Legislators Offer Their Version of Finance Control

Former state Insurance Commissioner Chuck Quackenbush would have been forbidden to take five- and six-figure campaign gifts from insurance companies if a ballot measure that voters will decide this November had been in place.

Future governors would be prevented from accepting donations of more than $40,000 from 45 individuals, businesses and labor groups, as Gov. Gray Davis did when he raised a record $13 million in 1999.

Disney could not have given $30,000 to Senate leader John Burton (D-San Francisco), who sponsored the proposition. Or $30,293 to Assembly Speaker Bob Hertzberg (D-Sherman Oaks), who helped rush it quietly through the Legislature last week before the summer recess, in what critics call an attempt to thwart tougher limits already approved by voters.

For the fifth time in a dozen years, Californians will vote on a proposition to limit the ever-escalating political money wars. Courts have struck down others that have passed, leaving California with a wide-open system of no-holds-barred spending.

If voters approve Burton’s measure, they most likely will find that they have not dammed the flow of campaign cash; they will merely have diverted it.

“There has never been a campaign finance measure that has ever diminished the amount of money spent on political campaigns, and there never will be,” said Michael Schroeder, past chairman of the California Republican Party. “The money is simply driven underground.”

Lawyers practiced in challenging such measures say this one probably will withstand court attacks. The reason: While it may impose some order on California’s Wild West campaign finance system, the caps are higher than those in many other states and three times the sums generally allowed for federal offices.

Advocates of strict limits insist that the measure, SB 1223, is aimed primarily at undermining the tougher Proposition 208, a 1996 initiative approved with 61% of the vote.

“It is a Band-Aid approach,” said Bob Stern, co-director of the private Center for Governmental Studies in Los Angeles. “A Band-Aid is better than nothing if you have nothing else. There are some limits. But Proposition 208 was a tourniquet.”

Repealing Key Parts of Prop. 208

The new measure would repeal key portions of Proposition 208, mooting a pending lawsuit challenging that initiative. Proposition 208 has been tangled up in federal court since it passed, and a trial on its fate opens today before U.S. District Judge Lawrence Karlton of Sacramento.

Karlton struck down the measure in 1998, concluding that its caps of $500 per donation in legislative races and $1,000 in statewide races were so low that the initiative denied candidates their free-speech right to get their messages to voters. However, the U.S. Supreme Court earlier this year upheld similar restrictions in a Missouri case, giving backers hope of prevailing in the new trial.

With its size, wealth and lack of limits, California leads the nation in campaign spending. In 1998, moneyed interests donated more than $500 million to state campaigns. The race for governor cost a record-shattering $118 million. Gambling interests spent $100 million on an initiative to legalize tribal casinos and various other campaigns.

The spending didn’t stop in 1999--even though there was no statewide election. Records filed with the secretary of state show that no fewer than 182 political donors gave upward of $100,000 each, pouring a combined $105 million into California politics last year. And at least that much will have been spent this year by the time voters go to the polls again.

In California, the big cost-drivers are initiative campaigns, which commonly cost $20 million each. That won’t change. The U.S. Supreme Court ruled in 1981 that there can be no restrictions on initiative spending.

Donations directly to candidates would change, however. To help ensure that the new measure would survive any court challenge, Burton settled on caps that would allow individuals to give up to $3,000 to candidates for the state Assembly and Senate. That’s six times the $500 maximum imposed by Proposition 208.

Caps on donations to candidates for governor would not kick in until after Davis runs for reelection 2002. Starting in 2006, donors could give no more than $20,000 in the primary campaign and $20,000 for the general election, compared to $1,000 per election under Proposition 208.

The measure would enhance the power of political parties. While donors would face modest limits on the amounts they can give to candidates, they could give $25,000 a year to parties, which can use the money to help candidates win. Donors also could give unlimited sums to parties for use on such endeavors as boosting voter registration.

Under Burton’s measure, unions, a main source of money for Democrats, and corporations, which traditionally give more to Republicans, would be restricted in the sums they could give to individual candidates.

But unions likely would gain an edge. Burton’s measure would permit each union member to donate a maximum of $200 a year to a political action committee. The California Teachers Assn., long one of the state’s most powerful donors, has 300,000 members including retirees. If each member gave $200, the public school teachers union could amass $60 million a year for state politics.

Union locals also could contribute the maximum to candidates. So large unions could give up to $6,000 to a candidate, as could each of their many locals.

Different Money Paths Predicted

“Interesting, but not really reforming anything,” said Steven Thompson of the California Medical Assn., which donates roughly $1 million per election.

Thompson predicts that organizations that want to spend more than $3,000 on a legislative candidate will establish committees independent of the candidates, and air television spots or send mail to voters supporting that person.

“It will change the nature of political money,” Thompson said. “It will squeeze it into independent expenditure campaigns.”

Such committees are common in congressional races, in which donors may give no more than $1,000 to candidates. In many instances, the harshest attacks are made by such committees, and candidates often complain that they have no control over them.

Both measures offer incentives for candidates to limit spending. Burton’s voluntary spending limits are significantly higher than Proposition 208’s: $1.1 million for Assembly candidates divided between the primary and general elections, compared to $300,000 under Proposition 208.

Proposition 208 limits spending by candidates for governor to $12 million, compared to $16 million in Burton’s measure. That may seem like a princely sum. But in California, it is paltry. A winning governor hasn’t spent a mere $16 million since Pete Wilson’s first election in 1990.

Stanley Zimmerman, a major political benefactor and a semiretired mortgage broker in Los Angeles, said his biggest worry about caps on donations is that wealthy candidates can swamp politicians who have limited money. But while the Burton proposal would stop him from giving more than $40,000 to a candidate for governor, he could find ways of getting more to the candidate of his choice. His wife could contribute another $40,000. And he has friends.

“I’m going to get on the telephone,” said Zimmerman, who reported giving Davis $51,000 last year. “I surely am not going to stand down and not raise money when the opponent is raising a lot of money.”

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Times staff writer Tim Fields contributed to this report.

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Campaign Cash

The Legislature’s November ballot measure to change the way state political campaigns are funded could replace Proposition 208, a 1996 citizens initiative that is tied up in the courts. Some differences between the restrictions contained in the two measures:

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Proposition 208 Senate Bill 1223 Limit on donations from individuals Local races $100* no restriction Legislative races $250* $3,000 Statewide races $500* $5,000 Governor $500* $20,000 *

Limit on donations from unions and other committees of small contributors Local races $200* no restriction Legislative races $500* $6,000 Statewide races $500* $10,000 Governor $500* $20,000 *

Voluntary spending limits Assembly candidates Primary $100,000 $400,000 General election $200,000 $700,000 Senate candidates Primary $200,000 $600,000 General election $400,000 $900,000 Statewide candidates Primary $1 million $4 million General election $2 million $6 million Governor Primary $4 million $6 million General election $8 million $10 million

Donations to political parties $5,000 $25,000**

Limits on donors $25,000 to No limit candidates, parties

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* Amount doubles if candidates agree to spending limits

** This is the limit if money is spent on candidates; no limit if money is for voter registration and similar causes

Note: The changes would not apply to candidates for Congress or the U.S. Senate, which are subject to federal rules.

Sources: State Legislature; Tony Miller, proponent of Proposition 208