Prop. 211 Money Going to Fight Other Measures

In an eleventh-hour surprise, the well-stocked campaign to defeat the securities fraud lawsuit initiative on Tuesday’s ballot has poured at least $2.3 million into defeating two other propositions.

The targets are Proposition 217, which would raise income taxes on the wealthiest Californians, and Proposition 207, which would restrict the Legislature’s power to regulate attorney fees.

The avalanche of late contributions was made during the past few days by Taxpayers Against Frivolous Lawsuits, a business-backed campaign group opposed to Proposition 211, the securities fraud measure.

The organization has given at least $1.3 million to a committee opposed to Proposition 217 and $650,000 to an anti-Proposition 207 committee.

Taxpayers Against Frivolous Lawsuits has reported raising at least $36.7 million this year with more flowing in each day. By contrast, the low-budget Yes on Proposition 217 campaign has reported raising only $2.7 million.

Backers of Proposition 217 charged Thursday that the last-minute contributions by their opponents hid the identities of the actual donors in violation of state disclosure laws.

Dario Frommer, state director of the Yes on Proposition 217 campaign, claimed that the anti-Proposition 211 campaign “laundered” its anti-217 funds to conceal the identities of its donors and also failed to tell anti-211 donors that their contributions would be spent on other campaigns.

Kirk West, co-chairman of Taxpayers Against Frivolous Lawsuits, defended the expenditures in a written statement. He said “many contributors” to the anti-211 campaign requested that some of their money be spent to fight Propositions 217 and 207 if the committee accrued “excess funds.”

Last month, Secretary of State Bill Jones warned that a loophole in the law has enabled general recipient committees to avoid specific identification of donors.

Frommer said the anti-211 group is not such a committee and should identify the source of its money.