Ban on Fund-Raising Limits Stands : Politics: U.S. Justice Sandra Day O’Connor refuses to reinstate the campaign contributions measure. Sen. Pete Wilson says he’ll start seeking large donations.

U.S. Supreme Court Justice Sandra Day O’Connor refused Thursday to reinstate California’s campaign contribution limits, prompting Republican gubernatorial candidate Pete Wilson to announce he will begin seeking large donations.

For the second time in less than a week, O’Connor denied without comment a request that she block last week’s lower court decision striking down the contribution limits of Proposition 73 as unconstitutional.

In one last attempt to resurrect the campaign law before the Nov. 6 election, authors of the proposition immediately filed a motion with Chief Justice William H. Rehnquist, asking him to restore the donation limits.

But the Wilson campaign said there was little likelihood that Rehnquist would stay the lower court order. The Republican senator, who earlier had called on Democratic rival Dianne Feinstein to join him in voluntarily abiding by the limits, abandoned the plan Thursday.

“The court decision leaves us no choice if we are to be competitive in the campaign,” said Bill Livingstone, Wilson’s campaign press secretary. “So we will accept contributions in excess of $1,000 but no large contributions will be accepted from special-interest groups” that do business with the state or the federal government.

If the Supreme Court eventually stays the ruling, Livingstone said, the campaign “would be happy to return the checks . . . but it looks highly unlikely.”

Proposition 73, approved by the voters in June, 1988, prohibited state and local candidates from receiving more than $1,000 from individuals and $5,000 from political committees during any fiscal year (July 1 to June 30).

Last week, U.S. District Judge Lawrence K. Karlton overturned the contribution limits, ruling that restrictions by fiscal year were unfair to challengers and violated the First Amendment. The judge also threw out Proposition 73’s prohibition on the transfer of campaign money among candidates.

The decision was a victory for Assembly Speaker Willie Brown, Senate President Pro Tem David A. Roberti and labor unions, who brought the lawsuit. Karlton, acting again at the request of Democrats, later issued a partial stay reinstating the Proposition 73 contribution limits for legislative races.

Over the last week, two authors of Proposition 73, Assembly Republican Leader Ross Johnson of La Habra and Sen. Quentin Kopp (I-San Francisco), appealed unsuccessfully to the U.S. 9th Circuit Court of Appeals and to O’Connor for a stay of Karlton’s entire decision.

Since Karlton’s ruling, most candidates for statewide office have begun soliciting contributions above the voter-approved limits. Feinstein, who had lagged well behind Wilson in fund raising, quickly took advantage of the new rules. Dee Dee Myers, Feinstein’s press secretary, said the campaign has raised about $1 million already in contributions above the Proposition 73 limits. “We’re thrilled that none of the courts would stay the decision because, as Dianne has said, Proposition 73 made it difficult for outsiders and challengers to compete,” Myers said. “We were going to be outspent three to one. Now maybe we’ll be outspent two to one. It helps us to close the gap.”

In announcing he would begin accepting large donations, Wilson sought, as he had in the past, to maintain the moral high ground. He again sharply criticized Feinstein for taking $150,000 from California Highway Patrol officers and said he would not take large donations from groups that could benefit from his actions as governor or U.S. senator.

Johnson, the principal author of Proposition 73, said he will continue to press in the courts for reinstatement of the campaign limits. “Without the stay, statewide and local candidates are raising as much money as possible and from whatever source,” Johnson protested. “Clearly, the political arms race is escalating at an alarming rate, which is something the voters of California sought to stop.”