New Bid Made to Revive Political Funding Limits : Campaigns: Backers of Prop. 73 take argument to federal appeals court, where judges had previously refused to restore the money-raising curbs.

Backers of a beleaguered 1988 campaign funding initiative sought Tuesday to persuade an apparently reluctant federal appeals court to revive limits on political contributions that were struck down last fall.

A three-judge panel of the U.S. 9th Circuit Court of Appeals heard more than two hours of exhaustive arguments in a politically charged constitutional test of restrictions that Proposition 73 imposed on donations to campaigns for state and local elective office.

Lawyers for its sponsors and the state Fair Political Practices Commission defended the measure as a legitimate effort to limit the influence of big contributors. A federal district judge’s ruling that the law improperly discriminated against challengers was “clearly erroneous,” said L. Michael Bogert, an attorney for the backers.

A lawyer for opponents of the initiative contended that the way the limits were imposed effectively would allow officeholders to obtain more donations than challengers. “This law tells challengers, ‘You can’t raise money in the same way as incumbents,’ ” attorney Joseph Remcho said.

Proposition 73, adopted in the June, 1988, primary, restricted annual contributions to candidates to $1,000 from each person, $2,500 from small political committees and $5,000 from big committees or political parties. The measure also prohibited the use of public funds for campaigns--an issue not before the court--and barred the transfer of funds among candidates.

The initiative was challenged in a suit by Democratic state legislative leaders and labor organizations. In September, U.S. District Judge Lawrence K. Karlton in Sacramento struck down the contribution limitations--along with the transfer prohibition--finding them to be violations of the right to free speech and equal protection under the law.

Karlton concluded that by imposing annual contribution limits by fiscal year rather than full election cycle, the measure improperly favored incumbents, who as a practical matter are able to raise large amounts of money during all years that they are in office. By contrast, he noted, challengers ordinarily do not become candidates and begin obtaining donations until an election year.

The judge temporarily allowed the initiative’s donation limits to be applied to state legislative races in the fall election. But he permitted candidates for other offices to raise unlimited amounts of money, opening the way for a wave of big contributions in the governor’s race.

Lawyers for two sponsors, state Sen. Quentin L. Kopp (I-San Francisco) and state Assemblyman Ross Johnson (R-La Habra), sought unsuccessfully in the federal appeals court and U.S. Supreme Court to reinstate the measure before the election, pending further review of its legality.

Tuesday’s hearing was conducted before Judges Cecil F. Poole, William A. Norris and Charles E. Wiggins--the same panel that last October refused 2 to 1 (with Wiggins dissenting) to restore the limits.

In a barrage of questions to attorneys, members of the panel indicated Tuesday that they have doubts about the legal validity of the contribution limits. Of the three judges, only Wiggins appeared to be receptive to the backers’ pleas to revive the provisions.

Attorneys supporting the measure denied that it was a thinly disguised scheme to keep incumbents in office. “Proposition 73 applies equally to incumbents and challengers,” said Scott Hallabrin, a lawyer for the FPPC. “There is no evidence in this case of any invidious or evil intent.”

Any unintentional adverse impact on challengers was outweighed by the need to reduce the influence of special interests in elections, Hallabrin argued.

But Judge Norris noted repeatedly that as a practical matter, incumbents were able to raise money for years between elections--while challengers were prevented from doing so, either because they had not declared for office or because they could not find willing contributors in non-election years.

Incumbents are busily acquiring donations while eventual challengers “are not even close to smelling an election,” Norris said.

Judge Wiggins emphasized that there was still nothing to prevent a challenger from declaring for office at the same time as an incumbent and attempting to raise money. “Under the law, they both have the same opportunity, do they not?” he asked.

Attorney Remcho replied that while that was true in theory, “in the real world” incumbents could start collecting $1,000 annually per contributor up to four years before an election. Thus, he said, officeholders could wind up with $4,000 per contributor by election time, while challengers could end up with only $1,000 that they were able to raise in the final year before an election.