Candidates Found to Divert Funds for Political Overhead

Local politicians in California spend only 38% of their campaign funds directly on wooing voters, including expenditures on television time and other advertising, according to a new study of campaign financing.

Despite the contention of some candidates that increased advertising costs are driving up the price of campaigning, most of the money raised by local candidates is spent on maintaining their political organizations, fund raising and paying the salaries of political consultants, according to the study by the California Commission on Campaign Financing.

Los Angeles County Supervisor Pete Schabarum, for example, spent only 2% of his 1986 campaign budget on directly appealing to voters. He devoted 29% to fund raising and another 36% to the general expenses of running his campaign operation, the report said.

Furthermore, incumbent officeholders dominate fund-raising during non-election years and frequently use their huge campaign treasuries to scare off possible opponents, said the study, which was made public today.

Incumbent War Chests

“Much of what candidates now collect in campaign contributions is used to build war chests and deter serious challengers,” the report concluded. “Because incumbents raise substantial funds in non-election years, the money they spend on fund-raising events pays them dividends by discouraging prospective opponents. This tactic not only deprives voters of a choice, it also deprives them of the opportunity to hear the candidate’s views.”

The commission’s report is based on a study of 18 local government jurisdictions throughout California representing about two-thirds of the state’s population. The statewide study is a companion to a report on Los Angeles County local governments released a week ago in which the commission called for local campaign spending restrictions and the creation of local enforcement agencies.

The nonprofit, private commission was founded in 1984 to study campaign financing in California. Its study of local government campaign spending was funded by five foundations. The organization is co-chaired by Cornell C. Maier, retired chairman of Kaiser Aluminum and Chemical Corp.; Rocco C. Siciliano, retired chairman of Ticor, Los Angeles, and Francis M. Wheat, former member of the Securities and Exchange Commission.

The campaign finance commission’s analysis of spending by local candidates, the first comprehensive study of its kind, illustrates that candidates in small jurisdictions spend a larger proportion of their money on contacts with voters than do officials in large cities and counties.

Included in the study’s category of “voter contacts” were broadcast advertising, newspaper ads, campaign literature and billboards. All other expenditures were lumped into the category of overhead--including the cost of staff members who may have met with voters or distributed campaign material.

High Overhead

In large jurisdictions, candidates spent only 33% of their campaign money on direct appeals to voters, compared to 57% in small jurisdictions. Overall, the candidates spent 38% on voter contacts and 62% on overhead, the study said.

But in regions where the races were competitive, spending on direct appeals to the voters soared, reaching as much as 77% in Agoura Hills and 72% in Irvine.

In all jurisdictions, campaign literature was the largest single expenditure by candidates, making up 26% of all spending. In small cities and counties, candidates spent 48% of their money on campaign literature, compared to 23% in large jurisdictions.

Overall, candidates spent more on fund raising (13%) and political consultants (10%) than they did on television ads (7%). At the same time, candidates spent as much money (6%) on campaign donations to other candidates as they did on salaries for their staff members.

“Professional consultants are absorbing an increasingly large portion of all candidate’s budgets,” the study said. “The use of professional consultants may help candidates spend their money more effectively. . . . But an increasing reliance on professional fund-raisers requires candidates to raise more money to pay expensive consulting fees.”

Incumbents More Successful

When it came to raising money, incumbents were much more successful than challengers and started collecting donations far earlier.

In the areas studied, incumbents received 83% of all contributions raised by both incumbents and challengers. Incumbents also had a decided advantage when appealing to most contributors: elected officials received 95% of the contributions made by businesses, 83% of donations from labor organizations and 83% of the contributions from individuals, the study found.

“If you were a developer or an investment banker, wouldn’t you wish to give to an incumbent instead of a speculative challenger?” Los Angeles City Councilman Zev Yaroslavsky told the commission.

In addition, incumbent local officials raised 60% of their campaign funds during non-election years and only 40% during the year in which they ran for office. That gave them a decided advantage over challengers, who raised 99% of their campaign money during their election year.

At election time, the study said, incumbents outspent challengers by a ratio of nine to one.

In efforts to limit campaign donations and reduce the influence of special-interest contributions, more than 60 cities and counties in California have enacted campaign finance laws--more than the total enacted by local governments in the rest of the nation.

‘Laboratories of Reform’

“California’s local jurisdictions are true laboratories of reform, offering many insights into the pros and cons of various campaign financing ordinances,” the report said.

But the commission concluded that the key to effective action is in limiting campaign expenditures. In the past, the courts have ruled that governments must provide public financing of campaigns in exchange for limiting campaign expenditures. But now Proposition 73, approved by voters last year, bans taxpayer financing of races for local and state office in California.

The commission, in an attempt to come up with a new alternative, suggested that cities and counties establish a system of “variable contribution limits.” Under this plan, candidates would face strict contribution limits, such as $100 per donation. But candidates who agree to abide by a ceiling on campaign expenditures--for example, $10,000 per election--would be allowed to raise money in larger amounts under a higher contribution limit, such as $1,000 per contribution.

“The commission’s ‘variable contribution limits’ proposal would offer candidates a choice,” the report said. “They could raise and spend as much money as possible, but under low contribution limits. Or they could raise money more quickly and easily under higher contribution limits, but only if they agreed to spend no more than a specified expenditure ceiling.”

WHERE CAMPAIGN FUNDS GO Only 38% of all local campaign budgets surveyed are spent on direct communication with voters. The bulk of campaign money goes to overhead costs. Chart below shows how expenditures compare in selected small, medium and large California jurisdictions.

SMALL MEDIUM LARGE ALL VOTER CONTACTS 57% 49% 33% 38% Broadcast 0 8 7 7 Literature 48 30 23 26 Newspaper 6 3 2 2 Outdoor 3 8 1 3 OVERHEAD 43 51 67 62 General 17 16 25 22 Personnel 5 10 4 6 Fund raising 6 11 15 13 Surveys 5 3 3 4 Consulting 8 8 11 10 Travel 0 1 1 1 Candidate transfer 2 2 8 6

Incumbents are much more successful than challengers in raising money from major donor groups. Challengers, however, give more money than incumbents to their own campaigns.

Source: California Commission on Campaign Financing