Quiet Cash Playing Large Role

As candidates stump for votes in the recall race, moneyed interests are waging freewheeling parallel campaigns largely beyond public scrutiny.

Unfettered by caps on contributions or spending that apply to candidates, Indian tribes, labor unions, conservative Christians and Planned Parenthood have infused independent expenditure committees with $5 million and used $3.7 million of it in support of their preferred candidates and causes.

In a 48-hour period last week, labor unions and Indian tribes spent nearly $3 million on mailers, television spots and other efforts aimed at swaying the electorate. Almost all of it was spent on behalf of Democratic Lt. Gov. Cruz Bustamante and Republican state Sen. Tom McClintock, their favored candidates to replace Gov. Gray Davis if he is recalled. Many major donors to Bustamante and McClintock also double as independent operatives.

Conservative Christian Howard Ahmanson Jr., long a McClintock supporter, has spent $75,000 to set up a phone bank operation to urge voters to support McClintock. Environmentalists are preparing to spend several hundred thousand dollars advising voters to help Gov. Gray Davis retain his job.

Now that the federal courts have reinstated the Oct. 7 recall election date, other interests are expected to weigh in. Though they have not yet become a dominant part of the recall campaign, donors and consultants say the committees almost certainly will spend more than $10 million.

So far, the committees are helping candidates by amplifying their campaign themes. A television spot paid for by an Indian tribe on McClintock’s behalf, for example, closely follows the ads that the McClintock campaign is airing. But as election day draws near, the independent committees could become political hit men.

In any campaign, these committees are the wild card. They are notable in the current campaign largely because this is the first time California has had a statewide race subject to contribution limits that apply to candidates themselves. Exactly which groups are planning independent campaigns, and what they’re contemplating, is difficult to track. Dozens of committees have been formed in recent weeks; whether they receive cash won’t be public record until after they start spending.

“With independent campaigns, it’s difficult to follow the money,” said Kim Alexander of the nonprofit California Voter Foundation, which promotes Internet disclosure of all campaign donations and expenditures.

The groups are proliferating, thanks to Proposition 34, the ballot measure that voters approved three years ago to restrict donations to political candidates. In campaign literature touting Proposition 34, promoters decried the fact that $100,000 gifts to candidates were common. But six- and even seven-figure checks continue to fly; they simply land in independent expenditure funds.

“You wouldn’t see nearly as many of them but for the so-called reforms,” said Fred Keeley, a Democrat who served three terms in the Assembly, and is contributing to an independent campaign aimed at encouraging environmentalists to vote to keep Davis as governor. “They’re the existing big loophole in the law.”

Some candidates denounce independent committees, largely because they can’t -- at least, they’re not supposed to -- have any control over them, and because their actions sometimes backfire.

In a legislative primary race last year, state employee unions trying to help a Republican candidate sent a mailer describing her foe as a religious conservative -- to conservatives. In Northern California, a police union “helped” a Republican state Senate candidate by sending a mailer to GOP voters urging that they not only elect the candidate but also support Democrats running for governor and other statewide offices.

“It did terrible, terrible damage,” said Republican campaign consultant Ray McNally, who managed the candidates’ losing campaigns.

In the recall contest, as independent players largely echo the campaign themes of Bustamante and McClintock, they’re proving valuable to those candidates, who, unlike actor and GOP candidate Arnold Schwarzenegger, have no personal wealth and cannot fund their own campaigns.

Bustamante has raised $9 million for the current race. But that is only part of the cost of his campaign. Organized labor and Indian tribes rich with casino profits have poured $2.6 million more into independent committees in support of his candidacy.

And the Hotel Employees and Restaurant Employees International Union has embarked on what its California political director, Jack Gribbon, hopes will be a $2.5-million campaign to persuade 750,000 immigrants to vote against the recall and for Bustamante as a possible replacement for Davis.

“In our view, this is a real war that needs to be won,” Gribbon said.

Independent money makes up an even larger share of McClintock’s campaign. The state senator from Thousand Oaks has raised roughly $1.5 million for his gubernatorial campaign. Donors led by Indians and Ahmanson have spent $632,000 on McClintock’s behalf.

