Spending in L.A. Elections Defied Limits

It wasn’t supposed to be this way.

Vast amounts of campaign cash flowing through political parties. Billboard companies plastering candidates’ names across the city in free advertising worth hundreds of thousands of dollars. Indian tribes financing a blitz of last-minute attack ads and mailers.

And the public paying $8 million to finance political campaigns in a year that saw an explosion in campaign spending and unregulated “soft money.”

But 11 years after voters in the nation’s second-largest city approved campaign reforms to limit special interest influence, control runaway spending and provide partial public financing of local races, the complex system they established broke down in the election campaign that ended on Tuesday.

The public matching money was intended to reduce the clout of special interests at City Hall; instead, well-financed groups with particular agendas devised new ways to exert influence without having to even disclose where they raised the money.

“I’m not ready to say a comprehensive public financing system doesn’t work,” said Rebecca Avila, former executive director of the Los Angeles City Ethics Commission. Still, she acknowledged: “It is in need of a tuneup.”

The amount of money spent by special interests shot up more than eightfold since 1993--the last mayoral race without an incumbent--as billionaires, Indian tribes, labor unions and the Democratic and Republican parties found new ways around the city’s campaign finance laws.

The unrestricted independent spending by political parties, individuals and businesses--which often have a vital interest in what happens at City Hall--jumped from $323,203 in 1993 to more than $2.5 million this year.

That increase far outpaced the jump in spending by the candidates themselves, which grew from $28.5 million eight years ago on all city races to $36.4 million, a 27% increase made all the more remarkable by the fact that the 1993 campaign included more than $6 million spent by Richard Riordan on his own candidacy for mayor. The final total for 2001 will show an even sharper rise once all the campaign bills are paid and the candidates file their final campaign finance reports at the end of July.

Furthermore, the spending by outside groups this year is understated--the result of a state law that allows political parties, unions, businesses and other groups to communicate with their members about candidates or issues. Unlike other political outreach, those communications are not considered independent campaign expenditures and therefore often do not need to be disclosed before election day.

Local officials object strongly to the law, approved last fall by California voters as Proposition 34, which they say has badly subverted Los Angeles’ own requirements.

“Proposition 34 was written by people who knew exactly what they were doing,” Avila said.

Under pressure from the Los Angeles City Council, some of those taking advantage of that system promised to comply with the city’s disclosure rules--but failed to live up to their word.

Despite a promise of voluntary disclosure, for instance, the state Democratic Party provided only partial information on its fund-raising and spending to promote unsuccessful mayoral candidate Antonio Villaraigosa and other candidates in city, school board and community college races. The California Republican Party provided incomplete information on its role on behalf of mayoral candidate Steve Soboroff, who finished third in the April 10 election.

Lee Ann Pelham, executive director of the city Ethics Commission, said Proposition 34 marked a huge change that essentially allows “soft money” in local elections.

“It encourages the use of large amounts of unlimited money in an attempt to influence city voters,” she said.

After a protracted discussion Friday in Sacramento, the state Fair Political Practices Commission rejected the pleas of city officials and public interest group representatives that there should be more disclosure of fund-raising and spending by the political parties. Instead, the commission approved, on a 4-1 vote, a formal legal opinion sought by the Democratic and Republican parties, which concludes that the emergency disclosure ordinances adopted by the City Council last month are preempted by state law.

“The Los Angeles ordinance conflicts with state law, and in our view the state law preempts the local law,” said FPPC Chairwoman Karen A. Getman, an appointee of Gov. Gray Davis.

That vote came despite the pleas of city officials. Assistant Los Angeles City Atty. Tony Alperin--whose boss, James K. Hahn, was elected mayor last week--said “the state’s interest in avoiding confusion is not as serious as the city’s interest” in requiring disclosure, particularly of large contributions.

“The insatiable need to raise political funds” creates a concern about possible political corruption, he argued.

Carol Scott, an appointee of state Controller Kathleen Connell, was the lone dissenting vote. She said disclosure was the crux of the matter. “The issue is: What is the information the citizen needs to know to make a decision in an election?”

When Los Angeles voters approved a sweeping campaign reform measure on the June 1990 ballot, they established a system of partial public financing for local political campaigns. Candidates who agree to participate in that system receive taxpayer money to match part of the political contributions they raise from individuals in the year before the election.

The system is intended to provide an incentive for candidates to seek smaller individual contributions and be less dependent on bigger donors.

Candidates who agree to accept public money are bound by a spending limit that varies depending upon the office they are seeking.

