FPPC Unlikely to Act on Fund-Raising

The agency responsible for enforcing campaign laws is unlikely to consider action against Lt. Gov. Cruz Bustamante any time soon for raising money in six- and seven-figure chunks for his gubernatorial run, officials said Wednesday -- even though state law generally caps each donation at $21,200.

Liane Randolph, chairwoman of the Fair Political Practices Commission, told reporters at a commission meeting Wednesday that the watchdog agency probably will not act on Bustamante’s fund-raising before the Oct. 7 recall election. Officials said the commission may never take action.

“Every single election,” Randolph said, “we get complaints right before the election, and the complainant always says, ‘We want you to take action before the election.’ Sometimes that is not always feasible. In fact, it is rarely feasible.”

Randolph, appointed earlier this year by Gov. Gray Davis, noted that “anyone who files a complaint with this agency will tell you that cases take a long time.”

“I don’t know how long this matter would take,” Randolph said. “But it is pretty unusual for us to take action based on something that happened eight days ago, nine days ago.”

Bustamante is the one major Democratic officeholder who is running to replace Davis if voters recall him next month. The lieutenant governor began taking donations of $100,000 and more last week into an old campaign committee that is not covered by the $21,200 limit imposed by the voter-approved Proposition 34 of 2000.

A San Diego County Indian tribe upped the ante on Tuesday by announcing a $1.5-million donation to that committee. On Wednesday, the Alameda-based local of the Operating Engineers unions gave Bustamante’s old committee $106,400.

There are no limits on what Bustamante can accept into his old committee. His chief strategist, Richie Ross, has said Bustamante hopes to raise as much as $4 million into that committee and use it for the current campaign. Bustamante’s attorney, Lance Olson, who helped write Proposition 34, defends such a move as legal. Ross could not be reached for comment Wednesday.

Bustamante campaign manager Lynn Montgomery said she was not surprised by Randolph’s comments: “We didn’t think there was any basis to file a lawsuit.”

The five-member commission, seeking to clarify fund-raising rules in the recall campaign, issued a statement last week hinting that what Bustamante was planning might violate state law. “The commission has advised that state candidates may not solicit contributions into a pre-Proposition 34 committee for the purpose of using those funds in a post-Proposition 34 election,” the statement said.

On Wednesday, however, Steven Russo, head of enforcement for the commission, described the release as “a broad statement as to what has and has not been said in the past.” Russo also suggested that what Bustamante is contemplating may be legal.

“There are certainly arguments to be made on both sides as to what the provisions of the law are,” Russo said. “The question we face is, what was the intent of the drafters of Proposition 34, and how does it apply to a specific set of facts.”

Sen. Ross Johnson (R-Irvine), among the FPPC’s most persistent critics, filed a complaint Tuesday urging that the commission take action against the lieutenant governor.

Upon being told of Randolph and Russo’s remarks on Wednesday, Johnson said: “Sounds like a confession that they’re a toothless watchdog. That may be good for the soul, but not for the body politic.”

Johnson, who helped write Proposition 34, vowed to sue to prevent Bustamante from transferring the money into his gubernatorial account, if the commission fails to act.

Russo said the fact that a state senator filed a complaint will not force the FPPC to act more quickly. Noting that the commission receives 1,000 complaints a year, Russo said: “Does the public want us to say, ‘Excuse me, everybody. We’re going to ignore you now because we have this complaint.’?”

Until Wednesday, Russo and other commission officials said, the commission had never sued a candidate or ballot measure committee before an election. But the commission filed suit Wednesday against a nonprofit corporation controlled by Ward Connerly, to compel him to disclose donors who gave the entity $1.5 million in support of Proposition 54. That initiative on the Oct. 7 ballot would limit government’s ability to gather racial and ethnic data.

Republicans raised the possibility that the Democrat-dominated FPPC was using a tougher standard against Republican Connerly than Bustamante, a Democrat.

But commission spokeswoman Sigrid Bathen noted that the investigation into Connerly’s nonprofit organization began in July 2002.

The commission began looking into Bustamante’s campaign financing plans only after it received Johnson’s complaint.

The commission is composed of two appointees by the governor, including the chairperson, who is the one full-time member. The state attorney general, the secretary of state and the state controller each have one appointment.

A 1974 initiative approved in a landslide in the aftermath of the Watergate scandal created the Fair Political Practices Act, and set up the commission to enforce its provisions. The act limited wining and dining by lobbyists to expenditures of $10 a month on a single politician -- enough for a hamburger and a Coke, as Gov.-elect Pat Brown, one of the initiative’s main proponents, described it then.