“We’re certainly glad to have the help,” said John Stoos, a top McClintock aide.

Many advocates of campaign finance reform view Proposition 34, written primarily by state Senate President Pro Tem John Burton (D-San Francisco) and Sen. Ross Johnson (R-Irvine), as a mild overhaul, in part because independent expenditure committees have virtually free reign:

* There are no limits on the size of donations to independent campaigns. Donations made to independent committees in statewide and legislative races are disclosed on the California secretary of state’s Web site. But unlike candidates who might face voters’ wrath for negative mail ads and television spots, independent operators don’t face the electorate.

* Who is making such pitches may or may not be clear. One committee in the recall race is called Tax Fighters for Tom McClintock for Governor. Its single source of money so far is the Sycuan Band of Kumeyaay Indians, owners of a casino in San Diego County and a group that has given $600,000 to Bustamante’s gubernatorial campaign.

* By law, independent committees must remain at arm’s length from candidates and their consultants. Those caught coordinating campaign efforts could face criminal penalties.

Richie Ross, Bustamante’s main campaign strategist, represents two donors spending heavily in independent campaigns for Bustamante: the Viejas Band of Kumeyaay Indians, which has spent nearly $500,000 on an independent campaign, and the hotel workers.

“The presumption ought to be,” said Jim Knox, executive director of California Common Cause, “that if a consultant is representing a candidate and the entity making an independent expenditure, then by definition they are not independent.”

Ross said he has paid no attention to independent efforts, and dismissed any notion that he has had any involvement in them. “If somebody even implies I’m coordinating or doing anything illegal, I’ll own their house,” Ross said.

Bustamante similarly expressed indignation. Attending the Oscar De La Hoya-Shane Mosley title fight this month in Las Vegas, the lieutenant governor angrily dismissed a Times reporter’s inquiry about a $2-million donation by the Pechanga Band of Luiseno Indians to an independent committee called First Americans for a Better California.

“Are you accusing me of a felony? ... You’re out of bounds, man,” Bustamante declared.

Increasingly, tribes are spending on independent efforts for both McClintock and Bustamante. The Morongo Band of Mission Indians, owners of a casino near Palm Springs, has given McClintock $20,000 directly and spent $500,000 on an independent television ad campaign for him. The Morongo Band now is preparing to spend heavily on behalf of Bustamante, a tribal spokeswoman said.

In recent days, Schwarzenegger has begun airing commercials decrying tribes’ heavy campaign spending and accusing them of failing to pay a fair share in taxes.

The ads have angered several tribes. And at least some are contemplating responding with ads attacking Schwarzenegger’s candidacy.

Pechanga Chairman Mark Macarro acknowledged that tribes’ spending -- more than $6 million on the recall race -- is causing “heartburn for some folks,” and he blames the criticism in part on “latent racism.”

As he sees it, tribes are simply doing what other wealthy entities have long done: spending on politics.

The Pechanga Band, like those of other tribes, wants to expand the number of slot machines in its casino and must renegotiate a compact with the governor to do so. Talks with Davis are at an impasse.

“As tribes,” Macarro added, “we now have a vested interest in the outcome of statewide elections.”

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Contributions race

These contributions were reported by major candidates on the Oct. 7 ballot who have received at least $100,000 for their gubernatorial campaigns. Totals are for all contributions through Aug. 23 and for contributions of $1,000 or more for the 24 hours ending Tuesday. Donations of $1,000 or more must be reported within 24 hours.

*--* Contributions Candidate or committee Total reported Reported in 24 hours ending Tuesday Cruz Bustamante $3,310,933 $35,200 645 contributions 7 contributions

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* Development Specialists Inc., a national firm with a Los Angeles office that operates financially troubled companies for investors, contributed $21,200*. Thomas M. Valenzuela, founder of a New York investment firm, gave $5,000. American Income Life, a Concord, Calif., insurance agency, made a $5,000 contribution.

Bustamante controls three other committees:

Californians for Stability is an anti-recall fund that has raised $425,044. The Cruz Bustamante Committee Against Prop. 54 has collected more than $4.5 million, most of it transferred from the Lt. Gov. Bustamante 2002 Committee, an old reelection campaign fund. That committee reported raising more than $900,000, excluding the transfers.

