Financially, the Recall Was Business as Usual

Relying on the same sources of cash that long have funded California campaigns, rivals in the recall fight -- a battle portrayed as a revolt against politics as usual -- raised $80 million.

The 77-day sprint, involving Gov. Gray Davis and three major candidates to replace him, cost roughly the same as the last general election, a seven-month marathon involving two candidates.

Gov.-elect Arnold Schwarzenegger led the pack this time by bringing in $21.9 million. Davis raised nearly $17 million.

“This is business as usual, as far as I can tell,” said Democratic campaign consultant Bill Carrick.

To wage their campaigns, Schwarzenegger, Davis, Lt. Gov. Cruz Bustamante and state Sen. Tom McClintock (R-Thousand Oaks) tapped individuals, corporations and other entities. Most of the donors have a stake in the outcome of legislation in the state Capitol.

“You can have a popular revolt -- if you can find tens of millions of dollars,” said political science professor Gary Jacobson, a campaign finance expert at UC San Diego.

The campaign’s price tag “reflects the reality of communications,” Jacobson said. “There is no cheap way to do it.”

California has 15.4 million registered voters. Each piece of campaign mail costs about 40 cents to deliver. The price of sending a single piece of literature to each would have exceeded $6 million.

But the biggest factor in the cost of the campaign was television.

The campaign climaxed during a week when television series were premiering and television stations were charging premium rates.

“Prices are through the roof,” said Richie Ross, chief consultant to Bustamante.

The Democratic lieutenant governor was spending $3.5 million a week on television during the final stretch of the campaign. Ross estimated that the price of that air time was 50% higher than it was during the summer.

“By one measure, that is extraordinary,” Ross said of the costs. “But by another measure, it’s not really. What are they spending on Clarinex ads? All these candidates were competing in a hugely important election.”

Although Schwarzenegger gave his own campaign $10 million in bank loans and contributions, he raised more than $11.9 million from an array of donors after vowing not to raise money from special interests.

“I take money from [the] little grocery store, or the little shoe store or the guy that owns the real estate company or something like that,” Schwarzenegger said. “But most of my contributions, 90% of them, are just from regular people.”

Real estate interests accounted for at least 14% of the money he raised.

He also took contributions from farming and financial interests, insurers and manufacturers, all of which have lobbying presences in Sacramento.

Car dealers gave him almost $800,000. Schwarzenegger’s promise to roll back the vehicle license fee, which Davis tripled in an effort to close the budget gap, was one issue that attracted auto dealers.

“The car tax was one of the issues that was very strong,” said Galpin Motors owner Bert Boeckmann, who helped arrange a fund-raiser for Schwarzenegger last month.

A complete accounting of the recall spending will not be available until early next year, when candidates, donors to independent campaign efforts and political parties must file final 2003 finance reports.

But a preliminary analysis based on public filings and interviews shows that on average, the recall cost $1 million a day, assuming the meter started running July 23, when Secretary of State Kevin Shelley certified the election, and stopped on election day.

About 30% of the money Davis raised came from unions. Bustamante raised $12.4 million, with Indian tribes that own casinos accounting for 28%. McClintock raised nearly $2 million, much of it in donations of $100 or less, though casino tribes, conservative Christians and right-to-work advocates accounted for significant sums as well.

Schwarzenegger was by far the largest individual spender. But several donors joined the million-dollar club in their effort to sway the election’s outcome.

Four Indian tribes spent seven figures in a failed attempt to elect Bustamante or McClintock, both of whom support tribes’ right to operate their reservations, and casinos, as they see fit.

Casino-owning tribes spent at least $10.1 million directly and indirectly.

Organized labor contributed at least $10 million, and the California Democratic and Republican parties spent more than $4 million between them.

Among the unions, there were at least three seven-figure donors -- the Service Employees International Union; American Federation of State, County and Municipal Employees; and the Hotel Employees and Restaurant Employees Union.