The city’s campaign laws also restrict the amount individuals and businesses can donate to a candidate for mayor, city attorney or controller to $1,000 per election. City Council candidates are limited to donations no larger than $500. In the council races this year, campaign experts say, the limits worked by encouraging vigorous competition between candidates, particularly for open seats.

But the limits were blown out during the recently completed mayor’s race.

Soboroff, for instance, put $687,000 of his own money into his campaign. That lifted the limits on other candidates, allowing them, under the city rules, to collect up to $7,000 per donor for the April election.

In addition, a number of rich contributors, including billionaires Eli Broad and Ron Burkle, first gave directly to the Villaraigosa for Mayor campaign but then found ways to extend their largess. They also wrote checks for $100,000 each to the state Democratic Party, which was waging its own mail and phone campaign for the former Assembly speaker. Screenwriter Steven Bing and Westside developer Casden Properties also sent $100,000 contributions to the state party.

Other individuals and labor unions that had reached the contribution limit under the city law turned around and gave far larger contributions to the state party. The California Teachers Assn., for instance, kicked in $354,000 and the Service Employees International Union provided $300,000. The party, in turn, sent out mailers to Los Angeles Democrats supporting Villaraigosa.

Before he was elected mayor, Hahn--who was significantly outspent in the runoff of the mayor’s race by Villaraigosa, not to mention the other contributors on his opponent’s behalf--complained bitterly that such contributions to the state party circumvented the city’s contribution limits and amounted to money laundering.

In the final days before the election, Hahn’s campaign called on Dist. Atty. Steve Cooley to launch a criminal investigation into fund-raising and spending by the Democratic Party and its role in the Villaraigosa campaign.

His opponent appealed to the district attorney as well.

Villaraigosa and some of his prominent backers--county Supervisor Gloria Molina, Sheriff Lee Baca and former Dist. Atty. Ira Reiner--asked Cooley to investigate a Times report that Daniel Weinstein, a fund-raiser and longtime Hahn supporter, had solicited $100,000 from the Soboba Band of Mission Indians.

The tribe’s money was spent on mailers that attacked Villaraigosa as soft on crime and suggested that his votes on certain pieces of legislation favored violent sexual predators and child pornographers.

The Sobobas joined the Morongo Band of Mission Indians, which spent $200,000 on radio ads attacking Villaraigosa, and the Santa Ynez Band of Chumash Indians, which chipped in another $50,000.

If anything, billboard companies were even more aggressive than the Indian tribes--though not as lavish as the unions and Democratic Party were on Villaraigosa’s behalf. The billboard firms donated space to Hahn and Deputy Mayor Rocky Delgadillo--both winners on election day. In the race for city attorney, Delgadillo defeated Councilman Mike Feuer, who had angered the companies with his support for legislation limiting some billboard advertising.

By the time election day rolled around, Eller Media had given $301,000 worth of billboard space to Delgadillo. Regency Outdoor Advertising provided another $125,000 in billboard space. The billboards, with their distinctive “Rocky” slogan across the Los Angeles skyline, have been widely credited with elevating Delgadillo’s profile and helping him engineer an upset victory.

In total, Delgadillo received more than 200 times the support from billboard companies that city law would have allowed him to take in direct contributions from those firms. And yet, he is not required to recuse himself from handling cases that may come before him involving those same companies.

“Clearly there is tremendous room for improvement in citywide races,” said Bob Stern, president of the Center for Government Studies, a Los Angeles-based group that promotes campaign reform. “We need to look at the law and tighten it.”

Stern urged Delgadillo voluntarily to recuse himself from cases involving the billboard companies that championed his campaign.

“We’re talking about $400,000 in independent spending,” he said. “It’s not like $1,000.”

Delgadillo’s campaign manager said that he won’t shy from such cases.

“Rocky has said elected officials have to have the courage and strength of character to stand up to special interests and tell them no,” Kristina Scott said. “That’s what he’s done as deputy mayor, and it’s what he’ll continue to do as city attorney.”

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Record Campaign Spending

This year’s election season in Los Angeles saw an explosion in campaign spending. Special interests found new ways around the city’s complex campaign finance laws that were supposed to limit contributions and restrict spending.

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* Preliminary figures likely to increase when final campaign reports are filed July 31.

** Numbers reflect spending only by candidates’ own campaigns.

Source: Los Angeles City Ethics Commission

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Sacramento bureau chief Virginia Ellis contributed to this story.