Generous Campaign Donors Showing No Signs of Fatigue

By Dan Morain

Nov. 8, 2005 12 AM PT

Times Staff Writer

SACRAMENTO —

They have shelled out a record-breaking $250 million for the special election campaign in what was supposed to be an off year for politics, but deep-pocket donors and others say there’s more where that came from.

Contributors, candidates and consultants expected to spend 2005 stocking their political war chests for next year’s gubernatorial fight -- which in effect begins Wednesday. When the special election came along with its high stakes, some of them feared that the battle over Gov. Arnold Schwarzenegger’s policy proposals would leave them with nothing.

And in fact, the campaign has stretched some donors, who gave money for television and radio ads, consultants’ fees and direct-mail appeals -- even takeout pizza, limousine service and dinners at fancy restaurants.

But major contributors and consultants for Democrats and Republicans alike say they are prepared to dig deep again.

Netflix Chairman Reed Hastings gave away $730,000 in the special election campaign. Most of it went to the promotion of Proposition 77, which would authorize retired judges -- rather than lawmakers-- to draw legislative and congressional boundaries.

But he says he will give more.

“Win or lose this cycle, I’ll continue to invest both philanthropically and politically,” Hastings said via e-mail. “I don’t feel any donor fatigue, because improving California” is “a multi-decade effort, not a one-shot fix.”

Stanley Zax, chairman of Zenith Insurance, dislikes politicians’ use of propositions, believing legislators and governors should work out their differences.

But he nonetheless wrote $100,000 checks to Assembly Speaker Fabian Nunez (D-Los Angeles) and a fund controlled by Schwarzenegger for the special election, which features eight statewide initiatives.

And one day last week, he had lunch with a prospective 2006 candidate.

Donors, Zax said, will continue to do “the same thing they always do” -- give money to candidates and causes they support.

“The nature of the state, the importance of the state and the issues all suggest that there will be substantially more money rather than less,” he said.

The previous high point for spending on ballot measures was November 2004, at about $210 million.

The final 2005 tally won’t be known until early next year, but campaign reports filed with the state provide preliminary numbers showing that Democrats and organized labor have been the biggest spenders.

The California Democratic Party has spent $5.7 million in an effort to defeat four Schwarzenegger-backed initiatives. Legislators and congressional members, most of them Democrats, have tapped donors for an additional $14 million in their quest to kill the redistricting measure, Proposition 77.

Democrats’ main patron, organized labor, has spent the most -- about $100 million. Most of it has gone to fight Proposition 75, which would crimp public employee unions’ ability to raise campaign money, and Proposition 76, which would restrain state spending and give governors more power over state budgets.

“Boy, have [unions] spent,” said Alan Bonsteel, a physician and activist in conservative causes. Even if voters turn down Proposition 75, the battle will not end, he said: “We’ll be back with the same concept, one way or another.”

But if voters approve Proposition 75, unions will still have money. Most held some in reserve for 2006 campaigns, and Proposition 75 would not keep them from using member dues for so-called issue advocacy ads. Such ads can be strident and critical, as long as they don’t urge people to vote a certain way.

No single donor in the special election has matched the California Teachers Assn. It has contributed $55 million, primarily to defeat Proposition 74, which would extend the probationary period for new teachers and make them easier to dismiss, and to fight Propositions 75 and 76.

To raise the money, the union extended its line of credit and raised dues on its 330,000 members. Smaller unions have also contributed heavily to labor’s joint campaign against Propositions 74, 75, and 76.

The 70,000-member California Federation of Teachers has spent $3.6 million, financed by a dues increase; its national parent gave $250,000.

If the governor pushes an initiative next year to alter the pension plan for civil servants, as he intended to do this year before dropping the proposal, union leaders will probably ask for another dues increase to fight it, said Mary Bergan, president of the federation.

“Money will be there, simply because people care so much,” she said.

The California Correctional Peace Officers Assn., an aggressive political force and one that has repeatedly tangled with Schwarzenegger, has spent at least $2.2 million in the special election. But the union, which represents state prison guards, levied an extra charge on its 25,000 members that is expected to generate about $18 million.

Its main electoral goal almost certainly will be to defeat Schwarzenegger.

“We’re big fans of the governor. We’d like to see him making movies again,” said Lance Corcoran, the union’s chief of governmental affairs.

On the Republican side, the California party has distributed $5.5 million in the special election, mostly in support of the governor’s four main initiatives.

Schwarzenegger, who convened the election, has collected about $50 million from his donors -- at least meeting his fund-raising goal.

They include wealthy individuals and businesspeople such as farmers and builders with interests in state government. He has also drawn $7.25 million from his personal wealth.

Some donors who lean toward the GOP have given relatively modest amounts. Players in the healthcare industry, for example, have given less than $100,000.

Schwarzenegger has also received relatively little from the entertainment industry, apart from $250,000 given by Fox Group, the media conglomerate controlled by Rupert Murdoch, a major Republican donor, and $1.5 million from Univision Chairman A. Jerrold Perenchio, Schwarzenegger’s largest donor.

Many corporate donors have held back, too. That will probably change in 2006. Governors can always raise money, given their power over legislation, policy direction and state spending.

Schwarzenegger is “not going to have any trouble” raising money, said John Sullivan, director of the Civil Justice Assn., which lobbies to restrict lawsuits aimed at members of his organization, including insurance firms, tobacco companies, automakers and other businesses.

“The day after the election, no matter what happens, the governor is important to the business community and to our members,” Sullivan said.

Some major contributors have largely sat out the special election, including trial lawyers, a major source of Democratic money, and wealthy Indian tribes, which give to Republicans and Democrats.

Tribes have been the largest source of campaign money since 1998.

“If there is something that catches their eye, they certainly have the ability to be a major player,” said Gene Raper, a Republican consultant to the Agua Caliente Band of Cahuilla Indians, owners of casinos in and near Palm Springs.

The stakes will be high in 2006: In addition to all statewide offices, all 80 Assembly seats, half of the state Senate’s 40 seats and 55 California congressional seats will be up for grabs.

But some contributors have become disgusted by the ever-growing amounts of money spent on politics in this state.

Burlingame trial attorney Joseph Cotchett, long a major Democratic donor in California and nationally, spent $120,000 this year to tape and air an ad urging Californians to vote down all eight initiatives on Tuesday’s ballot.

He believes donors will start closing their checkbooks.

“I mean, look at what you see on the air,” Cotchett said, referring to the massive number of ads in the special election campaign. “Think what could have been done with that money.”

(BEGIN TEXT OF INFOBOX)

Campaign spending

The final tally for the special election will not be known until early next year. But here is what has been spent according to reports filed with the state through Monday.

Proposition 73 (abortion restrictions)

Yes: $1.4 million

No: $2 million

Proposition 74 (teacher tenure)

Yes*

No: $12.4 million

Proposition 75 (union dues)

Yes: $4.6 million

No: $41.8 million

Proposition 76 (state spending)

Yes*

No: $16.5 million