Lesser candidates and recall promoters spent an additional $8.5 million, led by Republican businessman Peter V. Ueberroth, who spent nearly $4 million on his short-lived campaign.

Rep. Darrell Issa (R-Vista) spent almost $3 million to finance the petition drive that placed the recall measure on the ballot and for his aborted gubernatorial campaign.

Bay Area Internet entrepreneur Garrett Gruener spent $1 million of his own money, or about $460 for each of the 2,179 votes he received.

The big spending took place even though the recall was the first statewide contest in which there were campaign contribution caps. Under the Proposition 34, individual donors could not give more than $21,200 to a candidate. But there were exceptions:

* Candidates could spend unlimited sums on their own campaigns. And although Proposition 34 barred them from giving themselves loans directly, Schwarzenegger used a loophole to take out $4.5 million in bank loans.

* As the target of the recall effort, Davis could raise unrestricted sums. A master fund-raiser, he accepted 70 separate donations of more than $21,200.

* There were no caps on donations to committees set up to support or oppose the recall, or on contributions to independent committees established to support or oppose candidates. Organized labor and Indian tribes spent at least $10.5 million on independent campaigns for and against the candidates.

Some advocates of campaign finance reform believe that Davis was ousted in part because of his fund-raising practices, and that Bustamante’s loss came about in part because he used what he thought was a loophole to take donations far in excess of the $21,200 cap.

Bustamante accepted $1.5 million from a single casino tribe. Altogether, he accepted $3.8 million from donors who exceeded the $21,200 cap, including 10 that were $100,000 or more.

The money went into an old campaign account not covered by Proposition 34 restrictions.

But Bustamante spent the money during the campaign, prompting criticism from other candidates, and a lawsuit by state Sen. Ross Johnson (R-Irvine). Based on that suit, a Superior Court judge concluded that Bustamante had violated Proposition 34.

“It made Bustamante seem like a tool of the special interests,” said Jim Knox, director of California Common Cause.

Bustamante consultant Ross acknowledged that the attacks over the money had some effect.

Schwarzenegger was also criticized over fund-raising. Although he is worth hundreds of millions of dollars, the actor helped finance his campaign by taking $4.5 million in loans at 4% interest from City National Bank. City National is a regular campaign donor and has a lobbying presence in Sacramento.

Officeholders who have debts can hold fund-raisers and accept contributions to pay off their loans.

Schwarzenegger spokesman Rob Stutzman said the governor-elect has not decided whether to repay the loan on his own or hold fund-raisers to retire the debt. Stutzman also was not sure whether Schwarzenegger planned to hold fund-raisers in the coming weeks.

Robert Stern, president of the Center for Governmental Studies in Los Angeles, suggested that Schwarzenegger focus on solving the state’s problems, not raising money: “It is bad for him because it makes him look like Gray Davis. If he takes money from the special interests, he puts an albatross around his neck.”

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Money raised in the recall campaign

Campaign cash raised in the recall race totaled $80 million, including more than $60 million in contributions to Gov. Gray Davis and to the major candidates to replace him.

*--* Candidate or Committee Total Contributions Arnold Schwarzenegger $21.9 million Candidacy fund $18.5 million Pro-recall fund $3.4 million Cruz Bustamante $12.4 million Candidacy fund $5.7 million Anti-Proposition 54 fund $5.54 million Anti-recall fund $525,773 Old campaign fund $667,703 Peter V. Ueberroth* $3.95 million Tom McClintock $1.67 million Arianna Huffington* $812,560 Bill Simon Jr.* $588,309

*--*

Gray Davis raised money to fight the recall...$16.97 million

Californians Against the Costly Recall of the Governor...$14.6 million

Taxpayers Against the Governor’s Recall**...$2.37 million

* dropped out of race

** not directly controlled by Davis

Reported by Times staff writer Joel Rubin and Times researcher Maloy Moore.

Source: California secretary of state

Los Angeles Times