Council Places Restriction on Public Aid in Mayoral Race : Politics: Measure will prohibit distribution of taxpayer money to candidates who spend more than $2 million on campaigns.

Forcing the city’s mayoral candidates to quickly rethink how to fund their campaigns, the Los Angeles City Council on Friday voted to deny public funds to candidates who spend more than $2 million on the April primary.

By a 9-5 vote, the council directed its attorneys to draft an ordinance to impose the prohibition, authored by Councilman Joel Wachs, a mayoral hopeful.

“This is a victory for the people who voted for ethics reform,” Wachs said, clearly moving to position himself as the champion of the issue among mayoral candidates.

A final vote on the proposal is expected soon, although no date has been set. Mayor Tom Bradley, who would have veto power, has not disclosed his position on the issue.

But the measure--suddenly a factor within a week of Wednesday’s opening of filing for the mayoral race--could force candidates to face a tough decision: Do they turn down up to $667,000 in public financing or adhere to a $2-million limit that might hurt their ability to compete against millionaire candidate Richard Riordan, who has said he will spend more than $2 million?

“I would say the candidates have got their financial strategy charts out on the table now and are trying to figure out what to do next,” said Benjamin Bycel, executive director of the city’s Ethics Commission.

Wachs introduced his measure to close what he called a loophole in the city’s campaign reform law that would allow a mayoral candidate to get public financing while exceeding the spending limit.

The law as written set the $2-million limit as a condition for candidates seeking public funds. But it provided an exception if a “rich candidate” emerged who rejected the tax dollars and filed notice of intent to exceed the limit. In that case, other candidates could also raise more than the $2-million limit while keeping any public financing they had received.

The exception became a real issue after Riordan indicated he would not accept public money and would spend more than $2 million.

Wachs said the loophole made a “mockery” of efforts to control rampant spending and the influence of special-interest contributors. He also accused fellow councilman and mayoral candidate Michael Woo of being a hypocrite for calling himself the author of ethics reform while vowing to match whatever Riordan spends.

Vicky Rideout, Woo’s campaign manager, scoffed at the notion that Wachs had won the moral high ground with Friday’s vote. “Having a bunch of politicians change the rules in the middle of the games . . . in my view that’s just politics as usual,” she said, contending further that the Wachs measure will only make it easier for wealthy candidates to buy the election.

Rideout said she did not know what route her boss would take: accept the public money and the spending limit or refuse the money and get into a fund-raising war with Riordan.

Assemblyman Richard Katz (D-Panorama City), another top-seeded mayoral candidate, also is uncertain about what to do, according to Peter Taylor, his campaign manager.

Councilman Nate Holden, also a candidate, supported Wachs’ motion and said he believes he can remain competitive with Riordan, even under the spending restraints. “People know that City Hall is not for sale,” Holden said.

California Common Cause and the city’s Ethics Commission opposed the Wachs proposal.

“The purpose of the public financing system is to enable candidates to reduce their dependence on large contributors and still be able to run a viable campaign,” said Cecilia Gallardo, field director for California Common Cause. “Under Councilman Wachs’ proposal, accepting public financing becomes punitive.”

In a related matter, the council shelved a proposal to put a measure on the April ballot to lift the $1,000-per-donor campaign contribution limit if any mayoral candidate spends more than $30,000 of his or her own money.

“If we don’t change this charter, you’re saying the mayor’s office is open to the highest bidder,” said Councilman Zev Yaroslavsky, who authored the proposal. But critics, including Common Cause, said it would undermine an intent of the ethics law--to lessen the influence of special interests on government--because such donors then could contribute large sums.