Gov.’s Allies Test Curb on Fundraising

Allies of Gov. Arnold Schwarzenegger went to court Wednesday, arguing that he has a constitutional right to raise unlimited amounts of money to advance his causes.

A group promoting Schwarzenegger’s agenda for transforming state government filed suit in Sacramento County Superior Court against state campaign finance officials. The lawsuit said Schwarzenegger should be allowed to control the group’s work and raise as much money as he wants for their efforts.

Under current regulations, Schwarzenegger must remain independent of the group, which has been holding fundraising events throughout the state and considering ballot initiatives to implement his proposals. If Schwarzenegger controls their actions, strict fundraising limits kick in for the committee, which is called Citizens to Save California.

The lawsuit tacitly acknowledges that the committee cannot do its work without Schwarzenegger directing its actions and controlling how its money is spent. The suit follows complaints filed with the state by a watchdog group this week that alleged that Schwarzenegger was skirting the regulations.

He has been raising money for Citizens to Save California, appearing at its events and, according to committee members, sending signals to them about what he wants.

Schwarzenegger has said he is not “controlling” the group.

Other politicians want to get involved with Citizens to Save California as well but don’t, because doing so would invoke the fundraising limits.

That, according to the lawsuit, would have a chilling effect on their efforts.

“There is no question this is an infringement on my 1st Amendment rights,” said Assemblyman Keith Richman (R-Northridge), who has introduced a measure in the Legislature to overhaul the state’s public pension system, something the governor also is promoting, as is Citizens to Save California.

During his campaign, Schwarzenegger deplored the flood of money in politics and proposed to limit contributions in certain circumstances, not expand them. During radio interviews Wednesday, he was asked to defend his prolific fundraising this year, including dinners with seats at his table selling for $100,000.

“As you know, the most important thing is to communicate with the people, and the only way you can do this is through radio ads and television ads and to do interviews and go to the shopping malls,” Schwarzenegger said on KFBK in Sacramento. “But when you put TV spots on, it costs money.”

The governor has a substantial agenda for the year: allow 401(k) pension plans for state workers; impose strict spending limits on the state budget; broaden his power to reform state bureaucracies; allow merit pay for public school teachers; and require judges, rather than lawmakers, to draw voting districts. All of those plans require approval by voters.

Assemblywoman Lois Wolk (D-Davis) is preparing legislation that would lower the amount that committees such as Citizens to Save California could raise if they were controlled by politicians.

And the watchdog group that filed the complaint with the Fair Political Practices Commission this week said Citizens to Save California should be subject to campaign finance restrictions because Schwarzenegger was controlling it.

“If you’re not in violation of the law, why would you have any problem with the law? Why would you want to challenge it?” said Derek Cressman, director of TheRestofUs.org, which filed the complaint. “The fact that all of a sudden, two days after we suggest they’re in violation of the law, they go to court to strike down that law strongly suggests to me that we’re right.”

In general, the courts have ruled that committees promoting ballot measures can raise unlimited amounts of money because there is no candidate involved who can be corrupted by the donations.

Candidates are limited in what they can raise under Proposition 34, a state law designed to reduce the influence of money on politicians.

Some campaign finance experts say it doesn’t matter whether campaign money is raised for an initiative committee or a candidate -- there is still the chance someone could be corrupted.

“We know that candidates are intimately involved in ballot committee campaigns,” said Rick Hasen, a Loyola Law School professor and elections expert. “As far as I am concerned, the same kind of corruption and appearance of corruption that animate the limits on candidate committees apply to ballot committees.”

The lawsuit filed by Citizens to Save California and Richman asks the court to overturn a regulation written by the Fair Political Practices Commission. The commission said it was reviewing the lawsuit and intended to defend its regulation, which was issued in June.

Richman said the commission’s rule that limits donations to initiative committees if politicians are involved was capricious and arbitrary. If Schwarzenegger is controlling the committee, the limit is $22,300 per donor. If Richman is controlling it, the limit drops to $3,000 per donor.

“What is important is that there be a fair and level playing field,” Richman said.

If the court rules in Schwarzenegger’s favor, all committees controlled by him probably will be able to raise money in unlimited amounts. His California Recovery Team, for example, could once again collect donations in five and six figures, as it did before the Fair Political Practices Commission’s ruling.

Richman said the governor’s opponents would be able to raise unlimited amounts. Their committees are not controlled by candidates.

Several groups aligned with Democrats this week formed a new committee -- Seriously, Saving California -- to raise money and push their ballot initiatives.

The effort probably will include teachers, healthcare workers, public employee unions and prominent Democrats working to oppose whatever Citizens to Save California puts on the ballot, said a lobbyist involved in the effort.

“It’s quite a large group of people who care about education and other issues and feels like the governor’s proposals would take the state in a different direction, and they want to oppose that,” said John Hein, a former lobbyist with the California Teachers Assn.

In the radio interviews Wednesday, Schwarzenegger said he still hoped that the Legislature would approve his proposals for change. Lawmakers would then put them on the ballot.

But the governor reiterated that he was prepared to take his program directly to voters in a special election in the fall.

Schwarzenegger cited his strong approval rating as a sign that voters wanted his agenda, not that of the Legislature. He said that while his favorability rating was above 60%, the Legislature’s was in the 30s.

“The poor little guys there -- they’re in the 30s,” the governor said.

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Times staff writer Peter Nicholas contributed to this report.