*--* Arianna Huffington $602,052 $2,500 2,320 contributions 1 contribution

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* Gary Hirshberg, president of Stonyfield Farm, a New Hampshire organic dairy company, contributed $2,500.

*--* Tom McClintock $981,412 $15,000 1,258 contributions 6 contributions

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* Richard Gay, an engineer for Boeing, gave $10,000; he previously gave an identical amount. Michael Zacha, a Malibu contractor, gave $1,000.

*--* Arnold $12,091,731 $284,873 Schwarzenegger 1,301 contributions 65 contributions

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* Johnson Machinery, a Riverside retailer of heavy machinery and tractors, contributed $21,200. Edward Snider, chairman of the professional sports firm Comcast-Spectacor, which owns the Philadelphia Flyers and Philadelphia 76ers, contributed $10,000. Jerry Bruckheimer, producer of several Hollywood films, made a $10,000 contribution. Frank Caufield, a partner at the Bay Area venture capital firm Kleiner, Perkins, Caufield & Byers, contributed $10,000. Another partner at the firm, Raymond Lane, is an economic advisor to Schwarzenegger’s campaign and previously gave $21,200. Burrtec Waste Industries, a statewide waste hauler, contributed $10,000.

Schwarzenegger also controls Arnold Schwarzenegger’s Total Recall, a pro-recall committee, which has raised more than $1.3 million.

* Paul Folino, CEO of Costa Mesa high-tech company Emulex, contributed $40,000; Folino has given a total of $150,000. Timothy Draper, partner in a Bay Area venture capital firm, contributed $20,000, raising his total contributions to $30,000. Frank E. Baxter, chairman of Jefferies & Co., an international investment firm, contributed $10,000. All three men have also contributed to Schwarzenegger’s campaign committee.

*--* Davis Fights the Recall Californians Against $8,159,869 $120,500 the Costly Recall 488 contributions 25 contributions of the Governor

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Gov. Gray Davis controls this anti-recall committee.

* RGI Group, a New York company controlled by cosmetics giant Ronald Perelman, gave $50,000. Two plumbing industry groups gave a total of $15,000. Plumbing unions and councils have contributed more than $950,000 to Davis’ anti-recall efforts. The Mechoopda Indian tribe contributed $10,000.

Davis also continues to raise money through his former reelection committee, the Gov. Gray Davis Committee, which has transferred more than $1 million to Californians Against the Costly Recall. Excluding the transfers, the fund has reported raising more than $360,000.

A third committee, Taxpayers Against the Governor’s Recall, has reported more than $2.4 million in contributions.

*Contributions to candidates from each outside source are limited to $21,200. There is no cap on the amount candidates can give their own campaigns, or on donations to noncandidacy committees.

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Source: Campaign reports filed with the California secretary of state.

Los Angeles Times

Reported by Times staff writer Joel Rubin and Times researcher Maloy Moore.

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Spending by independent committees

*--* Percent of total Expenditures independent Committees July 1-Sept. 23 expenditures First Americans for a Better California -- Pechanga Band of Luiseno Indians, Sycuan Band of $1,479,425.00 40.06% Kumeyaay Indians Morongo Band of Mission Indians $1,000,029.70 27.08% Viejas Band of Kumeyaay Indians $461,648.34 12.50% Community Civic Participation $364,243.73 9.86% Project -- labor unions Fieldstead & Co. -- controlled by $75,000.00 2.03% Howard Ahmanson Jr. Californians for Responsible $72,860.00 1.97% Choices -- Planned Parenthood California Republican Assembly $57,559.06 1.56% Miscellaneous* $87,137.55 2.36% Tax Fighters for McClintock -- Sycuan Band of Kumeyaay Indians $49,530.00 1.34% Former State Sen. Jim Costa $45,170.57 1.22% Committee Total of independent expenditures $3,692,603.95 100.00%

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*Committees financed by builders, unions, Indian tribes and others

Source: Reports filed with California secretary of state - Researched by Jeffrey L. Rabin and Maloy Moore