State Legislators Push Spending Law to Limit : Times’ Review of Campaign Income Shows Officeholders Use Funds for Families, Travel

Five years after a law barring the personal use of campaign funds took effect, some elected state officials are using campaign money to place wives, girlfriends and relatives on their payrolls.

Other officeholders pay their own companies--or those owned by colleagues--to help run their reelection campaigns, an arrangement that can net extra outside income.

In one case, the wife of a prominent Assembly Democrat was paid $75,000 last year for organizing a campaign fund-raising event for Assembly Speaker Willie Brown. The lawmaker, Assembly Rules Committee Chairman Tom Bane of Tarzana, failed to report his wife’s income as required on his annual financial disclosure statement until a reporter asked about the omission.

Non-Campaign Purposes

A review by The Times of hundreds of campaign expenditure reports filed by legislators and other statewide officials also shows that many spend the money for non-campaign purposes, pushing the law prohibiting personal use to its limit and sometimes beyond.

Sizable amounts of contributors’ dollars were spent on overseas and domestic travel; on professional baseball, football and basketball tickets; on unsecured low-interest loans to staff, friends and contributors; on bonuses to legislative employees; on car leases and auto insurance; on tuxedoes and Western garb, and on meals at some of the country’s most posh restaurants.

The campaign spending measure--approved in the closing hours of the 1981 legislative session--requires that campaign expenditures have “more than a negligible political, legislative or governmental purpose.” It also prevents elected officials from putting surplus cash into their pockets when they leave office.

Almost Outright Gifts

Those who lobbied for the change in order to end the worst abuses admit that it continues to allow the spending of contributions for activities only marginally connected to winning elections and that contributors’ checks approach being outright gifts to incumbents facing little opposition for reelection.

“When you give someone a campaign contribution, aren’t you expecting it to be used on a campaign?” asked Robert M. Stern, former general counsel for the Fair Political Practices Commission. “If not, why call it a campaign contribution? If it is going for things other than influencing voters, it is another category of gifts to candidates.”

One veteran Democratic campaign adviser, who asked not to be identified, lamented: “All longtime officeholders feel like it’s their own money.”

Especially among incumbents able to amass sizable amounts of campaign funds, the money has become a source of power and influence, to be spent on the races of political allies as well as on the perquisites of office, whether leasing a Cadillac for use at home or hiring a limousine when out of town.

Several elected officials agree that they use campaign funds to cover costs that would prove embarrassing if taxpayers picked up the tab. Prevented by an unwritten legislative rule from putting family members on their state-paid staffs, many legislators pay relatives out of campaign treasuries.

Brown, for example, paid his son, Michael, 23, more than $13,000 from campaign funds last year. Brown said his son arranges entertainment for campaign fund-raising events.

“Michael would be equal to if not superior to most of the people who work in my district office on the state payroll,” Brown said. “I’ve chosen not to do that, only because I don’t want to have to answer the question whether or not he knows what the hell he is doing.”

Also on Brown’s campaign payroll is a close personal friend, Wendy Linka, who was paid about $40,000 last year for fund-raising activities.

When asked whether having Linka--once described by San Francisco columnist Herb Caen as Brown’s “glamorous sidekick”--on his campaign payroll is a problem, Brown replied: “No, not for me it isn’t.” Among fund-raisers, Brown said, Linka is “one of the best.”

Until recently, Linka’s sister was also on the Brown campaign committee payroll.

Like several other legislators interviewed, Brown said he very deliberately hires people he is close to for campaign committee jobs. “The only people you can really trust on your campaign committee are your relatives,” he said. “The guys who get in trouble in their campaigns and come to the attention of the Fair Political Practices (Commission) are people who just have employees.”

Trust and loyalty are paramount to a politician, Brown said, “and there is no better place to get that than in your own bloodline.”

Unruh Hired Son

State Treasurer Jesse Unruh, unopposed in the 1986 Democratic primary and with no Republican opponent in the general election, paid his son Bruce $35,000 last year to be his campaign finance director--and kept him on the campaign payroll into 1987, when Bruce Unruh made an unsuccessful attempt to win election as Redondo Beach city treasurer.

The campaign committee also paid $7,500 to another of Unruh’s offspring, his son Bradley, and paid $6,250 to Chris Edwards, most of it before she became Jesse Unruh’s wife last October.

