Bustamante Accused of Violations
California’s political watchdog agency sued Lt. Gov. Cruz Bustamante Wednesday, seeking up to $9 million in penalties for alleged violations of campaign fundraising laws in his unsuccessful run for governor this fall.
The Fair Political Practices Commission accused Bustamante, a Democrat, of illegally sidestepping campaign fundraising rules by taking donations from an old campaign committee and spending the money on the recall race. The agency said Bustamante had raised $4 million from the committee, which was not subject to the state’s individual donation limit of $21,200, set by voters in 2000.
Typically the watchdog agency settles campaign law violations administratively. But it chose in this case to file a civil lawsuit in Sacramento County Superior Court because officials considered the alleged violations egregious and deserving of tougher penalties that could be obtained only in court.
“We felt this was among the most serious violations and warranted civil action,” said Steven Russo, the commission’s chief of enforcement.
In a three-paragraph response to the lawsuit, Bustamante said that his private attorneys had not had the opportunity to review the lawsuit.
But “on the face of it,” Bustamante said, “all the allegations appear to be in regard to actions taken on the advice of my campaign attorneys during my campaign for governor, and in consultation with the FPPC.”
Russo said Bustamante’s campaign had not asked his agency for advice about whether its actions were legal. A candidate who follows a commission advice letter is protected from subsequent prosecution by the commission, Russo said.
Bustamante was the only prominent Democrat who sought to replace Gov. Gray Davis in the Oct. 7 recall election. Republican Arnold Schwarzenegger won that election with 48.6% of the vote. Bustamante got the second-highest tally -- 31.5%.
Accusations of campaign-limit violations plagued Bustamante throughout the two-month campaign. State Sen. Ross Johnson (R-Irvine) sued him in September, charging that Bustamante had illegally used an old campaign committee, the one created to collect money for his 2002 run for lieutenant governor, to skirt donation limits.
Johnson won a temporary injunction during the campaign and, in September, a judge ordered Bustamante to return nearly $4 million in campaign contributions from the old committee.
Bustamante responded that most of the money had been spent on television advertising.
Bustamante appealed the judge’s ruling in December. The case is pending before the 3rd District Court of Appeal in Sacramento.
Both Johnson and the commission accused Bustamante of violating Proposition 34, a ballot measure passed by voters in 2000. Proposition 34 restricts the amount of money that candidates may loan themselves and bars individuals from giving a candidate for governor more than $21,200.
The commission alleged that, between Aug. 8 and Sept. 22, Bustamante used his old campaign committee, which was not subject to the $21,200 limit, to raise $4 million from 44 donors, including Native Americans with casinos and labor unions. Bustamante then transferred the money to the new committee, called Yes on Bustamante, that he had created to run for governor.
The commission also alleged that Bustamante had illegally used money directly from his 2001 election committee to fund his campaign and that he had failed to properly disclose more than $4 million in contributions. Candidates for statewide office must regularly disclose to the public how they have collected and spent contributions.
Johnson said he was “delighted” with the commission’s action. “The lieutenant governor was blatantly laundering campaign funds in an effort to evade the contribution limits of Proposition 34,” he said.
If Bustamante is sanctioned by the court, he could use campaign contributions to pay the fines, according to the commission.
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