Fast Spender Soboroff Gains Rich Fund Source in Riordan

Los Angeles Mayor Richard Riordan’s announcement Tuesday that he will lend his support to mayoral hopeful Steve Soboroff could not come at a better time for the campaign that has far outspent the other challengers in the race.

With two weeks to go until election day, Riordan said that he will pay for a slate mailer prominently featuring Soboroff and that he will appear in a new television ad scheduled to be unveiled today. Those efforts will bolster a campaign that has spent lavishly--or, in the view of its critics, foolishly.

From the beginning of the campaign until a month ago, Soboroff had raised about $2.9 million--the most in the race--but he also has spent about $2.4 million, leaving him with less money than some competitors. Most of his money has been used for consultants, ads, polls and voter direct mail lists, according to campaign finance reports. Soboroff has contributed more than $667,000 of his own money, but he also has turned to friends, allies and former business associates--some with interest in city policies--to help pay for his bid.

City Atty. James K. Hahn, the second-highest fund-raiser in the crowded field seeking to replace Riordan, raised $2.7 million during the same period. But he spent only about $1 million.

In part, Soboroff’s spending reflects his relative lack of name recognition when the campaign began.

Soboroff, a commercial real estate broker and self-made millionaire, was an unpaid advisor to Riordan and a former city Recreation and Parks Department commissioner. He has never held elected office. His major competitors, aside from Hahn, include U.S. Rep. Xavier Becerra, state Controller Kathleen Connell, former Assembly Speaker Antonio Villaraigosa and Councilman Joel Wachs.

“A candidate like me that comes in without the 20 years of Rolodexes . . . is hugely disadvantaged,” Soboroff said. “You have to start early. You have to spend.”

Riordan understands Soboroff’s candidacy firsthand. Like Soboroff, Riordan began an early advertising blitz eight years ago, well before any of his challengers, Assemblyman Richard Katz, Wachs and Councilman Mike Woo. Like Soboroff, Riordan was a political unknown. And, like Soboroff, he spent his own money on the race; although the much wealthier Riordan spent far more of his own cash.

On Tuesday, Riordan predicted a tough election for Soboroff on April 10. If no candidate in the race tops 50%--and none is expected to--a runoff will be held on June 5.

“It’s going to be a tight race,” Riordan said. “Looks like it’s three-way: Soboroff, Hahn and Villaraigosa. All three would welcome any help from any source they’d get.”

Riordan’s independent expenditure committee, which the mayor will use to support a slate of candidates for City Council, controller, city attorney and the school board, primarily will help Soboroff. The mayor said he will spend $130,000 on the mailer and is considering sponsoring radio spots and other direct mailers.

Riordan for months has been considering launching this independent fund-raising campaign. Under finance laws, the committee must operate outside the candidates’ own campaigns.

Ace Smith, Soboroff’s campaign consultant, welcomed the mayor’s support and said a new television ad--paid for by the campaign--should boost the effort.

“Dick Riordan is the best endorsement in L.A. It will be tremendously helpful,” Smith said. “I’ll take Dick Riordan’s endorsement over anyone else they [Soboroff’s challengers] have rolled out so far.”

For Soboroff, the help is especially valuable because his campaign has been forced to rely on his own money to supplement fund-raising. Earlier this month, the businessman announced that he would tap his own bank account to keep up its advertising and political efforts as the campaign moves into high gear.

That came on top of $20,000 that he and his wife already had donated to the effort.

Soboroff was the first candidate to break through the city’s spending cap of $2.2 million, a decision that lifted limits on his rivals.

Soboroff’s spending has become a source of snickering among the other major candidates and their consultants and staff in the race for mayor.

“I’m thinking this is one conservative Republican who’s not big on fiscal restraint,” said Parke Skelton, campaign consultant for Villaraigosa. “As mayor, he’d only make it through a year and a half at this rate.”

And Kam Kuwata, Hahn’s campaign consultant, said he believes Soboroff’s campaign is spending far more on what he calls “overhead” than on “persuasion.” Kuwata said he believes Soboroff put too much money into consultants, polling and other internal support, rather than voter outreach.