Questions about what services the Unruh family members provided could not be answered by the campaign treasurer, attorney Kenneth A. Berk, who said he has “nothing to do with the day-to-day workings of the committee.” However, the California Political Reform Act, approved by voters in 1984, spells out that “no expenditure shall be made by or on behalf of a committee without the authorization of the treasurer or that of his or her designated agents.”

Unruh declined to be interviewed.

The current record for hiring relatives appears to belong to Assemblyman Pete Chacon (D-San Diego), who paid five family members out of campaign funds in 1986, including his wife, Jean, who was paid about $10,000 as campaign treasurer. Also on the payroll from time to time were three of Chacon’s four sons and his brother, Mark.

Chacon said his family provided the same services that political consultants perform for other election committees, “maybe not as expertly,” but with more enthusiasm.

Statute of Limitations

Sen. James W. Nielsen (R-Rohnert Park) paid his wife, Brenda, $6,000 and his daughter, Brandi, $320 out of his campaign committee funds in 1985. When an opponent charged that the arrangement violated the ban on spending campaign funds for personal use, Atty. Gen. John Van de Kamp concluded that a one-year statute of limitations had lapsed since most of the payments were made. (Van de Kamp has backed a bill this year to extend the time limit for prosecution to three years.)

As long as Brenda Nielsen “provided a sufficient level of skill and hours to justify her salary,” the expenses were proper, he wrote. In 1986, Nielsen’s wife found a new job on the campaign payroll of GOP Sen. John Doolittle of Citrus Heights, who paid her $3,400 for professional services.

Sen. Herschel Rosenthal (D-Los Angeles) paid his wife, Patricia, $7,500 from campaign funds last year for “typing individual letters to anybody in the district who is to be congratulated, a congratulatory letter to everybody who has a baby, a letter to every graduate of law school, to every constituent with a 50th anniversary.” She also completed his campaign reports. “She is the reason I have no opposition,” Rosenthal said.

Unruh and Brown were among a large number of elected officials to spend substantial amounts of campaign money on their travels last year.

In Unruh’s case, about $55,000--more than 13% of the $397,537 in campaign committee expenditures he reported last year--went to travel, accommodations and meals. The spending included more than $7,000 paid to the Ritz-Carlton Hotel in Boston and more than $2,000 paid to two restaurants near his Marina del Rey home. Neither Berk nor Unruh’s accountant, Madale L. Watson, could explain the expenses.

Austrian Trip

Brown used campaign funds to help defray the costs of an eight-day trip to Austria. The travel was underwritten by Austrian business and government interests, which paid $6,200 of Brown’s travel expenses, and the campaign paid $1,500.

The San Francisco lawmaker said the purpose of the trip was to look at technology for converting waste into highway sound barriers, and he argued that he could have legitimately billed the state for his expenses. Brown said he has always refused state money for travel outside the capital so that “if anybody ever accuses me of doing something for my personal gain on state time I can say, ‘Listen, I’m even. I give the state a hell of a lot more than the state (gives me).’ ”

A systematic review of campaign expenditure reports reveals a number of expenditures not directly related to campaigns:

- Senate Democratic floor leader Barry Keene of Benicia reimbursed his campaign $3,485 last summer after the attorney general’s office told him he could not use campaign funds to pay a psychologist for stress management sessions. In response to a Keene inquiry, Deputy Atty. Gen. Ted Prim concluded: “Stress is not a condition peculiar to political, legislative or governmental activities.”

Still under review is a long list of campaign expenses questioned by a former opponent, who called for an investigation of Keene’s use of campaign funds for California State Bar dues, speech improvement tapes, luggage, reading glasses and Western shirts. In all cases, Keene said the expenses could be justified as needed for legislative or political business. With no income other than his legislative salary of $37,105 a year and his $75-a-day tax-free living allowance when the Legislature is in session, Keene said, “I couldn’t afford some of the things that it is my responsibility to do out of my private funds.”

- Assemblyman Curtis R. Tucker (D-Inglewood) reported campaign expenditures totaling $6,114 for himself and his family on two stays at the Royal Sonesta Hotel in New Orleans in 1986, including a weeklong convention sponsored by the National Conference of State Legislatures last August, when he had a suite overlooking Bourbon Street. Included on the bill was a $2,500 dinner for 40 members of the California delegation, lawmakers and their aides. “You missed a good one,” he told a reporter. “We had four or five kinds of oysters.”

