Finance Laws, Scandals Hit Political Fund-Raisers Hard

These are glory days for California, with Silicon Valley sizzling, Hollywood humming and the unemployment rate skipping to its lowest level in seven years.

But times are tough for Kristin Hueter, who finds herself working longer and harder just to pull in the same money she was making a year or two ago.

Hueter is not a refugee from the welfare rolls or a victim of corporate downsizing. She is a political fund-raiser, toiling in the toughest environment many in her profession--Democrat and Republican alike--have seen in years.

A combination of upbeat economic times, placid politics and a steady diet of campaign-finance scandals has caused many donors nationwide to pull back and snap their checkbooks shut. In California, additional factors, including new restrictions on giving and uncertainties about what candidates are seeking which offices, have created an especially adverse fund-raising climate.

As a result, several statewide candidates have been forced in recent weeks to deny rumors that they plan to quit their races or jump into alternative--and presumably less costly--contests. Those most prominently mentioned--Democratic gubernatorial hopeful Gray Davis and Republican Senate candidates Matt Fong and Susan Golding--all insist that they have no intention of abandoning course.

But their difficulties suggest that California--long seen as a fountain of wealth waiting to be tapped by a flood of ambitious politicians--may be entering a new era of donor scarcity. If so, the advantage could shift dramatically to candidates like multimillionaires Al Checchi, a Democratic gubernatorial hopeful, and Republican Darrell Issa, a candidate for the U.S. Senate, who have the financial wherewithal to pay their own way.

At this point in the 1992 campaign, candidates for California’s two U.S. Senate seats had already raised $11.5 million, despite the state’s worst recession in decades. This time around, only one seat--Democrat Barbara Boxer’s--is up in November. Still, Boxer and her main challengers have raised just over $4 million--about a third of the amount collected at this stage six years ago.

Figures from the last governor’s race are even more revealing.

Four years ago, incumbent Republican Pete Wilson raised $3.3 million from Jan. 1 to June 30. This year, under the new restrictions of Proposition 208, candidates could not begin raising money until June 2, one year before the 1998 primary. Republican Atty. Gen. Dan Lungren collected $550,000 and Davis about $200,000 in the 28 days ending June 30, their most recent campaign-finance reports showed. Despite that start, neither is expected to raise anywhere near Wilson’s $3 million by the time their year-end statements are released next month.

“It’s very difficult right now,” said Laurie Black, a Democratic fund-raiser in San Diego. “People aren’t just zipping off $1,000 checks the way they once did.”

From the candidates’ perspective, the biggest change has been Proposition 208. The campaign-reform initiative, passed by California voters in November 1996, prevents statewide candidates from accepting more than $1,000 from any one giver. Gone are the days when a single generous donor could write a check for $10,000, $50,000, $100,000 or more. To collect those sorts of sums, a candidate, or his or her proxy, must get maximum contributions from 10, 50 or 100 donors.

“So you’re working 10 times as hard to get the same amount of money,” said Hueter, a San Francisco-based Republican fund-raiser.

Further complicating matters, Proposition 208 remains tied up in federal court in Sacramento, as opponents challenge its constitutionality. “The campaign-finance laws are so encumbering and unclear that a lot of people don’t want to bother,” Hueter said. “They don’t want to break the law, they don’t know exactly what the law is, therefore it’s easiest for them simply not to contribute.”

Until recently, it was also unclear whether candidates would be subject to the term limits approved in 1990 or whether voters would be able to participate in the open-primary system they approved last year. Recent court rulings suggest that both laws will be in place for 1998--unless the U.S. Supreme Court decides otherwise.

The uncertainty is further compounded by the question of whether Democratic U.S. Sen. Dianne Feinstein will run for governor. As the front-runner in opinion polls, she could set off a chain reaction up and down the ballot as candidates reassess their prospects--which gives would-be contributors another reason not to sign any checks just yet.

There is more to the fund-raising slump, however, than a single candidate’s equivocation or even the wholesale revision of the state’s campaign-financing rule book.

After all, Proposition 208 applies only to elections for state offices. For candidates seeking places in the U.S. House or Senate, the laws haven’t changed in more than 20 years. Candidates can accept $1,000 per donor in the primary and another $1,000 for the general election, plus $5,000 for each race from political action committees. So for incumbent Boxer and for Fong and Golding, Proposition 208 is irrelevant.

Their fund-raising difficulties have been more closely tied to the campaign-finance investigations that have consumed Washington for much of the past year--and apparently persuaded many potential donors that it is better to not give than to receive the unwanted attention that could follow.

“The issues raised around Asian fund-raising, around the White House coffees, communicate a very clear message to would-be contributors,” said Darry Sragow, a veteran Democratic operative. “It is: ‘If I give money, I’m probably worse off. I might see my name in the paper, my motives are going to be suspect. So I’m better off keeping out of it.’ ”

Sragow, who is helping to run Checchi’s gubernatorial campaign, has the luxury of sitting out the money chase. But others, operating at full tilt, agreed that the revelations of abuses in the 1996 campaign “have brought a taint to the whole process,” as Democratic consultant Scott Shafer put it.

“It’s given a lot of people pause about whether or not they want to get involved,” said Shafer, whose San Francisco firm represents several candidates at the state, federal and local levels.

The other side of that coin, paradoxically, is a feeling of relative contentment and a sense that many of the day’s big political issues have been settled, for now anyway.

Without big fights over matters such as abortion, term limits or a balanced budget, “you have fewer issues to motivate people around than you did before,” Shafer said. “It’s hard to get people motivated about the status quo.”

In short, when times are good, fund-raising is bad--or at least not as good as when voters see cause to rant and rage.

Some frustrated fund-raisers suggest, or at least hope, that things will improve when people start paying more attention to politics as the campaign season picks up. With the new year comes the promise of new crises, new evils, new urgency--something to snap the drowsy donor community out of its stingy somnolence.

“Most people really only think about elections in June and November,” said one Democratic fund-raiser in Los Angeles. “The rest of the year they’re pretty apathetic, and that goes for givers too.”

Until then, the pick-and-shovel work continues. Laments San Diego fund-raiser Laurie Black: “The caviar and champagne days of big givers are definitely over.”