nonprofit organization received the money from donors, then transferred it to a political action committee. Thus, the legally required disclosures from the PAC list only the nonprofit group as the contributor, not the individual donors.

In similar fashion, this year's successful campaign against a ballot measure to extend term limits and a group that ran ads critical of Gov. Gray Davis during the energy crisis last year kept donor names secret under the same loophole.

All California political campaigns are supposed to disclose the identities of donors who give more than $100 as part of the state's Watergate-era Political Reform Act.

Citing the spirit of that law, a number of organizations, including the League of Women Voters and Common Cause, asked Connerly to disclose the donor names behind his latest effort, the Racial Privacy Initiative. But Connerly has not, and a rival campaign to defeat the initiative is considering a lawsuit.

"Ward Connerly is hiding the donors, and his intent is to hide the data," said Abdi Soltani of the Californians for Justice Education Fund.

The group is part of a coalition of health officials, educators, labor unions and civil rights groups that is forming to oppose Connerly's initiative on grounds that race-based data are needed to combat diseases and disparities in the educational system, among other things.

On Friday, the Racial Privacy Initiative submitted nearly 1 million signatures to county elections officials around the state, hoping to qualify the measure for the November ballot.

Kevin Nguyen, the executive director of the American Civil Rights Coalition, the nonprofit group that has funneled $897,400 to Connerly's political action committee and is listed as the official sponsor of the initiative, declined to discuss the disclosure issue Friday, saying that it has been referred to an attorney. He said the campaign will disclose in its next public report that it has spent nearly $2 million on the signature phase of the campaign alone.

"We don't want to set a precedent, either for ourselves or some other nonprofit engaged in the political process," Nguyen said when asked why the group has chosen not to name its donors.

The group believes California should stop collecting data on race, ethnicity and national origin to end what it sees as an obsession with race that is preventing the state from moving forward on an array of civil rights issues. It points out that a growing number of Californians decline to identify racial backgrounds on college applications, and argues that the state's racial complexity is too profound to be so simply categorized.

"The initiative is a unique and tremendous opportunity to unite the state and insist that we are all individuals and all Americans, not a Balkanized collection of hyphenated Americans," Nguyen said. "With the end of racial divisions, we could do a much better job of addressing discrimination."

Nguyen dismissed arguments that the initiative would affect the work of public health professionals or police. He noted that it contains an exception for data collected for medical research or treatment, and that it allows the Legislature to carve out other exemptions.

The initiative is significant, not only because it would prevent state and local governments from collecting any race-based information, but also because it could potentially influence the tenor of this fall's gubernatorial contest, as 1994's Proposition 187 did. That measure to slash government services to illegal immigrants, which passed but was later derailed by the courts, was endorsed by Gov. Pete Wilson and became a major factor in his reelection.

However, Connerly is asking elections officials to count all of the roughly 980,000 signatures the group turned in instead of conducting a sample to determine whether the group met the requirement of 670,000 valid signatures, the more common approach. An individual count could drag out the process beyond June 24, the deadline to make this fall's ballot. If it does not make the November ballot but still qualifies, the initiative would appear on the March 2004 ballot, the next statewide election.

Connerly has rebutted speculation that he asked for a full count because he was pressured by worried Republican Party officials to keep the initiative out of the same election as the governor's race. Whatever the case, it is clear that if it appears on the November ballot, Davis and his Republican challenger, businessman Bill Simon Jr., will both be pressured to take sides on the issue.

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