THE MONEY GAME : Proposals for change in campaign financing : Rival Campaign-Fund Initiatives Differ Widely in Effects

Two rival initiatives on the June 7 ballot that seek to limit political campaign contributions would have had dramatically differing impacts on Orange County’s state legislators had they been in effect last year.

Proposition 68 would have wiped out all of the nearly $2 million raised by the county’s eight Assembly members and five senators last year because it would ban fund-raising in non-election years. Proposition 73, by comparison, would have outlawed about 15% of the money the county’s lawmakers took in last year, the rest having been raised in amounts at or below the limits set by the initiative.

Currently, there is no law in California limiting the amount of money legislators can spend on their campaigns, and there are no limits on how much individual contributors may give. The spending of campaign contributions also is virtually unrestricted, and every year thousands of dollars that have been donated to the campaigns of individual legislators are transferred to colleagues facing tougher races.

It is a system that has been widely criticized.

In an effort to assess the state’s current campaign-financing system as it relates to Orange County’s legislators, The Times conducted a computer analysis of all contributions collected by the county’s lawmakers during 1987 for campaigns this year, as well as all 1987 expenditures. That analysis shows that the passage of either Proposition 68 or Proposition 73 would probably prompt major changes in the way the county’s legislators do business.

Both Proposition 68 and Proposition 73 would limit campaign contributions to $1,000 to $5,000, depending on the kind of donor, and both would prohibit transfers of funds from one campaign to another. But that is where the similarities end.

Proposition 73 would apply to all state and local elected officials and candidates. Although it would limit campaign contributions, Proposition 73 would place no restrictions on campaign spending. It would prohibit taxpayer financing of campaigns and end the practice of incumbent legislators sending mass mailings to their constituents at public expense.

Proposition 68, which would apply only to legislative races, seeks to limit campaign spending through a system that involves matching private campaign contributions with taxpayers’ funds. Politicians accepting the public funds would have to agree to cap their spending at certain levels.

The proposed use of public money for political campaigns has been an especially controversial aspect of Proposition 68, which is sponsored by former insurance executive Walter Gerken of Newport Beach and a coalition of consumer and business groups.

“I could not sleep well at night as a taxpayer if I knew my money could be funding Tom Hayden’s reelection,” Sen. John Seymour (R-Anaheim) said of the Democrat and former Vietnam War protester who now represents Santa Monica in the Assembly.

Added Assemblyman Ross Johnson, a La Habra Republican and co-author of Proposition 73: “Why in the world should your tax money match contributions from someone you disagree with? That’s welfare for the large special-interest contributors.”

Last year, Orange County’s legislative delegation collected about $1.9 million in campaign contributions for use in 1988 races, and much of what they raised they quickly spent. They also transferred a total of more than $382,000 to other politicians’ campaigns--a practice that would be banned by both Proposition 68 and Proposition 73.

Although all of the money raised last year would have been disallowed under Proposition 68’s prohibition on off-year fund raising, about 90% of it would have been permitted under the initiative’s terms if the same contributions were made in an election year. Only $200,686 collected by the delegation in 1987 exceeded the limits Proposition 68 proposes for election years.

If Proposition 73 had been law last year, its limits would have barred contributions to county lawmakers totaling $313,207.

Campbell Opposed

Sen. William Campbell (R-Hacienda Heights), who raised about $269,000 last year, is the county legislator who would have felt it the most had Proposition 73 been law in 1987. Campbell took in a total of $84,000 more than Proposition 73 would have allowed.

Campbell, who opposes both initiatives, said he favors strict public disclosure of campaign finance activity rather than limits on contributions and spending.

Proper public disclosure, he argues, leaves it up to the voters to reject a candidate if they believe his or her actions are tainted by campaign contributions.

“The people, in my judgment, are smart enough to make the decision if they have all the information,” Campbell said.

Several lawmakers from the county collected almost no contributions in 1987 above the limits in Proposition 73. Assemblywoman Doris Allen (R-Cypress) would have lost just $1,600 of the $62,150 she raised last year. Assemblymen Robert C. Frazee (R-Carlsbad) and Nolan Frizzelle (R-Huntington Beach) collected $2,000 each that exceeded the Proposition 73 limits.

Although the proposed limits themselves would have had only a marginal impact on the size of contributions to legislators in 1987, Johnson argues that the more important portion of his measure is the provision banning transfers of funds among candidates.

Because Orange County lawmakers represent relatively affluent areas, they are expected by colleagues to raise more money than they need for their own campaigns and to funnel that money to other legislators or candidates who need it. Such transfers are permitted under current law and are common practice by legislators in both political parties.

Noncombatant Legislators

“By eliminating those transfers, you’re going to see an awful lot of legislators, Republicans and Democrats alike, who are going to become noncombatants,” Johnson said. “They’re going to step to the side. They’re going to raise what they reasonably need to run a reelection campaign and no more.”

Sen. Marian Bergeson (R-Newport Beach), who supports Proposition 73, said she believes that putting an end to the shifting of funds among candidates would fix the part of the current system that troubles her most. She said she believes that the money transfers give legislative leaders too much influence over the members they help to elect.

“Eliminating transfers would solve well over half of the problem, where individuals mount a war chest so that they can buy political favors through the providing of dollars to the other people running for office,” Bergeson said.

Sen. Campbell is the only county lawmaker opposed to Proposition 73, while Sen. Cecil Green (D-Norwalk), Sen. Edward R. Royce (R-Anaheim), and Assemblyman John R. Lewis (R-Orange) are neutral toward it. Green is also neutral on Proposition 68, while the other 12 county legislators oppose it. Most of the county’s lawmakers object to its provision for using taxpayers’ funds to finance election campaigns.

Limits in Other States

Gerken and his supporters say no real reform will take place unless the voters place caps on campaign spending as well as on contributions. Many states offer public financing to candidates who agree to limit their spending.

The U.S. Supreme Court has ruled that across-the-board mandatory spending limits are an unconstitutional infringement of freedom of speech, but states may require candidates to limit their spending as a condition of receiving public funds.

The public financing provisions of Proposition 68 would be financed through a voluntary $3 check-off on state income tax returns. Taxpayers could designate a portion of their taxes for the campaign fund and would pay no more in taxes if they chose to support the program than if they chose not to.

“By limiting spending you reduce the overall need for the money,” said Walter Zelman, a prominent backer of Proposition 68 who is executive director of California Common Cause, a private group that monitors campaign contributions and spending. “That’s what we think is the most important reform that we need. You reduce the leverage of the big contributor.”

Under Proposition 68, Assembly candidates who accepted partial public financing would be required to limit their spending to $150,000 in primary elections and $225,000 in general election races. Senate candidates would be limited to $250,000 in primaries and $350,000 in the general election.

Prop. 73 ‘Loophole’

Zelman argues that Proposition 73 contains a “glaring loophole” because it does not limit the total amount that contributors may give to all campaigns. Proposition 68 allows an individual to contribute no more than $25,000 combined during a two-year period to all committees supporting legislative campaigns. Businesses and organizations would be limited to a total of $200,000.

Without such limits in Proposition 73, donors could simply contribute separately to several independent committees supporting a particular candidate, Zelman said.

“It doesn’t take a scheming mind to figure out how any individual could spend as much money as they wanted and get as much money to any candidates as they wanted,” he said.