Campaign-Financing Law Produces Only Confusion Thus Far

More than a year after California voters approved Proposition 73, one thing is certain: no one is sure how the state’s new campaign finance law is going to work.

The Fair Political Practices Commission, the state’s campaign oversight agency, is still in the process of interpreting the initiative and issuing regulations that tell candidates and campaign contributors how to comply with the law.

At the same time, a total of 10 lawsuits have been filed in courts around the state challenging key provisions of the initiative and some of the regulations already adopted by the commission.

The resulting confusion has left candidates, political fund-raisers and potential donors uncertain as to how to operate within the law as they prepare for the 1990 elections.

“Everybody’s worrying,” said one adviser to a Democratic candidate who asked not to be identified. “The state of it is so unsettled it’s very painful. Even if you want to comply with the spirit of the law it’s hard to know.”

When the dust finally settles, some critics of Proposition 73 predict, the initiative will do far less to reform the political system than voters expected when they approved the measure.

In any case, next year’s elections will be a period of experimentation in which candidates will discover how the law works and the public will see whether it really reduces the cost of campaigns.

“The jury is clearly still out,” acknowledged Assembly Republican Leader Ross Johnson of La Habra, the primary author of Proposition 73. “It’s really not been put to the test yet. Part of that is just the general confusion of all these court actions and conflicting decisions by the Fair Political Practices Commission. It’s been sort of left in limbo.”

Billed as a “campaign reform” measure, Proposition 73 was sponsored by Johnson, Sen. Quentin L. Kopp (I-San Francisco) and Sen. Joseph B. Montoya (D-Whittier). (Montoya pleaded not guilty last week to 10 counts of extortion, racketeering and money laundering stemming from the FBI’s undercover investigation of political corruption in the state Capitol.)

The initiative was designed to limit the size of campaign contributions, ban the transfer of campaign funds between candidates and prohibit the use of campaign funds collected before Jan. 1. It also contains provisions banning mass mailings of more than 200 pieces sent at taxpayers’ expense, prohibiting candidates from spending money they raised for one race on a campaign for another office, and limiting to $1,000 the size of some gifts and honorariums elected officials can receive.

So far, however, the only major provisions that have not been modified by regulations or challenged in court are the ban on transfers of campaign funds from one candidate to another and the campaign contribution limits of $1,000 from individuals, $2,500 from small political committees and $5,000 from broad-based political committees per fiscal year.

John Larson, chairman of the Fair Political Practices Commission, said the five-member panel has struggled to find rational ways to implement the initiative but sometimes has been frustrated by ambiguous language in the measure.

“It was not well written,” he said. “Many of these questions could have been worked out (when the initiative was drafted).”

Furthermore, members of the commission have been disappointed by court actions overruling some of the agency’s regulations. Larson said he is concerned that some legal challenges to the initiative may not be resolved before the 1990 elections.

“It seems like every time we think we’re on the path to something, there’s another court decision that throws a monkey wrench in things and we have to re-evaluate,” Larson said. “It would be unfortunate if it took so long that the 1990 election had to be carried out under a court order that had not had time for appeal.”

Earlier this year, the Fair Political Practices Commission joined Democratic leaders and Assemblyman Johnson in asking the California Supreme Court to consolidate the various lawsuits and settle once and for all what the measure means. But the high court declined to take the case, leaving the suits to wend their way through state and federal courts.

The most significant court decision so far was a preliminary injunction issued by U.S. District Judge Lawrence K. Karlton overruling the commission’s regulations in three areas.

Judge Makes Ruling

In the case brought by Assembly Speaker Willie Brown (D-San Francisco) Senate President Pro Tem David A. Roberti (D-Los Angeles) and labor unions, Karlton ruled that candidates who had raised money before Jan. 1 could spend all the money in future campaigns as long as they did so in keeping with the contribution limits of Proposition 73. This decision was welcomed by politicians such as Atty. Gen. John K. Van de Kamp, a Democratic candidate for governor who had collected $1.5 million before 1989 and now would be able to spend much of it in his upcoming race.

The judge, making it much easier for politicians to switch from one race to another, also ruled that a candidate who had raised money for one campaign could spend it on his own campaign for a different office.

And Karlton overturned a provision that restricted political endorsements contained in mass mailings sent out by labor unions and other membership organizations. Under Proposition 73, political endorsements included in a group’s regular newsletter had been considered as in-kind political contributions and therefore subject to the initiative’s $2,500 or $5,000 contribution limits.

But the judge said that placing such a restriction on the ability of a group to communicate with its own members was not constitutional and ruled that unions and other groups were entitled to endorse candidates in regular publications they send to their members.

In August, Karlton is scheduled to consider other Democratic challenges to the law, including a motion recently filed by the Democratic Party seeking to have political parties excluded from the restrictions on membership mailings.

