Governor Race Set Spending Record

Shattering campaign spending records for a governor’s race, Democratic Gov. Gray Davis and his opponents spent $118 million in last year’s campaign--almost double the amount spent by former Gov. Pete Wilson and other candidates in 1994.

When the cost of campaigns for statewide initiatives, plus the sums spent by candidates for other state offices, are totaled, the expenditures on California politics almost certainly will have topped $350 million in 1998.

Davis raised $34.6 million and spent $34.8 million on his winning campaign, and ended 1998 with $3.1 million in the bank for his next race, according to year-end campaign finance reports filed Wednesday with Secretary of State Bill Jones.

Former Atty. Gen. Dan Lungren lost to Davis by a landslide--but not for lack of money. Lungren raised $27.6 million last year and spent $27.9 million. He had almost $600,000 left in the bank, possibly for some future run for office.

The combined $62.7 million spent by Davis and Lungren--plus the $55.2 million spent by Davis’ primary challengers, multimillionaires Al Checchi and Jane Harman--means that California’s 1998 gubernatorial campaign was easily the most expensive in history in this or any other state.

The overall $117.9-million price tag for last year’s governor’s race is almost twice the previous record of $60.6 million, shelled out by Wilson and other candidates in 1994.

The general election alone cost Davis and Lungren a total of $47.9 million. Wilson and Kathleen Brown, Wilson’s Democratic opponent, spent $31.8 million on the 1994 fall campaign.

The record-setting spending came in a year in which a federal judge struck down strict voter-approved limits on campaign spending, finding that caps on donations violate the 1st Amendment.

“What you have now [is] the 1st Amendment being preserved in campaigns for those who can afford it,” said former state Sen. Barry Keene, who studies politics at the Center for California Studies at Cal State Sacramento.

Keene said that although California is less corrupt than most states, the campaign finance system is one “that needs fixing. It contributes to a lot of the pablum we get. What you get is a very low level of information.”

Campaign experts say that about 80% of the cost of a statewide campaign goes to airing television and radio spots. Garry South, Davis’ campaign manager, estimates that Davis spent $25 million on such advertising.

Complete campaign finance reports for the year’s single most costly campaign--the fight over Proposition 5 to expand casino gambling on Indian reservations--were not available Wednesday.

However, that campaign is believed to have raised about $100 million, a record for an initiative. A few gambling tribes raised the bulk of the money in their successful effort to win passage of the measure. Nevada casino interests spent $25.4 million to defeat it.

Other reports filed this week show:

* Major electric companies and others spent $38.1 million in defeating Proposition 9, aimed at unraveling 1996 legislation to deregulate the electric utility industry. Edison International was the single largest donor to the campaign against Proposition 9, at $17.6 million.

Consumer activists who backed Proposition 9 reported spending $1.4 million, the bulk of it coming by way of loans from the nonprofit Public Media Center in San Francisco.

* The tobacco industry spent $29.7 million in a failed effort to defeat Proposition 10, which raised tobacco taxes by 50 cents a pack. Philip Morris, the world’s largest tobacco company, spent $20.9 million in the unsuccessful effort to defeat the measure. Backers of the measure had not filed their report as of Wednesday.

Unlike federal law, which has strict caps on donations to candidates, California law places no limits on the amount that donors can give to candidates. Dozens of donors, from unions to businesses to wealthy partisans, gave Davis and Lungren donations of $100,000 and more.

The latest campaign finance reports show that Davis raked in at least $2 million from major donors in December, the month after the election.

Many of those December donors had formed the core of Lungren’s fund-raising base, suggesting that at least some were hoping to persuade Davis that they were his new best friends.

South, Davis’ campaign manager, explained the December donations as “makeup work.”

“In addition,” South said, “they woke up and realized that Gray Davis was not this anti-business, job-killing Democrat his opponent made him out to be.”

Arco was among the firms that initially gave more to Lungren, then shifted its money after Davis won. The Los Angeles-based oil company gave $102,000 to Lungren, campaign finance reports show, and $102,500 to Davis. Of that $102,500, $77,500 went to the new governor on Dec. 30.

Thomas Markin, Arco’s manager of external affairs, noted that the firm has donated in the past to both Lungren and Davis, and had a “history with both, and a good one.”

“We wanted to help get the governor off to a good start,” Markin said. “As a retailer, if California is doing well, we’ll do well too.”

The same pattern applied to several other donors. The Irvine Co., long one of Wilson’s main benefactors and one of Lungren’s largest fund-raisers, gave Davis $25,000 in December. Edison International gave at least $103,000 to Lungren, and $233,500 to Davis, with a $100,000 check to Davis on Dec. 14.

Davis’ largest single source of money remained organized labor. In 1998, the California Teachers Assn. gave Davis $973,000 in direct donations and in so-called in-kind contributions, such as calling voters during the campaign.

The American Federation of State, County and Municipal Employees gave Davis $507,000. The California State Employees Assn. gave Davis $522,000. The Professional Engineers in California Government gave him $290,000.

Since his election, Davis has angered state workers--they haven’t had a raise in four years--by not moving quickly to grant them pay hikes. While some union leaders have criticized Davis, they remain confident that the new governor will remain friendly to labor.

The money reported in the candidates’ year-end reports reflects only part of what was spent on the candidates’ behalf. Davis, for example, reported receiving one donation of $100,000 from the California Correctional Peace Officers Assn. in December.

However, the union, which represents state prison guards, controls several independent campaign committees. One of those committees reported spending $946,405 in a separate so-called independent expenditure on Davis’ behalf during the campaign.

A second campaign group financed by the prison guards union and Native American tribes that run casinos reported spending another $512,000 independently on Davis’ behalf. Most of the money went to air television spots.

For his part, Lungren continued to raise significant sums even as polls showed he was likely to lose. The Republican Party remained his largest single source of money, as party leaders feared--correctly--that many Republican candidates would suffer if Lungren were trounced.

Various state and national GOP committees gave Lungren $930,000 in the campaign’s waning days. Conservative billionaire John Walton gave him $100,000 two weeks before the election, raising Walton’s total contribution to Lungren to $250,000.

Lungren’s leftover $594,000 has raised eyebrows among Republican donors, since it suggests that he wasn’t going all-out to win. Lungren’s campaign advisor, Rick Davis, said Lungren has not decided how to spend his remaining money.

“He wants to wait until this campaign is completely cleared up,” he said, noting that there are still unpaid bills. “Then he’ll look beyond at what he wants to do.”

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Candidates’ Tab

California’s candidates for governor spent nearly $118 million in primary and general election campaigns in an attempt to win the state’s top job.

The last two races

1994: $60.6 million

1998: $117.9 million

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What $118 million will buy:

* The 1997 payrolls of the Dodgers and Angels ($115 million)

* Shaquille O’Neal’s 7-year Laker contract ($120 million)

* 4 Boeing 717 jets ($25 million apiece)

* The filming of “Lethal Weapon 4” ($120 million-$150 million)

Source: Secretary of state’s press office

compiled by LYNN MEERSMAN, JULIE SHEER / Los Angeles Times