Senate OKs Legal Funds Loophole

The Senate voted overwhelmingly Thursday to create a loophole in California’s campaign contribution laws so that elected officials and candidates would be allowed to raise unlimited amounts of money for their legal defense.

Members of the Senate, worried that they might someday have to borrow against their homes to pay their lawyers, voted to exempt legal defense funds collected by any state or local candidate from the restrictions of Proposition 73, the campaign finance measure approved by voters last year.

“We are exposed to litigation as if we’re billionaires but we have to defend (ourselves) on middle-income salaries,” contended Senate President Pro Tem David A. Roberti (D-Los Angeles), a backer of the bill. “Anybody who has more money than you can sue you in court and then what’s your option: mortgage the house or concede defeat?”

Among those who could benefit from the measure and raise unlimited legal defense funds is Los Angeles Mayor Tom Bradley, who is being sued in civil court by City Atty. James K. Hahn for failing to disclose personal stock holdings.

The bill was prompted by the case of freshman Assemblyman Curt Pringle (R-Garden Grove), who is being sued in federal court for his role in posting uniformed guards at polling places in an alleged attempt to intimidate Latino voters during his election last November.

In a separate action, the Senate passed and sent to the Assembly a bill that would prohibit legislators and top state officials from lobbying their former colleagues or agencies for a year after leaving office.

The measure by Sen. Milton Marks (D-San Francisco) would only take effect if voters pass a proposed constitutional amendment next June that would create an independent salary commission to set legislators’ salaries.

Legislators from both parties began pushing for the legal defense legislation after the Fair Political Practices Commission ruled that funds raised for a candidate’s defense in court are considered to be campaign contributions. Under that ruling, donations to a politician’s legal fund are subject to Proposition 73’s contribution limits, which range from $1,000 to $5,000.

Roberti and other advocates of the bill said they were particularly concerned that an opponent could tie up a candidate’s campaign funds simply by filing a lawsuit.

Supporters of the legislation contend that it would have no bearing on politicians who face criminal charges, since the U.S. Constitution already protects their right to raise unlimited funds for that kind of defense.

But critics of the measure argue that it would spell out in state law that a politician under criminal indictment could raise unlimited amounts of money from special interest groups.

If so, one legislator who could benefit from the bill is Sen. Joseph B. Montoya (D-Whittier), whose acceptance of payments from groups pushing special interest legislation led to his indictment on federal charges of extortion, racketeering and money laundering.

Objection Raised

Sen. Herschel Rosenthal (D-Los Angeles), without naming Montoya, objected to the possibility that politicians facing such charges could raise unlimited amounts of money from special interest groups to pay for their defense.

“It seems entirely inappropriate to exempt those legislators who would seem to be most vulnerable to undue influence,” Rosenthal said. “It makes little sense to exempt those who are threatened by jail or other sanctions--those who there is reason to believe may be corruptible.”

The measure was passed by the Senate by a vote of 35 to 0, with Rosenthal abstaining and Montoya, a co-author of Proposition 73, voting for the bill.

The legislation now goes to the Assembly, where it may run into problems with the lawmaker who is listed on the bill as its author: Assemblyman Steve Peace (D-La Mesa).

The legal defense loophole was amended into Peace’s bill in the Senate without his approval. Peace objects to the fact that the bill would not prohibit a politician from paying a court-ordered judgment or fine with funds raised outside the Proposition 73 limits.

Peace said Thursday he may refuse to take up the bill, but under the Assembly’s rules, any other member is entitled to seek a vote on the measure.

Later in the day, Senate leaders of both parties called for the creation next year of a Senate Ethics Committee with the authority to investigate and discipline senators for misconduct.

Meanwhile, an aide to Roberti said the senator will not push for passage of a bill this year that would extend a ban on campaign fund-raising during non-election years to candidates for statewide office. Roberti’s attempt to expand the Proposition 68 prohibition, which now applies only to legislators, was widely viewed as a slap at fellow Democrat Atty. Gen. John K. Van de Kamp, a candidate for governor in 1990.