Limits Urged on Spending by Candidates : Report Fears Real Estate Influence in Agoura Hills

The potential for large amounts of campaign spending in Agoura Hills by real estate interests could stifle candidates without big financial backers, according to a study released today by a campaign watchdog group.

To curb the influence of campaign dollars, the city should consider adopting a voluntary spending limit for candidates, said the report by the California Commission on Campaign Financing.

The commission is a nonprofit, bipartisan research group made up mainly of business and legal leaders from around the state.

Agoura Hills was one of nine Los Angeles-area jurisdictions that the commission examined as part of a broader three-year study aimed at making recommendations to improve the state’s campaign-financing system. Agoura Hills was studied because it is a relatively new city that has had both expensive and inexpensive campaigns, the report said.

But several elected officials and political candidates in Agoura Hills discounted the study’s findings. Voters in the city of 20,200, they said, have frowned on candidates who were heavily financed by developers.

“They don’t know our town,” Councilman Jack W. Koenig said.

Mayor Darlene McBane said Agoura Hills residents “are intelligent and well-informed and smart enough to not be fooled by the glitz.”

Contested 1985 Election

The commission cited a hotly contested 1985 election in which two candidates received substantial backing from developers. It also cited this year’s failed recall drive, which was supported with a large infusion of cash from real estate interests.

The pivotal 1985 election shifted power in the city to a slow-growth council majority. It happened after a bitter fight in which development was the primary issue.

“Development and real estate interests . . . threatened by rapidly growing anti-development feelings sweeping the city contributed unprecedented amounts to pro-development candidates,” the report said.

One candidate in 1985, Hayden Finley, spent $18,000. Another, former Mayor John Hood, raised at least $9,000 from business sources alone, more than the combined total raised by the three candidates who won the election.

By contrast, the report said, no candidate raised more than $2,500 in 1984 and $4,700 in 1987.

$18,000 Spent in Recall Bid

This year, a pro-development group launched a recall campaign against four council members. Although recall proponents failed to gather enough signatures to force a special election, they spent more than $18,000, far more than any political committee since 1985. Much of the money came from real estate interests.

The commission noted that development has become an issue again and has brought with it large amounts of campaign funds. The report predicted a donnybrook over growth, reminiscent of the 1985 campaign, in the campaign leading to the Nov. 7 general election.

But after the report went to press, John Ellis, a candidate backed by the recall proponents, dropped out of the race in early August.

Although the commission maintained that its study continues to be valid because development will remain an issue, several political players in Agoura Hills doubt that big campaign spending can significantly alter the city’s elections.

They argued that the big 1985 campaign spenders--Hood and Finley--lost big.

Their defeat showed that large campaign donations can become a potentially damaging issue, said Councilwoman Fran Pavley, who won in 1985 and is seeking reelection this year along with Koenig and McBane. Mayor Pro Tem Vicky Leary and Councilwoman Louise C. Rishoff are not up for reelection.

“If you run, voters ask where did you get the money,” Pavley said.

“The residents did get together, and they did organize to fight off this big money,” conceded Matthew T. Stodder, commission senior researcher. “We’re saying in the future the residents may not be able to organize, so the big campaign may have an impact.”

The City Council this year passed a campaign reform ordinance that limits contributions to $250 and requires full disclosure of any gift of $10 or more.

Good ‘1st Step’

The commission called the law a good “first step” but suggested that the council re-evaluate it after November’s election, which, before Ellis’ withdrawal, it had predicted would test the law’s effectiveness.

“I don’t think there are any real pro-development people running this time,” said Ed Kurtz, who is among the three remaining challengers in November. The others are Gary Mueller and Barry Steinhardt. “I can’t see any real pro-growth, anti-growth, no-growth big fights coming around this time.”

Ellis, who said he needed to devote his time to taking over a new accounting business, said he had planned to spend $10,000 to $15,000. Ellis said a spending cap would prevent challengers from raising the money for advertising necessary to counter the press coverage given to incumbents.

With Ellis’ unexpected withdrawal, “this might not be the supreme test” of Agoura Hills’ new campaign ordinance, Stodder said. “If it’s not the November, 1989, election, it could be the next one. I don’t think this issue is going to go away.”

The disclosure last week that recall proponents, who tried to oust all the council members except Koenig, had spent $18,000 illustrates the commission’s point, he said.

Voluntary System

The commission recommended that Agoura Hills consider a voluntary system of limiting campaign spending by candidates, who would agree to a spending cap of between $7,500 and $10,000.

Because the U. S. Supreme Court ruled in 1976 that campaign spending is a form of political speech, cities cannot impose mandatory limits on the amount candidates can spend.

So the key question becomes how to induce candidates to agree to voluntary spending limits. It is unresolved, Stodder said. One method would be to offer public funds as an inducement. Although Proposition 73 prohibits use of public funds for campaigns, the commission suggested that the courts might eventually exempt charter cities from the prohibition.

Agoura Hills is not a charter city and would not have a chance of becoming exempt unless it adopted its own charter, a sort of city constitution. McBane said city officials have discussed making Agoura Hills a charter city but have no plans to seek voter approval of charter status.

McBane said the electorate’s harsh judgment of big campaign spenders in itself limits candidate spending. But she added that financing of campaigns by real estate interests will probably always loom as a factor in city politics.

“I’m sure the developers would like someone like us out of office,” McBane said. “They would like to develop a lot more intensely than this council is prone to let them do.”

RELATED STORY: Part I, Page 1

CAMPAIGN FUNDING SOURCES

The following chart provides a breakdown of the sources of campaign funds in the 1984 and 1985 Agoura Hills elections. The data was compiled by the California Commission on Campaign Financing.

Business Agoura Hills: 52% Other cities and counties*: 40%

Individual Agoura Hills: 44% Other cities and counties*: 45%

Labor Agoura Hills: 0% Other cities and counties*: 2%

Political Agoura Hills: 0% Other cities and counties*: 5%

Candidate Agoura Hills: 4% Other cities and counties*: 8%

* The commission studies 17 California cities and counties of varying size to compare overall campaign spending patterns to those in individual cities such as Agoura Hills.