Tucker was one of several legislators to use campaign funds to pay part of the cost of leasing a state-owned car, in his case a Cadillac. His campaign committee paid about $300 a month for rental fees in excess of his $400-a-month legislative auto allowance.

- Every year, the records show, many legislators use contributions to pay bonuses to office staff or to sweeten relations with employees, colleagues and constituents with gifts, candy and flowers. Brown paid Brooks Brothers of San Francisco $2,900 late last year for leather-bound appointment books that he gave as Christmas presents to each of the 80 members of the Assembly. The law permits gifts of less than $100.

- Numerous lawmakers use campaign money to buy tickets for professional and college sports events. Assembly Speaker Pro Tem Mike Roos (D-Los Angeles), for example, paid $2,540 from his campaign treasury for four Dodgers season tickets. Roos declined repeated requests for an interview, but his aide, Peter Taylor, said the legislator gives the seats away to constituents and community groups and added, “Not a single one (has been given) to a campaign contributor.” In past years, Roos has sometimes used the tickets to take his daughters to a game, Taylor said.

Low-Interest Loans

With a sizable chunk of surplus cash on hand, more and more campaign committees are lending money to friends and staff, often at low interest rates and with little or no security.

Sen. Joseph B. Montoya (D-Whittier) used campaign contributions to make loans totaling $78,000 over the last three years to his campaign committee treasurers, his state-paid staff and a major contributor. Generally, the loans were unsecured, without definite due dates and at interest rates similar to those offered by banks to their prime business customers.

Angel Diaz, a Kern County businessman, has borrowed $41,000 in unsecured loans from a Montoya campaign committee in the last two years, according to committee records. In a recent interview, Diaz said he has raised thousands of dollars for Montoya’s campaign committees.

Potentially troublesome for Montoya are loans of up to $3,000 that the Friends of Joe Montoya committee made to its treasurer, Ralph Colclasure. Colclasure said in an interview that the loans were used to help purchase a home and later to refinance the mortgage. State law bars the use of campaign funds for the purchase of property if the title is held by a committee treasurer.

When told of the section of the law that bars the use of campaign funds for purchase of property, Colclasure said, “If that is what (the law) says, (the loan) will be paid back tomorrow. I did not know that.”

The same committee also loaned $10,000 to Leonard Talbert, husband of Asnif Talbert, treasurer of a second Montoya-controlled committee.

Sen. Alan Robbins (D-Van Nuys) loaned more than $280,000 from campaign coffers over the last year, most of it to state-paid consultants on legislative committees he chairs and to private individuals who help him raise campaign money, said Sheldon Davidow, an aide to Robbins. Davidow owes a Robbins committee $70,000 and agreed that, at 8%, the terms of his unsecured loan were “no doubt favorable, very favorable.”

Campaign Services

Several other legislators hired their own companies to provide services to their campaigns.

Assemblyman Steve Peace (D-Chula Vista) paid more than $50,000 to Four Square Productions for campaign media and polling. Peace owns 29% of the company, which paid him more than $10,000 for personal services and royalties in 1986. His wife was paid between $1,000 and $10,000. (The rules for economic disclosure do not require outside income to be reported in exact amounts. Instead, they permit the reporting in broad categories, such as “$1,001-$10,000.”)

The firm’s income from political work is “a pittance” compared to the amounts earned from other activities, including film production, Peace said. The company’s latest movie is “Happy Hour,” an R-rated feature that opened earlier this month.

Assemblyman Bill Jones (R-Fresno) owns 25% of California Data Marketing, a company he and other Republican candidates have hired to handle direct mail to voters. The firm charges Jones’ campaign committee the same amount it bills other political and non-political clients, said the firm’s executive vice president, Robert Jennings.

“We may give him more personal attention,” Jennings said.

Sen. H. L. Richardson (R-Glendora) has hired his own firm, Computer Caging Corp., for a variety of campaign-related activities since he started it in 1978. The company did the mail for his unsuccessful race for lieutenant governor. Among the firm’s other clients last year were the Deukmejian Campaign Committee and the state Republican Party.

