Campaign Reform Leaves Small Givers but Big Spenders

The new Los Angeles city campaign finance limitations law was tested for the first time in the special election held in December for the seat vacated by Councilman Art Snyder. Assemblyman Richard Alatorre, spending three times as much as all his opponents combined, easily defeated six other candidates.

Others have analyzed the historic victory by Alatorre, only the second Latino to serve on the City Council. But did the Los Angeles campaign law work as expected?

Briefly, the charter amendment enacted by the voters in June, 1985, limits contributions to City Council candidates by individuals, corporations, labor unions and political action comittees to no more than $500 per contributor.

It does not limit how much a council candidate can spend, only how much the candidate can receive from any one contributor. The purpose is “to encourage a broader participation in the political process.”

Although candidates in the special election have not submitted all their disclosure statements (the last one is due today), the figures on file provide an interesting preliminary look at how money was raised under the new restrictions. First a caveat: one special election may not be reflective of how the new law will work, especially since Alatorre was the equivalent of an incumbent in the sense that he dominated the fund raising and the election.

Four conclusions about the capkon contributions emerge from the data and interviews with the major candidates:

--It did not hold down spending.

--It did reduce the size of contributions.

--It caused an increase in contributions by individuals, while reducing the amounts being given by corporations and political action committees.

--It slightly reduced the amount of money contributed by developers and development interests.

The candidates themselves have concluded that the limit on contributions had no real impact on the amount of money raised or spent. Even with the $500 lid, Alatorre reported raising more than $200,000 and his final campaign statement is expected to top $300,000. Runner-up Steve Rodriguez raised only $20,000 while third place finisher Gil Avila collected nearly $60,000.

Some people believe that Alatorre raised so much because he was able to use the huge war chest that he collected in Sacramento while chairman of the Assembly Government Organization Committee, a so-called juice committee. However, the charter amendment required Alatorre to begin his campaign in the same shape as all other candidates. Under the law, he was not permitted to transfer any of his Assembly surplus to his own council race. Had he felt he needed it, Alatorre could have raised far more money than he did. The more funds raised by the other candidates, the more he would have collected. The other candidates had trouble collecting funds, but not because of the limits. Instead, contributors assumed the inevitability of an Alatorre victory and were hesitant to give to other candidates.

The candidates also agree that a limitation on expenditures would have had a major impact on the election. Rodriguez and Avila believe that they could have raised more money with a spending cap. Avila noted that a spending cap would have put all the candidates on an equal footing, thus Alatorre would have had a tougher fight. “If there had been an expenditure ceiling, it would have been a whole new ballgame,” Rodriguez said.

Alatorre received money from more than 600 contributors, who gave an average of $382 each. Most of these contributors (nearly 60%) “maxed out” by giving the $500 permitted under the law. Alatorre did not concentrate on the small donors: less than $1,000 came from donors giving under $100. Rodriguez collected the maximum $500 amount from 57% of his contributors, Avila from 27% of his.

The $500 limit did have the effect of spreading the money around. For example, Alatorre’s 1984 Assembly fund-raising campaign netted him nearly half of his total contributions in amounts over $500. In the Snyder recall election Snyder and Rodriguez both received about two-thirds of their money in contributions over $500.

Alatorre gathered his money much differently in his City Council race than for his 1984 Assembly contest, in which he also raised more than $200,000. Much to the surprise of most veteran political observers, Alatorre raised nearly half of his money for the council race from individuals and only 44% from businesses. (Other sources such as labor and Assembly colleagues provided the remaining 6%.) Contrast these figures to his Assembly fund raising, where he collected 21% from individuals and more than two-thirds from business interests.

A common perception is that developer money dominates local elections. In Los Angeles, developer money is an important but not an overwhelming factor. For example, when he was fighting a recall effort, Snyder received about 27% of his $500,000 from development interests. They accounted for about 18% of Alatorre’s totals.

One of the most striking changes in fund raising was the amount that Alatorre collected from Latinos--20% as opposed to only 3% received by Snyder two years ago and 10% received by Alatorre for his last Assembly race.

Both Alatorre and Rodriguez agree that it is too early to make any major changes in the law. Both would like to have been given clearer advice and instructions from the city attorney’s and city clerk’s offices. But as Alatorre noted: “We were the guinea pigs.”