“If you have the resources, you really have a microphone,” Kuwata said. “If you don’t, you’re speaking without a loudspeaker system. That’s the bind that they have gotten themselves into. Right now . . . you just can’t shake enough hands, reach enough public events unless you are on the air day after day, night after night. That is the challenge not just for his but for all six campaigns.”

Soboroff’s profligate spending--and personal contributions--have altered the course of the mayor’s race.

Campaign contributions from individuals and businesses to candidates running for citywide offices were limited to $1,000 before Soboroff’s contribution of his own money. Under the city’s campaign finance laws, that limit is lifted once a candidate exceeds $30,000 in personal contributions. Now, individuals and businesses can give as much as $7,000, provided their total donations to candidates in city races don’t exceed that amount. New campaign finance reports are due before week’s end.

Employees from the same business or organization are allowed to contribute to the same campaign--a provision from which Soboroff is benefiting greatly.

He already has benefited from Riordan’s endorsement: Eighteen lawyers and others from Riordan & McKinzie, the mayor’s former law firm, have collectively given nearly $12,000 to Soboroff, according to a review of donors who each have given at least $750 to Soboroff’s campaign. The mayor has hosted fund-raisers at his home for Soboroff, the first resulting in donations contributions of about half a million dollars.

Walt Disney Co. officials have been significant contributors to the effort, donating nearly $8,000, according to campaign finance records.

Soboroff has accepted that money while criticizing other candidates for taking contributions from individuals and companies with an interest in city business. In the case of Hahn, Soboroff has chided the city attorney for accepting donations from law firms with municipal contracts.

Many of Soboroff’s contributions have come from real estate companies, developers and businesses that have either hired Soboroff or have worked with him in other ways.

Top officials of Majestic Realty, the company that built Staples Center, and their associates have given the campaign nearly $12,000. Soboroff was Riordan’s point man on the sports arena, shepherding it through City Hall until construction.

Though Majestic Realty continues to have significant interests in city government decisions, Soboroff denies any conflicts are created by acceptance of those contributions.

“I’m not awarding city contracts to these people,” Soboroff said. “Yes, these are people I do business with for years. For 30 years. People like me. I’ve been honest. I’ve been creative.”

Still, the striking aspect of Soboroff’s campaign finances is not so much how the money comes in as how it goes out. Last year, long before the other mayoral efforts began in earnest, Soboroff began spending in full swing. In 2000, Soboroff spent $914,000, two-thirds more than Villaraigosa.

That was before Soboroff’s television advertising hit the airwaves but reflected in part his extensive polling efforts.

After the beginning of the year, the candidate stepped up that spending even more.

He was the first candidate to buy pricey television advertising. His ads aired frequently and attempted to portray the candidate as a law enforcement supporter and a public school district opponent.

With the first round of the mayor’s race coming to a head on April 10 and another two months of campaigning after that for the two survivors, Soboroff said he remains confident that he can raise what it takes and shepherd what he needs to be there at the finish.

“The end result, you’ll see, is that they’re all going to spend what I’m going to spend,” he said. “But they’ll go from winning to losing.”

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Soboroff Campaign Expenses

The following are some examples of Steve Soboroff’s expenditures from last year. In 2000, Soboroff spent $914,000--more than any other candidate. Former Assembly Speaker Antonio Villaraigosa, by comparison, spent less than $300,000.

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Fairbank Maslin Maulin & Assoc., Santa Monica, polling and consulting firm: $77,700

Reed & Davidson, Los Angeles, law firm that compiles campaign reports: $29,000

SCN Public Relations Inc., San Franciso, campaign consultant: $143,658

Alice Borden, Sherman Oaks, fund-raising: $266,145

Trippi McMahon & Squier, Alexandria, Va., advertising agency and retreat organizer: $33,000

Balloons of a Different Kind, West Covina: $308

Krispy Kreme Donuts, Van Nuys: $168

Source: Los Angeles City Ethics Commission