Secretive Group Is Major Supporter of Term Limits : Election: Organization, which has ties to Libertarian movement, has given $678,000 to promote Prop. 164.

TIMES STAFF WRITERS

More than 40% of the funds behind California's proposition to limit congressional terms is coming from a secretive group in Washington that has ties to major figures in the Libertarian movement.

The organization, U.S. Term Limits, has spent $678,000 in California so far, including $455,000 in the past nine days, to push Proposition 164, a measure championed by former Los Angeles County Supervisor Pete Schabarum.

In all, two California campaign committees backing the term-limit measure have received a total of $1.64 million in donations. By itself, U.S. Term Limits gave $455,000 to one of the committees, Schabarum's Limit Congress, in the 11th-hour cash infusion.

U.S. Term Limits gave another $200,000 to a separate committee run by the group founded by the late anti-tax crusader Paul Gann, but a top official in that organization told The Times he became wary of the Washington group and is distancing himself from it.

The Washington organization has spent hundreds of thousands more in other states that have ballot measures to limit congressional terms this fall. Earlier this week, U.S. Term Limits kicked in $150,000 in support of a Michigan ballot measure to limit congressional terms.

In California, opponents and at least one leading supporter of Proposition 164 said they believe that U.S. Term Limits has links to billionaire brothers David and Charles Koch of Wichita, Kan.

The Koch brothers, whose fortune is based on oil, operate Koch Industries, the nation's second largest privately held company. The Koch brothers (pronounced coke) long have been associated with conservative and Libertarian causes and are strong advocates of term limits.

"I have no idea, and I frankly don't care," Schabarum said when asked who was funding U.S. Term Limits.

Jeff Langan, spokesman for U.S. Term Limits, said the Koch brothers have donated no funds to his group. But he acknowledged that his organization uses promotional literature, mailing lists and other items from a campaign committee that the Koch brothers funded to push term limits.

"We are up against major opposition," Langan said, declining to divulge where U.S. Term Limits is spending its money, or how much its major donors have contributed to it.

"What we're not going to do is put out a road map for the special interests and career politicians (saying) 'Here's what we've been able to raise, and this is where it's going.' "

Riff Yeager, spokesman for Koch Industries, said the Koch brothers have "absolutely no direct participation in the California effort," or any of the other term-limit measures.

"They've moved onto other things," Yeager said.

David and Charles Koch's fortune is estimated by Forbes at $3 billion. They are the sons of Kansas oil man Fred Koch, a founding member of the ultraconservative John Birch Society. David was the 1980 vice presidential candidate on the Libertarian ticket.

The brothers have made news over the years, becoming embroiled in a bitter dispute with two other brothers over the family money, and they have had major confrontations with the federal government. More recently, they were targets of fierce attacks when their involvement was revealed in a move to limit congressional terms in Washington state last year.

Libertarians run candidates for state and federal offices on a platform that calls for a free market approach to economics, repeal of taxes, an end to government regulation of industry, and the abolition of laws against drugs, obscenity and prostitution.

Under California law, U.S. Term Limits is not required to disclose the names of people who donated to it. It is merely registered with the secretary of state as a major donor and must identify to whom it donates.

Since it gives no money to federal candidates--the congressional term-limit measures are state ballot issues--U.S. Term Limits is not covered by federal law, which would require that it identify its benefactors.

A Times poll earlier this week showed Proposition 164 leading by a 2-1 margin. So far, foes of the measure, including Common Cause, the Sierra Club and the League of Women Voters, have raised about $100,000.

"They have taken advantage of every loophole in state and federal disclosure laws to keep the public in the dark about their source of funding," said Kim Alexander of California Common Cause. "We would hope that the Proposition 164 proponents wouldn't accept (this money) without knowing where that money originated."

In addition to the mystery over the source of the funds flowing into the campaign, there are unanswered questions over the measure's authorship. In Los Angeles, Schabarum takes credit for being the co-author of the initiative.

But the measure on the ballot is not his. Its stated author, according to the secretary of state, is Anita Anderson, who manages a small libertarian bookstore in San Francisco.

Anderson's bookstore is owned by a corporation whose board includes the wife of the president of U.S. Term Limits, Howard Rich, a New York businessman who also has been involved in Libertarian politics.

Rich sits on the board of the Institute of Humane Studies, a conservative think tank in Virginia. Charles Koch is chairman of the board, and has endowed it with $2 million, according to a recent article in the National Journal.

Schabarum said a measure he had been pushing is "very similar" to what appears on the Nov. 3 ballot. "As matter of fact," he said, "there is only a couple of deviations."

Schabarum's measure had sought to create a constitutional amendment, while the measure before voters Tuesday would create a statute limiting congressional terms. Schabarum also sought to limit congressional service to eight years. The measure before voters would limit service to six years.

U.S. Term Limits first became a player in California politics when it contacted the California Committee to Limit Terms, a campaign committee formed by People's Advocate, the organization set up by Paul Gann.

In a letter dated Jan. 30, U.S. Term Limits President Rich promised Ted Costa of People's Advocate that his group would donate $200,000 to gather signatures to qualify the measure for the November ballot. In exchange, the letter said, People's Advocate would be the lead spokesman for the measure.

"Obviously, fund raising is essential to this whole process, and we both agree that we will need a substantial media budget," Rich's letter said.

While Costa accepted the money, he also responded coolly to the arrangement, insisting to Rich that his organization had to maintain its independence. Now, he noted, he no longer is receiving funds from U.S. Term Limits. Rather, the recent funds are going to Schabarum's group.

"What a goddamned mess," Costa said when asked about U.S. Term Limits. "I wished I knew who they were. . . . "

Costa noted that it "was common knowledge" that the Koch brothers had "bankrolled" the pro-term limit organization, Citizens for Congressional Reform, which took the lead in financing the unsuccessful congressional term limitation initiative in Washington state last year.

Citizen's for Congressional Reform was pushing a similar initiative this year in Michigan, spending $200,000 to qualify it for the ballot. But Citizens for Congressional Reform folded as elections officials in that state asked for information about its source of funds.

As Citizens for Congressional Reform folded, U.S. Term Limits became more prominent, raising speculation among many, including Costa, that it was the Kochs' new vehicle for pushing term limits. Citizens for Congressional Reform transferred its promotional literature, desks, computers and mailing list to Rich and U.S. Term Limits.

"We wanted the separation, but we also wanted the assets to be used wisely," said Paul Beckner of Citizens for a Sound Economy, the chair of which is David Koch. Citizens for a Sound Economy is the parent organization of Citizens for Congressional Reform.

Morain reported from Sacramento and Bornemeier from Washington.

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