Donation Transfers Let Officials Share Wealth : Campaign finance: Supporter contributions can--quite legally--wind up in other politicians’ coffers.

Leon Anderson gave $150 in 1986 to the campaign of Assemblyman Ross Johnson (R-La Habra), assuming that the whole contribution would go toward Johnson’s reelection.

Just last week, however, Anderson discovered that the assemblyman passed some of that money on to the 1986 supervisorial campaign of Don R. Roth.

“I didn’t know he’d done that,” Anderson, a certified public accountant from Fullerton, said of Johnson. “I don’t have any particular problem with it, but I don’t remember being asked about it.”

Fullerton investment real-estate broker Robert L. Andrews was even more surprised--and irritated--to learn that a fraction of the $250 he gave Johnson in 1986 also wound up in Roth’s coffers.

“I was not aware of that, and I’m not happy to hear it,” Andrews said. While stressing that he remains a loyal Johnson backer, the businessman declared: “I don’t like that technique. . . . That’s how kings are built.”

Call it the transfer technique: Politicians solicit contributions from supporters so they can run for office, then find themselves getting a little more money than they need. So they dip into their political bank accounts, where all the contributions are mixed together, and share the wealth with their political friends. That cements alliances, incurs debts and thwarts enemies--all with other people’s contributions, at no personal cost to the politician.

But it’s a practice that many people find deeply disturbing. Transfers take contributions made for one purpose and allow them to be used for another, and the switch usually gets made without the contributor’s knowledge or consent. Those who give a few hundred dollars to a candidate because they support his or her views on issues may find their money going to someone else instead--politicians they may never have heard of, whom they may even oppose.

And it is absolutely legal.

“Many contributors believe that transfers are the worst abuse of the campaign finance system,” a report by the California Commission on Campaign Financing concluded in 1989. “The commission recommends that transfers by local incumbents and candidates be prohibited.”

Because they are not prohibited from engaging in the practice, Orange County politicians have dabbled in it, and a few have reaped tidy rewards.

A Times Orange County Edition study, which used a computer to investigate 14 years of contribution records, found 30 cases in which the political action committees of elected officials made loans or contributions to supervisors or candidates for the board.

All told, those transfers supplied the recipients with $55,995.

The importance of those transfers to local campaigns varied widely. Most were simply small tokens. But records show that some transfers ladled large amounts of cash onto candidates at politically opportune moments.

Take 1986, when three of Orange County’s best-known politicians faced off for a vacant seat on the Board of Supervisors. From the start, Roth, who was then the mayor of Anaheim, was favored to win despite a strong field that included former Congressman Jerry M. Patterson and James Beam, then mayor of Orange. But it was nip and tuck for a while.

As Roth scrambled to stay ahead, he received a series of timely financial injections from Johnson.

With the June election less than a month away, Johnson reached into his political pocket, took out $10,000 that contributors had raised for his reelection and loaned the money to Roth.

Beam surprised the field by finishing first by a hair, but Roth managed to force him into a November runoff. Then, as that contest entered its final weeks with the outcome still too close to call, Johnson again came through for his candidate: The Let’s Reelect Ross Johnson fund contributed $7,000 to Roth in mid-October and loaned him another $7,500 on Halloween.

The following week--as Roth and Beam sifted through the results of a battle that saw Beam lose by just 1,087 votes out of nearly 100,000 cast--both candidates attributed Roth’s victory to the endorsement of departing incumbent Ralph A. Clark and to the last-minute mailer that got word of it to county voters.

Once the campaign was over, Johnson forgave the loans, allowing Roth not to worry about repaying the $17,500. The following year, Roth reported yet another $2,625 contribution from the assemblyman. So the newly elected supervisor ended up winning with a total of $27,125 from Ross Johnson’s contributors.

What makes those transactions even more startling, however, is that Johnson has since emerged as perhaps the state’s most outspoken foe of the very same technique that he used to pass money on to Roth in 1986. Johnson was the principal author of Proposition 73, a 1988 state initiative that outlawed transfers as part of a far-reaching package of campaign reforms.

The practice, Johnson now argues, gives a few elected officials the power to influence many elections and strips voters of control over their contributions.

Johnson did not respond to more than half a dozen requests for an interview, even when told the precise subject matter of this article and given several weeks to respond. But Otis Turner, an aide to the assemblyman, noted that Proposition 73 was not in effect when the transfers were made to the Roth campaign.

