Investigation of Bankers’ Campaign Pledges Urged

California Common Cause and Consumers Union called Tuesday for an investigation into possible violations of state bribery statutes by California bankers, who late last month pledged $200,000 in campaign contributions to legislators just before votes on bills that would open the state to interstate banking.

In letters to state Atty. Gen. John Van de Kamp and the Sacramento County district attorney, the two organizations contended that the timing of the promised contributions to 80 legislators and delivery of pledges in the Capitol may constitute criminal violations.

However, officials of the California Bankers Assn. insisted that the association was simply following its usual procedure for making contributions to legislative campaigns, without any intention of influencing votes on the banking bills.

“We are embarrassed because there is an appearance of impropriety,” said Blair Reynolds, association vice president and general counsel. “It does look improper, but we never attempted to tie in together the contributions and the legislation.”

Because of that appearance, Reynolds said he would recommend to the bankers’ political action committee that contributions “never occur during the last week of the legislative session” unless the organization had no further interest in any pending legislation.

“We go to exhaustive lengths to follow the letter and the spirit of the law,” said Robb Evans, a San Francisco bank president and chairman of the banking association’s political action committee. Evans termed the accusations against his group “a cheap publicity stunt.”

Common Cause Executive Director Walter Zelman conceded that he had no direct evidence of a bribe being offered and said the banking group may have been following its normal procedures in conformity with state law.

“But a political contribution at that point in time to a large number of legislators just before a critical vote, if unusual, deserves some serious investigation by an enforcement office, to see when a campaign contribution becomes a direct attempt to influence a vote,” Zelman said.

On Aug. 25, three days after a meeting of the bankers’ political committee, Evans signed a series of letters to the 80 lawmakers promising contributions that averaged about $2,500, according to Evans and Reynolds.

The letters were hand-delivered to the Capitol by the association’s secretaries, Reynolds said. In each case, the letters named the amount of the contribution and noted that a banker from the lawmaker’s home district would arrange to present the check.

Banking association officials would not identify the legislators who received the pledges, but Reynolds said the list included some who opposed the interstate banking legislation.

Bills in Progress

Between Aug. 25 and Aug. 29, two companion bills that would allow out-of-state banks to purchase financial institutions in California and permit California banks and savings and loans to expand into 11 Western states were approved by the Legislature. Gov. George Deukmejian has not yet acted on the bills.

Supporters of the legislation, including the bankers’ association, argued that the bills would increase competition and benefit consumers through higher interest rates on deposits and lower rates on loans.

But consumer groups, including the Consumers Union, opposed the final compromise, asserting that competition from large New York-based banks could drive smaller institutions out of business and dry up important sources of funds for home buyers and farmers.

Under state law, an attempt to influence a legislator’s vote with a payment or promise of a payment is a bribe, punishable by up to four years in prison.

Reporting Contributions

The California Political Reform Act allows campaign contributions as long as they are properly reported and not given in exchange for a vote; however, the act does not allow contributions to be delivered to legislators in the Capitol.

In their call for an investigation, Common Cause’s Zelman and Consumer Union Director Harry M. Snyder argued that the hand-delivery of the Aug. 25 letter promising contributions may be a criminal violation of the act, punishable by a fine of up to $10,000.

A spokeswoman for Van de Kamp said that his office had not had time to review the allegations, but that criminal matters are usually deferred to local prosecutors.

Sacramento Dist. Atty. John Dougherty said his staff would review the letter “and investigate if it needs to be investigated.”