Big Business Gifts Help Beat Two Initiatives, Report Says : Elections: Huge infusions of company money were cited in the defeat of measures in Torrance and Rancho Palos Verdes.

A study by a private bipartisan organization concludes that large contributions from powerful business interests helped defeat at least two South Bay ballot initiatives in recent years, illustrating the group’s call for reform of the referendum process.

The South Bay cases were among 40 campaigns studied in a 407-page report called “To Govern Ourselves: Ballot Initiatives in the Los Angeles Area,” released Wednesday by the California Commission on Campaign Financing. The commission is a private, nonprofit group of two dozen civic leaders studying how best to reform campaign financing at all levels of the state.

According to the report, the defeat of ballot initiatives in Torrance and Rancho Palos Verdes was due in large part to huge infusions of money from companies the referendums targeted.

In Torrance, the report says, Mobil Oil spent more than $741,000--more than $53 per vote and more than 12 times what proponents could muster--to defeat a 1990 proposition that would have forced the company to stop using highly toxic hydrofluoric acid.

During the previous year, local land development and real estate companies in Rancho Palos Verdes formed a $148,000 juggernaut--just under $11 per vote--to defeat a community-sponsored view protection ordinance and pass a City Council-sponsored alternate measure. Proponents of the community measure raised less than $1,000 for their campaign, the report noted.

The report’s authors cited both cases as examples of local campaign spending run amok.

“Torrance and Rancho Palos Verdes ballot initiative trends of huge contributions, high spending per vote and successful one-sided spending closely parallel--and in some cases far outpace--those of multimillion-dollar statewide initiatives,” said the commission’s co-chair, Frank Wheat, former Securities and Exchange Commissioner and an advisory partner with Gibson, Dunn & Crutcher.

Researchers who spent two years working on the report said the two South Bay campaigns were among the most notable in California.

“These campaigns were astonishing, both in the total amount of money spent and in the way the money was spent,” senior commission researcher Matt Stodder said. “We saw total saturation by the opposition in both those campaigns.”

Mobil’s campaign was the only one to spend a sizable amount of money--$130,880--on television advertising, Stoddard noted. Although the ads ran on local cable channels, Stoddard said, the expense marked a disturbing shift away from the low-cost, low-key city campaigns that used to mark the local initiative process.

“You have a situation, if this continues, where the cost of access to the initiative process becomes higher,” he said. “An initiative industry starts to form, and what used to be and should be easily accessible to the citizens . . . becomes much too high-priced. It becomes reserved for people who can afford to get on the ballot and who can afford to run these big campaigns.”

Commissioners made several suggestions to reform the local initiative process.

The two biggest funding sources should be listed in all television and radio ads, as well as all direct-mail pieces, the report concluded. In addition, petitions used to gather signatures qualifying a measure for the ballot should list the names of the two biggest donors.

The report also suggested that local governments should hold public hearings on an initiative within 30 days of its qualification for the ballot and that elected officials should be allowed to amend a measure approved by voters as long as the amendments do not conflict with the intent of the measure.