Laws Fail to Limit Political Spending

By Jeffrey L. Rabin

June 6, 2005 12 AM PT

Times Staff Writer

Unchecked independent spending is playing an increasingly large role in Los Angeles elections, despite city campaign finance restrictions that sought to limit the influence of big-money donors.

In the May runoff between Mayor James K. Hahn and his successor-elect, Antonio Villaraigosa, one of every three dollars was spent by entities trying to influence the race but not governed by city rules that limit candidate donations and spending.

For the first time, a labor union paid for a costly television commercial attacking one candidate -- Hahn -- and promoting his opponent. And a landowner with development projects under the purview of the City Council and the next mayor spent more than $193,000 to advocate Villaraigosa’s election.

Separately, executives of the massive Playa Vista project waged a last-minute offensive against a Westside council candidate critical of the development near Marina del Rey, but their effort appeared to backfire.

Independent spending by noncandidates has exploded from less than $300,000 in 1993 -- the first mayor’s race under finance restrictions -- to more than $4.2 million in this year’s campaign. Of that, more than $3.4 million was spent in the runoff.

The money paid for phone banks, precinct walkers, mailers, advertising, signs, banners, absentee ballot campaigns, T-shirts -- even decals for the hard hats of electrical workers. The activity is legal as long as it is not coordinated with a candidate’s campaign and is disclosed properly to the city Ethics Commission.

Under the city’s campaign finance system, approved by voters in 1990, strict limits were imposed on how much money could be given directly to candidates and how much the candidates could spend on their own campaigns. Campaign contributions from individuals were matched by city taxpayers, a change designed to reduce the influence of businesses and labor unions.

But court decisions have limited the reach of those rules. Wealthy candidates are free to make unlimited contributions to their own campaigns because of court decisions citing the right to free speech. Donors soon found they could bypass the city’s contribution limits by waging their own campaigns for or against candidates.

Supporters say independent campaigns comport with the right of free speech and do not necessarily affect the outcome of races, a point borne out by the mayoral race. Independent expenditures supporting Hahn -- largely by city employee unions -- totaled $2.26 million in the runoff. Villaraigosa, the winner, got slightly less than $1.6 million in independent spending during the same period, though he far outdistanced Hahn in overall fundraising.

Still, critics say the developments raise the specter of increasing -- rather than decreasing -- power on the part of moneyed interests.

“Independent expenditures have a corrupting impact,” said campaign reformer Bob Stern, president of the Los Angeles-based Center for Governmental Studies. “They are being done to get around the contribution limits. They are a big problem.”

Stern said he sees very little difference between independent expenditures and large campaign contributions. “Both are given to gain access to the official if the official wins,” he said.

Virtually all of the independent spending in the 2005 mayoral race came from labor unions and one individual, Richard Meruelo, a major downtown landowner and developer.

Meruelo gave $5,000 directly to Villaraigosa’s campaign, then spent $193,311 in the runoff on an absentee ballot effort, automated phone calls to voters and radio ads urging Republicans to vote for the councilman.

Meruelo could not be reached for comment. But the Cuban American developer, who divides his time between California and Florida, said in a preelection interview that he strongly supported Villaraigosa and would take pride in the election of a Latino to the highest office in Los Angeles.

He and his family own property throughout downtown Los Angeles, including near the Staples Center, next to an architectural school near the Los Angeles River and in the produce and garment districts. In March, Meruelo sparked controversy by acquiring a site in Glassell Park that the Los Angeles Unified School District wanted for a high school.

Development and land use issues are the province of the city Planning Commission, whose members the mayor appoints. Projects also must win approval from the City Council and the mayor.

Asked about the propriety of such unlimited donations, Villaraigosa said there are limits to what the city can do to control independent spending. “In a perfect world, you’d like to eliminate independent expenditures,” he said. “But the courts have taken the position that people have 1st Amendment rights to advocate for candidates.”

Another development in the mayoral contest was the California Teachers Assn.’s decision to spend more than half a million dollars for commercials on broadcast television stations in the nation’s second largest media market, a first for a Los Angeles campaign.

The union also spent about $74,000 on polling and support services.

Barbara Kerr, president of the teachers union, said Villaraigosa, a onetime organizer for United Teachers Los Angeles, “supports public education. He understands it. He understands the students, the parents and the challenges we face.”

Unions representing firefighters, electrical workers, engineers, architects and myriad other city employees invested heavily in the mayoral race. L.A.’s mayor is one of the key players in contract negotiations over pay, benefits and working conditions.

“When a labor union makes a large independent expenditure, they are expecting something when their candidate wins and not just good government,” Stern said. They are seeking “easy access to the public official and as much favorable treatment as fiscally possible. I would call it clout.”

But such efforts do not always succeed. Nearly $590,000 in independent spending was put into in the battle for the Westside council seat being vacated by Cindy Miscikowski, who is termed out of office.

About 60% of the money went to neighborhood activist Flora Gil Krisiloff. In the final days before the May 17 election, developers and executives of the Playa Vista project spent $91,000 to promote Krisiloff against her opponent, former cable television executive Bill Rosendahl.

Playa Vista, a huge residential and commercial project rising from land near Marina del Rey once owned by industrialist Howard Hughes, has been the focus of contentious debate about overdevelopment on the city’s Westside.

Some of the late spending was not reported to the city Ethics Commission until the final hours of the campaign, even though it involved earlier expenditures for printing, mailing and phone bank operations. Spending is supposed to be reported within 24 hours of incurring the expense.

Rosendahl seized on the last-minute spending to make the case that Krisiloff would be more receptive to Playa Vista if she were elected. A grass-roots network of his supporters e-mailed and called voters about the eleventh-hour spending on Krisiloff’s behalf. Ultimately, she lost.

Rosendahl sees uncontrolled independent expenditures as a threat to the city’s campaign finance system. “Independent expenditures are out of the control of the process,” he said. “It’s a problem. It has to be addressed.”

LeeAnn Pelham, executive director of the city Ethics Commission, would not discuss whether the panel was examining the late expenditures in the council race. She said the panel would study the election and forward its recommendations to the council this summer.

She said the city might be able to require earlier notification of such spending and might recommend that the beneficiary of independent campaigns be barred from voting on issues that affect the donor. “It is important to be creative and think about what options we have,” she said.

Times staff writer Patrick McGreevy and researcher Maloy Moore contributed to this report.

(BEGIN TEXT OF INFOBOX)

Independent spending

The money spent on independent campaigns in Los Angeles has soared in the past dozen years, particularly in the mayoral runoff elections. This independent spending falls outside the city’s system of contribution limits, spending caps and partial public financing of campaigns.

The growth of independent expenditures

Mayoral runoff elections*

1993 Richard Riordan vs. Michael Woo

Spending by candidates: $8,357,598

Spending by independent groups: $276,914

2001 James K. Hahn vs. Antonio Villaraigosa

Spending by candidates: $6,494,042

Spending by independent groups: $1,542,935

2005 Hahn vs. Villaraigosa

Spending by candidates: $6,458,884

Spending by independent groups: $3,406,458

* There was no runoff in 1997.