California limits politicians’ use of funds raised for ballot measures

The state’s ethics watchdog agency enacted new rules Thursday to prohibit politicians, including Gov. Arnold Schwarzenegger, from using certain political accounts as “slush funds” to promote themselves.

Funds raised by politicians for ballot-measure campaigns must be spent on specific propositions, the Fair Political Practices Commission ruled. There are no limits on how much money can be raised for such accounts.

“They have been treated as rather open-ended slush funds for whatever purpose the officeholder wants to use the funds for,” said commission Chairman Ross Johnson. “What we’re saying is, if you are going to accept unlimited contributions . . . it’s got to be tied to a ballot measure.”

The new rules followed complaints that a committee controlled by Schwarzenegger, called California Dream Team, spent $2.4 million last year to support a redistricting measure but also used $2 million to cover other expenses that some said promoted and benefited the governor and his other causes.

Carmen Balber, a leader of the group Consumer Watchdog, noted that last year the governor’s committee spent $523,000 on executive jet services. Under the new rules, that travel would have to be related to a ballot measure.

“Candidate ballot-measure committees now engage in the kind of Wild West spending that voters thought they eliminated when they approved limits on campaign contributions,” Balber said.

For committees formed when a candidate is running for office, state law limits individual contributions to $25,900 for contenders for governor and $3,900 for candidates for the state Legislature.

But the courts have held that there are no contribution limits on ballot measure committees, and some individual contributions to them have topped $1 million, said Lawrence T. Woodlock, an attorney for the FPPC. He said voters approved contribution limits to reduce the influence of wealthy donors.

Under the new rules, the name of a ballot-measure committee must contain the name of the politician who controls it, so voters can see who is behind the spending.

The commission had considered barring spending on measures before they qualify for the ballot.

But attorneys for Schwarzenegger threatened to challenge such a prohibition in court as an unconstitutional infringement on free speech.

So the commission changed course and decided to allow committees to spend money advocating on an issue proposed for the ballot before it qualifies -- for instance, during the signature-gathering process.

The amended rules were praised by Liane Randolph, an attorney for the governor, as “carefully” crafted.

The FPPC adopted other rules Thursday aimed at making candidates’ own election committees more transparent as well. One requires that the name of the candidate, the office sought and the year of the relevant election be included in the committee name.

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patrick.mcgreevy@latimes.com