Initiatives Would Cap Campaign Donations

By MARK GLADSTONE

Oct. 6, 1996 12 AM PT

TIMES STAFF WRITER

SACRAMENTO —

When political reformers call, California voters will probably listen.

Voters have a tradition of embracing efforts to cut the influence of big donors--from Hiram Johnson riding into the governor’s office in 1910 by pledging to slam the door on “political machines or special interests” to Jerry Brown sharpening his reform credentials and winning the state’s top job in 1974.

Californians exhibited so much enthusiasm for changing the system in 1988 that, as a Capitol racketeering scandal erupted, rival measures to toughen campaign laws were approved.

But the two proposals were largely invalidated by court challenges, prompting a new wave of reform efforts.

On Nov. 5, Californians once again will be asked to decide on a pair of competing initiatives, Propositions 208 and 212. Each promises sweeping changes by restricting donations to--and spending by--candidates pursuing elective office, from city halls to the statehouse.

“Voters are way ahead of the politicians. They know the impact of big money on politics. Both [initiatives] are attempting to reform the system,” said Robert M. Stern, co-director of the Los Angeles-based nonprofit Center for Governmental Studies who advised supporters of both initiatives.

Proposition 208, favored by Stern, takes a more modest approach, one its backers say would withstand expected court challenges.

“Our measure doesn’t demonize politicians,” said Ken Masterton, campaign manager for Proposition 208, which is supported by Common Cause. “These people we send to Sacramento aren’t evil people . . . it’s the system that corrupts good people.”

Doug Phelps, a leader in the Proposition 212 campaign, said his initiative seeks to overturn a U.S. Supreme Court case that invalidated mandatory spending limits and reshape a California political culture dominated by TV spots and targeted mailers.

“It’s aim is to get rid of . . . what politics has become,” said Phelps, chairman of United States Public Interest Research Group, whose California chapter (CalPIRG) is behind Proposition 212.

“It’s all about money and how much money you can raise. . . . Average voters are totally disenfranchised, and the process is totally about marketing, like marketing soda pop.”

With little organized opposition, there is a widespread belief in the Capitol that both measures will pass. But critics describe the initiatives as unworkable and urge their defeat.

Although California may be the only state with dueling campaign reform initiatives, it is not alone in considering revisions to political financing systems.

There are reform measures on the ballots in Colorado and Maine. The measure in Maine is particularly tough and would provide public funds to candidates who forgo private campaign donations.

The push to reform California’s system comes in the wake of an FBI sting operation in the state Capitol that led to the indictment and conviction of 12 public officials. By the time it ended in 1994, the probe provided Californians with a rare glimpse at how fund-raising can corrupt politicians and public policy.

At the core of Propositions 208 and 212 is their supporters’ belief that the state’s political system has lost its integrity. It has become, they contend, too tilted in favor of big business and large labor unions with huge amounts of campaign cash that can be used to gain the ear of politicians and influence government decisions.

Propositions 208 and 212 have many similarities because they spring from negotiations among reformers who initially tried to craft a single measure.

Among other things, they each seek to put a lid on campaign contributions and skyrocketing expenditures, limit off-year fund-raising, prevent transfers of funds from one candidate to another, and prohibit lobbyists from making or arranging contributions.

Under Proposition 212, contributions would be limited to $200 for statewide offices and $100 for other races. Only 25% of the funds could be raised outside of a legislative district.

Under Proposition 208, individuals, businesses and labor groups could contribute $250 to legislative and local races, and $500 to statewide campaigns. If voluntary spending limits were accepted by candidates, contributions could be doubled.

Backers of Proposition 212 say the schism among reformers--which has triggered an increasingly bitter war of words--is rooted in the voluntary spending limits provision.

“That was the sticking point,” Phelps said. “It [voluntary spending limits] moves in the opposite direction we want. It gives an advantage to the person with the fat cat donors.”

Proposition 212 seeks a mandatory spending cap.

A mandatory spending limit would directly challenge a 20-year-old U.S. Supreme Court decision that knocked out mandatory spending caps.

Under Proposition 212, spending in a gubernatorial campaign would be limited to $7 million, compared to a voluntary $14 million under Proposition 208, according to a review by the independent legislative analyst. In 1994, Pete Wilson spent $26.2 million to get reelected as governor.

Masterton, the Proposition 208 campaign manager, said his group questioned the need for mandatory spending caps, which directly challenge court cases.

“CalPIRG, in our opinion, wants to grandstand. Do you charge up the hill, knowing all the soldiers will die?” asked Masterton, maintaining that the group would face an uphill fight in the courts.

So far, the campaign has been intense but low-key, marked by cable TV debates, newspaper advertising and a flurry of news releases and reports highlighting the need for reform, especially CalPIRG or Common Cause’s particular brand of reform.

Each side in the debate sees its solution as the best way to overhaul the system.

CalPIRG contends that its initiative is the only one that will end the domination of special interests.

But backers of Proposition 208 note that Proposition 212 allows groups to bundle small contributions so they can give as much as $20,000. This, they contend, provides a boost to labor unions.

In the summer, the sparring spilled into court when proponents of Proposition 208 unsuccessfully sought to get Proposition 212 tossed off the ballot.

They contended that supporters omitted key details in their petitions to win a place on the ballot, particularly a provision that would repeal laws limiting gifts and banning speaking fees for public officials. Those restrictions were imposed by voters in the wake of the FBI corruption probe.

Backers of Proposition 208 say this provision “reopens the door to blatant corruption.”

Phelps dismissed the issue as trivial, saying gifts and speaking fees total less than $200,000 a year.

The attacks have provided ammunition to critics of both initiatives. Opposition is being voiced by the California Chamber of Commerce and some campaign consultants whose livelihood is tied to election spending.

The opponents fret that under restrictions in both initiatives, candidates won’t be able to reach voters with their messages, a view echoed in a recent study by the Citizens Research Foundation at USC.

In their report, Herbert E. Alexander and Jeremy Wood concluded that “campaigns need money to communicate with voters and, by making it harder and more expensive to raise funds, lower contribution limits would increase the extent to which candidates would be engaged in fund raising.”

If both measures are approved, they said, the courts will void the low contribution limits in Proposition 212 and will strike down some provisions in Proposition 208, leaving an unworkable political finance system.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Campaign Finance Reform

Propositions 208 and 212 would make sweeping changes in how much money could be raised and spent in political campaigns. Here are some of the differences:

CONTRIBUTION LIMITS

* 208: Up to $500, but doubles if candidate accepts spending cap

* 212: Up to $200

SPENDING LIMITS

* 208: Voluntary

* 212: Mandatory, unless invalidated by the courts

OUT-OF-DISTRICT DONORS

* 208: No limits

* 212: Prohibits more than 25% of donations from outside district

SMALL DONOR COMMITTEES

* 208: Could give up to twice the limit for individuals

* 212: Could give up to 100 times the limit for individuals