O.C. Supervisors Rely on Developers to Win : Campaign finances: The building industry's share of donations to board members--42%--dwarfs all other interests, and is unmatched in other political arenas.

By JIM NEWTON and MARK LANDSBAUM

Oct. 27, 1991 12 AM PT

TIMES STAFF WRITERS

SANTA ANA —

As county supervisors cleared the way for a decade-long housing boom that changed the face of Orange County, millions of dollars poured into their campaign coffers from development interests, many of which stood to profit from that growth.

A new computer-assisted investigation by The Times Orange County Edition found that developers and related businesses--architects, contractors, realtors and the like--have donated 42% of the campaign money collected by supervisors and board candidates during the past 14 years.

No other industry even comes close. Second place went to the finance industry, but its $698,000 in contributions were dwarfed by the $3.7 million that the development community donated.

“The disparity is huge,” said Larry Makinson, research director of the Washington-based Center for Responsive Politics and one of more than a dozen campaign-finance experts, politicians and activists with whom The Times shared its findings. “That shows you who’s driving the politics in Orange County. It would certainly cause me concern if I lived there.”

At the same time that they received important financial backing from the development community, the supervisors--who have the final say over land-use decisions in unincorporated areas--made decisions that transformed southern and eastern Orange County. With the board’s approval, thousands of acres of rural ranchland were developed into some of the nation’s most valuable residential real estate.

In the process, the board consistently voted in favor of policies and projects that were backed by the development industry. For example:

* The board has approved the construction of thousands of homes--the developments that became Mission Viejo, Rancho Santa Margarita, Coto de Caza and Laguna Niguel, among others--often over the objections of community groups and environmentalists.

* Despite vehement opposition from many residents, particularly in South County, the supervisors worked with developers to create three tollways that are slated to crisscross Orange County, making transportation easier for thousands of home buyers. The county’s lobbyist in Washington is pressing for legislation that would let the corridors pass through public parkland, an idea backed by developers but opposed by many residents and environmentalists.

* A majority of the all-Republican, anti-tax Board of Supervisors twice backed measures designed to increase the sales tax by half a cent to pay for transportation improvements. One of those measures passed last year, aided by huge contributions from the development community, which saw unclogging the county’s freeways as a key to its future livelihood.

The supervisors defend each of those decisions, and many of them drew support from more than just the development community. Most importantly, say board members and others, the decisions to support those projects and issues were made not because of political contributions but because they would benefit Orange County residents.

“I think a concentration of any particular segment of the community, when it comes to political contributions, is not comfortable,” Supervisor Harriett M. Wieder said.

But she added: “It’s a bunch of baloney to say that contributions affect votes. Your decisions can’t be for helping your angel. It’s got to be a good project. I have voted many times against people who contributed to me.”

The relationship between the board and the development community is of particular concern to some observers, because while building has lagged during the current recession and more and more land is being swallowed up by new cities, thousands of acres of buildable property remain under the supervision of the county board. The supervisors defend their record of overseeing the past growth and pledge to continue keeping tabs on the development industry in the future.

“Orange County is a place to live that’s second to none,” said Supervisor Thomas F. Riley, whose South County district has experienced huge growth during the 17 years that he has represented it. “That’s partly because of our parks, our fire stations, our libraries. We wouldn’t have those things if the board didn’t require developers to dedicate them.”

But other observers question the propriety of supervisors soliciting and accepting such a large percentage of their campaign money from a single industry. They also warn of the appearance those contributions create.

“The political process of this county has been perverted by that,” said Norm Grossman, an environmental activist who lives in Laguna Beach. “Development money is used to scare away challengers, and the supervisors rely on it to do that. That, no doubt, causes them to look more favorably on development proposals.”

While supervisors say that is simply not true, they and others acknowledge that development money plays an important part in supervisorial campaigns. Of the $8.7 million that candidates for the board reported receiving during the past 14 years, $3.7 million came from companies or individuals who make their living through property development and sales.

Second place went to the finance industry--bankers, stockbrokers, accountants and a few other related fields. But it was a far distant second, contributing 7.7% of the total, compared to more than 42% from development interests. Lawyers and law firms ranked third, contributing a little more than $543,000--or about 6.2%.

That means land-development and real estate companies and individuals contributed 548% more money than any other industry. They also gave more than the finance industry, the legal community, the tourist trade, the manufacturing industry and organized labor combined.

