Prop. 34 to Halt Funds’ Use for ‘King-Making’

Veteran state Assemblyman Lou Papan, chairman of the lower house’s Banking Committee, is barred by term limits from running for reelection.

But nothing prevents him from sharing the financial bounty he has amassed during his lengthy political career, so he has given more than $200,000 this year to his chosen successor--his daughter Virginia.

Large transfers of cash between campaign accounts are commonplace in California’s laissez faire politics. Soon, however, they will be illegal.

Under Proposition 34, the campaign finance measure approved by voters this month, money transfers by state lawmakers will be banned, beginning in January. A year later, they will be banned for other state officeholders and candidates.

Political parties will still be able to move large sums to preferred candidates, but lawmakers will no longer be able to use their campaign treasuries to act as kingmakers. Critics of the practice predict a flurry of transfers before year’s end.

“You will see an orgy of fund-raisers and transfers like the one by Mr. Papan to his daughter,” said campaign reform advocate Tony Miller.

Papan, a blunt-spoken man who earned the nickname “Lou the Enforcer” during his days as loyal henchman to former Assembly Speaker Willie Brown, agrees that large amounts could change hands.

But he doesn’t think the reform effort will truly change the way business is done in the capital.

“They call it reform, but I have been around a long time,” said Papan, who was elected to the Assembly in 1972, and returned four years ago after a decade-long absence. “I have yet to see any of that.”

Papan acknowledged that his decision to dump $203,000 into the campaign coffers of his daughter, an attorney who is deputy director of the state Office of Criminal Justice Planning, was partly meant to “scare off people” who might be interested in running against her for his Bay Area seat in 2002.

Virginia Papan could not be reached for comment.

Disgraced former Insurance Commissioner Chuck Quackenbush made one of the more criticized transfers in recent California history when he moved $565,000 in contributions to the account of his wife’s failed state Senate campaign. The money was used to settle debts. The transfer was perfectly legal.

The most common money transfers occur during election time, when incumbent lawmakers from both major parties pool resources.

Party leaders in the Assembly and Senate take that money, along with the millions they have personally raised, and dole it out to selected candidates in the war for control of the Legislature.

Such contributions often help determine the political worth of lawmakers within their caucus--an assemblyman who has given generously to the cause is more likely to make friends, win key committee assignments and be considered a future leader.

For example, Assemblyman Kevin Shelley (D-San Francisco), majority leader under Speaker Bob Hertzberg, gave $215,000 to Assembly Democratic Leadership 2000, the committee controlled by Hertzberg. Assemblyman Herb Wesson (D-Culver City), considered a leading candidate to succeed Hertzberg as the next speaker, gave the same account $330,000, campaign reports show.

But critics say the myriad money moves also make it difficult to keep track of who is bankrolling campaigns and serve as a way of essentially laundering contributions from politically controversial sources. A candidate who receives $100,000 from Hertzberg’s leadership fund, for instance, does not have to answer for the fact that some of that money could have been part of the $44,000 Wesson accepted from the payday loan industry or the $25,000 Wesson took in from Miller Brewing Co., part of tobacco giant Philip Morris.

Proposition 34 will prevent legislators from transferring more than $3,000 to favored candidates. However, the Democratic and Republican parties are immune to limits.

As a result, the parties will soon play a larger role in quarterbacking state legislative campaigns--and could be the last, great beneficiaries of lawmakers’ money transfers.