Eu Weighs Fines for Donors to Wilson Race

Secretary of State March Fong Eu began investigating Thursday whether at least 66 wealthy contributors to Gov. Pete Wilson’s election campaign should be fined for failing to report $860,000 in donations.

Anticipating that the donors would be fined about $250 each, the Wilson campaign committee intends to pay the estimated $15,000 fine on their behalf because it concedes that it was negligent--not Wilson’s supporters.

The governor’s campaign committee had reported the donors’ names and contributions to the secretary of state as required by political reform laws. However, the committee conceded that it failed to also notify the contributors that they must quickly report the same contribution.

“Every case will be reviewed with respect to the circumstances,” said Tony Miller, chief deputy to Eu, who is empowered to levy fines for failure to promptly report political contributions. “If there is a major donor who should have known better, that fact will be considered.”

Eu’s investigation is a spinoff of a decision last week by the state Fair Political Practices Commission, which ruled that Wilson and his 1990 gubernatorial committee failed to properly and quickly report $7.4 million in contributions and expenditures.

The violations occurred during the crucial final weeks of the race against Democrat Dianne Feinstein.

In the first such action against a governor, the commission fined Wilson and his campaign organization $100,000 in a negotiated settlement.

The commission gave the secretary of state the names of 66 people who made contributions to Wilson’s campaign, some of them veteran donors who were identified as “potential and possible” contributors who had failed to file individual reports.

Contributors included such sophisticated corporate entities as Atlantic Richfield Co., Shell Oil Co. and E&J; Gallo Winery, in addition to many individual financial backers. None of these contributors or several others returned a reporter’s calls seeking comment.

Miller said the requirement that both the political committee and the individual donor report the contribution, while redundant, is important so that the public has access to a “convenient format of who the major hitters are.”

For typical first-time offenders, Miller said, the secretary of state issues a $250 fine, although the law allows her to charge up to $10 per day for each day the contribution goes unreported. Depending on the case, she also can reduce or waive the fine.

In February, Eu assessed a record $3,560 fine against Frank G. Wells, president of the Walt Disney Co. He did not file timely reports on contributions of $1 million in 1990, most involving support of a forest protection ballot initiative.

As part of the settlement of the Wilson case, the campaign accepted responsibility for failing to notify the major contributors and agreed to pay $15,000 in fines on their behalf if Eu issues her standard penalty.

“It’s not really their fault; it’s our fault,” said Vigo G. Nielsen Jr., a private attorney representing the governor and his campaign committee. He said various committee officers mistakenly believed somebody else was making the required notification when no one was doing so.

Miller said it is relatively common for a committee to pay the fines of individual contributors, but it is rare for a political organization to post money for the fines in advance. He said some Feinstein contributors already have been fined for failure to report.

Nielsen said the mix-up occurred in part because six weeks before the November, 1990, election, a federal court judge struck down a state limitation on campaign contributions for statewide office. This touched off a major race between Wilson and Feinstein for donations.