Campaign Fight Nears Spending Record

The fierce battle over Proposition 211--the securities fraud lawsuit initiative--is nearing a spending record for a single California ballot initiative, official records showed Wednesday.

Reports filed with Secretary of State Bill Jones indicate that the fight over Proposition 211 is close to eclipsing the record $37.5 million spent on a single initiative in 1988.

The documents disclosed that nearly $32 million has been spent so far this year by supporters and opponents through Sept. 30. With both sides saying they aren’t through yet, the amount raised and spent is certain to increase in the final four weeks before the Nov. 5 election.

The record in California is held by Proposition 104, a 1988 no-fault auto insurance proposal sponsored by the insurance industry. It failed.

Proposition 211 would make it easier for shareholders to prevail in certain lawsuits against companies whose stocks are subject to volatile shifts in the market.

Backers of Proposition 211--including key supporter William Lerach of San Diego, a fraud plaintiffs’ attorney--have reported spending $6.5 million so far this year.

They were heavily outspent by opponents, many of them nationwide businesses, who poured at least $26.7 million into the anti-Proposition 211 campaign. At least $25.3 million has been spent on a barrage of television and radio advertising.

“Because Proposition 211 is so deceptive, it requires an effort of this magnitude to expose the truth,” said John H. Sullivan, co-chairman of Taxpayers Against Frivolous Lawsuits, chief opponent of the measure.

Opponents argue that Proposition 211 would make California a “mecca” for aggressive out-of-state lawyers who are now prohibited from filing such fraud lawsuits in federal courts.

Supporters claim Proposition 211 would give retirees and others a better shot at getting justice when their investments are soured by incompetent or fraudulent business managers. “We don’t have to spend as much money as they do because our message is much more powerful than theirs,” said Sean Crowley, spokesman for Citizens for Retirement Protection and Security, sponsors of the initiative.

Contributors to the anti-Proposition 211 campaign include many Silicon Valley high-tech companies who are often a target of Lerach’s lawsuits. Joining them is the California Chamber of Commerce, national corporations and major Wall Street businesses.

Meanwhile, incomplete reports arriving at the secretary of state’s office disclosed vigorous spending on other propositions as well, ranging from issues of affirmative action and political campaign reform to taxes and marijuana.

Backers of Proposition 209, the initiative backed by Gov. Pete Wilson to abolish affirmative action in government programs and college admissions, reported contributions of $2.6 million, including $1.3 million raised in the past three months.

The most generous donors included such out-of-state benefactors as financier Richard Scaife of Pittsburg, John W. Uhlmann of Shawnee Mission, Kan., and the Windway Capital Corp. of Shebogan, Wis. Each gave $100,000.

In California, the state Republican Party gave the campaign $159,000.

“We feel good about our opportunities to pass this initiative,” said campaign spokeswoman Jennifer Nelson.

Opponents of Proposition 209--who raised at least $1.4 million--split their fund-raising among 23 separate committees.

One major opposition committee, No on 209, reported raising $906,386, including a $10,000 donation from attorney Johnnie L. Cochran Jr. of Los Angeles. The Feminist Majority Foundation of Los Angeles made the biggest single contribution, $106,014.

Another key committee, the Campaign to Defeat 209, listed contributions of $256,973. Other contributors to the opposition campaign included the American Civil Liberties Union, various college professors, government employee unions and attorneys.

On the pair of competing political reform initiatives, Propositions 208 and 212, which both seek to reduce the influence of special interest money, supporters of Proposition 212 held a substantial fund-raising advantage over backers of rival Proposition 208.

The California Public Interest Research Group (CalPIRG), sponsor of Proposition 212, reported raising $1.2 million and spending nearly all of it. Most donations came from CalPIRG members, a spokesman said.

Backers of Proposition 208 said they raised $664,482 and spent about half of it as of Sept. 30. Included among contributors was a $10,000 donation from the Hewlett Packard company. Initiative sponsors include Common Cause, League of Women Voters and the American Assn. of Retired Persons.

Sponsors of Proposition 215, which would allow the medical use of marijuana when recommended by a physician, reported contributions totaling $1 million, including a $50,000 loan from George Zimmer, owner of the Men’s Wearhouse clothing stores.

Times staff writer Max Vanzi contributed to this story.