New Rules Hit Political Donations : Lawmakers and Donors Grapple With Prop. 73

Confusion about new campaign contribution limits dampened fund raising by most Westside lawmakers in the first six months of this year as officeholders and special interests struggled to understand the new rules of the political game in California.

The confusion, apparent in campaign finance reports filed in recent days, was compounded by a state appeals court decision at midweek that upheld a ban on all non-election-year fund raising by Assembly and Senate candidates.

But even as politicians and campaign donors try to untangle the new rules, the latest finance reports show that some already have found loopholes and techniques to keep campaign contributions flowing in spite of restrictions imposed by Proposition 73, which voters approved last year.

Working Around Limits

Some examples:

Some real estate developers are skirting Proposition 73’s limit of $1,000 on contributions by an individual to a single campaign by donating the maximum on behalf of themselves, their spouses, and family members.

Confirming predictions that contribution limits would simply cause some special interests to split into smaller components, the reports show that labor and some business groups are making separate contributions at the statewide level and locally. The contributions of the AFL-CIO’s big statewide Committee on Political Education, for example, are supplemented this year by donations from Los Angeles County COPE.

And in response to Proposition 73’s ban on transfers of funds from one candidate to another--a provision designed to limit the clout of legislative leaders--candidates are now instructing special-interest donors how to give. The new technique, says Sen. Herschel Rosenthal (D-Los Angeles), is for leaders to “call the special interest and tell them who to give the money to. . . . Those who need it are going to get it.”

In addition to Proposition 73, voters last year approved a competing campaign reform measure, Proposition 68, banning off-year fund raising entirely and setting strict limits on the total amount of special interest money that legislative candidates can receive.

Proposition 68

But Proposition 68, sponsored by the public interest group Common Cause, was blocked from taking effect by the state Fair Political Practices Commission. The commission ruled that it was superseded by Proposition 73, which received more votes.

Last week, however, the 2nd District Court of Appeal ruled that several key provisions of Proposition 68 were not in conflict with the other measure. The court’s decision is expected to take effect in 30 days.

This will occur as politicians and contributors are still learning the details of Proposition 73, which took effect New Year’s Day. The measure, sponsored by three legislators, imposed a $1,000 limit on individual contributions, a $2,500 limit for small political action committee donations, and a $5,000 limit for larger, well-established political action committees.

The contribution limits were based on fiscal years rather than calendar years. Campaign finance reports for the first six months of 1989--the last half of the 1988-89 fiscal year--show a flood of special interest contributions to Westside lawmakers.

A Gold Rush

“What we saw was a gold rush in the last few months of the fiscal year,” said Walter Zelman, executive director of California Common Cause. He said lawmakers now are free to tap the same sources again in the new fiscal year.

Zelman said campaign contributors were confused initially about the new rules, but then jumped into the fray.

The campaign contribution reports of some lawmakers are filled with pages of late June contributions from Sacramento-based lobbying groups.

Labor unions, doctors, hospitals, bankers, horse racing interests, developers, trial lawyers, insurance companies, garbage haulers, utilities, chiropractors, wine producers and brewers appear often in the most recent campaign reports.

Massive Fund Raising

Zelman predicted “massive special-interest fund raising in the next 30 days” before the ban on non-election year fund-raising imposed by Proposition 68 takes effect.

One key legislative aide, speaking on condition that he not be identified, predicted that printing presses in the state capital will be working overtime producing invitations to hastily arranged fund-raising events if the court decision stands.

In the first six months under Proposition 73, fund raising by Westside lawmakers generally failed to match the same off-year period two years ago.

Sen. Rosenthal, however, predicted that the decline will be only temporary.

“People didn’t know what they could or should do,” Rosenthal said in an interview. “It took a while before special interests created (new) PACs,” or political action committees.

Ways Around the Limit

Rosenthal suggested that lawmakers and special interests have been looking for and finding ways around Proposition 73’s contribution limits.

Proposition 73 also banned all transfers of contributions from one candidate to another. To get around the ban, Rosenthal, whose solidly Democratic district provides a safe seat, said he already has told special interest groups to make their contributions directly to other candidates rather than to him.

The sharpest drop in fund raising by a Westside lawmaker was reported by Senate President Pro Tem David A. Roberti (D-Los Angeles) who raised $292,999 between Jan. 1 and June 30, down from a total of $1.3 million collected by four campaign committees two years earlier.

Roberti, Roos, Hayden

The decline can be explained in part by the fact that Roberti was heavily involved in financing a Senate special election campaign in March, 1987.

Unlike the Senate leader, Assembly Majority Leader Mike Roos (D-Los Angeles) saw his fund raising soar from $42,540 in the first half of 1987 to $263,175 in the same period this year.

Roos, who like many legislators is on vacation during the Legislature’s summer recess, was unavailable for comment.

Assemblyman Tom Hayden (D-Santa Monica), reported receipts of $43,577 in the January to June period, down from $70,951 in the same period two years earlier.

Separately, Hayden’s main campaign committee reported raising $58,000 from the “sale of an asset,” namely, 11 copies of an Andy Warhol portrait of his wife, actress Jane Fonda. The campaign spent $600 to advertise the print sale in a Japanese magazine.

Not Required to File

The reports do not show any fund raising by a committee that is exploring prospects for Hayden to run for state Insurance Commissioner next year. Spokesman Bill Schulz said the assemblyman “raised no money” for a statewide race and therefore is not required to file anything at this time.

Assemblyman Terry B. Friedman (D-Los Angeles) collected $14,650 in the first half of 1989, down from $98,791 in the same period two years earlier.

The story was the same for Assemblyman Burt Margolin (D-Los Angeles) who also raised $14,650 in the Jan. 1 to June 30 period, down from $94,369.

Assemblywoman Gwen Moore (D-Los Angeles) raised $51,850, up slightly from the $49,100 she received in the first half of 1987.

Freshman Assemblyman Curtis R. Tucker Jr. (D-Inglewood) raised $208,470 and spent most of it on a special election in February to win the seat long held by his late father.

Sen. Rosenthal reported raising $77,152 in the first half of this year, down from $185,306 two years earlier. Rosenthal had a simple explanation for the drop: he didn’t hold a fund-raiser because he’s not up for reelection until 1992.

CAMPAIGN FUND RAISING Here are the amounts raised by Westside legislators during the latest reporting period, Jan. 1 to June 30, compared to their totals for the corresponding period in 1987, the previous non-election year.

1989 1987 Assemblyman Terry B. Friedman $14,650 $98,791 Assemblyman Tom Hayden $43,577 $70,951 Assemblyman Burt Margolin $14,650 $94,369 Assemblywoman Gwen Moore $51,850 $49,100 Assembly Majority Leader Mike Roos $263,175 $42,540 Assemblyman Curtis R. Tucker Jr.* $208,470 N/A Senate Pres. Pro Tem David Roberti+ $292,999 $1,329,030 Sen. Herschel Rosenthal $77,152 $185,306

* Most of Tucker’s money was raised and spent for February, 1989, special election, in which he succeeded his late father.

+ 1987 total is for four committees controlled by Roberti. Figure is unusually high because of heavy fund-raising and expenditures on a March, 1987, special election campaign.

Source: campaign contribution reports filed with secretary of state