L.A. may scale back its campaign-finance law

Los Angeles officials could be forced to scale back a law intended to level the playing field in elections in which wealthy candidates spend large sums of their own money.

Candidates for city office who agree to a limit on their campaign spending are currently eligible to receive public money, securing a dollar in taxpayer funds for every dollar they raise from private individuals.

Those so-called matching funds provide a financial boost to candidates who run against politicians who tap their own fortunes to finance their campaigns, are backed by well-financed special interests, or both.

But portions of the city program are now vulnerable to challenge after a U.S. Supreme Court ruling, which struck down part of a similar campaign finance law in Arizona, Deputy City Atty. Renee Stadel said. In a 5-4 ruling last month, the court said Arizona’s law “substantially” restricted the political speech of wealthy politicians and the special interests that seek to spend significant sums on their chosen candidates.

In a letter to the city’s Ethics Commission, Stadel said some provisions of L.A.’s matching funds law “clearly appear unconstitutional” and should be repealed in time for an upcoming special election in the Watts-to-San Pedro district represented by Councilwoman Janice Hahn. Hahn won a seat in Congress on Tuesday.

Limiting the use of matching funds may have the greatest impact on the 2013 mayoral campaign, which will attract numerous special interests and could feature two candidates with deep pockets: shopping mall developer Rick Caruso and Austin Beutner, an investment banker and former aide to Mayor Antonio Villaraigosa.

Ethics Commission President Paul Turner voiced dismay over Stadel’s recommendation, saying the matching-fund system fosters free speech by bolstering the voices of candidates who are at a financial disadvantage. “I see this as nothing more than another attempt by the court to get away from equality,” he said.

Los Angeles has distributed campaign matching funds for two decades to candidates who demonstrate an ability to raise money on their own.

The council updated that system in 2003 to provide additional matching funds, and at a faster rate, to candidates in races in which at least one politician spends a significant amount of his or her own money. That extra money is also provided in runoff elections if special interests, such as labor unions and business groups, make large independent expenditures on behalf of one or more candidates.

When either of those events occur, candidates receive $3 in matching funds for every $1 they raise.

That language allowed matching funds to be provided at a faster rate to such candidates as Mayor Antonio Villaraigosa, Councilmen Bill Rosendahl and Paul Krekorian, and City Atty. Carmen Trutanich — Stadel’s boss. In 2009, Trutanich received $420,000 in matching funds in the runoff against then-Councilman Jack Weiss.

If the matching-funds language is repealed, the city will be able to provide only $1 for every $1 raised. And the total amount of public money that various candidates can collect would decrease in some cases, officials said.

david.zahniser@latimes.com