Funding Exemption for Recall Questioned

When California voters approved a campaign finance reform initiative last fall, they hoped to weaken the pervasive influence of big money on local elections, not invite record-setting contributions.

But that is just what has happened in Thousand Oaks, where an unusually expensive recall--a political process now exempt from Proposition 208--has been raging since January, dividing neighbors and community leaders.

Using paid petitioners and a blitz of radio, television and direct-mail advertising, the Yes! Remove Elois Zeanah committee has spent more than $288,000 to force a Nov. 4 election to oust the outspoken councilwoman, whose current term expires next year anyway.

Two groups formed to defend Zeanah have also ratcheted up their campaign spending, collecting about $100,000, including a $50,000 contribution from a local attorney.

It is by far the most ever spent on a City Council race in this quiet suburban enclave of 114,000 residents.

Most of the anti-Zeanah committee’s money--more than $219,000--has come from a single person: Jill Lederer, the owner of a chain of Domino’s Pizza shops in the Conejo and San Fernando valleys.

Under Proposition 208 and its strict $250 limit on contributions, Lederer would be banned from giving even 1% of that amount in a regular election.

Concerned that the Thousand Oaks recall fight has exposed a loophole in the new law, the initiative’s backers are asking the state watchdog agency charged with implementing the measure to reconsider its decision declaring recall elections exempt.

The Fair Political Practices Commission decided that recalls are not affected by Proposition 208 because such elections fall into the category of ballot measure campaigns.

But the reform initiative’s authors and proponents contend the exemption was a mistake that has led to an abuse of the recall process, pointing to the Zeanah recall as a harbinger of ouster efforts to come.

“I think the situation in Thousand Oaks is a great example to use before the commission,” said Bob Stern of the private California Commission on Campaign Finances, one of the co-authors of Proposition 208. “This is the kind of thing that can happen now, and it’s not what we had intended.”

Zeanah supporters are convinced her foes chose to recall Zeanah, instead of fighting her reelection next year, to get around Proposition 208 and its strict contribution limits.

“I don’t think this recall would have ever made the ballot if they’d been limited to $250 contributions,” said fellow Councilwoman Linda Parks, who is managing one of the pro-Zeanah campaigns. “They’ve spend hundreds of thousands of dollars. The only way they did this was with a ton of money.”

But Zeanah’s foes deny the charge that they are, in essence, buying the election.

“That’s a slap in the face of the voters,” said Peter Turpel of the Yes! Remove Elois Zeanah committee. “Money does not buy votes or signatures. It’s a fact in today’s world that it costs money to reach individuals. People are busy. What Mrs. Zeanah is really worried about is that we’re getting information out to voters.”

To bolster their argument that the recall group is knowingly taking advantage of the loophole, the councilwoman’s supporters point to a letter by the son of Thousand Oaks’ top development attorney, Chuck Cohen, asking FPPC lawyers in December if it was true that Proposition 208 did not apply to recalls.

The answer, which came in December just days before the recall was launched, was that it indeed did not. The Cohens have said they are not involved in the recall and were merely exercising their legal curiosity, knowing that others in town were plotting Zeanah’s ouster.

The FPPC’s legal staff is now reviewing its decision on recalls, which, among other things, allowed Orange County Republican Assemblyman Scott Baugh to raise large sums to defend himself against charges of campaign wrongdoing stemming from the 1995 fight to recall Assemblywoman Doris Allen. The commission is expected to revisit the issue in December.

A reversal is considered unlikely, said Gary Huckaby, spokesman for the Fair Political Practices Commission. But the FPPC may decide to apply Proposition 208’s contribution limits to candidates running to replace an elected official facing recall. Such candidates are currently exempt from the law as well.

“What staff is likely to recommend is that the spending limits be applied to the replacement candidates, not to the recall committees,” Huckaby said. “Under California law, recalls are considered ballot measures, so Prop. 208 does not apply.”

Whatever the case, the commission’s decision will come far too late for politicians such as Zeanah, a former homeowner group activist known for her combative stance against developers.

The Zeanah recall turned so ugly at one point last spring that the Ventura County Sheriff’s Department planted plainclothes deputies in a council meeting for fear violence could erupt.

“I hope this does not happen to somebody else,” Zeanah said. “If this loophole is not closed, it is going to be used by special interests to defeat opponents they cannot beat in a general election. It jeopardizes the democratic process.”

How Proposition 208 is applied--or whether it should be applied at all--is a subject of intense debate in Sacramento. Challenges to the law by groups representing Democrats, Republicans and special interests have been consolidated and are being heard in federal court.

Already, special interests have found ways to easily sidestep the law’s intent, though the largest loophole was recently closed by the FPPC.

Until the FPPC’s July meeting, it appeared that wealthy benefactors such as Lederer or Edward L. Masry, the Thousand Oaks attorney who recently contributed $50,000 to Zeanah’s defense, would still have avenues to spend large sums to promote or oppose a candidate in a regular election.

How? By forming an “independent expenditure” committee to mount a campaign itself instead of giving the money directly to a candidate.

The FPPC’s legal staff issued an opinion earlier this year that such committees were exempt from Proposition 208 as long as they were not intertwined with candidates’ own campaign efforts. Until the committees actually spent $1,000, according to the legal advice letter, they were entitled to accept as much money as they wished, including contributions as high as $100,000 for each person.

But the FPPC threw out the highly controversial decision during its July meeting, saying it would have created an easy way around the new law. Any committee that plans to promote or oppose a candidate must now abide by the law’s $250 contribution limit.

By giving large sums to recall groups, however, special interests can still circumvent the contribution restrictions and discreetly wield enormous power and influence to remove political foes in a process traditionally reserved for cases of extreme malfeasance, according to Proposition 208 proponent Tony Miller. He believes the law should apply to recall elections as a whole, and at the very minimum, to recall replacement candidates.

“It is my hope that this loophole is closed,” said Miller, a Democrat who lost a 1994 bid for secretary of state. “It’s not going to be an easy matter because of prior court decisions. But I think the policy of limiting campaign contributions to prevent corruption applies to a recall election. There are candidates involved.”

Yes! Remove Elois Zeanah spokesman Turpel said too much has been made of the group’s fund-raising instead of its accomplishments, noting that it twice raised the needed signatures to force a recall election. The committee’s first effort was derailed in Ventura County Superior Court because the signatures were collected using petitions that violated state elections law.

It takes money to fight lawsuits and distribute campaign information to Thousand Oaks’ highly educated, white-collar voters, Turpel said--but money guarantees nothing. And besides, he said, the war chest amassed by Zeanah and her supporters is not exactly paltry either.

The perception that money played too big a role in California politics was at the very heart of Proposition 208, however, and voters apparently agreed with it. At the very least, the issue of whether the new law should apply to the recall process needs closer scrutiny, according to Jim Knox, executive director of the reform group California Common Cause.

“We think recalls are candidate elections, and Prop. 208 should apply to all candidate elections,” Knox said. “The FPPC has offered a different viewpoint. Right now, it’s really unclear. It’s a judicial gray area right now.”