Wall St. Rings the Bell on Political Contributions : Campaign giving: Big firms will shun state and local races, a precedent that other special- interest groups should follow.

Cease-fires, whether between street gangs or warring nations, are never easy to arrange. Last week, a remarkable cease-fire was called between warring interests, involving not bullets but campaign contributions. Their battles are for access to and influence over the politicians who with the flick of a pen can make or lose them millions of dollars.

In New York City, of all places, 11 heavyweight donors, such as Merrill Lynch, Smith Barney Shearson, Paine Webber, Lehman Brothers and Goldman, Sachs voluntarily put down their checkbooks and just said no to political contributions for state and local offices. There are predictions that the moratorium will become permanent.

For years, the largest brokerage firms in the nation, which make the most money from selling state and city bond issues, have donated millions of dollars to state and local candidates who influence decisions about underwriting business.

“This is the equivalent of the Berlin Wall coming down,” one story quoted Hank Morris, a New York media consultant. “This lowers the pool of money out there, and is a step toward a level playing field for the ins and outs and underdogs and front-runners.”

Why would companies who fiercely compete with one another for access and influence ban together to stop forking over money to politicians? Are they running out of money? Hardly.

Recent scandals, one involving New York City’s comptroller, have caused the bond-industry leaders to be concerned about their industry’s reputation.

“When it gets to the point that people feel it doesn’t look right and might undermine the integrity of the business, we should get together to change it,” said David Clapp, the new head of the Municipal Securities Rulemaking Board.

It took leadership, cooperation and, as one executive said, “a major mind-shift” for the bond industry to realize that it was in control and not the politicians.

Could this “mind-shift” be contagious? Will other special-interest groups, such as the nation’s health-care providers, ban together and stop mailing contributions to politicians?

We hope so. Large campaign contributions remain the single most corruptive force in American politics. Thursday’s court testimony in Sacramento by former state Sen. Alan Robbins, convicted of corruption, is an example, perhaps extreme, of the insatiable appetite of some politicians for campaign funds. Like the plant that thirsted for blood in “The Little Shop of Horrors,” campaigns demand more and more money.

This raging appetite will be evident in next year’s California elections. With at least seven hotly contested statewide races, contributions will zoom into the tens of millions of dollars. Already two Democratic candidates for governor have raised millions of dollars.

We can all do something to stop this political madness.

* Politicians can voluntarily agree to place a limit on the contributions they will accept.

* Competing special interests can agree to just say no to politicians dialing for dollars.

* Voters can refuse to support candidates unless they pledge to support limits on campaign contributions.

* The media can cover campaign finance as a major issue in next year’s races.

Without these changes, the public political debate on almost every important issue, ranging from gun control to health care, will be undermined by the access and influence that big donors have on decision-makers.

It’s time for all of us to say no.