Still, most observers agree that the development industry is far less dominant than it once was. Before the enactment of the 1978 county campaign law, known as TINCUP, it was not unusual for supervisors to raise 80% of their money from developers, according to one of TINCUP’s drafters, former Planning Commissioner Shirley L. Grindle. But the overarching role that developers and their allies still play in financing local campaigns troubles many observers.

“Those numbers are staggering,” said Lisa Foster, executive director of California Common Cause, a leading campaign-watchdog organization. “The danger is obvious. When you’re dependent on one industry for (nearly) half of your contributions, that’s extraordinary. It certainly suggests that you’d think twice before offending that industry.”

Foster and other campaign finance experts who reviewed The Times’ findings say they show a far more pronounced influence by a single industry than anything they have seen at the state or federal levels.

“There is no one industry that dominates the state that way,” Foster said. “We worry when 10% of the Speaker’s (Assembly Speaker Willie Brown) money comes from a single industry. There’s nothing like 40% or 50%. That’s truly astonishing.”

A San Francisco Chronicle study of fund-raising during last year’s gubernatorial campaign also suggests that no industry contributed as overwhelmingly in that race as the Orange County development community does here.

The Chronicle found that during one key, five-month stretch of that campaign, developers, including real estate interests, gave then-Sen. Pete Wilson $563,849. That was the most of any industry, but it still came to just 10.2% of his total.

The state development industry gave former San Francisco Mayor Dianne Feinstein $513,774, or about 8% of the money she raised during that same period.

Not one of the five sitting Orange County supervisors has ever raised such a small proportion of their campaign cash from the development industry, campaign disclosure statements show.

But while each of the 16 people interviewed for this article agreed that the Orange County development industry was far and away this area’s most potent political force--especially when it comes to campaign financing--many sharply disagreed on the reasons for it and the implications of it.

Representatives of several local developers and builders--including the Koll Co., the Irvine Co., the Mission Viejo Co. and the William Lyon Co.--say their firms and executives make contributions not to influence decisions but rather to assist candidates whose views they support.

“We have what I would probably characterize as a corporate ethic of activism in public affairs,” said Larry Thomas, the Irvine Co.’s vice president for corporate communications. “We give to candidates who stand for ideas that we share as a general philosophy.”

Some significant contributors also note that they give for purely personal reasons.

“My contributions to politicians are not in terms of business interests,” said William E. Cooper, a local executive who has an interest in Orange County real estate but is not a builder or a developer. Instead, he said, he gives money to support “good, capable candidates to run for political office.”

Although Cooper said his business ventures have profited from the Orange County land development boom “as everybody else has,” he added that he has never had a project that required approval of the Board of Supervisors.

And Dana Reed, a Costa Mesa lawyer who specializes in political campaigns, said that Orange County development contributions are bigger than other industries’ because developers are based here while those other businesses usually are headquartered outside of the county.

“With the exception of the development industry, Orange County is a branch managers’ town,” he said. “And branch managers don’t give with the frequency and magnitude that the corporate headquarters do.”

Indeed, Reed added, part of the reason developers are the major contributors to Orange County political campaigns is because they are the major industry of Orange County.

“The development industry is to Orange County what the automobile industry is to Detroit,” he said. “It’s the dominant, overriding force.”

John Simon, another local lawyer who works with developers, said he believes the building industry gives so much of the money collected by supervisorial candidates largely because those executives view it as part of doing business.

“Just look at what the Board of Supervisors does,” Simon said. “They make land-use decisions, they let contracts. . . . The interest groups that give the most are those that have the most to gain. That’s the good ol’ American way.”

That’s a premise that bothers many observers, though, especially those who worry that the year-in, year-out dominance of development contributions has made it impossible for candidates and causes opposed by the building industry to have their voices heard.

Tom Rogers, a San Juan Capistrano rancher and slow-growth activist, tried to run for the board, challenging Riley for the 5th District seat in 1978. Rogers raised no money from county development interests--in fact, he got only one contribution of more than $100. He was soundly defeated by the popular Riley, who has long enjoyed strong support in the 5th District.

“There was absolutely no other money out there,” Rogers said. “The development industry controls the contributions in this county, and that’s been terrible. When you ask why Orange County, with all the potential it had, is degrading at the rate that it is, the answer is those contributions.”