The act required that lobbyists register and publicly disclose their clients. It also required that elected officials and many appointees and civil servants disclose their financial holdings in public statements.

It gained wide support, and expectations were high. The commission has imposed fines and won civil judgments of $13.7 million since 1975.

In recent years, many of the cases have involved minor violations, such as campaign donors who give $10,000 or more in a year failing to file reports detailing their contributions. But the FPPC also investigates more significant cases of campaign money laundering.

On Wednesday, the commission imposed a $76,000 fine on an Encinitas public relations consultant for hiding the true source of campaign contributions to candidates for council seats in Southern California cities.

The commission also has had its problems. Ravi Mehta, a former Orange County deputy district attorney, was forced to resign as chairman in 1997 when he disparaged campaign finance limits in a private talk to lobbyists.

Mehta later became a lobbyist, and got into trouble when he gave a $25,000 campaign donation from his client, Oracle Corp., to a Davis administration official who had helped negotiate a $95-million software licensing contract on behalf of the state with Oracle. Davis fired the aide who took the check, the administration rescinded the contract and Oracle ended its relationship with Mehta.

On Wednesday, attorney Ben Davidian, who was commission chairman during Gov. Pete Wilson’s first term, chastised the agency for not acting against Bustamante, and instead busying itself with minor violations of campaign finance law such as failure to file major donor reports.

Davidian regularly represents clients before the FPPC, and his law firm represents the state Republican Party, as well as one of the committees that mounted the petition drive that led to the recall election.

“I’m sure the press release has Mr. Bustamante quaking in his boots,” Davidian said dryly. “When there is an obvious and flagrant violation of the law, this commission must take a stand.”

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Contributions race

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These contributions were reported by major candidates on the Oct. 7 ballot who have received sums of at least $100,000 for their gubernatorial campaigns. Totals are for all contributions through Aug. 23 and contributions of $1,000 or more through Wednesday. Donations of $1,000 or more must be reported within 24 hours of receipt.

*--* Contributions Candidate or committee Total reported Reported for 24 hrs. ending Wed Cruz Bustamante $900,792 None 155 contributions 0 contributions

Arianna Huffington $448,896 $8,000 2,258 contributions 4 contributions

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* Beverly Hills attorney Skip M. Brittenham gave $5,000; actress Cynthia Sikes of Los Angeles contributed $1,000.

*--* Contributions Candidate or committee Total reported Reported for 24 hrs. ending Wed Tom McClintock $613,272 $3,000 1,155 contributions 3 contributions

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* Cardinal Broadway Partners of Agoura Hills and Cardinal Investments Co. of Santa Monica each gave $1,000.

*--* Contributions Candidate or committee Total reported Reported for 24 hrs. ending Wed Arnold $3,768,918 $52,200 Schwarzenegger 426 contributions 6 contributions

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* The Dreier for Congress Committee, the campaign committee for Rep. David Dreier (R-San Dimas), gave $21,200.* Dreier is co-chairman of the Schwarzenegger campaign. Theodore J. Smith, founder of Filenet, an Orange County software company, gave $10,000. So did Robert Yellin, CEO of CalProtection of Newport Beach. Leonore Annenberg, widow of publishing magnate Walter Annenberg, gave $5,000.

*--* Contributions Candidate or committee Total reported Reported for 24 hrs. ending Wed Peter V. Ueberroth $2,953,323 250 contributions $114,399 21 contributions

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* Greg W. Penske, president of the Penske Automotive Group in El Monte, gave $21,200; Howard Lester, chairman of kitchen-cookware retailer Williams-Sonoma Inc., contributed $20,000; William J. Armfield, president of Spotswood Capital in Greensboro, N.C., donated $20,000. Ueberroth received $10,000 contributions each from Jacqueline Autry of Palm Springs and Warner Bros. television executive Richard T. Robertson of Burbank.

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Two anti-recall committees, which are not subject to the same contribution limits as candidates, have raised more than $5.4 million to help Gov. Gray Davis.

Taxpayers Against the Governor’s Recall has reported receiving more than $2.4 million from 177 contributions. Californians Against the Costly Recall of the Governor has reported raising more than $3 million, with $301,617 from 10 contributions reported in the 24 hours ending Wednesday.

The Advanced Diagnostic and Surgical Center of Alhambra gave $25,000 to the anti-recall committee. The personal injury law firm of Gillin, Jacobson, Ellis & Larsen in Orinda contributed $20,000.

*Contributions to candidates from each outside source are limited to $21,200. There is no cap on the amount candidates can give their own campaigns.

Reported by Times staff writer Jeffrey L. Rabin and Times researcher Maloy Moore. Source: Campaign reports filed with the California secretary of state.

Los Angeles Times