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Yank the 'For Sale' Sign

October 26, 2003

In his campaign, Arnold Schwarzenegger missed the target with many of the vague darts he tossed at "the mess in Sacramento," but he hit the bull's-eye with this television ad: "Special interests have a stranglehold on Sacramento. Here's how it works. Money comes in, favors go out. The people lose."

Anger at cash-register politics is not something that arose with the recall campaign. Californians voted half a dozen times in the last 25 years to "reform" the way politicians raised money for their campaigns and how they spent it. Every effort has been thwarted by political party opposition, adverse court decisions and loopholes in the laws -- either deliberate or unintended. The current law was written by legislators, sold to voters as a reform and approved as Proposition 34 in 2002. It actually gave the political parties a bigger-than-ever role in bankrolling the campaigns of favored candidates. The perversity of that "reform" is illustrated by the recall campaign itself.

Most notable was Lt. Gov. Cruz Bustamante's acceptance of nearly $5 million from Indian tribes operating Nevada-style casinos. He virtually promised them that, if he was elected governor, they could run all the slot machines they wanted without fear of the state taxing them. When a court ruled that the contribution amounts violated the law, Bustamante tried to use the money for ads against Proposition 54, which sought to ban certain uses of racial data. The ads actually amounted to Bustamante commercials. By the time the courts ruled against the shell game Bustamante used to pay for those ads, he had spent the $5 million. It is not clear whether he will face further sanctions.

About the same time, Maloof Sports and Entertainment, owner of the Sacramento Kings basketball team, gave Gov. Gray Davis' no-on-the-recall committee $100,000 while a bill that could help finance a new Kings downtown arena with public bond money was awaiting his action. Surprise, he signed. The link is just as clear during the frantic end of legislative sessions when lawmakers shake down lobbyists at receptions -- usually getting $5,000 a head for hors d'oeuvres while bills await final votes.

Schwarzenegger, however, looked disingenuous in condemning Davis and others for taking money from the casinos and public employee unions while himself was accepting at least $9 million from real estate developers, contractors and other businesses with intense interest in state law and regulation.

Each ding of the cash register makes Californians more distrustful of politics.

Public Financing

When he takes office as governor, Schwarzenegger will have momentum. He should use it for campaign reform. The Legislature may agree to close some loopholes in current law, but public financing remains the only sure way to reduce the legalized influence-peddling that rules the state today. Californians endorsed public campaign finance in 1988 in a measure that won a majority of votes but was canceled out by passage of a watered-down competing proposition.

The federal General Accounting Office cites recent studies showing that public financing in Los Angeles and New York city elections has increased electoral competition and helped challengers mount credible campaigns against incumbents. Seventeen states have some degree of public financing. Arizona and Maine offer nearly full public financing that candidates may use on a voluntary basis.

Seven of the nine statewide offices in Arizona, including the governorship, were won in 2002 by candidates who accepted public financing and its conditions. These included strict limits on how much they could spend and a commitment to debate opponents.

It's hard to quantify "clean" or "corrupt," and the laws are too new to make unassailable claims. Still, Arizona's public financing advocates tout increases in contested campaigns and increased voter participation. And we know it's better than what we have in California, whose motto for governing is little more than "pay to play."

Promising Proposals

The new California governor will find plenty of good advice already formulated. Some of the best comes from the California Clean Money Campaign, a nonpartisan umbrella group formed in 2002 that has drawn on experts, including Robert M. Stern, president of the Center for Governmental Studies in Los Angeles and the first general counsel to the state Fair Political Practices Commission in the mid-1970s.

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