Setback for Campaign Cash Limits

Orange County’s campaign-finance ordinances, long considered among the most restrictive in the nation, have been weakened by two court rulings that have implications for local spending-control efforts around California.

The county and eight cities are the only governments in the state that restrict campaign spending by outside groups that support or oppose local candidates and measures. But a federal judge last week blocked four of those governments -- Anaheim, Huntington Beach, Orange and the county -- from enforcing the laws.

And last month, the 9th U.S. Circuit Court of Appeals criticized a similar law on the books in Irvine, saying it restricted political speech. Irvine agreed not to enforce its ordinance, and Laguna Beach made the same decision after reviewing the court’s opinion.

The rulings are a setback for campaign-finance advocates, who -- over three decades -- have pushed through a series of limits on how much Orange County individuals and groups can contribute to campaigns.

“It’s created a farce of contribution limits,” said Shirley Grindle, an activist who has written a dozen campaign-finance laws in Orange County and across the state.

Among those laws were some that went beyond traditional restrictions on campaign finance by limiting so-called independent expenditures.

Those expenditures are by outside groups that try to influence elections without directly contributing to candidates, often by paying for mailers and signs.

The court actions appear to set boundaries on how far the local rules can go. While courts have upheld limits on contributions directly to candidates, they have struck down limits on spending.

Officials said the rulings effectively close the door on this type of campaign restriction at the local level.

“What the courts are saying is you can restrict the flow in [to candidates], but not out,” said Jim Knox, executive director of California Common Cause, a government watchdog group based in Sacramento.

The ordinances in Orange County were adopted in the mid-1990s. The laws applied to political groups whose members pay more than $1,000 a year in dues. They restricted the groups to spending no more than 25% of their campaign funds on any one race.

Irvine’s ordinance, passed in 1995, was even more restrictive. It took its existing contribution limit for individuals, now $340, and applied it to any group as well.

The restriction was challenged in 1999 by the Lincoln Club, whose members pay annual dues of $2,000 and donate to federal, state and local Republican candidates. The club’s members include some of the county’s top developers and CEOs.

Before the ordinances went into effect, the Lincoln Club spent freely in local races. In 1990, it spent a then-unheard-of $25,000 to help defeat Irvine Mayor Larry Agran.

Club President Michael Capaldi argued that campaign limits stifle free speech and free association. That argument was the basis of the group’s lawsuit challenging the rules.

The only other California city that limited campaign spending by independent groups was San Francisco. But its restrictions were overturned by a federal judge in 1999.

Grindle said the rulings “open the barn door” for outside groups to spend freely and influence the outcome of elections.

In light of the legal challenges, Orange County has revised its campaign laws and is putting them before the voters next month.

The changes include requiring independent campaign groups to disclose political activity within 16 days of an election. Officials reason that if they cannot restrict spending, at least they can make sure it’s publicly disclosed.

But the proposed rules would also ease other campaign restrictions. Currently, a married couple can donate up to $1,000 to a candidate -- the maximum single contribution allowed. Fearing that the rule would not survive a court challenge on the basis that it might constitute a marriage penalty, the county amended it to allow each spouse to donate up to $1,000.

Opponents of unfettered campaign spending say the only way to clamp down is to create public financing at local and state levels. Thirteen local jurisdictions across the nation have such systems, including Long Beach, Los Angeles, Oakland and Petaluma. And San Francisco went to such a system after the court threw out its spending ordinance.

But with the conservative elements in Orange County, experts said public financing is highly unlikely.