Contribution Limits for Legislative Races Restored : Campaign finances: Judge says he acted to minimize election ‘confusion.’ State and local contests not affected.

Trying to minimize “confusion” over California’s campaign financing laws, the federal judge who overturned portions of Prop. 73 agreed Friday to reinstate the measure’s contribution limits in legislative races.

The decision was the second victory of the week for Assembly Speaker Willie Brown and Senate President Pro Tem David A. Roberti, who have now succeeded in obtaining the least restrictive campaign financing laws possible for the Nov. 6 election.

U.S. District Judge Lawrence K. Karlton agreed to restore the provisions of Prop. 73 for state Senate and Assembly races in order to forestall the implementation of Prop. 68, a rival campaign measure that he maintained would be more “onerous.” Earlier, the state Fair Political Practices Commission had said the tougher Prop. 68 would take effect in the absence of Prop. 73.

“I can’t close my eyes to the fact there is an election going on,” Karlton said before issuing his ruling. “I know the Republicans don’t believe it in this case, but I really try to do what the law tells me to do.”

Siding with attorneys for the Democratic leaders, Karlton held firmly to his position that the contribution limits of Prop. 73 are unconstitutional and do not apply to candidates for statewide or local offices.

The judge’s latest decision means that candidates for state and local office can continue raising unlimited amounts of money at least until Tuesday, when the U.S. 9th Circuit Court of Appeals is scheduled to hold a hearing on the issue.

Earlier this week, Karlton ruled that Prop. 73’s campaign contribution limits--ranging from $1,000 to $5,000--were unconstitutional because they unfairly restricted the ability of challengers to raise as much money as incumbents. The key flaw of the measure, the judge concluded, was that it limited contributions by fiscal year, rather than for the entire election cycle.

In addition, he ruled, the initiative’s ban on the transfer of campaign funds among candidates was unconstitutional because the money had been collected in accordance with the contribution limits.

The ruling, sought by the legislative leaders, labor unions and the Democratic Party, provided a major boost for underdog candidates, particularly Democratic gubernatorial nominee Dianne Feinstein, who immediately began receiving large donations, including one for $150,000 from a labor organization representing California Highway Patrol officers.

The Fair Political Practices Commission had announced after Karlton’s initial ruling Tuesday that the even tougher restrictions of Prop. 68 would go into effect for candidates seeking election to the state Senate or the Assembly.

Prop. 68, among its many features, limits the size of campaign contributions, bans fund raising in non-election years, and imposes strict limits on the total amount of money candidates can receive from organizations. It does not apply to statewide or local races.

Both of the campaign finance initiatives were approved by the voters in June, 1988, but none of the major provisions of Prop. 68 had taken effect because it received fewer votes than Prop. 73.

The Democrats and the authors of Prop. 73 both contend that Prop. 68 cannot constitutionally take effect--an issue now before the California Supreme Court.

But without a decision from that court, and faced with the edict from the Fair Political Practices Commission, the Democratic leaders reversed course and appealed to Karlton to reinstate the restrictions of Prop. 73 for this election.

Karlton said he was agreeing to their request “with some reluctance.” But he noted that Republicans and Democrats alike agreed that Prop. 68 “has a more onerous effect” on the ability of candidates to exercise their First Amendment right of freedom of expression.

He also said he agreed that “the absence of a stay as to the legislative races will increase the confusion” among legislative candidates in the final weeks before the Nov. 6 election.

But again at the request of Joseph Remcho, attorney for the Democratic legislative leaders, Karlton agreed to pick and choose among the provisions of the two initiatives. Selecting the section of the law that is weakest, Karlton ruled that the ban on transfers in Prop. 68--not Prop. 73--takes effect. As a result, legislators will be allowed to transfer their funds to candidates for statewide office, a move that would have been prohibited under Prop. 73.

The Fair Political Practices Commission and two authors of the initiative--Assembly Republican Leader Ross Johnson of La Habra and Sen. Quentin Kopp (I-San Francisco)--had asked Karlton to stay the effect of his entire ruling that the contribution limits of Prop. 73 are unconstitutional. But they agreed that his order restoring Prop. 73 for legislative races was better than nothing at all.

Nevertheless, outside the courtroom, Johnson blasted the judge’s decision saying it served the interests of the “powerful politicians” and “special interests” that control state government.

“It means the floodgate is open,” Kopp added. “I think the court is clever and capable of unique reasoning.”