Other candidates and potential candidates who have seen development money line up against them agree. In 1990, Westminster Councilwoman Joy L. Neugebauer tried to campaign without relying on the development industry, but she, too, found the pickings slim. She raised less than $30,000 in her effort to oust Supervisor Wieder from office.

Neugebauer and a slate of other contenders succeeded in forcing Wieder into a runoff. But Wieder, who raised more money from development interests than Neugebauer collected from all her sources combined, won easily.

“That money affects the decisions that the supervisors make,” Neugebauer said. “We have critical problems in transportation, air quality and a water shortage, and still you see developers given the green light. . . . You don’t bite the hand that feeds you.”

Supervisors vehemently disagree, and say they vote their consciences on development proposals, regardless of the potential loss of political contributions.

“I don’t like anyone challenging my integrity,” Riley said. “I have never felt any pressure to vote a certain way (because of a contribution), and I don’t think anyone would ever ask me to.”

Similarly, Board of Supervisors Chairman Gaddi H. Vasquez--whose district includes large areas of undeveloped land but who has collected a much smaller percentage of his contributions from developers than Riley has--said he does not believe that accepting donations from any industry taints a supervisor’s voting record.

“A lot of people give to us because they believe in good government, whether those people are developers or contractors or whatever,” Vasquez said. “That’s a component that a computer cannot assess.”

Among political observers who followed the Neugebauer and Rogers campaigns, few were surprised to see that they got so little money from the development community. Like most other sophisticated political players, developers almost always give to officeholders and rarely choose to risk it on a challenger.

Since 1977, development interests have contributed nearly $3 million to incumbent supervisors, compared to $191,000 that they have donated to challengers, The Times’ investigation found. That means incumbents have received more than 15 times as much development money as challengers have.

In addition to overwhelming some candidates who do choose to run, Grossman and others contend that the money often persuades potential challengers that they have no chance of winning. That drives them out of the process altogether, depriving the county of a more open debate on growth-related issues, they argue.

And the supervisors whose war chests are bolstered by that money are the same officials who sit in a position to assist the industry when considering land-use matters or other multimillion-dollar issues involving growth.

“Back when I was the finance director of the county Republican Party, I realized that these people (local developers) did not have the motivation for good government,” Rogers said. “They would support a communist if it would get them their entitlements.”

As development industry supporters and opponents reviewed the findings of The Times’ investigation, both sides agreed on at least one thing: The county would be better off with a broader base of campaign money.

But broadening the political base is not an easy task, nor is it one that can be ordered by policy-makers.

With a few notable exceptions, other local businesses have shown little inclination to dive into local campaigns. The Orange County Chamber of Commerce is much less politically active than chambers in some areas, according to Reed and other observers. And although the county has other major businesses--among them Disneyland in Anaheim, McDonnell Douglas in Huntington Beach and a host of high-tech companies in Irvine--none of those has played a major role in county politics.

Indeed, the development industry does not just dominate political fund-raising. That industry and its captains also are the county’s most visible supporters of the arts, education and many charities.

“It’s almost by default that the development industry dominates here,” Reed said. “But even though that’s true, it’s not true in perpetuity.”

Ironically, he added, the only way to ensure that developers remain unrivaled in their political and economic power here is to discourage growth that would broaden the economy. So allowing growth, which the development industry consistently supports, actually could be the key to dispersing that industry’s influence since only growth can broaden the county’s economic base, Reed said.

Others were unconvinced by that recipe for change, and instead proposed more immediate suggestions: limiting campaign contributions; urging supervisors to wage less expensive races; working harder to tap constituencies that have been overlooked in the past.

“What the Board of Supervisors needs to realize is that the perception is that the development industry owns county government,” Grossman said. “It might take some self-restraint; it’s hard to turn down money. But I think that’s what they need to start doing if they’re going to change that perception.”

Computer research was conducted by Landsbaum. Newton reported and wrote this article.

How This Investigation Was Conducted

Figures for this Dollar Politics report were developed during a 10-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 county registrar of voters, the study identified 19,176 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. Industry categories used for this report were selected to conform with similar studies performed by research organizations and other publications. The nature of a firm or individual’s principal business was the basis for their classification. The computer research was performed by staff writer Mark Landsbaum, while staff writer Jim Newton reported and wrote the stories.

