New Limits on Initiative Campaigns

Clamping down on one of Gov. Arnold Schwarzenegger’s most effective political tools, the state’s political watchdog agency approved new limits Friday on contributions to ballot-measure committees.

The changes are designed to close one of the largest loopholes in California’s campaign finance laws. Donors are strictly limited in how much they can give to candidates, but there were no limits on how much they could contribute to ballot-measure committees controlled by those candidates. Such initiative campaigns have increasingly become part of candidates’ broader political efforts.

The Republican governor has set up five campaign committees since he kicked off his political career last year. He has raised millions of dollars through them.

Among the Schwarzenegger-controlled committees is one set up to defeat two November ballot measures that would regulate gambling. Schwarzenegger has negotiated a deal with some casino-owning tribes to raise money for the state budget, and he does not want to be constrained by the initiatives.

Under the rules approved by the Fair Political Practices Commission, donors cannot write larger checks to ballot-initiative campaigns controlled by a candidate or officeholder than they could write to that politician’s own election campaign committee.

In the case of a committee controlled by the governor, the maximum donation would be $21,200 per election. For a legislator, it would be $3,200.

For a ballot committee not controlled by a politician, the rules will restrict only the amount that can be given when the committee spends at least $50,000 on advertisements featuring a candidate or officeholder in the 45 days before an election. In that case, donations will be limited to $25,000.

In a concession to Schwarzenegger, the panel delayed the new rules from taking effect until after the Nov. 2 elections, meaning that the governor can continue to raise unlimited amounts to defeat the gambling initiatives.

Paul Ryan, an attorney at the Center for Government Studies, a nonpartisan group that favors restrictions on campaign donations, said the changes are a victory for voters, upholding the spirit of Proposition 34, the 2000 ballot measure that put caps on how much donors could give to traditional campaign committees.

“This is one step in [defeating] the potential corrupting influence of large campaign contributions in California politics,” he said.

Ryan said that over about three months last winter, ballot-initiative groups affiliated with Schwarzenegger received more than 150 donations exceeding the new $21,200 cap. Some of those contributions were as large as $250,000.

Charles Bell, Schwarzenegger’s attorney, argued before the commission that limiting funding for initiatives based on candidates’ or officeholders’ endorsements is unconstitutional, because it encroaches on free speech.

“There are a lot of problems with [the decision] and there will be a lot of unintended and unexpected consequences because it is so complex,” he said after the vote.

California politicians have linked their fortunes to ballot initiatives long before Schwarzenegger set up a committee to persuade voters to pass a $15-billion bond this year.

Former Republican Gov. Pete Wilson sponsored initiatives on welfare changes, juvenile crime and limitations on public employee unions. Lt. Gov. Cruz Bustamante, when he was running in last year’s recall, appeared in television ads denouncing Proposition 54, an initiative that would have restricted government’s ability to collect racial and ethnic data.

Darry Sragow, a Democratic political consultant, said that though “this closes a big loophole,” it “won’t end the search for the ways to raise the large amounts of money you need to run for office in California in bigger chunks.”

“Arnold Schwarzenegger can raise a lot of money in California,” he said. “This just makes it more time-consuming for him to do that.”

Efforts to further tweak the rules may continue in the Legislature, where a bill that tackles the same topic is pending.

Assembly Speaker Fabian Nunez (D-Los Angeles) had urged the commission to set a standard cap that would apply to all officials, regardless of whether they were governor, a legislator or someone else.

Also Friday, the commission fined Schwarzenegger’s personal lawyer, Martin D. Singer, $1,500 for failing to disclose a $10,000 contribution to his client in 2003.

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Times staff writer Jordan Rau contributed to this report.