Seek to Overturn Ruling

Several other lawsuits have sought to overturn a ruling by the Fair Political Practices Commission that the passage of Proposition 73 completely negates Proposition 68, a rival campaign finance measure sponsored by Common Cause. Proposition 68 was approved in the same election but received fewer votes than Proposition 73.

In one of the cases, backers of Proposition 68 have asked an appellate court in Los Angeles to rule that several of their measure’s provisions should be allowed to go into effect because they do not conflict with Proposition 73. In particular, they want the court to keep Proposition 68’s ban on fund-raising during non-election years as well as a total limit on the amount of money candidates can receive from all organizations during an election year. For Assembly candidates the limit would be $50,000 and for Senate candidates it would be $75,000.

“Proposition 73 is not going to make that much difference,” said Walter Zelman, a Common Cause lobbyist and backer of Proposition 68. “It’s not going to reduce the influence of special-interest groups and it’s not going to do very much to reduce campaign spending. Proposition 73 was primarily a fraud, concocted by a few legislators and interest groups to undermine the real reform measure that was on the ballot.”

In another lawsuit, Sacramento County has sued the Fair Political Practices Commission seeking to overturn Proposition 73’s ban on public financing of campaigns. Under the county’s Charter, Sacramento candidates had been able to receive taxpayers’ money for their campaigns if they agreed to abide by expenditure limits. The only jurisdiction in the state to offer public financing, the county contends that its law should not be preempted by the statewide ballot measure.

Interpret Ambiguous Section

Among the many regulations adopted by the Fair Political Practices Commission was a rule interpreting an ambiguous section of Proposition 73 that talks about limiting the amount of gifts and honorariums that legislators can receive.

The commission, however, adopted the least restrictive interpretation possible. Leaving a large loophole in the law, the panel ruled that there are no limits on gifts to legislators and that the $1,000 limit on honorariums applies only to a lawmaker’s speeches or articles on an issue relating to the “governmental process.” Legislators who give speeches on other subjects can accept honorariums of unlimited size, the commission decided.

“We’re interpreting the law as we see it,” said Larson, the commission chairman. “I think maybe the law should be different from some of these decisions but it’s not.”

Johnson defended his initiative and criticized the Fair Political Practices Commission and courts for weakening it. In particular, he said, Proposition 73 has been watered down by decisions that broaden the kind of mass mailings elected officials can send out and allow politicians to use assets obtained before Jan. 1.

“I have argued against many of the interpretations they’ve made,” Johnson said. “They’ve made some initial mistakes and now some of those mistakes are being compounded and made worse.”

Most Significant Element

Nevertheless, the GOP leader said he believes the most significant element of the proposition--the ban on transfers of money between candidates--will survive the court suits and commission rulings.

Johnson conceded that Proposition 73’s limits on gifts and honorariums are too weak and said he hopes to change that with a new initiative he is planning for the 1990 ballot. Among other things, that measure would ban gifts and honorariums for elected officials.

“I have never argued that Proposition 73 is perfect or solves all the problems of the world,” he said. “Sometimes in politics you have to compromise a little bit to gain support, and I did.”

Johnson also criticized Democrats who control the Legislature for subsidizing the legal challenges to Proposition 73. An aide to the Republican leader said the Legislature has paid at least $179,000 in taxpayers’ money to law firms that filed four of the cases seeking to overturn the initiative.

While the legal disputes go on, donors and politicians already are learning to live with the new contribution limits.

Too Early for Results

Most observers say it is too early to tell whether Proposition 73 has affected a politician’s campaign fund-raising. The first period subject to the limits is Jan. 1 through June 30. Reports on how much money was raised during those months will not be filed until July. However, Johnson said he believes that lawmakers are collecting less money than in previous years.

“I think they’re raising less, but if I’m perfectly honest about it, I can’t say at this stage that is because of the positive effects of 73,” he said. “I think that’s rather a result of the confusion that surrounds 73, so some people are not making contributions.”

But Zelman, the Common Cause lobbyist, contended that many politicians are now racing to collect donations before the first fund-raising period ends. “There probably is an unprecedented amount of fund raising going on right now to beat the June 30 deadline,” he said.

Zelman also maintained that the result of the campaign finance law will be to give incumbents an even greater advantage over challengers, who generally start campaigning closer to election time and will have less access to large sums of money.

Despite the attacks on Proposition 73, Johnson said he believes that the law will prove to be an important first step in reducing the high cost of political campaigns.

“If I had it to do over again, I’d still do it,” he said. “Ultimately, 73 is going to have a very profound effect on the way in which political campaigns are financed in California. And if it doesn’t, the issue isn’t going to go away and neither am I. We’re going to keep after this thing until we’ve got her tamed.”