The Sources of Campaign Cash

Industry breakdown of loans and contributions made to candidates for Orange County Supervisor, 1977-91.

Development: 42.3%

General business: 15.7%

Finance: 7.7%

Unidentified: 6.3%

Law: 6.2%

Candidates to Themselves: 5.0%

Political: 3.7%

Labor/Public Employees: 3.7%

Tourism: 3.5%

All other: 5.9%

Who’s Who

Development: $3.7 million. Developers such as the Irvine Co., and builders like the William Lyon Co.; trade groups, realtors, contractors and major landowners.

General business: $1.4 million. Industrial firms, waste haulers, mining companies and others that gave more than 1% of total contributions.

Finance: $678,000. Banks, stockbrokers, insurance interests, accountants.

Unidentified: $550,000. Contributors whose identities could not be determined.

Law: $543,000. Lawyers and law firms.

Candidates to themselves: $438,000.

Political: $324,000. Politicians and groups such as the Lincoln Club.

Labor/Public employees: $322,000. Unions, most notably the Orange County Employees Assn.; also all government workers, including teachers.

Tourism: $307,000. Hotels, theaters and resorts such as Disneyland.

All other: $527,000. Individuals and industries that gave less than 1% of total.

Source: Campaign disclosure statements

Lisa Foster, executive director of California Common Cause

“Those numbers are staggering. . . . The danger is obvious. When you’re dependent on one industry for (nearly) half of your contributions, that’s extraordinary. It certainly suggests that you’d think twice before offending that industry.”

Larry Thomas, the Irvine Co.’s vice president for corporate communications

“We have what I would probably characterize as a corporate ethic of activism in public affairs. We give to candidates who stand for ideas that we share as a general philosophy.”

Development, Real Estate Contributions Dominate

Candidates for county supervisor, especially incumbents, turn more often to the development and real estate industry for their political contributions than they do to any other source.

Top Development and Real Estate Donors

Leading campaign contributors who work in or represent real estate or land development businesses.

Building Industry Assn.: $48,005

* William Cooper: $38,405

Shapell Industries: $36,469

Irvine Co.: $32,191

Mission Viejo Co.: $30,563

William Lyon Co.: $30,214

J.M. Peters Co.: $27,847

Baldwin Co.: $27,815

Pacesetter Homes Pacesetter Real Estate Group: $27,636

Hon Development Co.: $25,883

* Cooper is a local executive with mortgage and real estate interests, but unlike other contributors on this list, his political contributions were personal, not corporate.

Note: Contributions by employees of these companies are not included in their totals.

Incumbents Benefit Most

Development interests, like most contributors, rarely gamble on a challenger. Instead they overwhelmingly give to incumbents

Development money to incumbents: $2,914,247

Development money to challengers: $191,002

* Contributions to the 1986 campaign for an open seat on the board are not included.

Disney’s Dollars

Disneyland and its parent firm, the Walt Disney Co., make big contributions in Washington and Sacramento, but they’re stingier with the Board of Supervisors.

14 years of Disneyland contributions to Orange County supervisor candidates.*: $15,050

4 years of Walt Disney Co. to U.S. Sen. Bill Bradley of New Jersey.*: 78,040

* Both include Disney employee contributions.

“Housewives” Favor...

Contributors who are identified only as “housewives” have made their overwhelming candidate of choice Harriett M. Wieder, the only woman ever elected to the board.

Wieder: $21,491

All other candidates during the past 14 years: $15,928

All four sitting supervisors combined: $8,947

Total “housewife” contributions: $46,366

Irvine Heiress

She is identified in disclosure statements by a variety of titles, including “homemaker,” but millionaire Joan Irvine Smith has long been willing to make generous campaign contributions to supervisorial candidates.

Joan Irvine Smith Total contributions to board candidates: $14,423

Supervisors And Development Industry Contributions

All five supervisors receive a sizeable portion of their campaign contributions from development interests over the past 14 years.

Thomas F. Riley: 57.8%

Development money: $564,775

Roger R. Stanton: 46.5%

Development money: $262,170

Gaddi H. Vasquez: 40.5%

Development money: $210,830

Harriett M. Wieder: 39.4%

Development money: $555,721

Don R. Roth: 39.4%