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Gov.'s Team to Pay Fine

Schwarzenegger's campaign improperly reported $25 million in donations for last year's special election. Now it agrees to pay $202,200.

July 01, 2006|Robert Salladay | Times Staff Writer

SACRAMENTO — Gov. Arnold Schwarzenegger's campaign has agreed to pay a $202,200 penalty for failing to properly report more than $25 million in campaign donations during the special election last year, the state Fair Political Practices Commission said Friday.

The penalty probably is the final chapter of Schwarzenegger's special election, in which voters rejected all of the governor's initiatives and handed him the biggest defeat of his political career.

Under California law, campaigns must publicly disclose donations they receive and money they spend -- in some cases within 24 hours of the transaction. Disclosure is the bedrock of California's finance law, allowing the public to see the money behind political campaigns.

In documents released Friday, the commission found that Schwarzenegger's California Recovery Team, created to advance the governor's causes, failed to report in a timely way millions of dollars in donations that were used to buy TV advertising pushing four initiatives on the November ballot. It found 143 delinquent reports on $25.6 million in expenditures.

The complaint was filed by the Alliance for a Better California, a union-backed group that worked against the governor last year. Robin Swanson, a spokeswoman for the group, said Friday they were "happy that the FPPC is holding the governor and the California Recovery Team accountable."

The largest fine ever levied by the commission was $263,000 -- against Lt. Gov. Cruz Bustamante -- for violations during the gubernatorial recall election in 2003. Bustamante improperly moved $3.8 million between campaign committees.

In the Schwarzenegger case, the issue was whether the California Recovery Team was really acting as an "independent expenditure committee," which is governed by rules different from those of a "general purpose committee," which has less stringent disclosure requirements.

The governor was sued during the special election to force him to disclose the donations within 24 hours, but election day came and went before the courts decided the matter. Nevertheless, Schwarzenegger filed the proper forms as an independent expenditure committee -- disclosing the donations in the weeks before the election.

The fact that voters could see the contributions before the election was a mitigating factor in reducing the fine, the political practices commission said. The state agency could have fined the California Recovery Team $715,000. Investigators also said Schwarzenegger apparently didn't know that the reports weren't filed properly.

"This settlement resolves an honest dispute over compliance with a very complicated campaign finance law," said Tom Hiltachk, the governor's attorney. "I hope the commission will work toward simplification of these rules so the public benefits from better, faster and more frequent campaign disclosure."

Ned Wigglesworth, a campaign finance expert with TheRestOfUs.org, a Sacramento nonprofit, said voters "weren't walking into the ballot box blind," but for a time "they were deprived of some of the information they should have had" about the governor's donors.

The penalty is the latest legal entanglement for Schwarzenegger, who has broken all fundraising records for a California politician. Since 2002, he has raised more than $150 million for the recall election of 2003 and other causes. He is expected to collect $75 million more for his reelection effort this year.

In 2004, a Superior Court judge ordered Schwarzenegger to repay a $4.5 million loan he illegally used to finance his recall campaign. Last year, a committee supporting Proposition 77, the governor's redistricting overhaul, was forced to return $1.75 million to Schwarzenegger because it exceeded state limits.

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