Angelides Mailers Use Preschool Issue to Skirt Campaign Contribution Limits

Sidestepping California’s campaign contribution caps, state Treasurer Phil Angelides is using a loophole in the law to tout himself in statewide mailings that promote a preschool initiative on Tuesday’s ballot.

Angelides, locked in a tight race for the Democratic gubernatorial nomination against Controller Steve Westly, is pictured smiling and surrounded by children in ads for the initiative, Proposition 82, sent to voters.

Although the advertisements don’t mention Angelides’ candidacy for governor, they align him with U.S. Sens. Dianne Feinstein and Barbara Boxer, who have publicly endorsed him over Westly. The ads say the two senators back Proposition 82 and echo lines from Angelides’ campaign for governor.

“As state treasurer,” the mailers say, “I am fighting to fully fund our schools because giving our children the resources they need and access to preschool is essential if we are to prepare our kids to compete in the global economy.”

Angelides is using similar photos and messages in ads in newspapers -- though state treasurers have no direct authority over public schools.

Under California law, a single donor cannot give more than $22,300 to a gubernatorial candidate. But there are no caps on contributions to campaigns for or against ballot measures.

Last month, Angelides established a new ballot-measure campaign account called Standing Up for Our Kids. He transferred more than $750,000 into it from another account, and spent the money on the Yes-on-82 mailers.

Much of that money was donated in sums as high as $250,000 -- far in excess of what Angelides can accept in his gubernatorial campaign.

Proposition 82 would raise income taxes on the wealthy to make preschool available for all 4-year-olds. Consultants for the Yes-on-82 campaign said they were surprised by Angelides’ ads.

“We don’t have anything to do with it,” said Mark Fabiani, spokesman for Rob Reiner, the Hollywood filmmaker who is sponsoring Proposition 82.

Reiner has donated $5,500 to Angelides’ political campaigns over the years -- a modest amount by California standards -- and no money to Westly, who also has endorsed Proposition 82.

“The issue is not support for Proposition 82,” said Jude Barry, Westly’s campaign manager. “The issue is that Phil Angelides is violating campaign finance law.”

Angelides spokesman Dan Newman said the treasurer “very conservatively follows state guidelines,” and likened the campaign account to a similar one controlled by Gov. Arnold Schwarzenegger. A court last year ruled that Schwarzenegger could raise unlimited funds into his account.

Lt. Gov. Cruz Bustamante was fined $263,000 by the California Fair Political Practices Commission for a financial tactic similar to Angelides’ when Bustamante ran for governor in the 2003 recall campaign.

“ ‘Spirit’ is one thing; ‘law’ is another,” said Robert Stern, president of the nonpartisan Center for Governmental Studies in Los Angeles. Angelides has used “a loophole in the law, and one that needs to be addressed.”