“I’m sure he’d say that he plays by the rules,” Turner said. “But he’s not going to tie one arm behind his back while his opponents are allowed to keep at it.”

Others are not so temperate.

“That’s terrible,” said John Phillips, chairman of California Common Cause, a campaign reform organization that opposes transfers but campaigned against Proposition 73 because it disliked other aspects of that proposal. “Do these people know that their contributions to Ross Johnson will go to Don Roth? I doubt it. Of course that should be banned.”

Phillips added that “there’s a certain level of hypocrisy” in Johnson pressing for the abolition of transfers even after having practiced the art himself. “You really have to ask yourself whether this guy is committed to campaign reform at all,” Phillips said, “or whether he was just trying to get himself attention and a reputation as a reformer.”

The assemblyman does have his supporters. Former Orange County Supervisor Bruce Nestande, for instance, said it is perfectly reasonable to advocate reform but not practice it until others are bound by the same rules.

“What’s Ross Johnson supposed to do?” Nestande asked. “Put himself at a disadvantage while everyone else goes on? It’s like letting one team take nine strikes while the other takes three. Who’s going to win? The guy who gets nine strikes.”

Other Beneficiaries

For the most part, county records show that the transfers to and from Orange County supervisors tend to be considerably less than Johnson’s assistance to Roth. They are mostly a few hundred dollars here and there, made more as a gesture of endorsement than as significant financial support.

But there have been exceptions beyond the Johnson-Roth transfers. Even as Roth was receiving the loans from Johnson, one of Roth’s opponents, Patterson, was getting a few contributions from his political allies as well. The Friends of Wilson Hart--a former Santa Ana City Council member--doled out $2,000 to the former congressman, and the Committee to Honor Ed Edelman--a Los Angeles County supervisor--gave another $3,000.

When Nestande ran for secretary of state in 1986, he was the beneficiary of a healthy transfer from another Orange County Republican, Bill Campbell, whose Campbell for Controller fund contributed $15,000 to Nestande’s effort.

The size of that contribution, however, largely reflects the fact that it was made to a statewide campaign, where the dollar stakes are much higher than in local races.

“I don’t have any problems with transfers, personally,” Nestande said in a recent interview. “The greater goal is . . . to place limits on the cost of campaigns.”

Walter Zelman, a well-known expert in campaign law who is working as a consultant for the state Department of Insurance, generally agreed. He said that he supports abolition of transfers as part of overall political reform but added that they have their place in the fund-raising process.

Transfers, in some cases, can help neutralize the overwhelming fund-raising advantage that incumbents usually enjoy over challengers, Zelman said. He added that he would sometimes prefer to see candidates get their money from other politicians rather than from special-interest groups.

“In some respects, transfer money is cleaner than special-interest money,” Zelman said.

Web of Influence

For politicians, using money to help other candidates run their campaigns can make them players in a variety of races. With few strong opponents on his horizon, Supervisor Roger R. Stanton has recently contributed chunks of his campaign cash to the election efforts of Dist. Atty. Michael R. Capizzi and Assemblyman Curt Pringle. Stanton went one-for-two in those contests: Capizzi won, but Pringle--despite $5,666 in mailers sent on his behalf by Stanton--was defeated by Tom Umberg (D-Garden Grove).

Last November, Stanton also spent some of his campaign money to help one of his county aides, Robert L. Richardson, who was running for a seat on the Santa Ana City Council.

The supervisor brought a double motive to that campaign: his support for Richardson and his dislike for one of Richardson’s opponents, incumbent Councilman Ron May.

May had challenged Stanton for his supervisorial seat in 1988, winning 42% of the vote despite being outspent by a huge margin. Although defeated in that race, May was considered a possible threat to Stanton in 1992.

“He was bothersome to the degree that you get a fly in your soup,” Stanton said in a recent interview.

If Richardson and May had been running just a few months earlier, Stanton could not have helped his aide with campaign money--Proposition 73 would have banned it.

But in October, the U.S. Supreme Court let stand a lower-court ruling that suspends most aspects of Proposition 73, including its ban on transfers in most political contests. With the ban out of the way, Stanton was able to lend Richardson $12,000 on Nov. 2, 1990, four days before the election. Stanton charged his aide no interest.

