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Big Money Is Drawn to Issues

The campaigns for and against two tax measures -- one on oil and the other on cigarettes -- are bringing in more cash than even the race for the state's top office.

October 15, 2006|Virginia Ellis and Dan Morain | Times Staff Writers

SACRAMENTO — In the world of politics, the race for money is as intense as the race for votes because often -- not always -- the politician or proposition with the most money wins.

In the competition for cash, Arnold Schwarzenegger and Phil Angelides are taking a back seat to two tax measures affecting some of the richest industries in America.

Oil and tobacco interests are investing millions in campaigns opposing Proposition 87's proposed increase in the oil extraction tax and Proposition 86's $2.60-a-pack leap in the cigarette tax. The two battles are the most expensive in this year's election.

Raising the stakes are the well-heeled proponents of the two measures, who also plunked down millions. Real estate heir and movie producer Stephen L. Bing and his allies matched the oil industry nearly dollar for dollar, dropping $47 million into the Yes-on-87 campaign. The oil industry has poured more than $60 million into the anti-87 effort.

Hospitals and healthcare groups that stand to benefit from the revenue generated by higher cigarette taxes have collected $14 million to promote the measure. But they are being outspent by tobacco companies and the $55 million those corporations raised to defeat it.

Funds for and against the two initiatives have far eclipsed the dollars devoted to the race with the highest profile. Between them, the Republican governor and his challenger, Democratic state Treasure Angelides have collected $50 million this year.

In California, the dollars collected for candidates and initiative campaigns occupy a stratosphere of their own, dwarfing amounts raised in any other state. In 2004, the most recent nationwide elections, ballot propositions drew $600 million in contributions across the country, more than half of it -- or $304 million -- in California, according to a study by the Institute on Money in State Politics in Helena, Mont.

Florida ranked next, with $57.8 million raised for ballot measures.

This year, more than $447 million has been amassed for both proposition and candidate races, with the election still weeks away.

Kim Alexander, president of the California Voter Foundation, a nonprofit voter education group, said big money flows into California because it's a bellwether state. Propositions that are successful here are likely to be copied elsewhere.

"A lot of political trends begin in California and take root here through the initiative process," Alexander said. "Stakes are high, and interest groups and corporations are aware the impact California initiatives can have nationally and even internationally."

Stem cell research, term limits and Proposition 13 property tax cuts were California-born initiatives that spread to other states.

"The real tragedy of campaign financing in the initiative process is that hundreds of millions of dollars are being spent to 'educate' voters, and yet most of the money is used to buy television ads that confuse, mislead or scare voters and do just about anything but inform them," Alexander said.

One initiative that is barely a blip on the money-raising screen is Proposition 89, a proposal by the California Nurses Assn. designed to curb political spending by creating a public financing system and putting strict caps on donations. The nurses group has raised $4 million; its opponents have collected $2.5 million.

For statewide political candidates, money is following a familiar trend: Generally the candidates with the most money are the candidates who are ahead in the polls.

Schwarzenegger, who holds a double-digit lead over Angelides in most polls, also swamped him on the fund-raising circuit. Schwarzenegger piled $33 million into his campaign treasury, while Angelides picked up more than $15.5 million and lent his campaign $1.5 million from his own wallet.

Both men have been affected by contribution limitations, which in this election apply to all gubernatorial candidates for the first time. There are no limits on donations to proposition campaigns.

Angelides also had to spend millions in a contested primary this year, while Schwarzenegger had only token opposition.

In the attorney general race, Oakland Mayor Jerry Brown, the Democratic nominee, holds a similar lead in the polls over Republican Chuck Poochigian, a state senator from Fresno. Brown has collected nearly twice as much money as Poochigian.

Insurance Commissioner John Garamendi, the Democratic candidate for lieutenant governor, and state Sen. Tom McClintock of Northridge, his Republican counterpart, are running neck and neck in the polls and close in money raising. Garamendi has raised $3.2 million this year and McClintock $2.3 million. But like Angelides, Garamendi had to spend heavily in a bruising primary.

A Los Angeles Times poll released Sept. 30 showed state Atty. Gen. Bill Lockyer, a Democrat, leading Republican rival Claude Parrish, a Board of Equalization member, by 24 percentage points. Their money gap is similarly wide: Lockyer has raised $1.3 million this year, compared with $226,724 for Parrish.

A departure in the trend is the insurance commissioner race. Lt. Gov. Cruz Bustamante, the Democratic candidate, has only a slight lead, pollsters say, over Republican Silicon Valley businessman Steve Poizner. The overall total Poizner has amassed for his campaign is $11 million; Bustamante has collected $1.1 million.

The difference? Poizner put $8.3 million of his own money into the race.


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