‘Soft Money’ Finds a Way Into the Race

Democratic Lt. Gov. Gray Davis is shunning contributions from Indian tribes involved in gambling during the general election campaign for governor. His Republican foe, state Atty. Gen. Dan Lungren, also rejects gambling money.

But neither Davis nor Lungren is complaining about the fact that those interests independently have spent hundreds of thousands of dollars in so-called soft money to help promote their candidacies.

Taking a page from past presidential elections, California’s candidates for governor and other posts refuse contributions from controversial interests, but nonetheless benefit as those groups spend big money in soft money on their behalf.

“We trust the party to keep it separate,” said Joanne Davis, director of Lungren’s finance operations. “They know we won’t take gaming money or tobacco money.”

Soft money is a bigger deal in federal campaigns, largely because political donors operate under strict caps on the amounts they can give to individual candidates. Donors get around the federal limits by simply funneling money to the national political parties. The two national parties have raised $125 million since January 1997.

California election law has no contribution caps. Donors can give as much as they want to state candidates. Still, money donated to California’s two main recipients of soft money, the state Democratic and Republican parties, will top $20 million this year.

Keeping Sources at a Distance

Dozens of other independent campaign committees representing interests ranging from labor to abortion rights advocates to gun owners are raising and spending hundreds of thousands more for candidates in the final days before Tuesday’s balloting.

Politicos who set up the independent committees use the money for television and radio ads, election eve mailers, phone banks and much more. It’s all supposed to be spent at arm’s length from the candidates. By law, these independent committees cannot have direct ties to the candidates they aid.

“Basically, the soft money dodge in California is a way of distancing yourself on the surface from the source of your money while continuing to reap the benefits,” said Robert Fellmeth, director of the University of San Diego’s Center for Public Interest Law. “You can with a nod and wink accept huge contributions and contend you’re not doing it.”

Through Oct. 17, the California Republican Party had raised $7.9 million, campaign finance filings show, and the state Democratic Party had raised $9.8 million. In one day earlier this week, the Democratic Party reported spending almost $1.2 million on its slate of candidates, including $300,000 for Davis.

The bulk of the money that the parties raise comes from their traditional backers. Democrats tap unions and trial lawyers. Republicans draw from business interests such as the insurance industry. They both draw from party financiers, with media magnate Rupert Murdoch and one of his corporate entities giving the GOP $250,000, and Richard Blum, U.S. Sen. Dianne Feinstein’s husband and a major Democratic donor from San Francisco, giving $145,000 to the Democrats.

But with the gambling industry warring this year over Proposition 5 to allow Indians to expand gambling on their reservations, casino interests are among the largest donors to both parties.

Tribes involved in the gambling fight have given $700,000 to the state GOP and $585,000 to the Democrats. Casino interests opposing Proposition 5, including Nevada corporations, have given $675,000 to the state Republican Party.

State Democratic Chairman Art Torres said the Indian contributions to his party came after he personally solicited donations from tribal leaders and gave them a pitch about his get-out-the-vote efforts. He disputed contentions that they or any other controversial donors might be giving to the party so that candidates would not appear to be tied to them.

“I told them this was a good-government contribution,” he said. “That it’s healthy to contribute to the party, because we’re in charge of getting people out to vote.”

The tobacco industry, which finds that more and more politicians reject its money, has given at least $370,000 to the GOP this year.

“You take special interest funds, and you as a party direct it for the party as a whole,” said Shawn Steel, treasurer of the state GOP, adding that the biggest expenses are aimed at getting out the vote. “We accept money from any legal source . . . and tobacco and gaming are legal and lawful enterprises.”

Lungren rejects tobacco money because he is suing the industry in a major antitrust and fraud case. He declines most gambling money because as attorney general, he must license card clubs. Still, the state GOP has given Lungren more than $400,000 this year.

“It doesn’t pose a problem, because the party is working for a lot of different candidates,” said Joanne Davis, Lungren’s finance director.

Reaping the Benefits

Torres said he established a firm rule that the state Democratic Party will not accept any tobacco money. “It’s always been my policy when I was in the Legislature not to accept tobacco money, and I was going to start once I began chairman of the party,” he said.

However, the Davis campaign has benefited from a $2,000 donation from the Brown and Williamson Tobacco Corp. to the Democratic Governors’ Assn.

State parties are only one source of soft money in California. Partisans have established several other committees that by law must operate independently of the candidates they seek to aid. Some of the harshest advertising attacks are leveled by such committees.

Davis has also benefited from $267,900 in expenditures on his behalf by the recently formed Native American and Peace Officers committee. The committee, financed primarily by Indian tribes that run gambling casinos, mostly provided phone banks that urged potential voters to cast their ballots for Davis.

The campaign did not respond to inquiries about the expenditures.

One independent committee working on Lungren’s behalf is the California Pro-Business Committee. Created this year, the committee has raised almost $300,000, and has spent almost all of it on Lungren’s behalf, hiring planes that fly above Lungren events toting pro-Lungren banners.

“I’ve seen the planes,” Joanne Davis said. “I wondered who was doing that, because we weren’t. We don’t know anything about that. . . . Legally, an independent expenditure committee can’t have anything to do with the formal campaign.”

The largest single donor to the committee is Dr. Edward Allred, at $100,000. In the past, Lungren has rejected money from Allred, who owns Los Alamitos Race Course and is a major donor to GOP candidates. In an interview, Lungren said he rejected Allred’s donations because Allred is involved in gambling.

Some anti-abortion lawmakers who have taken money directly from Allred’s racetrack have been the target of protests by anti-abortion activists. The reason: Allred also owns clinics where abortions are performed.

In an interview, Allred said his Sacramento lobbyist suggested that he give to the committee as a way of helping Republicans, Lungren in particular, this year. Allred said he appreciates Lungren’s opposition to expanded gambling on Indian reservations.

“Nothing I do politically is related to [the medical practice],” Allred said. “The Supreme Court has spoken. It’s an issue that was resolved a long time ago and it isn’t going to change.”