In an interview, Stanton stressed that the money was a loan. “I fully expect to get it back,” he said, adding that “a loan to Rob’s campaign was one for good government in Santa Ana.”

Not surprisingly, May, who was ousted by Richardson, disagrees.

“Transfers allow friends of powerful politicians to pursue their political careers with financial backing that is not available to others,” May said. “A politician like Stanton, who is threatened or nervous about a potential opponent, can use the money to do the work for them.”

Despite the public-policy arguments that some make for transfers, May remains opposed to them.

“The process, as practiced by political action committees, through things like transfers, is distorted,” he said. “It perpetuates a politician into a dynasty. . . . How do you compete with that kind of power? Which really means: How do you compete with that kind of money?”

Times staff writer Mark Landsbaum provided the computer research for this report, with clerical assistance from Darren Tass.

HOW THIS INVESTIGATION WAS CONDUCTED

Figures for this Dollar Politics series were developed during a four-month Times Orange County Edition investigation that used a computer to categorize 14 years of contributions to candidates for the Orange County Board of Supervisors. The period was selected to begin just before the county’s political reform law, TINCUP, was passed in 1978.

Using disclosure statements that candidates are required to file with the Orange County registrar of voters, the study identified 19,150 contributions made to either challengers or incumbents from all sources, including individuals, corporations, political action committees and other groups. Candidates are required to itemize contributions of $100 or more.

The information was edited to correct typographical errors, remove duplicate entries and confirm links between related organizations and contributors that had gone by different names during the study period. Where any links were unclear, those contributions were not categorized, so in some cases the findings are deliberately understated.

The results have also been checked against other government-maintained data, including the registrar’s separate list of major campaign contributors and the state’s list of registered political action committees. The computer research was performed by staff writer Mark Landsbaum, while staff writer Jim Newton reported and wrote the stories.

TRACKING THIS SERIES

* SUNDAY: The impact that unregulated political action committees have had on campaign contributions to the Board of Supervisors.

* MONDAY: County employee unions give thousands to the supervisors, who dole out millions in taxpayer-funded salaries.

* TODAY: The transfer technique lets money given to one politician find its way to another.

* WEDNESDAY: How a lobbyist uses a PAC to give thousands to supervisors, who then weigh the fate of his clients.

* THURSDAY: Companies with their own PACs give at will and still stay within the law.

* FRIDAY: Reformers and supervisors agree that the law is broken but disagree over how to fix it.

Transfers From Fellow Politicians (1977-90)

Recipient Amount No. Don R. Roth (loans of $5,000 $27,125 5 $5,000 and $7,500 and contri- butions of $7,000 and $2,625 Bruce Nestande $15,000 1 Bruce Nestande $3,000 1 Roger R. Stanton ($2,500) $2,800 2 Gaddi H. Vasquez ($3,00) Jerry M. Patterson ($2,000) $2,500 3 Don R. Roth ($250) Gaddi H. Vasquez ($250) Thomas F. Riley $2,000 1 Various $3,570 17 Total $55,995 30

Recipient Contributor Don R. Roth (loans of $5,000 Let’s Reelect Ross Johnson $5,000 and $7,500 and contri- butions of $7,000 and $2,625 Bruce Nestande Campbell for Controller Bruce Nestande Jerry M. Patterson Roger R. Stanton ($2,500) Royce for Senate Gaddi H. Vasquez ($3,00) Jerry M. Patterson ($2,000) Friends of Wilson Hart Don R. Roth ($250) Gaddi H. Vasquez ($250) Thomas F. Riley Friends of Senator John Seymour Various Others (13 politicians) Total

Note: Only transfers to supervisors or supervisorial candidates included Source: Campaign disclosure statements

The Transfers: Ross Johnson Comes to Don Roth’s Aid

In the neck-and-neck showdown for county supervisor in 1986, Assemblyman Ross Johnson (R-La Habra) made several timely loans and contributions to this choice for that office, Anaheim Mayor Don R. Roth. Each of the loans came just as the campaign reached an important benchmark, and, with Johnson’s assistance, Roth eventually squeaked into office. In 1988, Proposition 73, co-authored by Johnson, outlawed transfers.

Source: Campaign disclosure statements filed by the Roth campaign.