“For years and years, I never took a dime out of ‘the cage,’ ” Richardson said. “But I was accused of taking money, so three years ago I said the hell with it, and I started taking a minor salary.” Richardson said his income from the company was more than $10,000 and less than his $37,105 legislative salary.

Unreported Payments

Campaign committees controlled by GOP Assemblyman Gil Ferguson of Newport Beach paid his private consulting firm about $36,000 in 1985 and 1986, including nearly $18,000 that was not reported on an economic interest statement until a reporter pointed out that he had failed to do so.

Until last December, Assemblyman Tom Bane’s wife, Marlene, owned 25% of Data Plus Imagination, a computer software firm, to which Bane’s campaign committee paid more than $50,000 in 1985 and 1986.

Bane has been urging the Assembly to purchase the same system with state funds for members’ district offices, but the proposal has become embroiled in controversy because of Bane’s ties to the firm. That connection ended when his wife sold her share in the business for the same price she paid when she acquired it--between $1,000 and $10,000, according to a financial disclosure report that Bane filed only after he was asked about the transaction. (Bane was not required to report the precise dollar amount.)

Until 1982, when the ban on personal use of campaign funds went into effect, elected officials were generally free to do what they pleased with political campaign contributions. Legislators had little inclination to change that, despite numerous news accounts of flagrant abuses.

When public officials left office, they were able to take surplus campaign funds with them as a supplemental retirement kitty that could mean tens of thousands of dollars in added income. One former state senator, Democrat Alfred Song of Monterey Park, used $24,000 to cover his legal fees in a divorce, according to a report prepared by the Fair Political Practices Commission in 1981. Other officials used the money to buy cars or furnish their homes.

Obscure Provision

Led by Tom Houston, then its chairman, the commission launched a crusade to change the state law in hopes of ending the abuses.

When the Legislature balked, Houston proposed that the commission stop personal use of campaign funds by regulation under a relatively obscure provision of the 1974 California Political Reform Act, which was passed by voters in reaction to the Watergate scandal.

In response to the threat, legislative leaders agreed to amend the state Elections Code.

In the final hours of the 1981 legislative session, however, the proposal hit an unexpected snag in the state Senate: A number of senators wanted assurances that they could continue to use campaign funds to take their wives on trips with them, recalled Stern, now co-director of the California Commission on Campaign Financing, a nonprofit group concerned about the escalating cost of political campaigns.

In a closed-door session, several senators made it clear that the bill would be approved only if amended to permit campaign-paid travel by spouses, Stern said.

“Everybody used (campaign money) as a vacation fund to take wives places,” Houston said in a recent interview. “I decided to give them the amendment to get the bill passed.”

As a result, whenever officeholders can legally use campaign funds for travel--on either political or government business--they can also use contributions to cover the travel expenses of immediate family members who accompany them.

Other Concessions

Under that provision, for example, Deukmejian used $4,430 from campaign committee funds to cover the expenses of his wife, Gloria, who joined him on trips this year to Japan and Europe to open new trade offices, according to Deukmejian’s campaign treasurer, Patrick Formby.

The governor insisted on paying for the expenses of his daughter, Andrea, who accompanied the Deukmejians on the European trip, however, even though his campaign advisers told him he could legally charge them to the campaign, Formby said.

To win legislative approval of the ban on personal use of campaign funds, Houston had to make a number of other concessions as well. Enforcement was given not to the Fair Political Practices Commission, which had a reputation as a tough enforcer, but to local district attorneys and the state attorney general’s office, which Stern said “did not have a history of bringing enforcement actions.” Violations are treated as civil rather than criminal offenses and fines are minimal--up to $500 or twice the amount of the unlawful expenditure, whichever is larger.

Since the law went into effect on Jan. 1, 1982, no elected officeholder has been prosecuted for a violation, according to the state attorney general officials who are charged with enforcing the law.

“They have a reluctance to bring actions against public officials,” Stern contended.

Senior Assistant Atty. Gen. N. Eugene Hill acknowledged that his office does not audit campaign statements looking for potential violations. Among the factors considered in deciding whether to prosecute an elected official is whether the disputed amount has been repaid, as well as whether the amount of money involved “is worth the enforcement effort,” Hill said.