YOU ARE HERE: LAT HomeCollections


What Limits? New Law Can't Stop Big Money

September 03, 2003|Dan Morain | Times Staff Writer

SACRAMENTO — In November 2000, voters passed a measure billed as a way to clamp a lid on campaign contributions and close loopholes that helped the wealthy.

But in the recall election, the first statewide test of Proposition 34, six- and seven-figure checks are flying.

On Tuesday, a California Indian tribe announced its intention to pump $2 million into Lt. Gov. Cruz Bustamante's campaign to replace Gov. Gray Davis if the recall passes Oct. 7. The statement followed more than $800,000 in gifts last week from two other tribes. And Bustamante's campaign aides say he intends to spend the money and is entitled to under the current rules.

Although Bustamante's action is likely to be challenged, it illustrates the ways in which the new system is not as sweeping as it sounded when first proposed.

Proposition 34 was promoted as a reform, but as administered it contains provisions that still allow for big money to flow into campaigns:

* Under one that favors incumbents, officeholders can receive donations of unlimited size in campaign accounts established before the initiative's limits took effect. They can use that money for a variety of political ends. Roughly half of all state legislators, and almost all statewide officeholders, including Bustamante, have old accounts that remain active.

The Viejas Band of Kumeyaay Indians, which has major gambling interests in San Diego County, will give $21,200 -- the maximum that Proposition 34 allows to be donated directly to a candidate -- to Bustamante's campaign for governor.

But $1.5 million of its gift will go to a committee he formed to support his campaign for reelection last year to the lieutenant governorship. Bustamante's campaign officials say he will spend the $1.5 million on his run for the governor's office.

"Everything we are doing is legal," Viejas Vice Chairman Bobby L. Barrett said at a news conference Tuesday. "We are very proud of the contribution we are giving him."

* Under U.S. Supreme Court rulings, donors can give unlimited sums to independent committees established to support or oppose candidates. The donors are not supposed to coordinate their efforts with the candidates. However, state rules governing these so-called independent expenditures are looser than rules in many other jurisdictions.

The Viejas will spend $479,800 on an independent campaign for Bustamante. The tribe's political consultant, Richie Ross, doubles as the main strategist for Bustamante's gubernatorial campaign.

* Proposition 34 specifically exempts targets of recalls from contribution limits. Davis, who raised more than $70 million during his first term, can accept donations of unlimited size to his gubernatorial campaign account. He has tapped 20 donors for six-figure donations, including four contributors who have given $200,000 and more.

There are no limits on how much of their own money candidates can spend on their campaigns. Republican Arnold Schwarzenegger has given his campaign $2 million, and Peter V. Ueberroth, another millionaire Republican running for governor, has given his $1 million.

* Committees established to support or oppose the recall --there are 16 of them -- are considered the same as committees that support or oppose ballot measures. Under a 1976 Supreme Court ruling, such committees can accept unlimited donations of any size.

* While Proposition 34 imposed strict campaign disclosure requirements, campaigns have found ways of avoiding the sunshine provisions. Nonprofit corporations can, for example, amass large sums from individuals and corporations and pass that money on to campaigns, never having to disclose donors' identities. And as the election draws near, some of the largest contributions can easily be hidden from the public, with some donors pouring cash into committees that can raise, and spend, unlimited sums for or against candidates.

Legislators placed Proposition 34 on the ballot in November 2000, fearing that federal courts would uphold the much stricter campaign finance limits of Proposition 208, passed in 1996.

"California is still the Wild West when it comes to campaign fund-raising," said the ballot argument signed by Dan Stanford, chairman under Gov. George Deukmejian of the Fair Political Practices Commission, the state watchdog agency that monitors campaign fund-raising and spending. "Six-figure campaign contributions are routine. Proposition 34 finally sets enforceable limits and puts voters back in charge of California's political process."

While Proposition 34 was advertised as a way to tame California's campaign finance system, the attempt to corral spending quickly developed holes, in part because of interpretations by the FPPC.

In 2001, the FPPC interpreted Proposition 34 to say that restrictions do not apply to political committees created by legislators before the measure took effect Jan. 1, 2001. A bill to impose caps on such funds stalled in the state Senate this year.

Los Angeles Times Articles